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Read Ben Mezrich's Ugly Americans before. It was Meh! Seemed like a thriller and felt there was more fiction than fact and couldn't trust the story. Moreover did not learn much from that book. Decided to skip other books by him. How was this book ?

Ha! My secret shopping place for books is the used books sale at 2 local libraries. Picked up some really great books for pennies on the dollar e.g. hard cover copy of Snowball for $3 in 'almost new' condition. In fact, I have almost 70-80 investing/finance books and another 20-30 biographies in my physical library that were bought from a library sale. Have the feeling of going to an all-you-eat buffet when I go there ! Had to put a temporary stop to it after my wife complained that we would need a few more bookshelves if I continued at this pace. I am not sure who donates these books, but I sure would like to send him/her/them a thank you note and a lunch invitation, if I could.

Wow ! it seems we have a pretty similar collection of books, although my online library is much bigger than my physical library. The picture was a little blurry but could make out quite a few- Schrodinger, Genius, Superfreakonomics, Contact etc. I am Sagan fan too. Found "The signal and the noise" on your desk. Haven't had a chance to read Nate Silver's book yet, but it's on my list. Reading "Wizard: The Life And Times Of Nikola Tesla" and "The Travels of a T-Shirt in the Global Economy" right now. I would like to hear your opinion of Nate Silver's book though. Btw I think I have the same photonics book ( don't know which edition though). Bought it for a course in grad school quite a while back but never was able to get rid of it, even though I don't work in that area.

I've been looking a fair amount at the for-profit education, but it is very hard to get behind them due to the slimy sales practices that they have engaged in (at least in the past). Strayer looks interesting, but I might put it in my "too hard" pile. In any event, there's a lot of regulation risk, so the whole industry may have some structural issues. Further, education seems primed for disruption, e.g., MOOCs. I would agree with shipping ( although tankers maybe better off than the rest of the sector) and for-profit education ( I am short one dry-bulk shipping company and long a basket of for-profit stocks). Drybulk shipping is one industry I don't see much hope for in the next few years, contrary to what the talking heads on TV say. In spite of record scrapping there is almost ~30% oversupply of ships. Also, with chinese banks offering loans to shipping companies to build ships in chinese shipyards at very attractive costs, quite a few shipping companies are ordering more ships (why? It is beyond me, go figure!). So I don't see the oversupply issue abating anytime soon. China was the chief driving force behind the commodity boom in the last decade and consequently led to the phenomenal rise in TCE rates for dry bulk shipping. With demand for commodities apparently slowing in china and large oversupply of ships, I don't see anything in the immediate horizon to believe that dry bulk shipping will see a turnaround anytime soon. As for for-profit education, there was a long discussion/debate on for-profit education and disruption of MOOCs in this thread. So check it out http://www.cornerofberkshireandfairfax.ca/forum/strategies/investing-in-%27for-profit%27-industry

I have looked for it but haven't been able to find them. Maybe their AUM is not that high yet.

Thanks racemize. Appreciate your notes and comments

I know most would disagree with me here but I was pretty disappointed by the interview and the questions asked. If I had someone as brilliant as Munger on the other side of the room from me, I would probably prepare my questions a little better, instead of sticking to a formulaic interview. I think the questions posed during the Wesco meetings have more substance than the ones posed by Betty Quick. In fact, even Munger seemed slightly annoyed at one point by the repeated questions on economy and fed. I would say maybe 10 minutes of the interview was useful otherwise a waste of time or maybe I had higher expectations from the interview.

Bob has been pitching that for quite some time now. Btw, did the presenters share the outlook and risks for FIATY and BCO's. I researched Brink about a year back and think they have a decent moat and solid US and International operations, but haven't followed it since. May have to wait for it to get cheaper.

