racemize

You guys crack me up sometimes. It's pretty typical that Kraven comes in with a make fun of the value investment dogma and then oddball comes in with the upper cut for the finish. In any event, I agree with most of what your saying, but I think you are perhaps overassuming that these checklists are intended to cover every situation, be extremely long and exhaustive, etc. I'm just trying to make myself think about a few things I might have missed. If mine ends up being 100 questions long, I'm pretty sure I failed. Here's a couple that I like: Have you confirmed the auditor's statements in the 10-ks? (I have a habit of forgetting this, and it works for every investment) Is there outstanding debt? If it is trading below par, are you sure of your thesis? Is the YTM attractive? (Basically, go look at the debt, if you haven't--it can tell you stuff) These are easy questions to answer, and there are enough of them that I might forget one or two. I just want to make sure I've thought about some important items at the end. It isn't the be-all-end-all use, just a quick check-up at the end of the process.

yeah, that's coming, when is that ex date?

My intent is mostly to use it to make sure I look at everything (e.g., after I've completed analysis). A lot of times, without something making sure you've paid attention to each potentially important detail, you might forget a few things. Perhaps one of those few things ends up being critical later--you'd want to be sure you at least thought about it once, even if you decided to purchase anyway.

I thought they had hit their target debt level recently? I was suspecting continued buybacks, but nowhere near the level over the last few years? I am not an expert on DTV but they can de-lever via growing EBITDA and then lever up again. I'm thinking about creating a Malone type basket with LMCA, Global and DTV because they are so good at deal making and capital structure optimization. I never get fully comfortable with the assets though (specifically SIRI). I'll keep digging. that makes a lot of sense to me--I've had similar thoughts/lack of comfort.

I'm reading a 10-k where the employees are "team members" (seems like a popular trend). Always makes me think of this:

I have his checklist saved somewhere (I saw him give a talk before the BRK meeting). I still need to mine it to decide which ones to put on mine.

Hi All, I'm slowly adding questions to my final checklist for investments and thought I see if folks on the board were interested in generating a nice checklist or at least sharing questions with each other. For example, this article showed up in my RSS feed: http://www.wallstreetoasis.com/forums/anatomy-of-the-10-k and it reminded me to add this to the checklist: Before I get too excited, I always force myself to highlight in the auditor's note the phrase "fairly, in all material respects" twice, and "maintained, in all material respects" once. While most companies will have an unqualified opinion from their auditors, it's just a good exercise to make sure you don't miss any language changes or anything from year to year that might indicate something is a little fishy. I think it's a good habit to get into if you can help it. I imagine if we all posted just a few questions, we could generate a good checklist in no time--any interest?

I thought they had hit their target debt level recently? I was suspecting continued buybacks, but nowhere near the level over the last few years?

I think there are two things to consider: 1) tax rate now versus tax rate later; and 2) whether you want to put more effective money (this is mostly influenced by 1) If the taxes will be the same, then the answer is Roth, assuming you can put it away. The reason for this is that the limits are the same, even though one is taxed and one isn't. For example, for a 401k, the limit is 17,500 in the U.S., for both traditional and Roth. That means you can put more money into the plan now in a Roth than the traditional, because they two numbers aren't the in the same units. e.g.,: Traditional 401k - saves 17,500 in pre-tax money, that will later be taxed. Roth 401k - saves 17,500 after tax and won't be taxed later. As a comparable to the traditional, it needs to be converted back out to pre-tax to see the difference. At a 35% rate, you are saving ~27k pre-tax, which is a lot more to put into a retirement account than the traditional lets you, so you are effectively putting away more money with the Roth.

Funds have to be extremely careful not to do anything that is considered "advertising", so that is why you don't see that information and are unlikely to see it in the future.

Maybe for the invalid ones. I tend to think high value patents will still hold their price. Or said another way, I don't think that change will have much effect on the demand for the large wireless portfolios, but the factors I earlier above might.

Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field. What do you think of the valuations that value investors attach to patents? Well, it depends on the situation I guess. I tend to think the wireless portfolios have been in a bubble since the great patent war of the 10's started. I figure when everyone calms down quite a bit, there won't be any big buyers left. Particularly for companies that are trying to get their portfolios built up--once they are done, there won't be big wallets around to pay up for any new portfolios up for sale. That being said, whenever there is a big company that was in the forefront in the standards meetings and has a huge portfolio, it is pretty easy to guess that there are at least a few patents of significant value. A lot of times the value of a patent portfolio will come down to a relatively small number patents that can't be (or aren't) invalidated and hold up in court. I think attaching a certain value per patent and assigning that to any patent is ridiculous, though. Most patents are not very valuable at all.

Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field.

IP law - 8 years. focus on wireless as of late.

I was going through one of Pabrai's presentations which had info on this company. There's also this write-up: http://seekingalpha.com/instablog/1666291-Martim-Macedo/1329061-Sonae-Capital-A-Portuguese-Company-In-Which-Pabrai-Invested Anyone looked at it all?

A couple of issues on our bins: 1) the poll started before the year ended; 2) There is a dividing line that was right on the S&P returns. So, ours is fairly poor sampling I believe. For example, when I answered, I was at 24.6% or so, and I finished at 28.89%. I think many people ended higher, and that dividing line has some impact.

I watch these while making breakfast tacos!

Malone: Templton: http://www.bloomberg.com/video/contrarian-a-documentary-about-john-templeton-aD8U03jnSs2BFr4IuxF~IQ.html One of Pabrais: Slather: There's also a ton of IVEY ones, but I don't remember what format they are in these days.

I'm just going to go mostly IPOs I think: TWTR LNKD P GRPN ZNGA YELP FB and I'll throw in TSLA Alternatively, what if the answer is 100% cash? Perhaps that is much better, it would certainly work over the long haul...

I don't really know how fast it will be, but I expect 20-24 by 2016. Normalized earnings in the 1.80-2.00 range.

I'm going to have trouble not saying BAC. The expenses should be coming off pretty well this year + dividend/buyback increase in March.

I used to think the float let them invest in more equities, but I've had a huge turn-about on that view in the past year. Maybe levered bonds is generally attractive, except in the current environment? Certainly FFH's path has been much more rocky than BRK or MKL. Perhaps we can ask the levered bond question at one of the various annual meetings this year.

Does anyone have the 1956 Partnership letter? I've got everything he's written since then, pretty much, but am missing that one. Thanks!

I've decided to also look at mechanical value funds (preferably fully invested ones, which I assume they mostly are) in my cash allocation analysis, to add to market and individual studies. We've had a few discussions of these before. Can those familiar with those point me to a few of the best? I'd also be interested in ones that perform well, but are also volatile. For the analysis, I need the annual returns over a fairly long span (preferably greater than 10 years, if possible). Maybe one or two in low P/E, P/B types. Magic formula comes to mind, but that one is still fairly untested and it isn't clear if it works well yet, as I recall.

I guess it depends on what future ROE you expect. I have trouble thinking a stock is worth much more than 1.0 of book unless book is going to grow at 12% or more, over the investment period. I tend to try to figure out book value growth, assume I can buy at current multiple and sell at ~1 of book in the future and see if the returns are satisfactory. Also, given the extremely low rate of bonds, insurers have quite a headwind, at least for longer tail lines.