philassor
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Posts posted by philassor
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Buffet would get 50% return because he has 70 years experience in the stock market. I believe Ericopoly on this board had a 20 000% return over the last 10 years (about 70% annualized return). You can ask him how he did it.
BeerBaron
That's my RothIRA account with that return (according to Fidelity's calculations). And to date (as of 8/31/2010) it's 99.19% annualized for a total of 18,465% cumulative since 2/1/2003. The FFH options had a lot to do with it. Earlier this year the cumulative return was something like 24,000% but since end of April it has pulled back.
Blended (including my taxable account) it's 61.64% annualized since 2/1/2003 for a total of 3,709% cumulative. The reason the RothIRA outperformed is that I manage it with a different mentality, due to taxes. It was also a smaller sum so taking a huge risk on it didn't matter to me.
Another board member who doesn't post anymore (dengyuthenugget) has done 170% annualized since 2005 or so (perhaps it was 2004) -- overall, all accounts combined. Again, credit the FFH options for quite a bit of that.
Eric, Thank you for sharing with us how you accomplished your extraordinary performance; there is no question that your personal life story is inspiring. :)
There is also no question that your talent,intensity and guts met opportunity and you played big and won Buffett style (fat pitch).
However, we must put things in context; extreme fear was driving the Fairfax call options to a ridiculously low level, yet this board's confidence in Fairfax (and your own confidence) was rock solid allowing your multiple leveraged bullish super bets. Such situations are rare in a lifetime and I don't believe your extraordinary performance of 60% annualized over 6 years is sustainable in the longer term (say 20 years). I am in the uccmal camp here cautioning that the very best investors cannot return more than 20-30% annualized in a sustained manner over the long run.
Even though the collective knowledge of this board is very substantial and impressive, there are probably a few greener investors out there who could be tempted into believing the impossible that is why I am posting this note of caution.
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Must be my MacBook, but I can't get that bloomberg video to play;
frustration >:(
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The potential selection of Li Lu does make some sense when you considered that he is a little bit of a Munger protege, his personal life experience is almost as fascinating as Mrs B, He uncovered the BYD gem; and more importantly he has the chinese insider access
(knows the language, the mentality, the accounting,...) which of course is a wonderful investment market for the future of Berkshire. (remember that among brk's recent home runs Petrochina and Byd are both chinese companies).
The only thing that gives me pause is his tech bias... a field plagued by obsolescence and often heavy capital requirements. ???
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To be an "expert", you just have to be loud, obnoxious, and act like you know what you are doing.
Remember
ex means has been and spurt is is a drip under pressure.
;) :D ;D
Like Limbaugh, O' Reily, Beck and Hannety ;) oops forgive me, could not help it, this is a thread about Greenberg.
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Blood on the streets in the form of oil in the gulf of Mexico; seems like we are aproaching the point of maximum negative news regarding BP. Everybody is fearful; the situation appears to be just like a bubble in reverse; is it time to buy?
Tilson thinks so and he has been pretty good at using the greed when others are fearful.
I am starting to itch;
any takers here? :-\
http://online.barrons.com/article/SB50001424052970203296004575308800681560686.html
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"Suffice to say that I'm a happy shareholder and plan to hold my shares for the long term. This is my smallest position, but so far I've been satisfied."
I am with you Partner, and I guess today's 5% pop won't hurt. These guys are as shrewed as they come, they are great vultures, and they don't coattail at all. I guess that is why Buffett gets into ventures with them.
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I am a fan of luk but I have to admit that I am a little disconcerted by the CFO (Joseph Orlando) selling most his shares on march 22nd:
http://online.barrons.com/article/SB126946826656067059.html
What does he know that we don't? Or is it a personal emergency/opportunity he is facing?
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Sanjeev: Indra did come accross as a fast, sharp and knowledgable person. As to her sparring with Buffett, no offense but I thought it lacked finesse even though it was done in good humour. ;)
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Thanks for the link:
I am starting to like that fellow; brainy and insightful. Very impressive 1999-2009 forecast. The united corporations of america: priceless ( he stole it from me ;)) the terrible ratio of heath care cost to longevity compared to the insured world median: worth emphasizing. Finance as a drag to GDP: illuminating.
