bennycx

I've worked in this area before but what I mean is not that it will happen again soon It is more of when it happens it might just go to 0, and there is almost no way a ton of resources can prevent that happening. It is not really like risk management inside a bank that can cut trading losses by reducing leverage

Risk of KCG is very high, no..? One wrong code and another Knight Capital event might happen...

Anyone who has read Fortune's Formula will realise that Claude Shannon is a buy and hold investor. His Princeton-Newport partnership earned 28% compounded returns from late 1950s to 1986, mainly holding Teledyne, Motorola and HP. As a comparison, Buffett's early partnership returned 29.5% from 1957 to 1969. This begs the question whether using a net-net Grahamite approach is better even with small sums of money.. Perhaps "great companies at a fair/cheap price" is also ok.. Shannon was able to achieve such returns as a long term investor and he isn't really limited to size of the fund..

what's your thesis on CHRW? Seems like a good company but at an expensive price

Singapore !

One of the biggest problems I have is confirmation bias, as in working on an idea to confirm that I want to buy it and not to find out more about the company. To try and prevent that, whenever I have an interesting idea I would try to force myself to think that it is only an interesting idea and to think of all the potential negatives about the idea. Previously I always have the thought at the back of my head that this stock is going to be a 10 bagger etc etc, and because of that I missed out on all the potential downfalls believing that the upside more than compensates it ...

+1

Yes, this is exactly what it is like. I work at one of these large investment banks and that is being pushed onto you every single day. The other thing at least in my firm is we are being pushed to grow market share, even at the expense of margins. Just lock in the customer first.

Yeah, I am thinking since these guys all have a large portfolio of many stocks, you're essentially buying a large part of the market and it will probably beat s&p only by a slight margin.. Well, if they were bought below BV then you might get a higher return ~10%, but what if the market becomes overvalued and none of them trades at BV anymore? What would you buy then? This is much pessimistic! I have really an hard time imagining a year in which FFH might be more out of sync with the market than 2012. Well, in such a difficult environment and terrible year FFH still returned 6.5%. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence. One’s knowledge and experience is definitely limited and there are seldom more than two or three enterprises at any given time which I personally feel myself entitled to put full confidence.” - John Maynard Keynes

Yeah, I think it would be closer to ~8% over the long term...

This men sells his life through an IPO... http://www.wired.com/business/2013/03/ipo-man/

Oh.. DSWL.. I think it has been covered briefly on the board here.. :)

Hey! Thanks guys! I'm glad to say after sitting the order for more than a week, it has finally executed when I got back on Friday.. it must be the power of the board that answered the call.. Anyway my broker charges per day as well but the reason why I did an all or nothing is most of the time I see 100 or 200 shares trading everyday and the occasional 10k shares - I don't want to pay daily transactions to pick up only couple hundred shares! I guess I had no choice but to sit my order there and wait for the occasional big lot to sell into my order...

Thanks mate! Unfortunately I'm not investing a fund and do not have the luxury of using an investment bank! For individual investors like myself going through a normal broker, would I just have succumb to the fate of the luck? :S

Hey guys! Just need some help here. I have a fairly large order (~50% daily volume) sitting for an illiquid stock for a few days now but it is not executing because I've set it to all or nothing (don't want to keep paying transaction fees getting small pieces of shares). What would be the best way to even get a bunch of shares from these companies? Do I just have to sit there and wait until someone is willing to sell me that block of shares? Cheers!

Quite weird that he says that it is better than free money. Wouldn't it be the same as free money given consistently then? It's like saying a profitable business (like coke) is better than free money......

Don't think he would do that.. One of his principles is to not use excessive leverage and not even use it if you don't need it

That is very interesting because a lot of small or micro cap stocks from Nate at oddball or VIC do indeed get 50% returns, but the problem is many of these stocks are essentially "value traps" even though they may not seem to be so a priori. I think Buffett's main method in achieving the high returns would be to find these small stocks but at the same time concentrate on the good ones and avoid the value traps. In other words, being a value stock is not enough. It has to be the Absolute value stock. :)

Don't get me wrong I'm not saying that >50% is impossible. I'm saying the 50% compounded is possible maybe for 2-3 years but not over say 10++ years. In fact I'm sure alot of people including me on this board has 50% compounded over the past 2 years or so because of BAC and what not. Again let's say WFC at 9s. Well yes let's say he put everything into WFC he would have gotten something like 300% or something, but then what now? That is 50% compounded for 3-4 years but can it continue? He would have to dump Wells now at $30 and then put it into another Wells like situation again like BAC at $5 or something, and repeatedly do that to get >50% continuously. Not sure if I can buy the argument that Buffett is "miles" ahead now. If that were the case, we would see that all investors have exponential returns as they age. It seems that through the years Buffett's philosophy has changed to a Munger like style and looking for great companies which wouldn't really help increasing returns to 50%. What is more likely happening is reversion to mean and that his returns in his partnership days were good but also an "outlier" - the Malcolm Gladwell argument

Doesn't anyone think that Buffett is exaggerating a little when he says he can do >50% returns? He might have made >50% returns for a couple of years for say the Korean stocks, but I highly doubt he can replicate it over say a 10+ year holding period. Even during his early partnership days he made 30% odd compounded, and that was during the time when there seemed to be a lot more bargains and the crisis seemed worse like during 1973. Let's say Buffett were to do this all over again. He might be picking Graham-like stocks when handling lesser sums of money but again I think he would be making around 30% compounded or less. We also know that people like Ted Wechsler and Charlie Munger can make 20+% compounded by concentrating on great companies but not at dirt cheap price. Wouldn't it not make much of a difference in terms of returns whether you choose the Graham or the Munger style? Furthermore you would need to know when to sell when using the Graham method as you can see some of the investments Buffett made in his partnership days actually went into bankruptcy or below his costs but he sold it before that happened.

Thought he once said that going forward equity markets would yield about 6%. That would mean that there would be no equity premium if he values UST at 6% too...

Haha okay. Somehow I felt that Tesco's moat is not as strong as I once thought.

I have a feeling diversified retailing may refer to Tesco. Could that be possible?

Buffett is valuing stocks as if the long UST bond was yielding 6%. but that's just him. :) Really? Where have you seen that?

Hey! May I know what do your screens consist of?