constructive

I think to read stuff that brings new ideas... and this is a great one! I think what Buffett means when he says cash is like call options is: - a call option with strike price $10 will expire if it doesn't move, and will net $10 if it goes to $20 - if you hold cash and a stock is $20, it will do nothing if it stays at $20, but you will net $10 in VALUE if it drops to $10 i think schroeder explained it pretty well. option price of cash is opportunitiy cost less interest earned on cash holdings. underlying security is EVERY sercurity. strike price is whatever you want it to be. term is forever. cash has been a very expensive option for a couple years now. Schroeder completely mangled Buffett's point. Cash is like a put, not like a call.

Again, there is definitely a performance benefit. Look at all the value investors who suffer during bull markets and make it back and then some on a relative basis during bear markets. To put it another way, your performance depends on the investment decisions you make, nothing more, nothing less. It doesn't depend on the strategies you exclude. On average value investing is the most profitable set of mental models I have found, but that doesn't mean every situation classified as value investing is more likely to be profitable than every situation classified as market timing or speculation. If you are deciding between two investments do you choose the one which falls under value investing or do you evaluate both using the mental models at your disposal and choose the one which offers greater risk adjusted return? I find it hard to believe that Buffett would not have been successful at tech investing if he had applied himself to it. After all he has been successful at metals, currency and interest rate speculation. I would argue he is "completely principled" in the sense of using rational mental models, but his mental models are not an exact match for value investing.

I don't have any currently but here are some places to look. Merger arb list: http://www.sinletter.com/merger-arbitrage/ Spinoff list: http://www.stockspinoffs.com/

The way you use the term ideological purity makes it sound like a bad thing. It's definitely not a bad thing to believe in principles and follow them. When Buffett refused to invest in dot com stocks he was being ideologically pure even though the value strategy was not producing results. Yet in the long run he absolutely did get a performance benefit from being principled. Around the same time Buffett bought 4000 tons of silver. His whole career he has argued against investing in precious metals (which don't generate any cash flows) and for investing in productive businesses. Does that seem ideologically pure to you? And he has clearly adjusted his asset mix based on interest rates and valuations. Watch what he does, not just what he says. Buffett is a great example of multiple mental models giving his approach hybrid vigor. If he only invested in one kind of situation (NCAV, arbitrage, cyclical, high ROIC, etc) he wouldn't be one of the wealthiest men on the planet. There's a clear psychological benefit from ideological purity (other value investors agree with you, dopamines flood your system). But there's no performance benefit. If you have reason to believe a certain investment strategy will work, it doesn't matter whether other people classify it as value or not.

You can certainly see in hindsight that it worked for some, but can you use it looking forward and win more than you lose? I think that's the crux of the matter. Quite true. There are studies showing market timing strategies that worked. Whether you think they will continue to work is a judgement call. http://www.kc.frb.org/publicat/reswkpap/pdf/rwp02-01.pdf http://wpfau.blogspot.com/2011/01/valuation-informed-indexing-preliminary.html http://mpra.ub.uni-muenchen.de/35006/ http://philosophicaleconomics.wordpress.com/2013/12/20/the-single-greatest-predictor-of-future-stock-market-returns/ http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2302218 http://www.frankfurt-school.de/clicnetclm/fileDownload.do?goid=000000311260AB4 http://www.marketwatch.com/story/wisdom-of-richard-fabians-system-emerges-in-hindsight http://www.marketwatch.com/story/maybe-the-best-market-timing-system-ever-2011-07-12

There's no performance benefit from ideological purity, i.e. "Market timing is bad and never works". Lots of investing strategies work sometimes and fail sometimes. Market timing is no exception.

Cool. You can bring them into excel using a | delimited format. I was surprised to see many preferred shares with borrow/rebate over 20%. (DD, PRE, AGO, AIV, FRC, KIM, etc.) Why is that? Is it just that people who buy preferred don't like to lend them out?

