writser

I am a hardcore user of Google Spreadsheets. The stuff you can do with that in combination with Google Finance is really amazing.

Not to stereotype, but I would imagine us "nerds" have more affinity for companies like TSLA vs. companies like LULU. Yeah, I was thinking in similar lines. We could be too negative about retail because we don't like shopping on average :) . Also, all software engineers here have such strong opinions about operating systems, phones and search engines that it's pretty much impossible to have a discussion about Apple, Microsoft or Google that does not end in a giant flamewar.

Tangent question: suppose that this forum is relatively overpopulated by introvert engineers (a.k.a. nerds). Does that suggest that the board as a whole has some weak spots with regards to investing? If so, which ones?

If you really want to become a better investor, start posting random bullet lists in random topics. I think it worked out very good for Kraven.

Ok, so basically Kraven and Packer forced me to reread Marks' book :) . I have to admit it wasn't as bad as I made it sound. Basically it is a rehash of Buffet's wisdom, Nassim Taleb's theories, Graham's strategy and Klarman's patience. Probably a good starting kit for becoming a value investor, but I would recommend reading the predecessors instead. This book was a bit too philosophical and generic for my tastes. Nevertheless a well written summary. Snowball is next. Looking forward to juicy menage-a-trois scenes.

As far as I remember the book (and all his letters) basically boil down to three key points: be patient, be humble, be aware of general market levels. Klarman brings the same points across (as well as a whole lot of extra information) in a much more concise book. Not to mention that I'm getting tired of all the 'pendulum swings'. Nevertheless I'll give Marks another try given that all the gurus here immediately come to his defense!

Nice compilation! I read all of the 3+ endorsement books except for Schroeder and Lowenstein. All of them are highly recommended, as is 'Reminiscences of a stock operator'. A very entertaining read, not as much as a value investing book but as an eye-opener showing you how ruthless the market was (and is). I just don't understand why people like the Marks writings. Undoubtedly he's a very good investor but the book reads like 'generic advice about value investing' by C. Obvious. ;) Next on the list: Snowball.

How does A lead to B? I'm trying to understand it but I haven't succeeded so far.

The breakeven point is for book value if I understand you correctly, so you assume you buy at 126% and sell at 100%?

It's already past 12:58:32 PM forum time. Kraven is not interested anymore.

I think the companies with the biggest moats are the ones that have been granted access to limited resources. Saudi Aramco, Gazprom & Statoil come to mind. Impossible to replicate. Also the Channel Tunnel, BNSF and other railway companies: no way you are allowed to add more tracks in in urban areas / under the sea. In terms of sticky products I think Microsoft has one of the biggest moats. So many people and companies depend on Outlook, Word, Excel, Visual Studio and Powerpoint that it will take decades to undermine their position. Airbus & Boeing probably have a large moat too - their technical knowledge and safety records are very hard to replicate.

+1 +2 +3

How did you get to 13 / 14%? I guess you took the NAV from the annual report. According to latest filing NAV is ~ 1.17 vs last trade at 1.225.

Are you watching the Crucible or is that just a coincidence?

The smartest guys in the room. What a mess ...

What I don't really understand is that WEB abstains from voting but then trashes the compensation scheme on television .. If you consider the executive team your friends I'd say that's even worse than just voting 'no' and shutting up about it. Is it a bit of 'social blackmailing'? I really wonder what was discussed during board meetings.

I've been thinking about a similar problem; has anybody stored a list with accounts / passwords for all your online brokerage accounts somewhere? I have quite a few of them, very easy to forget one or two. I'm thinking about depositing this information at the bank / notary.

Minor problem with the S&P is that it is cap-weighted and float-adjusted. I.e. you're overweight expensive stocks and underweight owner-operators. Some of the new stuff is indeed interesting, fundamentally-weighted indices or, even simpler, equal weight indices. I like that concept. Still, a problem with all these index strategies is that they get exploitable when they become too popular. Regarding the original question: investing is fun. I'd probably even do it if I don't outperform the index :P.

Do you have any specific resources to get ideas in that space? Or are you just doing the a-z approach.

I think he is data-mining: he even says so himself: "This is a historical fact, not recommended as a timing strategy.". Data mining is pretty much the only thing you _can_ do. How did he come up with the 19/14 numbers otherwise? Not by writing a mathematical proof.

