LC

FYI: Calling the COBF forum excellent and somehow better than "lesser" forums i.e. yahoo, is the exact type of insular/echo chamber structure that the article is warning us about. Food for thought

Can't argue with that :)

I can't speak for anyone else, but I can speak for myself: I remember posting maybe...1-2 years ago about how I was 25% cash. Cue the regular reasons: market highs, potential overvaluation, lack of opportunities, dry powder, etc. Looking back, I think I only held cash out of fear. Maybe that is easy to say with 20/20 hindsight. I don't know. But all 4 of those reasons are bullshit: The first 2 are flat out guesses on the overall level of the economy. Essentially a macro call. So even calling yourself a value investor, ignoring the "macro" etc., I still fall into making a macro call and disguising it to myself. Fear. The second 2 are not real reasons either. Let's say I need cash. Sell something. Let's say I find an incredible opportunity. Sell something. Well, I paid for my decision (in opportunity cost), and am only realizing it a year+ later. Stupido :D

First, from an outcome-oriented analysis: I think only Baupost has been able to actually post "great" return while holding a sizeable chunk of cash relative to the portfolio size. And what Klarman invests in, I have no idea what his thinking is so I can't comment on that. Maybe he's just that damn brilliant. The dude is holding 20% cash and beating the market in weird pharma stocks. But otherwise, I can't think of an investor holding 20+% cash and outperforming. We're no Baupost or Klarman, and we manage a fraction of what they manage, but we've averaged at least 20% cash historically and beat the market from May 2005 when we launched. Bull market, bear market, bull market, sideways market, bull market...we just keep chugging along. And you can check it for yourself in our Annual Reports by simply adding cash at brokers to any T-bill securities we held! Yet, like so many managers, we struggle to find partners and keep the ones we have. Go figure! Cheers! I hereby amend my statement: only Baupost and Corner Market Capital :)

I realize I have an issue with holding cash as "downside protection". This probably jives with racemize's white paper on holding cash. First, from an outcome-oriented analysis: I think only Baupost has been able to actually post "great" return while holding a sizeable chunk of cash relative to the portfolio size. And what Klarman invests in, I have no idea what his thinking is so I can't comment on that. Maybe he's just that damn brilliant. The dude is holding 20% cash and beating the market in weird pharma stocks. But otherwise, I can't think of an investor holding 20+% cash and outperforming. Second, from a process-oriented perspective: First let me refer back to Buffett's partnership letters (maybe too cultish, bear with me). My recollection may be poor, but I think I recall this (correct me if I am wrong, please): Even back in his day, his downside protection was conservative BUSINESSES. Not conservative position sizing. His idea was, "let me be fully invested, but I will invest in "generals" (i.e. my non-arbitrage/control positions) that I think will fall LESS during a downturn". Equal upside compared to the market in general, less downside. I think this gives you options. Over the long-term, the market will rise. Cash sucks in the long-term. So in theory, your portfolio will rise with the market. When a crash hits, your portfolio does not tank as much. On a relative basis, you can then deploy more capital vs. your peers. This was always my understanding of his approach. Look for stable cash flows first (which protect your downside) and let the general rise of the market do the rest. So that is what I understand as a conservative investment approach. Holding onto 20+% cash (or whatever percentage) seems like a really poor decision. The critic could say: I am looking at the past 5-10 year bull market and saying "well of course you want to be fully invested". That may be true. Look forward to the board's thoughts.

I spent a few years doing the deep value/net net/etc...all the stuff the value icons have written about. Didn't motivate me. Buffett gets excited learning the ins and outs of every business he comes across. I get excited playing basketball but I'm no NBA player. I dumbed down my strategy. I expect to make a decent return. I'll never be disgustingly wealthy, but I'll also never spend hours reading 10k footnotes again. That's just me.

I go with unread posts and work my way thru.

The devolution is nearly complete, racemize. Politics, to gender, to race...we just need to hit religion in order to reach rock bottom.

I mean, at some point the chickens come home to roost. Eventually either the accounting winds down or your accountant becomes complicit.

Absolutely correct! I should have removed the "tied up" assets from the valuation...will lower the IV!

Thanks marlin :)

I have a 4-5 year record and it's ~12%/year. I'm pretty much mediocre :D

Premfan, I still have no idea what you mean by reframe. :)

Don't let the facts get in the way of a good lyching!

