cubsfan

They answered all my questions all right. Too bad that others did not feel that way, folks are fine to go to someone else to get their questions answered. Besides, they have been asked the same questions over and over again. They try new and interesting ways to answer them. At 83 and 90, they have my full appreciation for doing what they do, educate, freely. It is an extremely benevolent way of giving back. Surely, many of the regulars to Omaha share this view. Yep, I loved it and the other 3 guys that attended with me really enjoyed it. Why be disappointed because they skipped answering stupid questions.

If you were at last year's meeting like I was, you could conclude that Doug Kass is a waste of time, and has an ax to grind since Munger pimped him when he asked to be funded with $100M.

I have listen to all of these podcasts religiously, since they started releasing them early last year. They are great - and I use them on the treadmill, etc. You can learn a ton from them - and they are free.

Do you mean all this? http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/bruce-greenwald-buffett-has-lost-his-mind/

Here is why you should attend... I wrote this up after last years meeting: http://www.beyondproxy.com/fairfax-annual-meeting/

What the heck? you mean he got a 75% discount for 3months? How much worth of stocks are were talking about here? I mean who is selling these shares at 75% discount..... can't be too many before the seller(s) figure it out right? My god this is the biggest example of stockmarket inefficiency I have ever heard! That should be the nail in the coffin for EMT..... Strange thing happen in these overseas markets. About 1 year ago, I bought DKSH (Malaysia) at a 6 PE. Meanwhile, it's Swiss parent DKSH, traded at around a 30 PE. They were essentially similar profiles, and Malaysian sub contributed plenty of profit to the parent. 12 months later DKSH in Malaysia is a 3X bagger. I couldn't believe you could find stuff like this, but it happens. So much for EMT!

That is an excellent read - thanks for posting.

I don't understand how is managing other's portfolio work? If you trade for them don't you just shadow your own porfolio? Trading is zero work Random - that's not exactly what I meant. Trading is no work - correct. Frequent trading is destructive, as we are all investors on this board. You mentioned idleness, and some will see trading as filling idleness. I'm saying you have to fight that tendency. As you say, managing a portfolio is pretty easy. The work is in the front end - defining goals and reviewing the current portfolio they are in, and coming up with a plan that allows them to see the difference between an asset allocation model and a value investors approach. That has been significant work. Once accomplished, yes - portfolios are quite similar.

Thanks for your sincere response. That is very interesting how you got started full time. I truly recommend "Free Capital", it talks about how 12 people in Europe got started investing full time. So are you saying you manage money for other people? For me one thing is the opposite though, I hated trying to invest full time. I just couldn't deal with the pressure and the apparent idleness. I find that working at least helps me be more patient and take my mind off it, esp. when there is a market pullback. In terms of my getting started - I consider it "fate meets luck" - it was not planned, but worked out well that I was sort of forced to make a decision. Investing full time leaves me plenty of time to work on other peoples portfolios, friends and family. Since that can occupy plenty of time, and I like it, I am less likely to do I something stupid, like trade. I agree with you - the idleness can be filled up with something really dumb - like trying to "make things happen". Idle time is better spent reading, thinking, going over models a second/third time, and research. Patience and good decision making is a critical element. So I spend lots of time attending conferences as well - there is a lot of time for learning. But I agree - the people I have seen "blow up" are the ones that try and make things happen by trading when they get bored. I'll check out Free Capital - thanks.

This is an interesting conversation. Not sure where I come down on it. Maybe it just depends... In my case, 5 years ago, I can't find a job - and now I do this full time. By checking out of the tech workforce, like Eric says, I leave a space (high paying job) for someone else. That seems like a good thing. And I don't clog up the unemployment rolls. For myself, I eventually get to the point where I am paying a hell of a lot in taxes and supporting my family. I'm taking no government support. This seems like a double win to me. Plus I am helping several other people make a lot of money with some above average (index beating) returns. All this seems like a net-net-net positive to me. Plus I'm way happier than I was working for other people. It sure feels like I'm doing good.

A small & relatively new international fund I hold: FPIVX - First Pacific Advisors International Fund Domestic Funds - FAIRX, FPACX

http://dealbook.nytimes.com/2014/02/25/geithners-book-has-a-title-stress-test/?_php=true&_type=blogs&_r=0

I can't remember if he said to sell (probably not explicitely), but his Sun Valley speech clearly talked about overvaluation around the dot com bubble. I think in 2006, 2007 it was pretty clear that he was not crazy about equities. At the annual meeting he was always getting beat up about having so much cash piling up - why haven't you put this cash to work, etc? I remember one of his answers "If we are able to put all this cash to work - you won't like the conditions under which we are able to do that". I had trouble understanding that answer until 2009 - then I got it.

