LC

Pot has been used by millions of people pretty much ever since the 1960's. Thats 50 years. The 1960s? Way earlier than that (well, I guess not millions of people)! I've got stories passed down in my family about back in the 1700s & 1800s some family members were engaged in transporting hemp & weed from the east coast to Europe. I've never heard a convincing argument against the illegality of marijuana.

I usually leave out changes to working capital. Working capital in most businesses changes over time...in reality working capital is a function of the business operations and usually we want those businesses to be consistently functioning (i.e. renewing working capital as the business uses it). You wouldn't want a grocery story to have shrinking average levels of inventories over time (i.e., not being able to move X amount of inventory so reducing average inventory on hand - a sign the business is decaying), so I usually don't add the "cash" provided by reduced inventories either. Same with the other working capital accounts. My usual calculation: NI + D&A + One-time (Extraordinary - only if they are truly extraordinary) charges - Capex I don't really distinguish that much between growth and maint capex as much as other investors do. If I'm investing in a small, growing company, "growth" capex is part of that. To some companies, "normalized" environments include "growth capex". Sometimes (take Packer's example over in the Intralot thread) capex is a direct function of revenue. They win a contract, they pay capex as a result. So in that case it makes more sense to get an idea of "normalized" capex.

The SEC filings have already been done...I think with a bit of thought and some googling we can all keep track of Sanjeev's outstanding progress. Congrats on your success! :)

Three cheers to Mr. Munger! :)

PhoneGap -- concurrent release of Android, iOS, Windows Surface, and BBRY (for Prem) Perhaps we should design an app that allows people to fight about which smartphones are better. We can charge them a premium if they want to use stylized text such as larger fonts, bold, italics, colors etc :)

Real estate consulting, non profit finance, currently an MBA student.

This is a bit old but I just got around to it...I really enjoy listening to Mr. Marks speak. He is funny! Even better, the central theme of the talk was about ethics. He was the right man to give the speech. One of the quotes I remember: "Think for a minute...in American corporations, how many AAA's are there? There are four...not very many: JNJ, MS, XOM, ADP...how many AAA's were created in mortgage-backed securities in the years leading up to the crisis? Not 4 not 40...over 1600!" Although I wasn't a huge fan of his book (despite agreeing with the majority of the content) I plan on re-reading it.

Finished 40% for the year. I am satisfied with my analysis and finding undervalued stocks, but I have to work on my technical and emotional skills in terms of trading. So much thumb sucking! For example, SHLD calls I was down 50% at one point...and the fact that they were so cheap...I should have purchased more but I was fearful. And to make matters worse, I put in a limit order to sell my entire position at a 20% gain. At the time, I was so angry for purchasing them at what seemed like a high premium that I simply wanted to exit with an acceptable gain. Then, I forgot I put in the limit order and did not cancel it as the share price was rising. Definitely my most embarrassing moment of the year...very rookie mistake.

Eric, I think the various threads and posts with questions about your trading methods are evidence that you do in fact have a discernible skill. The fact that you can take an undervalued mega cap and turn a 30% return into 100+%...as well as constructing your frankenstein portfolios by trading upside for downside...I think that is skillful.

Congrats on your side business' results! In response to your quoted section...BRK might fit the bill!

I don't see what his personal decisions have to do with anything. He could have gone to North Korea for all I care. He exposed a fact that a branch of the government is spying on citizens without their knowledge. What he does afterwards is of no consequence to the validity of that fact. I don't know the constitutional legalities behind whether the NSA is "legally" allowed to do what it is doing. I frankly don't care. What I do know is that the government shouldn't be collecting this type of information in the way that it is doing so. In my opinion, bringing up any other issue related to this individual is just avoiding having to deal with this fact.

Same with puts...you need to be right about timing, and premium paid.

I agree! And, it jives with my favorite line (in my signature) of Buffett's! ;D

Good read, thank you for posting.