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I just found the timing and the tone intriguing;
Here is the article (by J Laing) which predicted a dive to $ 35 a share, inducing of course a dent on the stock for the next few weeks followed by the quantum leap.
http://online.barrons.com/article/SB125089367772050425.html#articleTabs_panel_article%3D1
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http://finance.yahoo.com/q?s=SHLD
The recent super negative ariticle in Barron's about SHLD opened my contrarian ears. the fact is after a brief dip to the lowers 60s, the stock rebounded dramatically since. Is it Mr. Market's mental illness, or malice from Barron's or poor journalism? What was remarkable is the negativity of the article was inversly proportional to the jump. :'(
The stock is up 14 % today....
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FFHWatcher: I have not done any serious digging yet on SD (although I have been intrigued by the company for quite a while).
It appears that FFH is unloading 28.95% of its shares ???
http://www.gurufocus.com/StockBuy.php?GuruName=Prem+Watsa
I have spent some time in the past week or so reading about SandRidge Energy. I like to follow what FFH owns to try to learn how to discover value myself or at least try to shed some light into how FFH discovers value.
Without having a strong background in Nat Gas, it has been challenging. Here are a couple of points;
1/ Early stages of building a significant Nat Gas exploration and development company
2/ Key guy is Tom Ward. He is the co-founder of Chesapeake Energy with Aubrey McClendon. Tom was the operations guy. Chesapeake was Aubrey's vision. SandRidge is Tom's. Tom left in 2006 to start his own Nat Gas play. He bought into a company (Riata Energy), took over the CEO position and then started acquiring using debt and shares. Changed the name to SandRidge shortly thereafter. Main area is the WTO (West Texas Overthrust). Tom has around $500M invested in Sandridge (25M shares x $20 = $500M but market value is about half. Essentially all his shares are pledged for personal loans).
3/ It looks like FFH got interested in 2008 and gradually build up their position to about 1M shares. FFH bumped that up to about 25M shares, worth around $10 each or $250M. This occured in or around Dec. 2009, last month.
4/ In addition to the shares, it looks like FFH purchased 2M 6% Convertible Preferred Perpetual for $200M which automatically convert to common shares in 5 years at just under $11 or around 18.5M shares. These funds along with other debt is being used to fund an acquisition for SandRidge.
5/ Total investment looks like around $450M, unless I somehow double counted the new common share purchases and the 6% Convertible Preferred Perpetual. Capitalization is about 200M common shares plus likely over $2B in debt now. Maybe $2.5B. It goes up fast when you are making $800M acquisitions. :-)
6/ I think the docs also show that Prem bought 147k shares for his personal account. Almost all these loans and purchases happened in Nov/Dec. 2009.
7/ I find it interesting that FFH is investing so heavily in this. I have a lot to learn about Nat Gas companies. Very young company. Very little revenue compared to debt which is exploding but so are reserves, etc. Potential looks huge. Around 2Tcf of Nat Gas in proved reserves?
All the above may have errors. I apologize if it does. I wanted to start a discussion on this company. For new readers looking to learn, start with Sandridge Energy's homepage and read their 2008 annual report as well as their investor presentations and a transcript of their most recent quarterly report conference call. It is on the SeekingAlpha website.
Looking fwd. to learning more about Nat Gas and discussing SD/SandRidge Energy. Interesting investment to say the least, IMHO. Offline is ok too.
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I would say that the other call up there for "call of the decade", should be Buffett & Munger's warnings on derivatives as early as 2002. Cheers!
I agree fully, the "call of the decade" was definitely Buffett and Mungers's repetiive warnings about the derivatives as weapons of financial mass destruction in the early part of of the decade. And boy, fincancial destruction it was!
(Now we know why they kept their cash patiently and deployed it with vigor only recently.)
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Quote from Viking
"The one stock I am thinking about increasing my position in is BRK (again, as a stallwart, holding it in place of a bond) with the goal of getting 6-10% per year.
Should the CAN$ continue to strengthen I will likely buy more BRK."
Attaboy ;D, I think BRK is the easy safe investment staring us at the face. I would be surprise however that you'd get less than 10% a year over the next 5 years. the stock is selling at a minimum of 25% discount and the effect of the elephant capture (bnsf) will certainly be a strong plus compared to the hoard of cash the company had been dragging until now.
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the article does address your valid your point:
"To some degree these statistics are a quirk of the calendar, based on when the 10-year period starts and finishes. The 10-year periods ending in 1937 and 1938 were worse than the most recent calendar decade because they capture the full effect of stocks hitting their peak in 1929 and the October crash of that year."
