giofranchi

plato1976, thank you for your questions and the doubts you have raised! Generally, I never follow or try to understand every movement the management of a company I invested in is making. I don’t think I can have all the facts to judge them properly. And I believe that partial or incomplete knowledge is more dangerous than no knowledge at all! :) At least, it surely is misleading. So, what I tend to do is first try to read everything I can about the management, understand what they have done in the past and what they will (probably) do in the future, and most of all get to know how they will operate and why. Second, if I really could get comfortable with how they will operate and why (it happens very rarely indeed!), I tend to let them do their job. So, I am not familiar with what Tom Ward has done at SD, nor with the Fibrek takeover offer. And I would be grateful, if you could briefly summarize your objections regarding both Tom Ward and Fibrek. Thank you, giofranchi

Eric Sprott on Gold and Silver: http://seekingalpha.com/article/1080891-eric-sprott-i-think-we-are-in-for-a-shortage-of-physical-gold?source=feed giofranchi

The Keynesian Endpoint. giofranchi

Thank you Parsad, I think they will surely do! I remember sometimes ago I purchased a book titled “Warren Buffett Invests Like A GIRL – And Why You Should Too”… I bought it, but never read it… Now I plan first to read Hetty Green’s biography, then to discover why Mr. Buffett invests like a girl!! ;D giofranchi

Yes, we not only bought it, but jumped in with both feet after I finally understood why Warren loaded up on a stock that was obviously sliding down a slippery slope to bankruptcy. I didn't understand it at first as other value investors were bailing out of a sinking ship while Warren was loading up his truck with 15% of USG's stock. What's wrong with this picture, I asked. Has Warren suddenly become senile? No, the evidence showed he was still as smart as ever. He also knew more about asbestos liability than anyone else on the planet. Therefore, I bought some USG stock and averaged down to $11/share on the falling knife. I thought USG would lose 95% of its value as Dow Corning and WRGrace had done, and that's what happened. I stopped buying and a week later the stock bottomed at less than four dollars per share, and I'm sitting with a loss of about two thirds of my average purchase price, and USG is in Cpt 11 bankruptcy. This got my attention, and I started to spend some serious time (translation: become obsessed) studying USG and their situation. Two weeks later I finally understood the key insight Warren had from his first purchase, and I backed up my truck and started throwing in the moneybags, but still with a little nagging thought: could these possibly be counterfeit? WOW! That is very much “brain damage”! I mean, wonderful stuff, but so time consuming and difficult! … Sometime I think I must be a little dumb … I keep asking myself, why everybody try harder and harder to succeed in doing what’s so complicated?! Isn’t it much easier to extract all the cash possible from anyone’s business, job, or profession, and just buy some BRK, some FFH, and some LRE? And do it again and again, at least until you become financially independent? Why do people enjoy so much outsmarting everybody else in the trading game? Isn’t it rewarding enough to run a honest and useful business every day as effectively as possible, to save as much cash as possible, to be able to identify a few great businesses, and to use all your saving to become part-owner of those great businesses? Maybe, it is just an issue of lack of ambition on my part… but, twacowfca, on average how do your “trading experiences” fare, if compared with your investments in BRK, FFH, and LRE? Thank you very much, giofranchi

Yes! I also read that poem some days ago: really a lot of great stuff on your blog!! Congratulations and keep doing such a wonderful and very useful job! giofranchi

Farnam, thank you very much for posting this on your blog: http://www.farnamstreetblog.com/2012/12/hetty-green-the-richest-woman-in-america/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+68131+%28Farnam+Street%29 My favourite quotes: A girl ought to be careful about the man she marries, especially if she has money. When good things are so low that no one wants them, I buy them and lay them away in the safe; when owing to some new development, they go up and my shares are so needed that men will pay well for them, I am ready to sell. Railroads and real estate are the things I like. Government bonds are good, though they do not pay very high interest. Still, for a woman safe and low is better than risky and high. Common sense is the most valuable possession anyone can have. Ah! If we all could learn more from the women in our lives...! ;) Just out of curiosity: someone (Parsad, of course) knows how many women are members of the board? I would read their posts with much attention! I have purchased both the book and the audiobook. giofranchi

+1 giofranchi

David Rosenberg's 35 Charts For 2013 giofranchi David_Rosenbergs_35_Charts_For_2013.pdf