I get a lot of questions from people around regarding what I actually do, and I feel like I get a lot of disapprovement. I would much appreciate thoughts from fellow investors how to cope with this, and also how to cope with the potential for procastrination when you got all this time to do whatever you like. SwedishValue - interesting you mention this. For the last 5 years, as I've told friends/family what I am doing. They always ask me "How's the day trading going?". This seems to be the public consensus for anyone who calls themselves a private investor buying stocks. Then I tell them that 70% of my gains have been LT cap gains, and intend my holding period to be 1-3 years. Even then they don't quite get it. As a few others have mentioned, one of the tougher challenges is to find LIKE MINDED value investors that you can communicate with. Most of my friends don't really get it - since they can't possibly think of holding a stock for 12 months. Early on in my career before doing this full time - I proved to myself I could lose a lot of money by trading. Only when I started studying Buffett in 2002 (after large tech losses) - did I "get" value investing. If you are met with disapproval - I would venture to say they don't "get" value investing. They think speculator.

This definitely resonates. Some kinds of work stress are positive and even fun, but stress from office politics and working with assholes is not one of them. I'm curious... as a full-time investor working from home, what kinds of contacts and confidants do you develop? Are they fellow investors that you share ideas with? Part of my work schedule involves attending lots of conferences, so I have met many fellow investors. Just about everyone is helpful. There are a couple that I have a steady, ongoing dialog with - some of that involves exchanging investment ideas, a lot of it is just investment strategy and views. And like this CBF forum, although very new to me, I can see there are many worthwhile people to develop a relationship via the internet. You don't have to be a recluse unless you want to.

My questions for those that have "retired" early: Did investing really become a full-time activity once you stopped working? And did you see your returns improve as a result? (I'm in the camp that suspects my returns would suffer if I devoted all of my time and attention to my portfolio.) Did you ever find it socially isolating to be "retired" when everyone else your age was working during the week? Most of the friends I've made in the past 10-15 years were met through work. What kinds of other projects or activities have you taken up to replace your day job? Were they difficult to find? Did you find them before or after you quit your job? Do they give you the same sense of meaning and/or fulfillment that your career did? Has anyone used their "retirement" as an opportunity to find or start a new career? Leftcoast - all good questions, and I think the right questions - In my case: Investing became a full time activity - because there is always something important to do. It's turned into a full time job, because there are few things I would rather do. IF you don't love it, don't do it. With real focus & discipline - your returns should improve. Mine did. But I always had to fight the "urge to trade" and do something every week. I've seen others go down in flames because they are "trying to make something happen". Patience and finding quality investments can't be forced. As far as being socially isolated - yes - there is some adjustment, but that's ok because I am always busy - and I don't waste time. I'm much more productive, because I only work on things that will help me make money. No politics to worry about - just productivity. Your time is your money - you don't waste it. You develop a different circle of contacts and confidents. One of the really great aspects is that I do NOT have to work or associate with people I do not like or respect. That is a benefit I never thought about. Other activities/projects - I spend all my time trying to figure out what investments might be worth or looking for new ideas. It's plenty time consuming. It does leave time for education - which should never end. There are plenty of things to do to improve skills - listening to interviews, conference calls, etc, etc. -- You can't do this unless you really enjoy it - it's too much detail work. When I get burned out - I play racquetball or take the dogs to the park. But mainly I am always thinking about finding another great idea. It can consume you. Done properly, it's a full time job. There is always something to do if you really want to make money. It's about focus. My advice is only do this if you have a burning desire to do it.

Apologies. I read that your objective was to beat the S&P by 10% or more per year, and then I mentally went a step further and assumed that you had been doing it for a sustained period (and on this board we do have a couple of people who have actually done this sustainably and who are in the top 0.01 percent of investors!). As far as my own investing skills, I'm still undecided whether I am slightly above average or whether I'm just lucky. For planning purposes, however, I only assume that I am average because the consequence of being wrong might mean that I'll end up eating cat food! SJ No problem. In my case, I know I've been incredibly lucky. I follow the Pabrai formula - I copy people far smarter than I am. It works wonders.

