coffeecaninvestor

This is probably a bubble.. but it is too obvious, and too many people are calling a bubble, which probably means it is not ready to pop. So other than identifying the current bottle necks (that everyone already knows and has bid up).. lets have some fun and put our minds together instead of trying to time a top guess what the next rotation will be. I'll start... I think the next rotation will be into small cap stocks. YTD VB is outperforming VOO. To me small cpas seem like low hanging fruit in terms of benefiting from AI. Large bureaucratic organizations are slow to move, and rolling out AI across a large organization is expensive, but I could see smaller companies quickly adopting. I think it is probably a counter intuitive take since if we are truly late cycle with rising interest rates then small cap's probably don't outperform, but we have seen a lot of weird stuff happening like Gold rallying during a bull market, bonds and stocks dropped during 2022, etc.. I am curious what other ideas are out there?

Can we just get back to Fairfax related stuff… if I told my wife that I didn’t top tick a stock and get out with perfect timing she would probably call me a whiney b**** and tell me to get back to the real world or she’s leaving me. Watching this thread devolve into a child like argument is annoying. Can we just get back to discussing Fairfax and if we have personal finance related stuff start a separate thread.. I’m sure we could have a great many laughs about personal finance in a marriage. My wife thinks I’m a lunatic when it comes to money and investing.

Can someone just create a 10 year (or whatever) chart of the quarterly estimate of intrinsic value, and share it every quarter so we can turn off CNBC, log off our brokerage accounts, and stop looking at the share price. I am more of less pissed I didn't average in and am down double digits with limited cash in that account to add. It was hovering right above my remaining cash so without fractional trading I had to stew in anger. As more cash accumulates I will add as long as Prem continues to create share holder value.

But as a % of assets that’s what 30%. it’s usually in the 10-15%range . The size of the dollar figure is huge, but I just think they are mostly always invested. if shit gets crazy like it typically does in a bubble and we go up double digits per year for the next 2-3+ years (or longer) and have a 40-50% drop mostly in the bubble stocks and your not mostly invested I think you end up in a much worse place by trying to time it and stay out of the market.

AMRZ and GEHC

Not sure my last message was clear/understood. I don't think P/E is the end all be all. It is merely just a simple metric that tell you how much someone is willing to pay for each dollar of earnings. I don't think it really tells you anything about the future, or the companies intrinsic value. I don't think anyone would tell you COST/META/FB etc don't deserve to trade at 30x+ earnings (or any other valuation metric) assuming they continue to execute, grow, and preserve their "Moat". It' tells you nothing in terms of timing, and based on what you are saying forward returns. Which is why it is a terrible investment timing metric. To me it just lets me know there is the "potential" for a re-rating (which typically happens quickly when it starts), and I would rather avoid the unpleasant event, but I would be willing to pay up for a quality company 50x might be too much, but 25x sure..

There are a handful of companies that are like this ROL comes to mind. But I don't believe multiple compression is a made up thing.. Look at some of the software stocks. COST and ROL are continuing to execute better than any of their competitors.

Just don't fish in the Costco pond. Annualized Returns 2000-2002: S&P 500: -14.6% (29x PE in year 2000) Lg Cap Value: -9.56% Mid-Cap Value: 1.12% Sm-Cap Value: 5.94% Spending some time in value land you could have done much better than the index's. This seem to be rhyming a little (PE ratios are rounded). Annualized Returns 2000-2002: BRK.B: 9.81% (Year 2000 PE: 15x / Current TTM PE: 15x) BRO: 51.24% (Year 2000 PE: 18x / Current TTM PE: 18x) JNJ: 6.26% (Year 2000 PE: 26x / Current TTM PE: 26x) GIS: 12.45% (Year 2000: 8x / Current TTM PE: 8x) DEO: 15.17% (Year 2000 PE: 18x / Current TTM PE: 18x) AOS: 10.18% (Year 2000 PE: 15x / Current TTM PE: 15x)

+1 same thoughts.. just wish I hadn’t bought so much a few weeks ago. I’ll add here and there as cash rolls in.

BRO, AJG, DIS, CPRT, ADP, MKL

Started a small position in ACN. Going to add a little bit every day if it stays this cheap.

I think a person also make the decision to buy a index, and go about their life doing shit the enjoy, or work on their career, and being productive in the world. It's probably a better outcome in the end as well. I think the barbell approach makes sense for most people. They start with 100% index funds, and if they like investing and the right opportunity arises, they take a % of those index funds and buy a business, and keep repeating that as opportunities arise. I think it makes a lot of sense to run money this way for the average investor.

I’ve literally just did this I was 100% S&P for years, then lowered it to 80% a few years ago, and last week i lowered it down to 30% allocation.

I think this is very much like the conversation in another thread that you should focus on the increase in intrinsic value and not share price changes especially short term price changes. I agree with you It is definitely tough to see relative underperformance I see intel up double digits and Fairfax getting whacked 7% is massively frustrating but also long term beneficial to long term returns because I can see prem in there buying back shares as a discount. Also I know most investors chancing the hottest stocks on the way up will give back a lot or more of those returns where as Fairfax and BRK will be cushioned by their large bond holdings and take advantage of a down turn.

I think it’s clear Buffett has a lot of admiration for how Tim managed Apple post Jobs, and I think he would like if Greg followed a similar model. Focus on the core businesses, maintain a Fortress balance sheet, buybacks, and bolt on acquisitions. I doubt he thinks Greg needs to make a big swing on a large equity purchase or acquisition unless we see another GFC type draw down or something that serves up a can’t miss opportunity.