I am not aware of any resource where he lays down the mental models he uses ( maybe 'Poor Charlie's Almanack' but I haven't read it yet). However, he gave a brilliant speech at Harvard in 1995 entitled "Psychology of Human Misjudgement" where he goes into details about what he thinks are 24 types of human misjudgements based on some of the mental model he uses. The audio and transcript for the speech can be found here http://www.valuewalk.com/2013/01/charlie-munger-76-minute-lecture-on-psychology-of-human-misjudgement/

Time to short was 1 yr back, 6 months back, even 3 months back. Now its time to cover IMO as the incremental returns for holding the stock short in addition to the carry costs is not very attractive.

This looks like a pump and dump. I very much doubt it will happen. I also doubt an STP shareholder buying shares today will get anything, even considering the miniscule chance Buffett buys it.

Thanks compounding life. Using the ATOM feed definitely helped and I can all the posts in reader now.

I know there are some of us who are extremely disappointed with Google closing down Reader. I have already moved my google feeds to Feedly just in case all our petitioning turns out to be useless. But today I noticed something strange in both me Feedly feeds and Google reader feeds. When I opened the COBF message board , some of the posts under 'Recent Posts' were not even being shown in either Google reader or Feedly. I am not sure why? Does any one know why these posts do not show up in Reader or Feedly ( unless of course there is some sort of an international conspiracy against some board members ;-) ) I grabbed the screen captures of both. Can some one please explain the discrepancy?

This thread should be renamed - " Prince Eric and the Fight to Conceal Richest People Data from Forbes " ;-) I am very happy for Eric and I hope that he reaches that billion dollar mark pretty soon :-) Eric definitely looks much more grounded than most would be if they had such a record. In fact, I doubt if I could be as grounded and modest had I been in his shoes. It's refreshing to see a person who does not suffer from self-attribution bias and admits his approach as " prudent gambling". I think "gambling" is fine if that what one want's to do, but most of us on this board are trying to be prudent investors. Reading all the comments, I agree with Plan's observation about envy and greed. This thread is turning out to be one of the most dangerous (and somewhat amusing) threads I have come across. When extremely smart, disciplined and rational investors, who have earned 20%+ returns for a decade, wonder if their returns are good enough, that to me sounds totally nuts !! I sometimes wonder whether all the discussions we had on behavioral biases and differentiating skill vs luck had any effect on our long-term thinking. This thread reminds me of a story I came across as a kid. In fact, one of my aunts knew the reporter who covered this for our local newspaper. A small grocery store owner in our part of town had won a huge jackpot in a lottery. He sold off his grocery store, moved to a huge mansion, bought a few fancy cars and started spending money like crazy ( some of them charitable, I must admit). Once news of his winnings and escapades spread across town, other store owners who knew this guy ( some of them decent hard-working folks) started buying lottery tickets (even ones who have never gambled in their life). Everyone thought they would just win one jackpot and retire rich. When none of them won after a few months of constant lottery-ticket-buying, some gave up but some increased their purchases. They probably thought that if they just buy enough, one day they are surely going to hit the jackpot. It took them another few months or so to finally come to their senses, quit buying lottery tickets and get back to reality. In the meantime, I think one guy went broke and another guy got divorced and became an alcoholic. Most of the others who were interviewed found themselves regretting the fact that they spent so much money on lottery tickets. This story was of course an aside to the real story of the lottery winner and I am not sure what the reporter/editor was aiming for here - maybe some human angle to the get rich quick dreams. I remember telling my mom jokingly at that time that I hoped our neighbors never win a lottery because that would make our lives so miserable ! This taught me a valuable lesson in not chasing dreams where skill had a very small role to play in the final outcome. For those thinking of increasing leverage to juice their returns further, I hope you would seriously re-consider what that entails. I know there's not much I can teach the smart guys on this board, but sometimes it helps to reiterate. Not only do we have to be right on the direction of our bet but also on the timing. Add to this a 3rd component - keeping our behavioral biases under control this whole time - this becomes extremely difficult. Now consider the fact that we have to get all of these right and under control repeatedly and every time we buy a leveraged product, we soon realize why there's only one Eric amongst the hundreds(?) of COBF members. Given where this thread has meandered into, thought I'd share this link on survivorship bias (http://blog.asmartbear.com/business-advice-plagued-by-survivor-bias.html)

Oddball, Just to clarify, is this regarding the information on the site unlistedstocks.com? I would be interested in the physical book, although it would help if we can get a sense of what we can expect for the book. Maybe you can put a poll on your blog or this board and get a feel for how many would be interested.