The more I think about it...when we talk about risk-adjusted returns...it's difficult to really standardize. Let's take Nate since he is the topic of conversation right now...I could never run a portfolio like his! For me, it just does not jive with how my mind works. Let's say Nate and I ran the same portfolio, identical stocks, weightings, everything. I would consider his risk-adjusted returns much higher! He is more comfortable with this portfolio strategy. It is less risky to be in his hands than in mine. I might achieve the same results, but it would be much more risky. I think my thoughts echo those who say that investing truly has to match each individual. Otherwise it is just too risky...and trying to standardize that number to compare between managers...maybe it can be done partially, but I don't think one percentage can ever really capture all the risks.

I'm not sure I agree. I think this year was a bit crazy due to (1) the market in general going up up up and (2) the special-ness of BAC warrants. A good portion of most returns here were probably due to BAC and the 300+ page thread devoted to it, as well as Eric's insights regarding the cost of leverage between the common/warrants/options. This led to a lot of people moving into the options...hence the large upsides. I think most of the time this board is focused on cheap stocks. Packer's posts are a great example of this. I don't think he's ever suggested something trading at a EBITDA multiple > 6 ;D Finding cheap businesses and returning 20%/year during normal conditions is a skill more envious in my eyes than buying LEAPs during an awesome year for the market in general...just my 2 cents!

Happy New Year everyone! Thanks as always to Sanjeev and all the kind people on this board. To a happy and healthy 2014! ;D

He's just so rich that the only thing he can put major money to work in (with good future prospects and economics) is energy. Demand for energy isn't going down, not in this lifetime or the next. Solar, fossil fuels, all will benefit from increased demand. Hell, he may be following Munger's logic...generating as much renewable energy in the US for sale within the US.

Share your uploader name on Youtube perhaps? Found the way to do it (click the playlist you want to share, there is a "share" button which will promp you with a link. Here is my playlist of value investing videos I've accumulated: http://www.youtube.com/playlist?list=PLV-6FPX1lkKIou3WDcZnm_BtMZUUj4tm2

I there a way to share a playlist? I have a list of about 80 YouTube videos and I would be happy to share the list, if possible.

Fiat. I think a deal with Chrysler gets done later in 2014. To the market, I am about 15pct cash. I don't really hedge, IMHO cash is the best hedge.

http://www.smartplanet.com/blog/business-brains/icon-doug-morris-chairman-and-ceo-of-sony-music-entertainment/ Morris calls the incident his “favorite” mistake because it taught him a lesson about “how to really get the best out of an album and my own mistake, which I was happy to acknowledge because I was so wrong,” he said. The approach to obstacles sets Morris apart. “People make mistakes. Everyone makes mistakes,” he said. “As long as the mistakes aren’t intentional, there’s no reason to be upset by them.” This attitude, coupled with his interest in treating employees well, has given Morris an uncommon ability to hire and develop executive talent. “You want to set an example by always being there, and then you want to make them feel proud of their accomplishments,” he said. “You want to overpay them a little bit. But the truth is, you want to create an environment where people are motivated, are happy. There is no yelling in this company. The idea is never to give anyone a bad night, any reason to worry about Monday. That’s really important.”

I am certainly not an expert on FFH like many of the board members here are, but the way I view it is that the insurance operation offers two distinct benefits: 1. Increase the scale of Fairfax. This enables them to get better terms, participate in bigger deals, etc. etc. etc. Akin to increasing the AUM were they a hedge fund only. 2. Optionality. Eric mentions the 15% average. IMHO that is a 15% in relatively bearish times, or when constrained by the hedges. What happens if/when the tide changes? So if they can "break even" at 15% during the worst of times, then the insurance leverage should add some value during better times.

Merry Christmas and Happy Holidays from my friends and family to yours, everyone! ;D

The only way I see Mr. Market's valuation as being in the realm of accuracy is if there is growth ahead. Where is the runway? Are people going to stop buying from other home furnishing stores? Are Amazon, Target and Walmart suddenly going out of business? It's not like their offering is so niche that you can't find it elsewhere. I don't quite get it.