racemize

Definitely not possible with 100k AUM, if you are using an auditor and administrator. Ongoing costs were about 17k this year. It isn't cheap to run sadly. We don't target institutional. We don't really target anyone honestly, we just do our thing and aren't charging a fee until we have a good long record. Haven't spent any effort on raising money at all really. Half the fund is our own, so the focus is on good performance and that's about it.

Mostly just wanted it all in one pool so I wasn't worried about doing different things in different accounts. I just wanted to do the same thing I was doing for myself, but for a group of people. Also, clients can look at positions and leave a lot easier (at least I think) with the separate accounts. Tracking performance sounded annoying, e.g., if there were different fee structures/entry points/fund additions, etc. And probably, I just liked the idea of a fund better.

what?

I don't know whether this is related, or possible, but I do recall a situation in South/Central America (I think anyway) where there was an inflation issue and they couldn't get a handle on it. I believe what ended up happening is they introduced a new currency and started listing prices in both the current currency and the new currency. While the current currency had inflation problems (e.g., doubling in price over some series of time), they held the new currency stable (So, e.g., you might have a banana cost $1 at time A and you set it at 1 bogo at that time, then later, the banana costs $2, but it still costs 1 bono (but now 1 bono is worth $2)). Thus, people got used to this new currency being stable, and then trusted that currency, and the whole system stabilized. As you can see, I'm pretty vague on the details, I just remember the story. And I feel like I didn't read it from an economics viewpoint either. Anyway, sounds like a story Munger would like.

Just to add on to jmp's comments, my partner is a lawyer, and I'm a patent agent. We initially tried to write our own legal documents for the fund, but gave up and got a lawyer after spending quite a bit of time. Basically, you have to do the entire set of documents yourself, and no lawyer will really come in and "fix" your documents, since they just want to use their own. (It makes sense really, they know their documents, so reviewing yours actually takes more work than just using what they have) I would have loved if it were only 3k to get someone to do everything.

Well, I'm set up in Texas, so I only know those rules (I understand them to be mostly like the SEC rules and more stringent than some other places). So I can't speak to your state. In any event, setting up an LLC shouldn't be too hard. I can do it in Texas in an afternoon and a minimal fee. But before you do that, you have to decide: 1) are you just doing an RIA and managing separate accounts? If so, probably just go find one of those setup companies that do this, I think you can for 3-5k, and not too much hassle on your end. I set up a fund, so I don't know the specifics. I just know it would have been cheaper. 2) Alternatively, are you setting up a fund/incubator for a fund? If so, then you'll need a lawyer for sure. And expect it to be 15-25k total. Well maybe it will be less for just an incubator, but I think you need most of the paperwork done still anyway? It cost 25k for us to set up a fund, counting the extended setup costs that happened a year later. My process was to go read everything on hedgefundlawblog (actually a really good resource), then go find a couple of lawyers to talk to, and then just engage one that seemed reasonable. Narrow down the above, and hopefully we can help. In particular, it would be most helpful to find someone 1) setting up the exact same structure you are after; and/or 2) in the same state. I think I'm probably not either of those, but trying to be helpful to start.

There's a lot of us that have done this. So probably just start asking specific questions. First off, where are you, as that will narrow down answer the most to start off.

I was guessing that it was because inflation came in higher, and the Fed has been saying they can't raise rates until inflation is higher, and so it increased the chance of a raise this year (and maybe June), which the banks are leveraged for. No idea if that is right of course.

I live in Texas, so no point in voting really.

That is also in the Shiller data. I'm a little confused here, as the same data has been pointed to several times. Here's the link: http://www.econ.yale.edu/~shiller/data/ie_data.xls Edit: well it has the S&P Earnings at the time, every month, so not forward P/E. Not sure how you can get that really, as I'm not sure they had forward P/Es all the way back to 1871 anyhow. Maybe you want a newer set.

He has the data of the underlying there, and I mentioned I have that data (which is also from him) as well. FYI, Ben Graham had a CAPE-type ratio and CAPE has been Shiller's baby, so it isn't too surprising that's what he's making.

I've got a spreadsheet of all of that data from Shiller that I used to backtest quite a few things. I wrote an essay about it, but am happy to discuss if that is along the lines of what you are thinking.

There's no possibility of taking in Canadian, but having to pay out in USD? If it is always the same units, then I agree, and it was just confusing to throw it in the middle of the statement. I assume he's reading it from a script, so it would seem like someone wrote that down for him to say. Edit: looked at the quarter report and it is constant currency, so you are right, it was just a weird thing to say.

I wonder which one didn't quite make it to 100% CR this quarter? Come on... it's ok to say it was over 100%. Fairfax Asia and Brit certainly didn't need their currencies converted. Ouch:

Here's my compilation (though it does not have some of the items you requested): https://www.dropbox.com/s/d9o5gk2hsy594dr/Munger.pdf?dl=0 This has everything I can find on Munger that was written by him (skipping interviews). Includes talks that I've found. If you have anything that is not in the compilation, please let me know, as I'd like to add it.

I didn't quite follow Rose's answer to the railroad consolidation question--anyone have an explanation?

I'm a little confused here though--are you invested in hedge fund(s) and they didn't explain that it was a pass-through entity? It makes sense for some of the other entities (e.g., mutual funds), since it is easy to buy them without knowing how taxes work, but a hedge fund is typically a fairly involved investment process, so I would have expected that to have come up.

I don't think anyone has had a problem with the deflation bets--they are asymmetric. It's the 100% hedging of equities until they are "right". 100% hedging is not protection, it is a bet. They could have just bought berkshire and their returns would have been astronomically better than what they have gotten. Or any of those "permanent" holdings that lasted what, 3 years?

You have to pay taxes on the gains that those entities realized this year (they do not pay those taxes, so they flow through to you).

This is working for me: =Substitute(importXML("http://finance.yahoo.com/q?s=GM-WTB","//span[@class=time_rtq_ticker]"),"*","")+0

I´ll post the 2015 version here as soon as i got them. Do u have pre 2008 letters ? If so, please post them here. Thanks, I appreciate it. I only had from 2010, so you had me beat already! I'm trying to get the earlier ones too.

Has the PDF form of 2015 come out? I created a compilation of all the letters I could get, so I'm hoping to keep the cleaner form rather than stick in Value Walk's version. Thanks in advance.

I believe you are referring to whether or not there is an earnings impairment. The book value should be updated mark-to-market.

Just like the last five years of pretty awful returns because of the hedges. They only get more attractive over time, but it has been very painful.

And they are right back to 100% hedged. That decrease to 88% was short lived.