SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Strategies & Market TrendsBuffettology


Previous 10 Next 10 
To: jhg_in_kc who wrote (1720)8/3/1999 11:30:00 PM
From: Michael Burry
   of 4661
 
A lot of us missed the AOL train, which left at a price of 15, not 88.

Mike

Share RecommendKeepReplyMark as Last Read


To: jhg_in_kc who wrote (1720)8/4/1999 12:50:00 AM
From: James Clarke
   of 4661
 
<<How about putting mom in a little AOL at 45% off, or RMBS, whose bus will leave the station on Sep. 5 .>>

I thought about AOL, but decided that short-selling is a little too aggressive for my mother's retirement money. Or did you really think I would BUY a stock at 150 times earnings, where 27 out of 27 sellside analysts have buys on it and insiders are selling to the tune of $200 million? Let me give that some thought...no. Maybe at 30.

JJC

Share RecommendKeepReplyMark as Last ReadRead Replies (3)


To: James Clarke who wrote (1722)8/7/1999 10:55:00 AM
From: Michael & B.Anne
   of 4661
 
re AOL

There is a story in the "Right Stuff" (story of the
test pilots who went into the space program) by Tom Wolf
about a pilot who flew his plane directly into the ground
while looking at his instruments that said he was doing fine.
He found no sympathy with other pilots who derided him for
"not looking out the window."

AOL has such major problems

1) MSFT and ATT have combined to attempt to make the
household entry point cable with a proprietary cable modem.
ATT has come close to betting their company on this and it
is not a bad strategy. Further the strategy is to preclude others
(read AOL) from having access. If AOL is unsuccessful at gaining
legal redress - they could be history. And ATT is a master! at
such political infighting with special entrenchment in the communications
portions of government.

2) MSFT just announced the intention of offering ISP
services for FREE. Sounds familiar, remember when MSFT
wanted to be a browser provider despite the fact that
Netscape had nearly all the market. And where is Netscape
now (and how has it aided AOL in any manner.) If
MSFT is in anyway successful AOL's current problems with
inability to expand user base will get worse.

3) AOL provides an inferior service - much slower with
screens filled with banner ads. Further sailing into
the wind with keywords vs normal internet URL's (you
must use AOL unique procedures to reach sites that
give their address in URL formats.) And this can only
get worse - suppose that AOL is allowed to access through
pending cable modems, they will have to layer on top
of protocols with conversion routines that must be slaved
to ATT/MSFT base. Does anyone remember when IBM was king
and how they controlled the computer market by controlling
the access through ports.

In sum, AOL is such risk of being a technology loser and
this is never discussed - everyone seems to only focus on
the marketing and market meters on the instrument panel
.. no one is looking out the window.

Regards

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Michael & B.Anne who wrote (1723)8/10/1999 8:52:00 PM
From: jhg_in_kc
   of 4661
 
This really should be on the AOL thread, but two points: MSFT has "backed off" its rumored free ISP offer and T, says the NYTimes, is contemplating spinning off Excite, reducing ATHM to a "dumb pipe" and making AOL its portal, or start page on T cable lines. T denies this but not too convincingly.
That said, I am not as happy with my AOL investment as I was when I bought some at a split adjusted 24 last Nov. (I also bought some around 130) But this stock is like Bill Clinton; it keeps reinventing itself or maybe like nixon, a survivor of crises.
jhg

Share RecommendKeepReplyMark as Last Read


To: James Clarke who wrote (1722)8/11/1999 1:32:00 PM
From: Michael Burry
   of 4661
 
Pharms are often thought of as Buffett-like companies. Yet watch American Home make like Big Tobacco as it now denies the evidence and the fact that its product caused a lot of morbidity. The liability around this is potentially huge. I now look at AHP as like MO. Unknown liability, unknown valuation. Should all the pharms be thought of this way? And if so, don't they deserve a PE of 15-20 rather than 35-40? There is a huge potential off-balance sheet liability waiting to happen with each pharm, and I feel it is important to recognize this. Pharms have been taken off my "Buffett" watch list.

Mike

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Michael Burry who wrote (1725)8/11/1999 3:24:00 PM
From: hoyasaxa
   of 4661
 
Disagree. Believe the pharms have more retrun potential then their liabilties have disaster potential. AHP and MO, BTW are steals at these levels IMO. Value their legal liabilities as out of the money options, or as the overhang of a convert and perhaps you'll agree as their EBITDA outpaces the potential for ill, and high ROEs continue....

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: hoyasaxa who wrote (1726)8/11/1999 7:49:00 PM
From: Michael Burry
   of 4661
 
The interesting thing is pharms have outperformed over the last 10 years thanks as much to multiple expansion as earnings expansion. We're talking multiples 2-3X historical norms. Now comes Medicare and the issue of lawsuits. AHP's potential liability here is simply staggering. I'm just expecting some multiple contraction to recognize this.

Mike

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Michael Burry who wrote (1727)8/12/1999 12:46:00 AM
From: James Clarke
   of 4661
 
Agree on AHP - they've got a BIG problem here and it is going to get bigger. I hear that these diet drugs are the prime target for the extortionist lawyers bankrolled by the tobacco industry. "Corporate greed" my %&#$. But what does that have to do with my plan to buy Merck at 50 in a market meltdown? I see no reason to generalize across the industry. Yes, I agree they got way overvalued, but have come down signifantly already. Not quite at my price yet, but getting closer by the day.

JJC

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: James Clarke who wrote (1728)8/13/1999 2:51:00 PM
From: Freedom Fighter
   of 4661
 
I picked up some shares of Flowers Industries (FLO) over the last 2 days. Their 55% stake in Keebler is worth about $13 per share. That means the rest of the business is selling for $2-$3. It's hard to place an exact number on the remainder because there's so much restructuring, upgrading and reorganization going on, but it looks like they're giving it away. There's some good brands there.

Wayne
members.aol.com

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Freedom Fighter who wrote (1729)8/13/1999 3:42:00 PM
From: Michael Burry
   of 4661
 
Me too. Got mine today at 15 3/4. If anyone doubts Keebler or Mrs. Smith's will be around in 20 years...

Backing out non-cash and interest expense, I see them earning over 20% on capital in a down year. The story makes sense to me: capital and information age improvements expensive now, but improved distribution and profitability later. Feels like no one's looking as I steal this.

The debt probably would rule it out for Buffett, but they could pay it down rapidly if they wish. As far as I'm concerned, they don't have to.

Mike

Share RecommendKeepReplyMark as Last ReadRead Replies (1)
Previous 10 Next 10