Michael Burry: Look For Value Stocks That Have Been Going Sideways For Some Time

Johnny HopkinsMichael BurryLeave a Comment

In this discussion on the Silicon Investor Forum, Michael Burry says he looks for value stocks that have been going sideways for quite some time. Here’s an excerpt from the discussion:

Burry: Paul, I have concerns about OLS. In purchasing a value stock, I usually look for one that has been going sideways for quite some time.

This one has taken a recent fall to 14 from over 30. It has just posted it’s first quarterly loss in a while, and it doesn’t have any cash free of debt. I wonder if you have some comment on why it posted a loss and where the value is. As a temporary services company, OLS probably doesn’t have any hidden assets or much capital investment.

Further, the industry seems so incredibly competitive. I don’t see a floor here, but maybe you could enlighten me. I am pretty desperate for some good stocks right now.

Response: Mike, good reasons not to buy this one. I am confused about your comment “I am desperate for some good stocks right now”. Shouldn’t you be running some other thread that is more rapid-fire in seeing results? Value investing for me involves patience, and people who are desperate, lose, IMHO and in my own experience. With all the suggestions you see here, if you are desperate, I kinda see you hanging by your wrists, twisting in the wind, as each poster in turn whispers the one, two, three magic stocks for you to buy. (Mabe stocks that have languished, and now are about to POP!) Well…

Burry: Paul,

You took me much too literally. I kinda flippantly said I was desperate, but that was really a veiled market commentary more than anything. I’m pretty much ignoring the market right now because I’m starting to feel that no matter how much value one can buy now, if one waits, there will be a better value (that is, after the market corrects/crashes/collapses).

After, all, the Dow’s up about 10% in just over a month. Given that it’s been around for decades and decades, and that it’s grown over 40% in the last two years. When the slope on the Dow chart starts to approach infinity I cash out and tune out.

In any case, what was the reason for the sudden loss last quarter in OLS?

You can read the thread here:

Michael Burry: Silicon Investor Forum

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