Sunlight is the best disinfectant. Indeed, the increased scrutiny is good. And to a bunch of investors, this scrutiny can have monetary consequences, if pharma/agrotech/etc. companies are found complicit and liable. Take a look at the whistleblower settlements from this one law firm alone: http://morganverkamp.com/our-clients/ Here are a few of the medical-related settlements: UNITED STATES EX REL. GALE V. OMNICARE, INC. Result: Settled in 2014 for $124,000,000 UNITED STATES EX REL. HUTCHESON V. BLACKSTONE MEDICAL, INC. Result: Settled in 2012 for $30,000,000 STATE OF TEXAS EX REL. GALMINES V. NOVARTIS PHARMACEUTICALS Result: Partially settled in 2012 for $19,900,000 UNITED STATES EX REL. AUSTIN V. NOVARTIS Result: Settled in 2010 for $237,000,000 Most of these are related to illegal kickback schemes. But I don't think anyone would be surprising if certain research studies were influenced by big pharma to their benefit. In terms of conclusions, I have no problem with saying "I don't know". Like I said, I personally am not throwing the baby out with the bathwater. But I am acknowledging there are perverse influences in these fields. It is a risk, and that risk should be kept in mind when making medical decisions, investment decisions, decisions about what to put in your body, etc.

The issue isn't about vaccines, it is a broader issue about the state of scientific research. Rukawa has posted some above in his post, highlighting this broader issue. The original article contains other examples in the same vein (e.g. http://enveurope.springeropen.com/articles/10.1186/s12302-014-0014-5). In terms of vaccines, we (along with most rational individuals) both agree that the net benefits outweigh the individual risks. The issue is that there appears to have been instances where evidence was removed from studies suggesting that risks do in fact exist: https://www.nsnbc.me/wp-content/uploads/2013/05/BSEM-2011.pdf (evidence begins on pg. 3) http://web.archive.org/web/20140826171415/http://www.translationalneurodegeneration.com/content/pdf/2047-9158-3-16.pdf

I think it shows healthy skepticism. Which based on the examples from this article, and the word of two "experts" (former NEMJ editor-in-chiefs), seems warranted. In fact, my conclusions are not so drastic. As I just posted: Again, not a broad-sweeping conclusion, but a skeptical one. And frankly, what does being an "expert" have to do with it? Here is what Carl Sagan wrote about appeals to authority:

Maybe, but at the same time there are lots of money and power who really want to have the outcome go one way. I think the point is to be your own advocate, educate yourself as opposed to blindly accepting something (which may or may not be biased without your knowledge). So again I'll post this because I think it's important: So it's possible to have a more nuanced conclusion: perhaps there are some risks with vaccinations that we may not even be aware of because scientists may have been coerced into withholding data (or other reasons). Does that mean we throw out the baby with the bathwater? Not necessarily.

Less justified than having 100% certainty. You have a guy from the CDC who is admitting that they withheld data linking autism to the MMR vaccine pre-36months administration. Instead of having a knee-jerk response in either direction ("oh, all vaccines cause autism!" -or- "this guy is a liar let me bury my head in the sand"), I think all it does it raise questions and make people be a bit more thoughtful about what they are accepting as fact with 100% certainty. And if you'd like to post 99 more studies with contradicting conclusions, please do. The point is to have a discussion, not make drastic conclusions immediately.

I use the clickbait rule, the claim is preposterous on the face of it like the clickbait "Obama says refinance your mortgage" or "Trump uses xyz you should too" You don't need to read any further. Next I tried to address this in the original post by emphasizing that the article is well-sourced, and also by including two quotes from former editors-in-chief of the NEMJ whose statements echo the points made in the article.

Before I posted it, I checked some of the other articles from the homepage. I had the same response that you did. But I thought to myself: If the article itself is thoughtful, has legitimate points, and legitimate sources (I checked most of the sources myself), then it should be posted. The section on vaccines is what first made me question the article's authenticity: Sounds a little funky, right? Well let's check the source: http://morganverkamp.com/statement-of-william-w-thompson-ph-d-regarding-the-2004-article-examining-the-possibility-of-a-relationship-between-mmr-vaccine-and-autism/ It is a whistleblower law firm website with the following statement: So the source appears authentic, if you ask me. By that I meant that the claims made are backed up by authentic sources with the knowledge and relevance to have a professional opinion (such as the example earlier in this post). Not that those claims are the end-all.

http://wakingscience.com/2017/03/peer-reviewed-science-losing-credibility-large-amounts-research-shown-false/ Interesting, well-sourced article.

The "news" is just another program to sell advertising. If you're looking for the "truth", the "facts", or "journalistic integrity", you need to look at programs which are not designed to maximize advertising profit.

My 2 cents on the original topic: better to start your career in something more traditional. Easier money. More money. Invest on the side. If you are damn good doing this, and turn a few hundred grand into a million +, then you might want to think about selling your services.

Quite frankly, a market multiple on earnings will get you 90% of the way there. You want to know what BNSF is worth at market? Take Union-Pacific's earnings multiple and apply it. That is what it is "worth". Same for the energy division, and on and on. That will at least mark you to market. Now, if you STILL think it is undervalued vs the market, well you are in luck because now you have a further discount at your fingertips. Heck, you can say that the stocks which berkshire hold are also undervalued. So their ~250B portfolio has an intrinsic value of $300B.