racemize

From CES: it's running the full codebase, so you can dock and use it as a computer too. Pretty interesting, although as has been commented elsewhere, all those edge swipes are a bit tough on the UI front (good luck playing games with swipes!).

Parsad, maybe you can explain this to me, as I've always been confused--why do the redemptions matter? For example, many people have said that Berkowitz shouldn't have taken on the extra money from "hot money" investors, but I never understood why. When they sell, they only hurt themselves and not the other investors right? I think Berkowitz said in one of his videos that everyone could leave and he'd still make money off his portion of the fund.

Thanks Parsad, your comments and feedback are definitely appreciated. I totally agree that the returns aren't comparable (congratulations on your individual returns this year btw) and probably won't be worth anything to a potential investor, particularly one that doesn't know me personally. I want to convince myself I'm good before inflicting myself on anyone else though, and formalizing my thoughts in writing helps me develop both my investment thinking and my potentially useful letter-writing skills.

Thanks for all the input and feedback! So, here's the reasoning on a lot of it: 1) I've still got a full-time job and I have an amazing job/boss, so I'm doing investing part time (though it is a significant amount of time/week), but am not yet willing to go full time investing/fund unless I was convinced it could pay commiserately 2) I haven't passed the texas required certification to do money management 3) I still have only done this for 2.5 years, so I'm not convinced I'm good enough to manage other people's money 4) In the same vein, I'm not sure I'm willing to manage other people's money while I'm working/not devoting my full attention to it 1), 3), and 4) will be taken care of over 3-10 years, and then I'll make a decision on whether I should actually do it or if I should just manage my money on my own. 2) is just laziness at this point. On the personal financial info, hopefully I'm not letting out too much, but it's just my positions and how much I'm managing. I figure most people on the board (except the college/just out of college guys) are in the 6 figures, so it isn't a huge surprise. Besides, if anyone gets targeted on the amount of money, it will be Eric. =p With respect to why I'm doing this versus other tracking stuff, I just started keeping more rigorous track of my records to accurately see how I was doing, then I was letting my family know how it was going in emails, and finally it morphed into me formalizing it into "partner" letters just for fun.

yeah, so I'm pretty suspicious of these do-it-yourself with form kits. I work in the law field, and doing something you don't totally understand without good help can lead to really costly mistakes. The 20-50k is for custom forms with good lawyers, I believe.

I don't know the ongoing overhead very well, but I think just start-up legal fees are in the 20-50k range--without a lot of AUM to cover it (particularly if I go with no static fee), that's just not worth it for me.

It's just my account (the other partner is my wife!). I have quite a few friends who want me to set up a small fund, but the overhead is so high that it doesn't seem worth it until I can get a few million AUM. In any event, I'm managing mid 6 figures now. Edit: Also, I want to be sure I know what the hell I'm doing before I start managing my friends'/family's money. Unfortunately with investing, you can just be lucky for a long time...

I responded a bit about this above, but to answer directly, I was much more confident about Apple/Cirrus in 2010/2011 when I was buying. At this point, Cirrus has gotten a ton of surface area, so I'm not sure they can expand within Apple that much, and I'm less confident on Apple's future than I was (though I'm not a bear on them). Thus, imo, the growth over the next 2-3 years is essentially just Apple growth and I could buy Apple at a similar price at this point--however, I do really like the company and what they are doing in other areas (e.g., LED and motor control).

Thanks for reading, and your kind comments! Here's my responses: Re Crus, this was one of my first positions, as I mentioned. In 2010, I liked the Apple growth and if you assumed Cirrus' position in their products was strong, then you could use it to capture that growth. A lot of other people were also doing this, but usually on very short time horizons--I've noticed that most of the movement is speculative in the short term (more so than any other stock I've been in or watched) and generally the market reactions haven't made make much sense at all. Some other benefits CRUS had--if they got more space in the Apple chips, revenue and profits could go up much faster than Apple's growth (this did happen in 2012, much more than I expected), and they have some other income streams, so there is a little bit of diversification. For the most part though, I was just buying on dips down in the 10-13 P/E range for a stock that was growing at >20% EPS (even more than that recently). I actually could have made a lot of money if I had bought at P/E of 10 and sold at P/E of 17-20, as it was quite a rollercoaster. Every time I think it has stopped and will flatten out, some huge change happens (e.g., the giant drop since their last Q, despite the insane guidance). Gio--re OAK, I really wanted purchase, but I really didn't have much cash available to make a meaningful position and the tax consequences are just not worth it for me--right now I have really simple taxes, and I don't want to have to deal with K-1's and delaying filing until October every year, just for a small amount of distributions. If I had a lot more money, I would have done it though, I think. On the cash front, my income is still significant enough that I can make positions as opportunities arise plus I have a big position in FFH, which might help me deal with large market downturns. I'm planning on getting myself to a constant 5% or 10% cash position this year though. I'm also so worried that my positions will shrink relative to portfolio size (due to the incoming cash flows) that I try to get as much as I can of things that are cheap, which has put me 100% in for the last 2.5 years. This is why I eliminated Colgate and also why my WFC is so small--it used to be a 20% position I think (e.g., in 2010/2011). Finally, re: WFC--I bought it in 2010 and 2011, but then stopped as I started accumulating BAC. Basically, I was buying financials and choosing WFC at the beginning as it was more conservative, but shifted to BAC as I understood it more (in great part because of reading this board). Given that I have over 30% in financials (BAC, BAC warrants, WFC) I probably won't buy any more banks for a long while. I think I'd still choose BAC over WFC right now, just due to the price differences, though.

