netnet

I trust WEB and CM aren't going to put on running shoes!

Whoa, someone is in high dudgeon! I too have seen what I would call casual racism personally as well as in the media. Documented: Here: The state senator who said "slavery was a blessing". There is no way to parse that one well; approximately 10 million African perished on the way over to the Americas. It gets worse. He also said will it become "possible for black people in the United States of America to firmly establish themselves as inclusive and contributing members of society within this country?" Here: From someone who should know better: Haley Barbour, former gov. of Mississippi, "I don't remember that racism was that bad." Really, lynchings, Jim Crow, etc. Here: From Jim Greer, the former chairman of the Fla. Republican Party: “Unfortunately, I found that many within the GOP have racist views... " Mr. Munger has some interesting things to say about the psychological underpinning of denial...

Someone uploaded Munger's "Psychology of Misjudgement" Speech that he gave at Harvard in 1995. The transcript has been floating around for a number of years, but this is the first I have heard ;) of the actual audio being available. It's on YouTube: Enjoy!

I'm still laughing. :)

I too would love to see it. In doing this kind of data massaging, one has to very careful, or you might only find what you want to find. The first flag is the survivor bias

Ferriss's book describes how to make ten's of thousands not millions. He clearly loves the attention and he is making way more money and he is enjoying it, which is his ultimate point. NO, NO, NO, as in investments, in capitalism generally there is no particular reward for working hard, there is only a reward for what the market wants to buy; the market neither cares how hard you worked nor how smart, able or good looking you are, unless that is what you are selling! (Now in a large enterprise looking like you are working hard is often rewarded, but that is an entirely different thing.) If the reward were for hard (and dirty) work, roofers would make more than all of us. And the dalit sweepers in charnel houses would make the most of all. If the market pays for what you love to do, you have got it made!

With little capital and all the energy of a youngster, I would follow the prescription of Ferriss's 4 Hour Work Week and the $100 Dollar Start-up, i.e. put together something that nets between 40 to 400k per year. THEN, I would either try to morph that business to something bigger or having kept my eye out for a larger enterprise I would execute on that. As a matter of fact, I have had a lot of push back on this very idea from my own 19 and 15 year old kids. So I think I am going to bet them that I can put such a business together (with them) that will be at a net 40K per year run rate within 6 months, with the caveat that it will be something they could do. Regarding the group 1 and group 2 in software, group 1's are really, really rare. And group 2's, like the reservoir modelling are not necessarily that small. Also, in group 1 you will need a team or at least a co-founder. In the smaller group 2 like ItaValueTrap's business you don't. (That by the way looks like a classic 4 Hour Work Week company. Itavaluetrap, How are you marketing it?

Palantir, Might I suggest that just because it is run by an owner-operator does not mean it is a good business or that the owner-operator is any good. You probably do not want to invest in a corner liquor store run by a corrupt alcoholic who is drinking all of the (other) owners profits! Microsoft had a hell of a run from the 80's to 2000, but tech evolves and a 'lock' on the Wintel market, won't save you in mobile or search.

There are some methodological problems taking this post(s) without delving further, but here goes: There are meta cognitive issues to watch out for, i.e. the biases inherent in owning stocks--loss aversion, endowment effect and disposition effect. (for a quick over view see The Little Book of Behavioral Investing by Montier, the chapter on selling! Beyond that then: Firstly you have (obviously) to distinguish what kind of investment you are making. The implication is that this is a long equity type investment, not an arbitrage type position. (Buffett did arbitrage and the holding period was most certainly not forever!) Secondly, delving into long equity, as Christopher Brown says: "Make a clear distinction when selling between 'compounders' and cigar butt stocks." Once the cigar butts get to fair value, it's time to move on, because the cigar butts are "just going to go down again." The difficult thing is what to do with 25% down position, Pzena say that this is when you "add value as a value investor". He says sometimes you should buy more, sometimes you should hold on and sometimes you should sell out. (THat's not terribly useful.) For me, personally, if it is down and I am not will to commit more funds, it is time to get out. In this I'm following Ainslie of Maverick who says, "either the security deserves more capital at its current price point or it doesn't--in which case, let's sell it and put the money to work in a security that deserves that incremental capital."

They absolutely do have a policy see Kumar's quote of same on this thread. In that world (upper reaches of corporate America, in this case Berkshire) and with the level of service, and personal bonds (with Buffett), you let the guy go gracefully, i.e. he resigns before you have to fire him.

netnet, And yet, this is what Buffett had to say when he announced Sokol's resignation (pg. 2): (emphasis supplied) Sokol effectively got thrown under the bus as a result of the fairly vocal outrage over his trading in Lubrizol following this disclosure. Munger admitted as much in an interview (CNBC, I think) following that year's Annual Meeting. Seriously, is legality the only standard? Not for Buffett nor for me. Hence the idea of staying away from the line. First I should note that Sokol's behavior violated the written rules of the BK. Secondly, even if it were not in the corporate policy, would you want your partner to behave like this? (Remember, this guy was potentially slated to be the custodian of the wealth of many, including me!) The partnership test is what WEB and CM have repeatedly mentioned as their rule for business ethics. How would an ethical partner behave in that situation. In the words of a Wall Streeter of a bygone era; you should be able to trust your partner with your wallet and your wife.

