constructive

Deja vu: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/weighting-of-holdings-in-portfolio/

Almost all the value is in the water distribution system, not the water itself. Financialization through a third party is too inefficient for such a cheap commodity. Maybe you just want to sign a long term contract with your water utility.

It seems a little complicated. I don't see the point of positions less than 3%. I would guess most retirees would prefer 10-15 holdings instead of 29, easier to keep track of what you own and what role each one plays. I think it could use more foreign exposure. DEM is a good choice. TDIV would cover IBM, INTC and AAPL pretty well.

Isn't CAGR the same as geometric mean? Yeah, you're right. It depends on how you calculate geometric mean. I was thinking of using the growth rate versus 1 + growth rate. If you use 1 + growth rate it will give you the same result as the simpler CAGR formula.

This type of metric generally uses CAGR (as opposed to arithmetic mean or geometric mean). (r5 / r1) ^ (1/5) r2, r3 and r4 don't matter. http://shouldersofgiantsinvestor.tripod.com/growth.html

Scissors + Banach-Tarski = free pizza! http://en.wikipedia.org/wiki/Banach%E2%80%93Tarski_paradox

You mean like Soros, Druckenmiller, Robertson, Einhorn, Loeb and many other successful hedge fund managers? ::)

http://www.indexuniverse.eu/images/JOI/issues/2012/06/IndexArbitrageExplained_figure1b.jpg Index fund market share growth doesn't show any sign of slowing.

"asset flows into funds and ETFs tracking the S&P 500 boost the valuation (price-to-earnings ratio or price-to-book ratio) of stocks included in the index anywhere from 139 to 167 basis points as compared to stocks left out of the index." How long does this effect take on average? If you can do 1.4% over two weeks that's a pretty good source for statistical arbitrage. "In theory, it would only take one profit-seeking active manager to correct any security mispricing and keep security prices in line with fair values." - Mike Rawson Right, that's how you can tell your theory is broken. If you can't bother fixing your broken theory, it's probably better to have no theory at all.

This one is $1.97 / cu yd. Sounds like a pretty good deal. http://www.bizbuysell.com/Business-Opportunity/Excellent-Income-Landfill-and-Transfer-Recycling-Station-for-Sale/662081/

Neither does IB US. In fact I don't know any discount brokers that offer access to South America.

To figure this out you need to construct a personal utility function. I think it is quite rational to prefer a bird in hand versus two in the bush, as long as you have a consistent, well defined function that reflects your marginal utility and risk aversion. http://en.wikipedia.org/wiki/Utility I would take a 25% chance at $400 over a guaranteed $75. But I would take a guaranteed $75,000 over a 25% chance at $400,000. Utility functions are convex, so the marginal value of the 75,001 dollar is significantly less than the 1st dollar.

Agreed. I wouldn't bother taking any position less than $1k, or buy any shares that you don't intend to hold for several years. Smaller or more frequent transactions will just chew up brokerage fees and result in bad habits. In a few years you will be saving a lot of money so this particular $1k is probably not that important. What you learn from reading, writing and investing will be very important though. Some books I like: The Essays of Warren Buffett, The Intelligent Investor, Margin of Safety (online pdf), The Manual of Ideas, The (Mis)behavior of Markets, The Alchemy of Finance. Welcome to the board and good luck.

It's not regular summation - the addition and equals sign here are misleading since they don't mean regular addition and regular equals. It's Ramanujan summation. http://en.wikipedia.org/wiki/Ramanujan_summation

DTV, LUK, JSHLY

I'm not an expert but I think this is because those competitors are more efficient and more differentiated away from pure market making. Some operate dark market pools (which Knight also does), some specialize in less liquid securities, some offer more client service as opposed to trading for the firm's own account. KCG and the other large market makers may also be behind the curve in hiring computer scientists, mathematicians, physicists, etc. who have innovative ideas to push the business forward as opposed to S&T oriented MBAs. If I remember correctly KCG was trading around 1.3x TBV and 8% ROE before they blew up. So the upside might not be higher than that.

I would be less worried about another trading glitch and more worried about the erosion of the market making business model over the last decade. A lot of it is driven by HFT hedge funds (a superior business model). Some is also driven by more efficient brokers. How low will their ROE go? If they can only earn 5% ROE going forward, it's not worth book value.

I will also miss Sanjeev's ideas, and also the "Cheers" on the investment ideas board.

Yes this surprises me as well. Personally I voted for cash last quarter but not this quarter, despite raising cash and being a little more bearish now. The reason was that I only owned 4 stocks in the poll the first two quarters, and now I own 5.

Same here. Yeah, I recall that Autodesk is the goto software for the drawings. Is there a price point where people say I'll try something different? Kind of like what's happened with Gillette's razors? What do you think is separating them from the #2 and #3 guy in the space? Is it kind of like Excel for investment bankers? You're not going to send your clients a file in google docs Excel. If you are doing something simple with 2D CAD or 3D modeling, there are plenty of cheaper alternatives to Autodesk. They are probably not earning large returns here. On the other hand if you are designing a non-residential building, you probably need a Building Information Modeling program. This lets the architects and engineers create a comprehensive 3D model & drawing set containing all data about the building. The complexity of these models, programs and workflows is orders of magnitude greater than Excel. The whole design team which often involves several companies generally need to use the same program. If you don't use Autodesk, you could lose work because other companies will not want to team with you. I'd say the ecosystem effect is stronger than Office. If you want to work in OpenOffice and send and receive Office files you can do it. Not really with BIM.

The Packer effect is pretty strong this quarter. Votes for LUKOY up 330%, votes for ALSK down 60%, GNCMA goes from no votes to 7th most popular.

USG isn't a good business and not only because of asbestos lawsuits and the collapse of construction activity. They are a commodity producer without any significant competitive advantages. Many of their competitors have outperformed them through better financial management, diversification to other products, etc. Like USAir, the only reason Berkshire has done OK is Buffett's ability to make opportunistic distressed deals. Now that they own 30% of equity, the ability to do distressed deals is not going to help, they need the underlying business to perform.

Looks like it's from this study. http://www.gsb.stanford.edu/news/headlines/charles-lee-chinese-reverse-mergers-performed-better-than-their-reputation-suggested At a glance, looks questionable to me. They seem to have a significant problem with survivor bias (looks like delisted stocks weren't in their sample at a much higher rate than non-delisted stocks). Also, performing better than comparable US reverse mergers is not impressive, since those stocks did very poorly too. Also they only tracked 3 year performance which is problematic since CRMs failed at an increasing rate after 3 years.

Link? I think it's pretty clear that US-listed Chinese small caps (especially reverse mergers) have performed horribly.

Hey Ross isn't it time for the Q1 CoBaF fund rebalance? Packer's picks GNCMA and INLOT.AT probably need to be added. Also I think a lot of the names only getting 0-1 votes can be safely eliminated.