+1 +1 giofranchi

Great! Thank you, Christopher1! Cannot wait to put my hands on this one! :) giofranchi

dcollon, I have ordered it, but haven’t read it yet. Christopher1, instead, has already read “Cable Cowboy” (he is always one step ahead of me!! ;D ) and told me it is very interesting: for instance, he found that from 1974 Mr. Malone returned 91,000% for his shareholders! That’s better than Mr. Buffett and a result even our star ERICOPOLY could envy…!! ;D I really look forward to reading it! giofranchi

Hello ASTA! I wasn’t aware of the fact that Mr. Weschler bought this company for BRK! That’s a useful piece of information, and prompts me to dig deeper and investigate the company further! Thank you very much, giofranchi

Yes! Thank you very much for this recommendation. I have bought the book right away and I am positive I will enjoy reading it very much! :) giofranchi

It seems to be the only wide-moat company in the Morningstar’s universe to still deserve a 5-star rating (besides Applied Materials, Exelon, and Western Union, which seem destined to a perennial 5-star rating!). Price / Fair Value is just 0.65. Furthermore, its moat trend seems to be positive, and its management very shareholder oriented. Please, find the Morningstar’s analysis in attachment. Anyone follows this company and knows it well? Thank you, giofranchi National_Oilwell_Varco_Dec2012.pdf

Mr. Jeff Gundlach on Bloomberg: http://www.zerohedge.com/news/2012-12-18/jeff-gundlach-fiscal-cliff-circus-and-why-investors-should-hold-cash-through-2013 giofranchi

Does it sound too “materialistic” to wish you all not just a happy 2013, but also a very prosperous, rich and thriving new year?! ;D ;D ;D giofranchi

Point is, if you're not managing OPM, you can be fearful, max cash and that's fine. You don't have a mandate. Tepper used the word relative quite a bit...he's smart. Relative to cash at 0%, a lot of things look cheap. But, relative to cash with "honest" interest rates, not so much. Thank you for posting this: very interesting! giofranchi

And sometimes the obvious needs to be bolded :) Well, my firm already operates in the housing sector… I don’t want to invest there! Guess then I will have to look at the auto sector… ;) Thank you PlanMaestro and enoch01! giofranchi

I agree. Great book: a lifetime achievement! I think I have never used as many post-it to mark the pages of any other book before or since I read "Thinking, fast and slow". :) giofranchi

I am completely out of bonds right now. And I am 70% invested in high-quality stocks. Much more than the “Yale Plan” would suggest to be safe at the prevailing market valuations. The reason is that I also keep 8% in gold, and 22% shorting low-quality, cyclical stocks. My own adaptation of an hypothetical 30% stocks 70% bonds portfolio, in the age of “The Great Moderation”, is a long/short strategy. Results will be very lumpy, I know, and in the short run (2013) I clearly run the risk to lose money. But I really cannot get comfortable with any other strategy… giofranchi

That sentence doesn’t really make sense to me. As with every business, some insurance companies are fragile, others are robust, others (ok, I agree, the minority by far!) are even anti-fragile (see, for instance, FFH and LRE). It all depends on management. Management of an insurance company has three duties: 1) To asses risk better than the insured, to know the premium under which an underwriting contract risks becoming unprofitable, 2) To restrain from underwriting a contract, when competition forces the premium to fall below the minimum level required for the contract to be profitable, 3) To invest opportunistically the float gathered through the years. An insurance company that fails in 1), 2), and 3) is fragile, one that succeeds at least in 1) and 2) is robust, and one that succeeds in all those three endeavors is anti-fragile (it will literally benefit from volatility and disorder, like all successful investors do). That being said, I think Mr. Taleb makes a clear distinction between a single insurance company and the insurance industry. The insurance industry as a whole is clearly anti-fragile. The bigger the disaster, the more scared, and therefore the more irrational, the insured become. The more irrational the insured become, the greater the edge the insurance industry has on them: 1) benefits from disorder. Furthermore, the greater the disaster, the less dumb capital is available in the insurance industry: 2) benefits from disorder. giofranchi

Charting US Debt And Deficit Since Inception. giofranchi Charting-US-Debt-And-Deficit-Since-Inception.pdf

John Mauldin on Gold. giofranchi December_17_2012.pdf

Interesting thesis by Broyhill Asset Management. giofranchi CCH-Thesis-Dec-12.pdf