Thanks for starting this thread. My suggestion would be Simulation Plus ( SLP) although it is not by any means at a cheap valuation. They design simulation softwares for the pharmaceutical industry and have practically no competition. They license their software to pharmaceutical companies and to govt agencies like the EPA, FDA etc, and have very high renewal rates. They have a nice niche and growing at a decent pace. I do not have an idea about the size of their market as the industry is probably still at a nascent stage ( I think a reason why it has little competition is probably because the market size is not that big, which discourages larger players from entering the market) . They have eye popping margins (yes, all of them - GM, OM, NM) which goes to prove their dominance. They have pretty good ROE/ROIC ( ~avg. of 18% in the last 5 yrs) and no debt. Owners/insiders control 45% of the stock and are very conservative. There hasn't been much if any dilution in the last decade and the salaries are very reasonable. I owned the stock for almost 5 years but I finally sold last year after they started paying out pretty much their entire earnings as dividends( last Q they paid more in dividends than NI), which to me indicated lower growth in the future and little increase in retained earnings or BV. The high valuation also was making me nervous as I couldn't justify holding onto it with reasonable growth and DCF estimates. The owners are getting old ( in their 70s) so they may very well be trying to sell the company, but I didn't want to hold on to it based on hope. However, if there is market sell-off, the stock may become attractive again for me.

Thanks for the info. I am studying the container shipping industry and now know whom to ask if I have any question :) and welcome to the board once again.

Hi Phaceliacapital, welcome to the board ! When I first got introduced to the stock market ( in my early teens), TA sounded great until I realized my folly. I would never go back to that stuff ( gosh, I sound like a reformed cocaine addict or something ! :)). Btw, I would love to get your answers to the questions posted by LC and anything else you can share about the container shipping industry. Do you see a shift towards higher TEU ( 18,000+ like Maersk) vessels in the next few years? The growth of container industry seems to have slowed. Do you see a reversion to the historical 8-10% growth or further decline in growth in the next few years? How has the oversupply of container vessels in 08-09 changed business practices and strategy going forward? What do you think are the major shifts in the industry?

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. .... Also, I apologize for the offensive looking results using 5 categories produces. Like being flipped off every time you look at it. @racemize, I agree with you. I wonder what the plot would look like if we broke it up into standard deviation ranges. Its good to see that with more votes now, the distribution has clearly moved towards the higher end of the return spectrum. @rkbabang, LOL ! That was my first thought when I saw the plot. It does look like a collective FU from COBF members to the rest of the market ;)

@eclecticvalue Thanks. The spreadsheet was modified from a spreadsheet Jae from OSV posted on his website a few years back. @racemize. Yes, for some reason I prefer the NAV route, although if I had to go back and find my IRR from 2006-2007 ( when I started investing) I will probably have to follow the method you outlined.

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.

