reddog66

Presented for your consideration. CHRG-109shrg21324.pdf

One of the rare times when I have something to add. Please see attached. To your question, in one of the severe plausible scenarios, I don't know how much it would really matter. EMPfatals.pdf

Forgive the length of this post. It is very rare that I have anything meaningful to add. Our circle of competence is really only in the Apartment Industry. Thats why I read this forum often. I am greatly indebted to many of you for what I have learned from your comments here. Also to Parsad for pulling a Ben Franklin and being responsible for what seems to be a modern day version of the Junto Club. If interested in RE, I would strongly suggest getting your hands on the public REITs 10-Ks. I compete with them daily and many (not all) of the largest risk's are outlined in their 10-Ks. There is one topic I rarely see discussed except maybe by Dimon. The week Gene (business partner & childhood friend) and I were born prime was 13.5%. Less than 3 months later it was 21.5%. When putting together bank packages for acquisitions, you will find bankers much more comfortable with the writings of Dr. Cresson Kearny than you asking what it was like back then and how would that effect cap rates today if prime was 50% of 1980.. The role technology has played in our experience has largely been positive. In our early days, while Gene started to analyze an apartment deal I would have to spend several days cold calling and "scuttle butting" if you will conducting market studies and persuading potential competitors to give me their operating numbers. All while trying to annualize P&L's that were penciled out on a cocktail napkin. If the acquisition passed this cursory analysis (less than 1 out of 100 did) we would book flights, kill almost a week traveling back and forth for a site visit. If all of that worked out, I would then proceed with an LOI. Now, with about 5 mouse clicks, I can: get an accurate market study, view the property on google earth to learn if the asset is next to a Tiffany's or an "adult toy" store, conduct a title search to see if the LOI offer is even above their mortgage. I can do this in St. Louis or on Green Turtle Cay while listening to Munger on youtube. The problem is all of our competitors can too. Quite often success in real estate is its own worst enemy. Take Austin,TX for example. It is one of the best markets in the country for apartments. It has a high rent per square foot average vs cost per unit. Vacancy is low and the percentage of renters vs. home owners is high. That being said, this year over 17,000 apartment units are under construction in Austin. One might expect that to have consequences for operating fundamentals for anything you own there. In my judgement, RE is a poor industry to be in. Almost no acquisition makes sense unless you include a shitload of debt (80% of purchase price). On top of that you really never see any material fluctuation in asset values like common equites. Owners have months when considering selling and even then they only have to find the dumbest buyer in a field perverse with them. A short example. Around 2004, we were bidding on a 200 unit asset near Chicago. There were only two buyers at the auction, us and another guy who looked like the biggest piker you ever saw. We try pushing him around and bid very hard very fast. He just goes right along with us like we are at a pie supper. Very quickly we are at the limit of what we can pay and he wins. I approach him after and try to learn a little about him and what he is doing. Does he own any other apartments in his portfolio? No, this is the first he and his family trust are buying. I congratulate him for winning and ask where he saw the value that we missed, allowing him to pay more (just over 10M in final bid). He says "well you guys looked like you really know what your doing and I just figured we would make a little less that you." Just a year or two earlier Gene was still in college double majoring in pschology and criminology. I had dropped out and was working full time for Coca-Cola as a "merchandiser" stocking soda at gas stations and Walmarts in rural Missouri. Buffett mentioned a joke in his 85 letter. Upon reading it I took a deep breath and sat in silence for quite a while. The joke was about oil men and oil discovered in Hell.

racemize, Please see attached pdf Munger_Letter.pdf

merkhet We would love to join you guys for whatever is feasible. Made the reservations during labor day weekend perhaps they lost them?. Will be flying in LAX in the morning. Please let me know what you all decide. I have for quite some time been interested in your thoughts on some things and wanted to pick your brain a little. Thanks, reddog66

Gentlemen, In reviewing dinning establishments close to the meeting, a place has been located that we thought everyone might consider appropriate. Reservations have been made for a very small group at 7:00 pm on 9-9-14 under the name Mr. Mulliner. It has been requested to pass the word that everyone will be going dutch. If you have any interest in joining, please call and let them know so they can reserve seating at 213-623-8301.

I could not agree more

"Look at this generation, with all of its electronic devices and multi-tasking. I will confidently predict less success than Warren, who just focused on reading. If you want wisdom, you’ll get it sitting on your ass. That's the way it comes." - Charlie Munger From the 2007 Wesco Annual Meeting

Frankly, upon reading this I feel rather inexperienced and naïve. Still going to try the chi machine I just ordered off of amazon for back pain. Just in case it helps.

Oddball, My prior comment was in poor form and I am confident I need to lighten up. I agree with you on many points. One of the your points I agree with the most is establishing a system where someone minimizes the time they spend for similar results. Which is one reason why I admittedly, read and listen to Buffet and Munger like a brainwashed Kool-Aid drinking Scandinavia canoeist. Much if not all of my knowledge concerning securities is chauffeur knowledge. On the very, very rare occasion it is not, I try to go in loaded for bear. The main way I am able to do this is through lots of reading and some thinking. No hard feelings. reddog Ps. Would you consider providing any info you might have regarding the rumor of the pink tutu comments and if it is in a transcript somewhere? I would like to see if there is some truth to it.

OH MY GOSH...IT'S PER WEEK!?!?!?!?! Thank goodness, I was just surfing Amazon to find a book on divorce, our marriage is on the brink. I can't even think about the bills from Amazon, let along spending time with my family, I need to hit my daily quota. I'm a learning machine... I couldn't wait to add "divorce" to my list of mental models.... oddball, You nailed me. However, to save you some time, I would suggest His Needs, Her Needs if you want a better marriage. It really helped my wife and I. I did purchase several copies, both in print and on kindle from Amazon. I happily recommend it as one of the few valid things I can contribute to the forum. (I often find myself feeling like Karl Childers upon reading comments here) Then again, perhaps you would be better served just sticking to Franklin's essay "Advice on the Choice of a Mistress". It's a much shorter read.