Under the bus is clearly where he belonged! --Given his comments now and what he did at the time. Buffett's rules are and were clear. To all his managers he says, here is the line, not only are you not to cross it, you must never, ever get anywhere near it!. That is totally immaterial. If your hand is in the till, whether it is for you, for your ailing grandmother or for Mother Theresa, the fact remains: Your hand is in the till. [*]Get your damn hand out of the till [*]and you're fired. Remember Munger's analogy: if you catch bad behavior once, the odds are that it has occurred before and will occur again. I would call it the roaches in the kitchen problem; one is enough clue to call the exterminator. This only proves that Warren was not totally wrong to have hired the guy in the first place.

Here is Lou Simpson 13F filing for his fund, SQ. He has about 1.1 billion under management. This represent 99% of his holdings, as of September 30, 2012. here is the SEC link: http://www.sec.gov/Archives/edgar/data/1534380/000117266112001152/sqadvisors3q12.txt # Company Value as of filing date (000,000,000) % of portfolio (rounding errors) 1 Berkshire Hathaway $127 11% 2 Fiserv $125 11% 3 TE Connectivity $108 9% 4 Lowes $104 9% 5 Wells Fargo $96 8% 6 DirectTV $91 8% 7 Charles Schwab $82 7% 8 Cenovus Energy $81 7% 9 Valeant Pharmaceuticals $80 7% 10 Crown Holdings $79 7% 11 Brookfield Asset Managt $67 6% 12 Oracle $67 6% 13 Dell Inc $59 5%

It gets worse. Here is what he said to the Wall Street Journal: Quoted from the www.businessinsider.com/

I hope that you and yours have a happy, healthy and prosperous new year! Nick aka Netnet

Excellent point, to re-read Munger instead of listening to the talking heads or reading some drivel that purports to explain why the market moved as it did the day before. Happy New Year

I was flummoxed that this disappeared from the book section. I thought, well it couldn't have violated some super secret code of conduct, so I reposted it. I didn't know that it had migrated! Happy Holidays!

I hesitate to call these lists the "best" books of 2012. Suffice to say they are the selections of the editors of the respective publications: New York Times notables: http://www.nytimes.com/2012/12/02/books/review/100-notable-books-of-2012.html?pagewanted=all&_r=1& New York Times "Best" books of 2012 http://www.nytimes.com/2012/12/09/books/review/10-best-books-of-2012.html Wall Street Journal http://online.wsj.com/article/SB10001424127887323981504578180050561773288.html Seattle Times: http://seattletimes.com/html/books/2019888516_bookbestbooks2012xml.html?prmid=head_more Guardian: http://www.guardian.co.uk/books/best-books-of-2012 The Economist: http://www.economist.com/news/books-and-arts/21567575-best-books-2012-were-about-richard-burton-titian-rin-tin-tin-revolution The Washington Post: http://www.washingtonpost.com/entertainment/books/the-10-best-books-of-2012/2012/11/16/fd937c5e-2eb3-11e2-9ac2-1c61452669c3_story.html

Berkshire has bought back 9,200 of A shares from the estate of a shareholder. The board has authorized purchases at 120% of book. So that (presumably) sets the new floor at 120% of book. At a cost of 1.2 billion, this buyback is a fraction of cash flow. (And with the prospect of capital gains going away, could there be more? This is one of the few companies in America that could instantly buy back 10 billion worth of shares from aging billionaires between now and January 1st, without so much as a pause between bites of a Dilly bar. ) Netnet

The way LTCM practiced this, it was like picking up nickels in front of a locomotive. The way WEB practices it; it is like checking the lounge chair at the pool for nickels, just before settling in to enjoy your afternoon cocktail!

Student loan debt has been increasing as credit card debt has gone down; student loans are now greater than credit card debt. (see for example http://www.newyorkfed.org/householdcredit/) The for-profit higher education sector has been really dubious; they make Anthony Mozilla look like a saint. (I don't know how much of the debt is due to them however. The for-profit sector aside; there is an argument for making college education free in the US. That would cost about 1% of GDP. US funding for public higher education had been declining and the recession really hurt the state schools. (Too many people would howl I'm sure about free education, so you could say that federal loan repayments would be capped at 2% to 6% per annum per income for 20 years with school teachers and doctors paying less when they work in underserved areas.)

Well it takes two to make a market. I love the book and give to graduating nieces and nephews. Short, sweet, pithy. The "decider" and the (inevitable) devaluation of paper money alone are worthy lessons for 22 year olds! Now tell me in all seriousness, what did he say that was worthless and shallow-- simple yes but certainly not trite. The book does suffer from what I call the "first time author kitchen sink problem"--first time authors often throw everything imaginable into their books, in this case the top ten movie, . (The Munger book also suffers from those asinine illustrations, which I find unbelievably grating and more importantly the Munger book itself is not so easily assimilated by 22 year olds.)

Coursera (https://class.coursera.org/modelthinking-2012-002/class/index) is offering their Model Thinking course again. I enjoyed it when I took it last winter.

"...like"????? It iswatching a genius at work!!

I'll have to go back and look this up but I think you may be wrong on this. I suspect WB did not "put almost all in"; rather he put in a substantial amount.