netnet
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Posts posted by netnet
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Over 37 years, that's a 14.9% annualized yield, not including all the capital they've taken out and put into other businesses or their salaries.
14.9% compounded, not to mention the psychological dividends!
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Sanjeev,
Thanks for the materials; the link to the arbitrage study also seems to be broken.
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There is an article on BH in the Globe and Mail. Nothing new or insightful, seems reasonably accurate and is negative on the compensation scheme.
http://www.theglobeandmail.com/globe-investor/budding-buffett-feels-a-backlash/article1579497/
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Audio died ~32 minutes in to talk.
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Clearly Apple has a moat. The question is how wide and deep is it? Eric's comment is spot on
I'm not saying they don't currently have a moat. I'm just saying that in technology the moats are never as wide or deep or as easy to maintain as in other market segments.Buffett has said that the test of a moat is whether a determined competitor with as much money as needed can knock you off. I see Apple as having a narrow moat around iTunes and a narrow and shallow moat in the iPhone business. Once Jobs is gone or he stops producing hits, look out below.
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Okay, say the looming default is comparable to 2007, does anyone have any suggested actions? SD postulates buying 2yr notes at 65%. Any other ideas?
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I caught part of Patrick Byrne on BBC the other day. Here it is on podcast: http://www.bbc.co.uk/podcasts/series/bizdaily
The topic is short selling.
It seem like a rant to me.
Best,
netnet
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I know I'm the skunk at the garden party on this one, but why not use the Greenblatt's Magic Formula. It has beaten the pants off virtually every manager (except those who are managing small amounts of money and have alpha's of 15 to 20% over the market).
For example compare Magic Formula past performance with Chou's Associates fund. It beat Chou for every time period except 1 year.
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I seem to remember (perhaps falsely as I could not find it on the site) that someone had posted a version of Pabrai's checklist. Has anyone seen such?
Netnet
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This sounds like idle chatter to me: "think, had 17 staffers making $150K or more during the Bush administration; now there are reportedly 1500 staffers in that department making that much or more! "
One thing the Bushies did was cap the government payroll and farm out the work to "consultants", thus the "private" sector was doing the work, (read overpaid consultants).
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The reservation is under my name: Nick Henderson
But you can also ask for Munger or Value investor!!!
Best,
Nick aka netnet
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I have been looking at AAB.to--Aberdeen International. They are a merchant bank in the sector. They are selling at a substantial discount to NAV and are repurchasing shares. (By the way, I like them better than Endeavour Mining Capital . Those guys were selling their undervalued stock instead of buying, and they are finance guys (allegedly). Up to the crisis Endeavour had a great run for five years or so; almost precisely at the bottom of the market they issued shares, that was it for me for that company!) Anyway they and AAb have similar business models: they finance the juniors in the sector. Obviously they have an informational advantage and give you some diversity in the sector.
netnet
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I don't mean to play the fool here, but what exactly would prevent anyone with the same amount of capital from replicating this? Walton was knocking off crappy little retailers before they started knocking off the crappy big retailers. Okay they seem to be the low cost provider in a commodity business or are they? Are they cheaper than Costco?
All of which to say is what is and where is the moat?
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Thanks for the time change reminder!
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I've gotten private messages that some people would be more interested in a dinner. I suggest doing this one and have another one next quarter, say in June.
The restaurant is an Alice Water's off shoot, their "value" meal is Sunday brunch- 6 to 11 dollar entrees instead of 16 -26.
Location: 3917 Grand Ave., Oakland, CA. (It's about 2 minutes off the freeway, 580)
Date and Time: Sunday, March 14 11:00 AM
Looking forward to lively conversations!
Google maps
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WSJ article on convert purchase:
http://online.wsj.com/article/SB10001424052748703954904575110102914237396.html
General Growth Debt Bet Pays Off
By GINA CHON
Bloomberg News
With assets like the South Street Seaport in New York, shown last month, General Growth Properties was seen by some investors as worth a flier. With General Growth convertible bonds trading as low as three cents on the dollar in late 2008, those who got in have seen heady returns.
Going bargain hunting at the mall has rarely been so rewarding.
When the nation's second-biggest mall owner was tumbling toward bankruptcy near the end of 2008, a handful of investors dug to the bottom of the discount bin and snapped up the company's convertible bonds at three cents on the dollar.
[GGP] Bloomberg News
Today, these General Growth Properties Inc. bonds are worth 103 cents—one of the great trades of the financial crisis.
The return is "almost nonsensical," says William Welnhofer of investment firm Robert W. Baird & Co., which wasn't a buyer.
Shares of General Growth, which itself is still under bankruptcy protection, also have proved a home run, hitting a low of 32 cents and closing at $14.08 on Monday. After being delisted last year, the shares were relisted on the New York Stock Exchange on Friday.