Of course, if you can regularly and reliably thrash the S&P by 10 percent per year, then it's all academic. But if that's true, then that would put you in the top 0.01 percent of investors? That is a bunch of crap Stubble - so I beat the S&P for 5 years - that doesn't mean anything in the long run - it's just a goal that I set - otherwise I should just go back and get a job - and buy an index fund. I never said a thing about being a great investor, which I am sure you are.

Stubble Look - I never said ANYTHING about a withdrawal rate. I said I needed to see a 10% annual return over an extended period to be able to continue. Otherwise, I should just go back and get a job. And in the first couple years I withdrew no capital at all. When I did start withdrawing capital, it was far easier mentally to set a large expense sum aside and just focus on investing.

I think this implies that you need to make a decent bit more than 10% to stay even because of the volatility in your net worth. If you get a bad year that $150K withdrawal is a lot bigger than after an up year, and you would need to make a lot just to earn that back. If the first year would be a -40% year you would start the second year at 0.84 million. Spend 0.15 million and you need to get a 21% return just to get back to 0.84 million. That's why I linked to that Monte Carlo calculator a few posts above. Volatility matters! I stated this poorly - I figured I needed an 18 month startup period - and I could lose money, but I needed to be able to see that this would work. I knew 10%/yr every year would not happen like clockwork - and a better way to say it - I figured success would be a 10% annual return over 5 years. That would be a MINIMUM for being able to do this full time. In reality my own personal goal was to beat the S&P every year by 10% - which has happened. So volatility may matter - but the focus needs to be LT, not annual.

I did this 5 years ago, having lost my job on March 1, 2009 - during the recession. I'll tell you my experience: You can't be under pressure to make money. I told my wife, if this did not work, I'd go back and find a job in 18 months. Fortunately for me it did work. But I've seen people attempt this thinking that money would consistently roll in. I don't measure my performance monthly - I think of my performance in 6 month increments - the longer the better. You have to love doing this - or I do not think it will work - it's just too hard. Sounds like you do. Much of not putting too much pressure on yourself will have to do with your "burn rate". You really need to be comfortable with that in order to make good, long term investment decisions. So I don't know your burn rate. I started with $1.4M - and a high burn rate - around $150K per year. If your burn rate is significantly lower than mine - it may work with your amounts. But I figured I needed to make approx 10% in order to stay even. And it worked out far better than that - so here I am 5 years later - with the best job in the world. You have to KNOW that you will have a bad year and lose money. That will suck and you'll get depressed - I had periods during the summer of 2010 and 2011 - where it was very hard mentally because of the paper drawdowns that happened with the European banking crisis. You need to be able to make it through those periods mentally - and it won't be fun. It will put pressure on you - you need to know you can handle that. So far, I am waiting for that big down year - it has not happened yet - but it's coming. Something that helped me a lot - a couple years ago - I put 200K aside, essentially for the next 18 months "operating expenses". That helped me a lot mentally rather that withdrawing money from investment accounts to constantly fund living expenses. Also - from DAY 1 - I set aside $25K/yr for education, seminars, subscriptions. I did not have an accounting, finance or investment background - I came out of software sales. So while I had capital - there were important aspects that I did not have. But it was very important for me to not cut corners and treat this like a business - and make the proper investments in my skill development. These are just some random thoughts - I hope they help - good luck!

Here you go: http://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2014/03/03/2014-03-03%20Ask%20WarrenBuffett%20complete%20transcript.pdf Thanks Liberty - I appreciate the transcript, super helpful. I also like watching the video (so much of communication is in the subtlety of body language, etc). I was hoping to see the entire video, but it seems to be non-existent on the web. It seems like CNBC must have it somewhere, but their website is a bit of a maze wrapped in an enigma. They will release the entire interview eventually, after they make you watch all the commercials on each 3 minute clip.

Vitaliy on Putin: http://www.institutionalinvestor.com/blogarticle/3315726/Will-Russia-Go-to-War-Over-Ukraine-Dont-Bet-on-It.html

I think he did answer this on Monday, when he said it would be self serving to promote Berkshire.

After 2 wars in Iraq and Afghanistan, I can't imagine getting involved with this. Don't understand it well, but if Crimea is largely a ethnic Russian population and they want to succeed from the Ukraine - let them sort it out. We can apply our sanctions to Russia, etc - but I'd hate to see any show of force. We should pick our battles carefully if the current ethnic population of Crimea wants no part of the Ukraine.