Improving On Buffett And Desert Cat

[David Sklansky]

"Your technique actually may be valuable for fulcrum stocks, but that means it can only be used rarely, esp. by value investors."

Those last few words are blasphemous and obscene. At least for a two plus twoer. Value investors can't bet overlays at racetracks?

The fact is value investors should be more anxious than others to use my techniques even with fulcrum stocks. Hypothetical(?) example:

Phillip Morris is doing well but has to deal with a very real chance of going broke if they lose lawsuits badly.

I'm pretty sure there is a 20% chance of that disaster. My lawyer friends agree with me. I also think that the average investor in Phillip Morris has no taste for gambling and they will drive the stock down to about 60% of what it would be worth if there was no litigation. I'm not entirely sure about that but I invest anyway. But suppose I had Desert Cat telling me in no uncetain terms that without litigation, the stock is indeed worth almost double what I paid for it, if there was no litigation. That would confirm my suspicions that the low price was due to an overreaction to uncertainty. And I'd bet more.

There are probably already hundreds of good stock analysts who have been silently been reading this thread and have added the parameter "estimate of what public has made the stock price and why they are wrong" to their calculations. Stop arguing with me and do it too.