Here's another letter from my fake fund. (I'm just doing it to write things down formally and I think it's fun--maybe it will be a real fund one day) http://dl.dropbox.com/u/14968/stevensfund/reports/2013-01-06%20-%20Stevens%20Fund%202012%20Annual%20Report.pdf Feel free to comment or ignore! Edit: Just to be absolutely clear, this isn't an actual fund and I'm posting it for informational purposes only. It is not intended to solicit any kind of investment whatsoever

This is something I need to start getting a hold of as well--I look forward to any guidance!

A bunch of macro questions largely, but still not bad: http://resources.news.com.au/files/2012/11/16/1226518/380792-aus-file-marks-pdf.pdf

the suppliers are typically one or even two generations out--they have to get a lot of advance to get their designs done and made in time.

so, I was thinking about this some more (it was bothering me as I expected general outperformance from the board)--the graph is deceiving. It looks like a normal distribution, but the y-axis (in this case) is not linear, it is <0, 0-10 (gap of 10), 10-25 (gap of 15), 25-50 (gap of 25), 50+ (gap of 25), so I bet the underlying data are not centered around the S&P TR, but a bit above it. Admittedly it is a poorly done poll indeed. I did this because I didn't realize that it was possible to add more than 5 choices, but I see by your compounding poll that it is possible. I thought I was limited to 5 categories and I wanted to capture negative returns as well as really high returns. This left only 3 categories to work with in the middle. I broke them up best I could. Had I known I could create more options I would have done a much finer granularity. These types of polls are not scientific anyway. They are self selected in at least two ways. One is that we choose to be members of this board, and two we need to choose to answer the poll. Also someone could lie or estimate mistakenly when answering. They are fun though. And I agree with your analysis. There are 60 people (right now) in the 10-25% category which contains the 16% S&P500 return, but there are more people in the categories above that (55 people) than there are in the categories below that (46 people), and as you pointed out the higher categories have larger ranges than the lower ones, so it stands to reason that the center is on the higher end of that middle category, not the lower. no worries, I made the same mistake the last time I did a poll. Last year, we just had a thread and not a poll, so we are improving every time! I also think we get more responses in polls than in threads because of the anonymity.

so, I was thinking about this some more (it was bothering me as I expected general outperformance from the board)--the graph is deceiving. It looks like a normal distribution, but the y-axis (in this case) is not linear, it is <0, 0-10 (gap of 10), 10-25 (gap of 15), 25-50 (gap of 25), 50+ (gap of 25), so I bet the underlying data are not centered around the S&P TR, but a bit above it.

I think you can do the same with your NAV spreadsheet though, just have an entry on your last week with the taxes owed as an inflow.

I also worry about this. Particularly my insurance and banking exposure over the long run. I'll deal with it after a while I guess!

Can you please explain it? My returns posted above are gross returns, i.e. without taxes. I typically calculate my portfolio NAV every week and use that to calculate my portfolio returns for the year. Isn't that how most mutual funds/ hedge funds calculate their returns ( albeit every day, unlike mine which is done every week and is probably a simplified version)? I am not sure how to include taxes in my calculation though. Oh, I just include the taxes paid for the investments (e.g., on cap gains/dividends, subtracting allowable losses) as an inflow on 12/31 of that year (since it is a loan until that time). should work for XIRR, the easy TWRR, and Nav calculations. I personally don't like dealing with NAV, so I use the approximated TWRR method. It's almost always the same as IRR anyway.

well, he beat me to it, in any event, use the search bar up at the top. If we have a thread, it is usually the ticker symbol in the investment ideas section.

There's good info in the oak thread.

Oh, I meant in dollar value as well. I'm at 0.75 warrants:common in shares.

What does that mean, exactly? The warrant price should converge to (common price - strike price) as it approaches the end, and there shouldn't be much risk, presuming it is in the money. What is decaying? If BAC does what is even somewhat close what we think it will, then the warrants should increase in value faster than the common for quite some time. I guess it decays if it doesn't (or people think it won't) make it into the money? The decay means the warrant premium, calculated using Black-Scholes (yes, unreliable I know), decreases in value as the expiry date approaches. So assume in six years, the stock is at $20. There would be no premium at expiry and the value of the warrant would be $20 minus the exercise price of $13...so $7. If the stock for some reason stays at $15 (assume larger than expected legacy issues or loan losses, systemic crisis, whatever), then the value of the warrants say two years from expiry would be worth $15-13, plus probably about a $2-2.50 premium...so less than the current valuation...and that is due to the warrant value decay. Cheers! I see what you mean--I guess since I model it at over $18 (13+current 5), I hadn't really concerned myself with it. My distribution is a lot more common than yours (I'm at a 3:1 common:warrant ratio), so I can understand decreasing to 1:1 in your case.

I imagine most people get it largely right. That being said, I just had to correct a fellow investor to include taxes as an inflow for their IRR.

ok, sure, that's what I think as well.

What does that mean, exactly? The warrant price should converge to (common price - strike price) as it approaches the end, and there shouldn't be much risk, presuming it is in the money. What is decaying? If BAC does what is even somewhat close what we think it will, then the warrants should increase in value faster than the common for quite some time. I guess it decays if it doesn't (or people think it won't) make it into the money?