Nevertheless no matter how you slice it, the recent past of rolling decades has been subpar:
12/31/98-12/31/2008 : S&P 500 down 29%
12/31/97-12/31/2007: S&P 500 down up 55% (positive but not great for 10 years)
12/31/96-12/31/2006: S&P 500 up 88% (still subpar with a 6.5% compounded annual return)
12/31/95-12/31/2005: S&P 500 up 102% (mediocre 7.1% return)
Yes, the title of the article is a bit dramatic and slightly deceiving but the reality of the pulling
tide is evident.
So with Berkshire for example we are not swimming naked, but we are wearing no Speedo trunks either (could not resist).
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Berkshire stock price went from 54,000 dollars to 99,000 dollars from January 1st 2000 to today that is an 83% appreciation over 10 years, that is a paltry 6.2% compounded annual return. Yet of course it is a great result compared to the dismall performance of the market which went to negative return during that stretch. This does not even take inflation into account.
It does indicate that the headwinds were severe when mighty berkshire reverts to only 6% over 10 years which I think everyone would agree is a "long term" increment. Over the preceding 20 years (from 1980 to 2000 Berkshire returned your investment by a factor of 124 yet in the last 10 years it did not even double.
I personally invested a substantial amount of money in Berkshire at fair value and I must admit that the results are a little disappointing even considering the compression of valuation that the market is assigning to the stock these days. Cycles exist and we are experiencing a severe downdraft after the euphoria of the 90s.
I am the greatest fan of Buffett (never miss a meeting or an article) and I realize that the results are hindered by the size of the giant and I also realize that the results will revert more favorably in the next 10 year increment, but the facts are that the past decade was extremely rough.
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For all of those who did well this past decade, congratulations because we had severe headwinds... :-\
as documented by this article:
http://online.wsj.com/article/SB10001424052748704786204574607993448916718.html
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Thank you omagh and packer for the bibliography. I obtained browne's book and am looking forward to reading it.
His Columbia speech in 2000 is worth emphasizing:
http://www.tweedybrowne.com/resources/library_docs/papers/ChrisBrowneColumbiaSpeech2000.pdf
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kitacular, right on;
I have nothing to add. ;)
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I would guess they might need the money for some personal business venture outside the leucadia realm; it looks like both steinberg and cumming cashed out about 25 million $ each. So that would be my guess. From my perspective, I cannot see anything wrong with the company quite the contrary; The insider selling is sure keeping a lid on the stock price for now...
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It is one of my core investment as well:
the stock appears underpriced on several metrics such as
price to sales (50% discount on its 5 year average),
Price to earnings (20% discount on its average). the trailing pe is more like 16.
price to book (15% discount)
Assuming a little clean up (going on right now) and their efficiency and profit margin should pick up; allowing for a return to normal valuation.
Add the moat they have, and you have a "forever hold": the typical equity/bond with an expanding coupon.
Cadbury at the price offered should be a plus. I am cadbury aquisition neutral (as I own it as well) and its should be fine on its own as its international business is performing well.
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Wiht regard to Martin Whitman and co (and with all due respect to his often succesful efforts to value invest), Didn't he break rule number one and two badly (never loose money) by obstinatly investing in losers like MBIA.
Now maby third avenue is competent at diging out value bonds out of distress situations; but the fact that they were not able to identify that some companies were bound to distress, distresses me. therefore I pass, particularly at 1.4% of capital a year ;) . Besides I would never invest in a fund but that's me.
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As far as the delisting is concerned, this is what I got, so far, from Ameritrade:
"Thank you for your inquiry regarding the security FAIRFAX FINANCIAL (FFH) which plans to delist its shares from the NYSE on approximately 12/10/2009. This security will still be able to be traded through TD AMERITRADE because we are able to facilitate trading on the Toronto Stock Exchange (TSX). However, if the security only trades on the TSX, it will be necessary to contact a TD AMERITRADE broker to facilitate the trade as the order would need to be routed to Canada. You may call a broker at 1-800-669-3900 and broker assisted trades have a $44.99 per trade commission.
Often, when a foreign security delists from an exchange, it may change symbols to a 5-letter symbol ending in 'F' and continue to trade in the United States on the over-the-counter market. If this occurs, the shares would be able to be traded through the TD AMERITRADE website. It is too early to determine which of these two alternatives will actually occur as the delisting is not yet effective. Please feel free to follow up when the delisting has become effective".
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Thank you for the good report John; there is always something new and of interest to be extracted from those meetings.
Berkowitz Responds to Einhorn
in General Discussion
Posted