racemize

(Emphasis added). This is what I find confusing. These threads talk about macro and how bad long term investment prospects might be. I tend to agree. But I don't think it is data that is reliable enough to provide conclusions that will make you more money. And since you are 90% invested and like investments available today, does talking about this give you/us much insight? Honest question. I follow macro stuff a little bit just because it is fascinating, but if you can't act on it, it does seem like a waste of mental power, no?

I'm restricted from managing my own 401k, and these guys are available. I'm sure hoping their bets work out, because I should have indexed instead of going with value funds... Of course, now seems the absolute worst time to switch it to indexing, but I'll probably regret it.

If it did well, wouldn't there be a lot more money than $5 million in the fund right now? Maybe he was just running his own money then.

I wrote an essay on this topic, which might be helpful: https://www.dropbox.com/s/uwawteaj86zfz1l/2014-03-25%20Hurdle%20for%20Active%20Investors.pdf?dl=0

any estimates on their returns for 2015?

A while back there was a good discussion on returns of MKL when the P/B got relatively high: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/mkl-markel-corp/msg246061/#msg246061 I started making some spreadsheets to mess with different scenarios and then ended up writing an essay about it. Here's a link: https://www.dropbox.com/s/97v3etg2xzg6ty9/2015-12-31%20Price%20and%20Returns.pdf?dl=0 I hope it is useful to people!

~-6% in both my concentrated and diversified portfolios. 20% per year since I started tracking in 2010.

seems about right to me. And then +/- 5% (probably more on the negative end). Page 6 of this essay has the distribution of 10 year total returns, since we're talking about it: https://www.dropbox.com/s/uwawteaj86zfz1l/2014-03-25%20Hurdle%20for%20Active%20Investors.pdf?dl=0 And to the person saying <5% returns--this would be the first time in the period since 1873... Is that your work Race? If so, nice job. Yes and thank you! P.S. agreed on your comments on S&P data versus world data.

seems about right to me. And then +/- 5% (probably more on the negative end). Page 6 of this essay has the distribution of 10 year total returns, since we're talking about it: https://www.dropbox.com/s/uwawteaj86zfz1l/2014-03-25%20Hurdle%20for%20Active%20Investors.pdf?dl=0 And to the person saying <5% returns--this would be the first time in the period since 1873...

I'm also in this, but there's a lot of leverage and a lot of pain if things go bad in the auto market, so please use caution on all in! I'm surely going to burn for this one, but I think EZPW is ridiculously cheap. I've thought that for a while though...

I'm working on an essay and auxiliary to it, I created a spreadsheet that compares book value, price, and Tilson's IV over time. I thought some might be interested so I'm posting it. 2015_BRK_IV_BV_Price_comparison.xlsx

I read "The Richest Man in Babylon" at about that age and it had a big impact.

I generally agree with the strategy (and myself am implementing it), but I think if you have a portfolio of them and just a few that don't compound as they have in the past, you may get into trouble. Of course, it depends on whether the other ones outperformed enough...? e.g., if you had BRK, MKL, FFH, and LUK, which all had those characteristics, starting in say 2010, would you have outperformed? FFH and LUK haven't done much. BRK and MKL have done pretty well, but BRK has had trouble in the last five years (book value to S&P comparison, not price). Of course a five year time period probably isn't enough, but the possibility is there.

Yeah, I think this is a big issue. I don't think it is as bad as most of the management books (e.g., Good to Great), as capital allocation is clearly important. It may just turn out to really say, "pay attention to capital allocation!", which we pretty much already know. Not to denigrate the book, I enjoyed it a lot.

I think Kevin was just saying that the purchase at 3x book doesn't go onto the balance sheet at 1x book, but instead, still at 3x book, with goodwill included. In the first case, we could make an argument that a purchase above book would mean Berkshire's P/B should inflate the more of those acquisitions are made, which I believe was what Kevin was criticizing. In contrast, when it enters with goodwill, we only have the argument you just made (it was worth more) or what Kevin said, that applies to many acquisitions (such as Geico), that the corresponding value of the company is worth multiples of the original purchase price because of internal growth (i.e., creation of additional goodwill not found on the balance sheet).

I don't see how he didn't get over 10% on ZINC when he added at the $12 dollar range last year. Maybe I'm missing something though.

I think the start-up industry is bubbly. I've talked to several start-up guys, and they are able to get much much better deals than normal, simply because there is more demand than supply of start-ups. As one of my friends put it, he was one of 15 or so presenters for a y-combinator presentation, and there were 50 guys in the audience ready to put in money. He got whatever he wanted.

The thread asked for people making money this year. So, of course reporting is lop-sided. I'm negative for the year after the recent downturn.

I talked to an oil exec who is on a few boards this weekend. He basically said that exact quote and was expecting a lot of M&A among O&G this year.

I forget what you do here, but you don't have to have it. Maybe just leave it blank? Can't remember.

This has come up in the past, and Eric had some good comments on it. One thing to note though, is that you put more effective money when you max out the Roth. So, your calculations show you the same numbers assuming the same effective money. For a Roth, you can actually put more money in than a Regular IRA. More specifically: Both the Roth and the Regular IRA have a $5,500 contribution limit. These are not the same, however. For a Regular IRA, that is $5,500 pre-tax. But, for the Roth, the equivalent pretax number is $5,500 / (1-t). So with a tax rate of 25%, that would be $7,333. Thus, if you max out, the Roth is putting more money away than the Regular.

I thought this was interesting: http://www.bloomberg.com/news/articles/2015-06-10/a-3-trillion-traffic-jam-is-seen-looming-in-credit-by-citigroup insurers were the third.

I'll bite, what's the result?

Depends on the state/jurisdiction.

I think under sole discretion it is largely ok. That way, under the agreement, investors/partners expect a certain fee and it doesn't change. Two opposite things to say though: 1) In my series 65 book, they indicated that waiving fixed fees weren't allowed as it could turn into performance fees pretty easily; 2) In talking to our lawyers, they said that people waived fees all the time and that regulators didn't have a problem with it. For what it is worth, we're currently waiving our management fees as we think that the overhead costs are too high relative to AUM. We also have been visited by a state regulator while doing this and they did not have any objection to it (nor should they, of course).