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JBird

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    Buffett's stock pickers are beating the market

    in Berkshire Hathaway

    Posted

    We should NOT be looking at their performance on a YoY basis but using a 5 year yardstick similar to Buffett.  As Graham eloquently said, “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

     

    Tks,

    S

     

    I'm not sure if Ted Weschler is having a good year being that he a a pretty considerable position in GM which has been terrible this year

     

    Isn't it something like a 7 year yardstick now?  I thought he changed it when 5 years didn't work so well.  Maybe I'm wrong.

     

    Still 5 years. I know because I was at the meeting when he said it hasn't changed.

    Why are Russian stocks so cheap?

    in General Discussion

    Posted

    When you meant me, there is nothing to be sorry about :). Look at the lukoil thread to see how the world in russia looked like 7-8 month ago before the Ukraine crisis. It looked like Putin would be a lot more business friendly in the future etc. And now look at the current dilemma. I see my investment in russia as a failure that cost me no money, so everythings fine.

    Think about what will happen in russia with oil prices a lot lower than today. I doubt that any private asset in russia is safe from Putin in such a scenario.

     

    When I started that thread I wrote

    A final variable well worth considering is the country-risk that Russia presents. The Russian Government has proved its ability to commit folly against Russian oil companies. Ten years ago the Russian Government brought down Yukos Oil swiftly and illegally. When I created a mathematical expectation of Lukoil’s stock performance over time, I did so with the assumption there was a 20% chance that the Russian Government would take Lukoil’s stock price to zero.

     

    And then people responded by saying Putin is a maniac. And of course they were right. So I'm not sure what you're talking about.

    The Time Has Come...

    in General Discussion

    Posted

    I have arrived at a name for Sanjeev's new company:

     

    "Alpha Holdings"

     

    I know, Sanjeev will be thrilled!  Not only is that right up his ally, it can be listed as 'AH' so alphabetically it trumps 'BH'.

     

    LOL! 

     

    Not unlike Buffett, it wasn't GEICO that he managed to control, but Berkshire Hathaway.  He retained the name to remind him what an awful purchase it was. 

     

    Our circumstances are very similar...it wasn't Russell Breweries that we managed to control, but a distressed business where intrinsic value was considerably underwhelming like Berkshire in its original state.  We will keep part or all of this company's name in the future to remind us of the same thing. 

     

    I will give you one anecdote that will illustrate the culture we are trying to create.  I've refused a CEO's salary, because I denied our controller a pay raise.  Instead, I've told the board that I would like to get paid $500 less than our controller annually, and will not take a pay raise until he gets one.

     

    I will give you one further anecdote to illustrate the type of people we are trying to retain and hire.  When I became involved with the company's finances a few months ago, our controller had not been paid for 10 weeks...in fact, none of the core employees had been paid for 10 weeks, but they kept on working!  We've caught up on all of their salaries after I became involved, and retained those employees.  They could not be happier and morale could not be better.  I told them I cannot believe they did not leave and promised them they would always be paid every pay period going forward.  Cheers!

     

    This is really good stuff. Excited for the future.

    Is your Alpha Big Enough to Cover Your Taxes?

    in General Discussion

    Posted

    These are good articles, I wish I had read them before I wrote my own essays on the same topic!

     

    Here are mine, if you are interested.  They say very similar things to the articles, but I think mine have a bit more data and hypotheticals (but of course, I'm biased).

     

    https://www.dropbox.com/s/8om0k5hmvudz58a/2013-09-22%20Holding%20Period%20Essay.pdf?dl=0

    https://www.dropbox.com/s/uwawteaj86zfz1l/2014-03-25%20Hurdle%20for%20Active%20Investors.pdf?dl=0

     

    That's great work! Really well written.

    Daily Journal Annual Meeting

    in Berkshire Hathaway

    Posted

    You do not need to be a shareholder. You do not need to RSVP. And I did also call and check-- Munger is the only one speaking.

     

    If you're flying in I really recommend looking at an Uber cab. Cheaper than a rental car and you don't have to worry about parking.

     

    Netnet, my flight lands at 8:10 at Burbank if you want to carpool. I have a Uber gift card so my trip is already going to cost something like $7.

    Tracking Personal Net Worth

    in General Discussion

    Posted

    I'm 26 too and I've been doing this for a few years now.

     

    I have a spreadsheet that tracks my "balance sheet" and I update it every 2 weeks. I keep track of three things, the balance sheet, investment returns, and ordinary income. At the end of the year, I sum up what happened that year in a paragraph. Each year's paragraph gets added to a running word document. My idea is that over the years I'll be able to go back and catch a little snapshot of what happened that year and the financial results. I've come to really enjoy the process.

    Daily Journal Annual Meeting

    in Berkshire Hathaway

    Posted

    To make the meeting and fly in the morning, Angelenos, which airport is the best?  Glendale or LAX?  Obviously LAX is way bigger and presumably harder to negotiate, but....?

     

    Also, does anybody want to have a late lunch or early dinner?  Possibly missing some of rush hour traffic.

     

     

    Netnet

     

    I found that Burbank is 16 miles away and 23 minutes(non rush-hour), whereas LAX to the meeting is 20 miles and 32 minutes (non rush-hour).

     

    I found a flight that lands in Burbank at 8:10 am so I'll have 90+ minutes to go 16 miles. Even in rush hour that should be enough. After the meeting I'd love to meet up with some boardmembers and eat somewhere. My flight back to Phoenix doesn't leave until 7:10 pm.

    Charlie Munger and the Daily Journal Corporation (DJCO)

    in Berkshire Hathaway

    Posted

    As much as I love the Daily Journal and Charlie, a significant deviation between market value and intrinsic value has developed. Once you back out the net investment portfolio (the portfolio is pretty predictable), the market puts an ever increasing value on a declining business. If you would regard this extra premium as the price to be in business with Charlie, it sure gets expensive, especially since he rarely changes the composition of the portfolio and less net cash is added to the investable assets each year.

     

    +1

     

    The operating business is now valued at 30x earnings.

    Korean Prefs: LG Chem, SEC, Doosan, Marine Ins., Samsung Fire, Others

    in General Discussion

    Posted

    There are a lot of really attractive preferreds in Korea right now. I'm interested mostly in Nexen Tire, Hyundai, and Daelim Industries. I haven't been able to invest yet but I plan to within the month. Fidelity is the only broker I've found with access to that market.

     

    As a side note. I read a blurb in the WSJ a few months back on Andrew Weiss. He gave a lecture to some students and talked about Korean preferreds being the most attractive investment he's seen since the 08/09 panic.

     

    Nexen Tire preferred has return 60% since that post and is still trading at 6x earnings. Some news:

     

    http://www.reuters.com/article/2014/06/23/nexen-tire-europe-idUSL4N0P41OF20140623

    What are you buying today?

    in General Discussion

    Posted

    Gift cards going for curious prices:

     

    http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=231251221870

     

    And seller is charging $2.32 for email delivery...

     

    buying using stolen credit cards? I was curious why there were so many gift cards on sale at 80-90 face value. Then I learned hackers were laundering stolen gift cards using these gift cards reselling sites. The discount is warranted because any stolen cards have some possibility of being cancelled.

     

    That makes it clear why cards should sell at a discount, but the one I linked was selling at a premium. The face value was $50. It sold for $162.50.

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