siddharth18

Lots of good information in this thread and I don't want to sound as if I'm pontificating, as I'm still learning. But one of the questions I ask myself before buying is - What would happen if the stock price dropped by 50% without any news? Would I still hold it or even increase my position? Or Would I sell? If you answered "NO" to the first question, it means you don't know enough about the company and you need to research more. I learned a lot by reading about Dr. Mike Burry. He's one of the true outsider, who thought like an outsider from Day 1 and always thought independently. Read his letters to investors and how he made money. If I recall correctly, by the time he was done researching a company, he knew more about it, than anyone on Earth. And that research is what will give you the conviction to stick to your thesis when everyone is panicking from the mark-to-market losses. In the stock market, you're competing with all sorts of people - idiots and geniuses. You better know at least more than the average participant or else you'd have no hope. Oh and about buying something simply because Einhorn and Buffett buys it, ask yourself this: Will Einhorn or Buffett call you if/when they sell? Is the position an equal % of your assets as theirs? Are you aware of all their hedges for a particular position? (and I'm not just talking about direct hedging via derivatives, but also indirect hedging - like investing in oil producer but also owning a company that benefits from cheap oil) Do you even know if they'll be right for that particular position? Will you have other winners in your portfolio like them, if this specific pick backfires? ---------- We all make mistakes...but the smart ones learn from them and promise to never repeat them...

http://econweb.ucsd.edu/~jhamilto/IAEE_2014.pdf Paper by James D. Hamilton - Department of Economics University of California, San Diego July 20, 2014

I know there are a lot of Indians on this board (including NRIs). I'm wondering if anyone has had experience with FCNR (FOREIGN CURRENCY NON-RESIDENT) deposits. It's basically CDs offered by banks in India for NRIs, under the auspices of RBI (Reserve Bank of India - http://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8120). Normally it would be an easy pass if: (i) it offered same or nearly the same APY as US-based, FDIC insured banks, or (ii) it was only offered by private banks with no accountability/oversight/creditworthiness. but, in this case: (i) The APYs are over double what the current saving banks offer in USA (ii) It is offered by state-controlled banks such as SBI, Bank of Baroda, Syndicate Bank. Take a look at the APY for 5-year CDs, denominated in USD: http://www.syndicatebank.in/scripts/FCNR.aspx So I have two questions: 1. How should I be thinking about the risk in this case, especially since it's being offered by a state-owned/controlled bank? It's equivalent to buying an Indian government bond denominated in foreign currency (USD)? 2. Has anyone had experience with FCNR? What should I look out for? I should mention that after maturity, the CD is fully and free repatriable back to the foreign country without any tax obligation arising in India. More links: http://www.rbi.org.in/scripts/FAQView.aspx?Id=98 http://www.rbi.org.in/scripts/FAQView.aspx?Id=69

Because there were those in the market (analysts, traders, speculators, etc) that did expect OPEC to announce cuts in output. Remember the analysts were split before the meeting and it's likely that some market participants believed (and hence acted) as if there was a cut coming. And because it didn't, it was time to close their bets (ie - sell their long position) as the outcome contravened their thesis. "A Bloomberg News survey showed 20 analysts were evenly divided on whether the Organization of Petroleum Exporting Countries will cut supply." Source: http://www.bloomberg.com/news/2014-11-25/wti-extends-drop-from-4-year-low-as-pre-opec-talks-fail-on-cuts.html

Someone made an interesting comment on SeekingAlpha: A great business plan by those who control vast amounts of production - short various sized oil/gas companies across the globe, then announce increased production and tell everyone to be prepared for lower long term prices. Then reverse position and go long oil/gas 12-24 months later (prior to announcing production cuts) and lift oil back to $100+ so all of your holding increase 20-60% within a few months.

Great info in this thread! Is there a particular time of the year that better deals are likely to be found? (for example stocks get beaten down during the month of December). Also like stocks, there are lot more deals to be found during a recession/slowdown? Cheers!

http://www.forbes.com/sites/nathanvardi/2014/07/30/the-greatest-deal-of-all-time/

Definitely not. Pabrai has lots of ideas that you won't simply know about by just reading Graham. The three biggest I found were Checklist, position sizing & cloning. I like to watch every Pabrai video because even though he has a policy of not discussing current holdings, he will provide one or two examples of his current holdings nonetheless...or a new perspective on his past holding.

Thank you for posting. He comes off as very unemotional and rational with his "you gotta do what you gotta do" type of personality, probably from having worked so many years at a ferociously competitive institution in a ferociously competitive industry and having seen how dark and deep the abyss can be. Many good tidbits.