An addition: I think one of the risks of your investment strategy is that you develop a confirmation bias. You think stock markets are overvalued and debt is scary so you end up buying into owner-operators who think likewise. You go to AGM's where everybody thinks the same way and you defend your convictions by quoting people who think similar things. Not necessarily a bad thing if these people are smart and succesfull but it makes it practically impossible to falsify your investment theses. And the more time, money and conviction you have invested in these ideas the harder it will become to say: "well I might have been wrong after all, let's buy Twitter!" :) To counter that, one of the risks of my investment strategy is that I tend to end up owning stuff with questionable management or in questionable industries simply because it's very cheap - ignoring the fact that these things could be cheap for a reason and that I could very well be better off just buying Fairfax and leaving it alone for a decade.

These are extremely simple "models". All I'm doing is assuming that a certain amount of cash is held (or a variable amount of cash, based on a metric (such as CAPE or something else)) and then deployed at the bottom and it tells me what the results are. I've changed assumptions over and over again, and it pretty much always says that the higher returns come in when you are fully invested. The cost of cash is very high, generally. My issue is that you appear to just be assuming the people you quote are correct. I don't like to assume anything, really, even it appears to make sense. You are using a particular system, but how can you be sure it is the right one? How can you be sure that holding cash will give you higher returns? Perhaps you don't care about getting higher returns, but want to be conservative? I don't really know. I'm just trying to figure out what gives higher returns over the long term. (this might be a bit off-topic) Gio: your contributions make sense, your portfolio will probably do good over the long run and you are clearly a knowledgeable investor. But for some reason I always feel obliged to challenge your posts, even though I agree for 95% with what you are doing. I've been wondering for a while why that is the case :). I think the core of the issue is that you're more of a 'people'-based investor and some others here (racemize) are more 'math'-based. I'm not sure at all that either strategy is better than the other. It's just a question of what fits you best. Personally, I like numbers. I think I'm no expert at judging people. So as long as management doesn't look grossly incompetent or fraudulent I prefer to judge based upon numbers rather than management. When I look at the Fairfax results for the last decade I tend to give the numbers more weight and then it doesn't look spectacular (not bad of course). When you look at Fairfax you probably give more weight to your judgement of management and then it looks a lot better. What this thread boils down to is one group of posters saying "look at ratio A, cashflow B and book value C". And another group of posters replying "Management said X. Management will do Y. Management did Z in the past". The discussion will never end because these are two different (valid) ways of valuing a company - in a way we're talking past each other (hah, not the first one to suggest that I see). Nevertheless I enjoy the discussion, By all means please keep on going!

I used my account to hold a few Nordic stocks but twice in a short timespan I bought US shares and participated in a corporate action. A few weeks afterwards a significant sum of money disappeared from my account as a 'cash adjustment'. I had to contact support to figure out what happened. They told me Saxobank Denmark didn't have a tax treaty with the US set up (which sounded highly unlikely to me) so they had to charge 20% withholding tax over the nominal value of one of these transactions. Buy $10,000 worth of stock, participate in a tender offer, pay $2,000 to Saxobank. Even though I shouldn't have to pay these taxes (form W-8BEN) the money just disappeared from my account. They referred me to a Saxo-affiliated tax advisor whom I could hire to claim the taxes back partially. Say what? Half a year later I already scaled down my operations at Saxobank and only used my account to hold two Nordic stocks. I hadn't logged in for a couple of weeks. I open my account and see that another 'cash adjustment' was substracted. Because I was fully invested I suddenly had a debit cash position over which they had charged 9% interest for weeks without notifying me. I immediately closed my account after this. Fucking boiler room scam (to be fair this was for the Dutch entity). As of now, with IB providing access to more & more Nordic markets I don't think there's a single reason to have a Saxobank account anymore.

Gio: at what point would you reconsider your investment in Fairfax? Since your thesis is relying on excellent management have you set any rules for judging that? And aren't you afraid that you will develop a positive bias regarding Fairfax since you spend so much time defending it? :)

I have terrible experiences with Saxobank, closed my account there and I know more people have. I would not recommend them to anyone.