No, the average person doesn't have an edge on any stock, small or large. The average person should buy index funds.

If you annualize the last quarter they trade at 36x cash flow and 59x free cash flow. Then add another 9% dilution from Whatsapp. Not crazy, but clearly there is significant growth baked into the price.

What evidence is there that preferred are in much better position than common? Yes they are senior, but in a downside legal scenario they are worth $0 and in an upside legal scenario they are both worth a lot more. What is the middle scenario (and the likelihood of it) where they don't live and die together? Fairholme's preferred spinoff idea was a middle scenario, but it was dead on arrival, no real legislative interest.

They just released preliminary results and presentation last week. Now they trade at 14.4x earnings, 1.2x NAV. Jardine Strategic trades at 12.6x earnings, 0.7x NAV. http://www.jardines.com/investors/analyst-presentations.html

Morningstar is wrong - maybe they aren't subtracting the minority interest from Jardine Matheson and Jardine Strategic cross-holding. It trades at 13x earnings. http://markets.ft.com/research/Markets/Tearsheets/Summary?s=J36:SES

Employees only see one side of the cost equation - the fund fees. The company also has to pay administration fees. By offering plans with expensive funds, and by doing business with their bank, insurer, or payroll processor they can reduce the admin fees. (Some of those expensive funds kick back money to the administrator.) The best way to look at it is a total fee basis. Fidelity often comes out the winner, or Vanguard for larger companies. I volunteered for my company's 401k committee and we chose to switch to Fidelity.

I would start by making a full budget - not just the cost of assisted living, but all other expenses and taxes too. Then based on that, you have an annual withdrawal target from the portfolio. I'm guessing it will be around 5-6%? A little higher than recommended, but for most people it works out fine. If they are comfortable with it, I would weight conservative, dividend paying stocks (either individually or in ETFs) a little heavier than bonds / cash. Most retirement financial advice emphasizing bonds is the product of an era when interest rates were substantially higher than they are now.

Free Capital is a good book on retiring to invest full time, from a UK point of view. Discussed here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/tips-for-investing-full-time/ http://www.amazon.com/Free-Capital-private-investors-millions/dp/1906659745

http://www.businessinsider.com/the-cheapest-stock-markets-in-the-world-2013-3 Russia, Argentina, China and Norway were cheapest on PE, Greece and Ireland cheapest on CAPE.

Russia was the cheapest market a year ago too.

Insurance also requires large cash and fixed income allocation, which drags the returns down compared to an equity heavy portfolio. If he has historically earned ~20% on equities, ~5% on fixed income and insurance adds ~7%, the total still worked out to 20%.

Interesting how nobody in this thread said a word against Mt Gox until 2 weeks ago. Hindsight bias is a powerful thing.

My point isn't hypocrisy, it's just having a sense of perspective. Putin isn't history's greatest monster any more than Obama deserves the Nobel Peace Prize.

Do you think other countries should have suspended financial dealings with the US when we invaded Iraq? Our military has killed a lot more people in the past decade than Russia has.

Bancroft runs Makaira, a $540M fund. WAIR Wesco Aircraft Holdings 18.07% LINTA Liberty Media Interactive 15.82% CDW Cdw Corp 14.35% IRM Iron Mountain Inc 11.33% CVA Covanta Holding Corp 11.03% VRSN Verisign Inc 8.96% CPLA Capella Education 8.41% CXW Corrections Corp of America 7.72% TWC Time Warner Cable Inc. 4.32% I think value investors generally underestimate Tepper. Like Soros he's a great value investor, plus he has an incredible intuition.

In terms of violence Putin doesn't compare to Hitler at all. He's mild compared to Khrushchev or Brezhnev.

This is true but sanctions would have to be limited. If you apply extreme sanctions and turn off Gazprom pipelines in winter time, people all over central Europe would freeze to death.

Vodafone doesn't seem like his style in my opinion. Might just be more Tesco.