Didn't he ride RiteAid from ~$1 to $7 ? He had crazy performance while holding significant cash. He was quite reticent and avoided publicity. Would've loved to know more about him, but RIP!

Congrats!

Thanks Packer, for the specific names. What about Russian stocks?

I'm wondering which ones in particular?

Or the beach controversy... http://www.nytimes.com/2014/06/16/us/its-privacy-vs-the-people-in-the-battle-for-martins-beach.html http://www.forbes.com/sites/ellenhuet/2014/05/13/billionaire-vinod-khosla-dodges-answers-during-martins-beach-testimony/ http://www.latimes.com/local/la-me-martins-beach-20140513-story.html http://www.firstpost.com/world/vinod-khosla-calls-dibs-california-beach-lands-legal-battle-1576513.html http://blog.sfgate.com/stew/2014/05/28/billionaire-claims-he-owns-the-road-the-beach-and-the-tides/

ACH (or some other versions of it - like POPMoney, ClearXchange, Chase QuickPay) is 10,000% better than paper/physical check.

http://paulasset.com/wp-content/uploads/2012/09/Benjamin-Graham_-David-Dodd-Security-Analysis-Sixth-Edition_-Foreword-by-Warren-Buffett.pdf Starting Page 617 of the book, and page 670 of the actual PDF file.

What about long duration, out of the money puts (LEAPs) on Australian banks?

I love American Greed! A few of the episodes on "The Profit" have left me wanting for more. They spend almost an hour telling me about a specific business, the negotiations, etc but the final outcome isn't well described. For example, the "Key West Key Lime Pie" describes a nice "turnaround" but doesn't mention how well the business did on the first day. Revenue, profit, etc would've helped. I guess it takes a while for the revenue/profit to ramp up and for the business to gain momentum after it has experienced a tremendous makeover...so I'm hoping Markus will share some numbers of his previous deals on forthcoming episodes!

For the most part. He was entrepreneurial from the beginning though. So it was very likely that he'd succeed...it's just that you couldn't have told that he would make a few hundred million or BILLIONS. He was at the right place at the right time and convinced (to Cuban's credit) the right sucker (Yahoo) who handed over billions to him during the dot com frenzy. Maybe Mark was smart or maybe he got lucky or both, but he was definitely NOT dumb! To quote Pabrai, Mark "only drank half the kool-aid of the dot-com bubble" and was smart enough to get out at the top. I think he made the right moves after that pay day - he bought puts to lock in his profits and then bought a bunch of other assets to make sure he stayed rich. See http://www.bloomberg.com/video/bloomberg-game-changers-mark-cuban-FAScYey5RIiO~5MyEg1yGw.html

It's said that you can't last in this business of investing if you have no passion for it. In other words, you can't fake passion... So with that in mind, I really wondered if there were members on this board who were into investing just for the sake of money and not because they "loved" it. Meaning if they had enough money to live comfortably from the passive income (dividends) would they opt for it? Do we have any Andrew Lahdes on this board? Well I guess this thread answers/will answer that question.

It was a bit shocking to see when Automodular on TSE was selling for less than cash on their books last May...but your postulation would seem to justify it. I wonder if that'd been the case if Automodular were trading on NYSE/NASDAQ.

looks like they had a bad year with all the litigation nonsense. What do you think about that? ALso why is their tax rate so low, and how will that look going forward? It looks pretty cheap if business picks up next year. Easily a double with their growth prospects and ROIC. I feel like EBIX has been misunderstood and the management has been heavily distracted. I was a buyer around $10-$11/share and lower - I'm just holding here as I feel it has a pretty good business model. Tax rate is poised to gradually increase as we go forward and the overseas tax holiday comes to an end. At this price, the shares are slightly undervalued if you assume no growth but cheap if you think Raina hasn't lost his talent for acquisitions. Or you could just stay out of the stock until the investigation is resolved or if you can't handle the volatility. Wow - quite a track record! If I may ask - how does this compare to XPO and its chief Brad Jacobs? Definitely seems like an "outsider"! All we need is a handful of such companies to get very rich over time!

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/post-your-blogs-thread/

There you go - https://docs.google.com/spreadsheet/ccc?key=0Aisl_3YDx6vMdGZ2QnloNDJUNmlvS2lVcXFkdDA2RFE&usp=drive_web#gid=0

Common-sense rules from a guy with an extraordinary track record. Can't go wrong there; thanks for posting!