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First Annual or first quarterly depending on interest!! Sunday brunch March 14 11:00.
San Francisco Bay Area
Details to follow.
Let me know who wants to come so I can make the restaurant reservations.
Best,
Netnet
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Sorry, I like to think worst case.
When you prepare for the worst case, most often the black swan never comes; sometimes it's a sooty gray, but since you were prepared it roasts up rather nicely ;).
netnet
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This is also being discussed on the Berkshire part of this board. Munger has been saying this in so many words before, that the failure rate of empires is 100% etc.
My question is what does one do personally? Follow Jim Roger's example and move to Singapore?
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We do know that the failure rate of empires is....100%
Munger has talked about this before. But what do you do? Jim Rogers says move to Singapore and teach your kids Mandarin!
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That article was actually crap. It never fails to amaze me how many people will warn of a funding crisis, when all the evidence you need is that there's currently an excess of money that would rather be in government bonds than invested. Krugman posted a chart some time ago showing how federal government essentially stepped up and borrowed the difference between savings and private investment. When people have the courage to move away from government bonds to making actual investments, yields will rise. . . but so will business activity, taxes, etc.
If you're not going to read the economic literature, at least take some time to get comfortable with what should be the cognitive dissonance from this idea.
Indeed, a little intellectual humility might be in order here. I am not an economist, but you know AIG was a AAA credit once...
Are you saying that there is zero probability of the US having problems funding its public debt in the next five years? Zero? Zero that interest rates are going to ratchet up to make the debt attractive. Zero that the dollar will not fall relative to say gold?
Re: Krugman's point, where we are now isn't the issue. You have to think about what may and what is likely to happen. In the words of Gretzky, skate to where the puck is going. The last paragraph of Simon Johnson's article, The Greek Tragedy in today's (2/13) Wall Street Journal warns of the issue.
Speaking of reading the literature, I would suggest that you read Rogoff's book on financial crises. He knows way more that the both of us.
Best,
Netnet
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Okay it is a good article, and I might add it is blindingly obvious. I have been think about it a lot, since perusing Rogoff's book. But what I have been able to figure out is what course does one take as an investor and a business person. (Other than write a doom and gloom book--How you can profit from the next financial disaster)
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On using checklists in finance, an article in the Financial Times
This is an excerpt from Gawande's book. What is particularly interesting is how professional investors--venture and public equity--reject the notion of using checklists.
The researcher's
...most interesting discovery was not the relative success of the airline captains[those who use the checklists, as airline captains do], in fact. Rather, it was that most of his subjects were either... intuitive decision-makers instead of systematic analysts. Only one in eight [VC's]took the airline captain approach. Now, maybe the others didn’t know about the airline captain approach. But even knowing seems to make little difference. Smart published his findings more than a decade ago. He has since gone on to explain them in a best-selling business book on hiring called Who. But when I asked him, now that the knowledge is out, whether the proportion of major investors taking the more orderly, checklist-driven approach has increased substantially, he could only report, “No. It’s the same.”We don’t like checklists. They can be painstaking. They’re not much fun. But I don’t think the issue here is mere laziness. There’s something deeper, more visceral going on when people walk away not only from saving lives but from making money. It somehow feels beneath us, an embarrassment, to use a checklist. It runs counter to deeply held beliefs about how the truly great – those we aspire to be – handle situations of high stakes and complexity. The truly great are daring. They improvise. They do not have protocols and checklists. Maybe our idea of heroism needs updating.
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We have found MF to be a highly lucrative area in which to hunt. The three turnoffs are 1) unexplained insider selling 2) tech companies 3) unacceptable business risk--such as single troubled customer, etc. We got hammered in the downturn, who didn't?
Very sexy, but please explain why I shouldn’t just look up which are the current worst performing sectors on ‘XYZ’ exchange, & buy that sector (single share, index, or mutual fund).Its highly unlikely that 2 years from now the current sector ‘dog’ will still be on the bottom, & very likely that the next 2 years are not going to economically look like the back-tested data set.
Sharper, we are generally playing a mean reversion game, but MF should get you better results because the companies are sorted and ranked.
netnet
This is happening for real!
in General Discussion
Posted
There are no claims against the city of Oakland in the Oscar Grant wrongful death suit. City police officers were not involved. The suits are against the BART, a governmental transit agency, and various transit officers. (BART settled with the daughter's lawyer for 1.5 million, the mother has a multi-million dollar suit outstanding.)
Regarding the unfortunate layoffs of police officers. The police do not contribute anything to their pensions. For any pension concessions, i.e. make contributions to their retirement funds, they wanted a guaranteed no layoff policy, which is impossible in California's current fiscal climate. (Most counties and cities are going to have to cut even more in the next fiscal year.)