giofranchi

Generally, I look at PPP. Right now, according to Bloomberg, PPP would be reached at EURUSD = 1.15. So, every time the exchange rate is above 1.15, I just don’t worry. If it happens to fall below that level, I calculate the rate of return expected from my investments, subtracting the percentage points required to get back to the PPP level. At least, that is theory… In practice, I just treat my USD dollar exposure as another kind of protection: every time the market decline, the USD appreciate against the Euro; every time the market rallies, the USD depreciates against the Euro. So, I calibrate the amount of cash in my firm’s portfolio and its short exposure, taking into account that both its longs and its shorts are USD denominated. Let’s put it this way: if we were in a secular bull for stocks, I would stick with “the theory”. Instead, because I think we are still in a secular bear for stocks, I follow “the practice”. giofranchi

They have kept the dividend at $10. Payable on January 29 to shareholders on January 22. giofranchi

I think this is very similar to what Mr. Ray Dalio has recently warned us against: 1) With interest rates negative or at zero, and each round of money printing ever less effective, what policy tool will be left, to fight an eventual slowdown in the economy? And it is already 4 years the economy is growing (even though barely…). 2) When interest rates finally do rise, all assets will be automatically repriced down. Because interest rates are what we use to calculate the present value of their future cash flows, and so to make capital allocation decisions. As always, I am the pessimist here… but it really seems to me that our economic system right now resembles a person who contracted AIDS… with very weak or completely suppressed immune abilities… Until you don’t get a cold, everything will work out just fine. But, as soon as you get a cold (and eventually you will), a crisis will unfold… Let’s hope I am dead wrong! Anyway, we have to deal with risks, not certainties. giofranchi What_Will_Happen_When_We_Hit_the_Cliff.pdf

In my own very small organization, that’s exactly what I like to do! And now I know it is the right thing to do irrespective of size, from very small to extremely huge! ;) giofranchi

Sportgamma, thank you very much for posting the BusinessWeek article! It should be a fantastic piece of education and inspiration for every businessman! And it is also very funny: I have found myself laughing many a time! Just great! :) giofranchi

Very strong year for TPOU: +21.2%. Find the December 2012 results in attachment. giofranchi 2012-12-December-Monthly-Report-TPOU.pdf

Kraven, as I suspected, you are very knowledgeable and therefore very successful! :) Yours are extremely thoughtful answers about Mr. Graham’s way of investing and thinking about investing. He truly was the “Einstein of Money”! Thank you very much, giofranchi

Kraven, congratulations! Fantastic job! I think very few investors on this board can claim to have studied Mr. Graham as extensively as you surely have. Therefore, let me ask you two questions: 1) How do you reconcile Mr. Graham's advice that “investing is most intelligent, when it is most businesslike” with the way he actually invested? I really do not know of a single businessman who holds interests in dozens of positions and who sells them as soon as they reach IV… What am I missing here? Was Mr. Graham just advising that investing is no hobby, but serious business? If so, don’t you think that wonderful phrase loses a little bit of its strength and meaning? Isn’t it just obvious that investing is serious business? 2) Is it true that at the end of his career Mr. Graham acknowledged he had made more money investing in Geico, than in all his other positions combined? Or is it just a myth? If it is true, how can this statement be reconciled with the way he invested throughout his whole career? Don’t get me wrong! Your results speak very loudly for themselves! No doubt about it! And congratulations again! You are a much much much better investor than I am! It is just that you wrote your investing idols are Graham and Schloss, so I was curious! Thank you, giofranchi

Congratulations! Very solid returns, running practically no risk! I like it very much! giofranchi thanks gio... as long as klarman/watsa/rodriguez are happy with low single digit returns just to protect their capital, i am going to be very cautious, with all the protection i build into my portfolio, i am extremely pleased to (just) beat the market..... regards rijk +1 ... only wish I could also (just) beat the market ... well, I guess, by definition not all of us can achieve that, right? ;D Keep on the wonderful job you are doing! giofranchi

Lateast "The Credit Strategist" by Michael Lewitt. giofranchi 1-1-13_TCS.pdf

"Feeling Sorry For People Who Don't Drink" by Louis Gave giofranchi Feeling_Sorry_For_People_Who_Dont_Drink.pdf

Congratulations! Very solid returns, running practically no risk! I like it very much! giofranchi

As if one ERICOPOLY weren't enough...!! ;D racemize, why have you started this thread?! To make me suffer like hell??!! ;D ;D PS txlaw, just joking! And congratulations!! ;) giofranchi hey, I started the other thread for compounding returns! You can blame rkk for this one! Opps...! You are right... Sorry! :) giofranchi

As if one ERICOPOLY weren't enough...!! ;D racemize, why have you started this thread?! To make me suffer like hell??!! ;D ;D PS txlaw, just joking! And congratulations!! ;) giofranchi

giofranchi

yes, this is one of my concerns as well--hopefully, given that it is an anonymous poll, most (maybe all!) will respond, even if they don't post anything. Well, if you have read the Tepper thread, you already know my dismal return for 2012 all too well…!! And I have just had another thought... a sad, but glaring truth: this board is full of people who don’t talk (I mean, who write and post very seldom), but prefer instead to make a ton of money! Vice versa, it seems that I like to talk A LOT… and leave all the money to them!! ;D ;D ;D giofranchi

Hi orion, could you tell us which German small-cap you are so heavily invested in? I would appreciate it very much! Thank you, giofranchi Hi giofranchi, the German small-cap is TAKKT AG. It is a B2B mail order company for furniture/ business equipment. Nice FCF, low CAPEX. Here is their latest company presentation: http://www.takkt.de/tl_files/download/German_Equity_Forum_TAKKT_2012.pdf EDIT: This one gives a better overview: http://www.takkt.de/tl_files/download/Roadshow%20November%202012_neu_final.pdf Only downside with this company is that their major shareholder wants the FCF via dividends. orion Great! Thank you very much! :) giofranchi

Whenever I sit at the table for more than half an hour with ERICOPOLY, I really CANNOT understand who the patsy is…!!! ;D ;D ;D ;D ;D giofranchi

Hi orion, could you tell us which German small-cap you are so heavily invested in? I would appreciate it very much! Thank you, giofranchi

That's what I was wondering myself... ::) giofranchi

I think the graph in attachment should go with the Mauldin letter. giofranchi Stock-Secular-PE.pdf

http://www.ritholtz.com/blog/2013/01/shiller-remains-cautious-on-housing/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29 giofranchi

I think this might be of some interest: http://www.cnbc.com/id/100346881 We all know very well the comparison between BRK BV per share and the S&P Composite. Instead, here we find the comparison between BRK share price and the the S&P Composite. giofranchi

Very good letter by Mr. Mauldin and Mr. Easterling. giofranchi TFTF121231.pdf

giofranchi