Wow !! Congratulations Guys!! Posts like this make me embarrassed and apprehensive at the same time. Embarrassed because my results are much more mediocre than I initially thought (29% with an average of 37% cash. I have >50% in top 10 positions including ~20% in TARP warrants/LEAPS. I also have ~5% short) and apprehensive because for me mediocre returns generally follow one or two years of better-than-expected returns! I would say luck/timing had more to do with my 2012 performance than skill. I did sell a large position this year after holding it for 4 years and have not been able to deploy the cash effectively as the best equities on my watch list also ran up in price. I hope to be able to shake off my 'anchoring bias' and deploy cash effectively in 2013 ! A few observations on this post that I found interesting was that after 135 votes the poll results show a classic normal distribution curve. Although, I don't have access to the numbers and the granularity seems coarse, I suspect that the median returns would be very close to the returns of the S&P500. I also noticed that only a few members who posted their results here manage OPM ( at least that's my impression although I understand that there may be legal reasons money managers do not want to post their results on a message board).It would've been nice to know the returns for managers managing in excess of $1M and how have they positioned their portfolios for the next few years ( I am guessing BAC, BAC-WT is probably in a lot of portfolios). Regarding the portfolio returns, I cannot help but wonder how many members measure their returns consistently and accurately ( I have doubts about mine too..see my reply to Palantir). e.g. I have a friend who measured his performance for years, without accounting for cash. I am sure such 'n00b' accounting mistakes are uncommon amongst experienced board members, but given that a lot of members have their investments spread across a few different types of accounts( taxable/tax-deferred etc), I cannot help but wonder the methodology used to calculate each return rate posted on this post. Notwithstanding that, I think the returns posted by some members are phenomenal. This speaks a lot about the quality of investors on this board. Congrats again guys for an exceptional year !! For those who are unhappy about under performing the S&P, remember the Zen saying " This too shall pass" !! :) I am sure you guys will bounce back with great results in the years to come.

Hi Palantir, I have been measuring my performance since 2010 using a spreadsheet on google docs - the template for which is attached below. There are probably better and less cumbersome ways to measure portfolio performance but this is what works for me and I haven't tried anything else, probably a lot due to inertia :-) I measure my portfolio NAV every week ( typically on Saturday/Sunday), but one can measure it every day or month or whatever duration they want to do it for. The method should still hold. This is how you can use the spreadsheet: To get started, import this spreadsheet template to your own google drive account ( I am assuming you have one). Enter the date from which you want to start tracking your portfolio in cell 'A4' and enter the *TOTAL* value of all your equities - i.e. stocks, bonds, ETFs, options etc ( I typically enter the value of all my securities after Friday's market close) excluding cash in cell 'C4'. Most brokerages will give you the total value of your equity holdings and cash separately on their statements so you can easily get the values. If you have more than one brokerage account ( as I do), add the total closing market value of all your investments (excluding cash) in all your brokerage accounts on that date, in cell 'C4'. Add the total cash in all your brokerage accounts in the cash column ( start with cell D4) The number of units you decide to start your portfolio with is arbitrary but once you choose that number, it cannot be changed manually during the lifetime of the portfolio unless you are adding/withdrawing cash. When you add/withdraw cash, enter it into column E and the spreadsheet should be able to calculate the new total # of units (i.e. total units after the addition/withdrawal of cash). I typically add cash to my portfolio on Fridays ( although not every Friday) to avoid complicating my spreadsheet, but even if you were to add it in the middle of the week the effect on portfolio performance should be minimal, if done consistently. In order to add a row next week, just copy the previous row from the previous week. Keep recording the total market value of your equities and total cash at the end of day/week/month. Only fields shaded yellow need user input. I measure my portfolio's performance against two ETFs/Index funds - one tracking the S&P500 and the other the Russell 5000 ( SPY and IWM) but you can choose any other benchmark. I typically just look up the closing price of the ETFs or Index funds from google/yahoo finance and enter the value manually every weekend. Measuring portfolio performance using this spreadsheet becomes quite easy once you have it setup. You can also modify this spreadsheet and add a column for IRR to get your annualized compounded return rate. An explanation of the method of tracking portfolio performance above is given in this example: http://www.fool.com/foolfaq/foolfaq0056.htm I am not sure if this is what you were looking for hope this helps. If you have any questions/comments/suggestions feel free to pm me. Portfolio_Performance_Template.xlsx

I wonder how much of this is due to fear and how much is due to shifting demographics. Has any one considered the effect of baby boomers retiring and the need for preserving capital as retirees? I think that the significant shift towards fixed income asset classes may be due to a combination of different factors instead of just one, as the article seems to suggest.

Yes, It's one of my favorite inspirational poems along with Robert Frost's - Road Not Taken Btw Farnam, good to see that the poem made it to your blog :-)