rukawa

From the article His parents pressured him to do the wrong thing and then took credit when he did the right thing. Hilarious.

I have gotten a lot of value out of this forum. I wonder whether there are other good value investing ones, particularly for international stocks. So far I can only think of one other: https://www.valueinvestorsclub.com/ Anybody know other ones?

Instead of trying to find businesses that can be run by idiot managers. I would prefer to find investing styles that can be implemented successfully by idiot investors...like net-nets or negative enterprise value investing. This thread is about copying the Buffet/Munger style of investing. I think its pretty difficult to make that style work. Buffett rarely used this style when he was managing money in the order of the scale/size that most of us have. He invested plenty of horrible businesses when he managed small amounts of money and his record was even better than we he managed large amounts of money. And according to Munger he was also a much worse investor during this period. So unless your managing large amounts of money and you have billions in cash just laying around, I don't see the point to this exercise.

On this point we are in full agreement. In fact I tried to resist commenting on this...but I failed. I do hereby promise not to comment on this thread ever again. Mathematical verification is completely different that scientific modelling. The two aren't comparable As for science I would argue that pass success is the only metric for judging all scientific claims or theories including novel ones. So we can agree that we disagree on this. You right its completely artificial and made up my me. Feel free to make up your own. My question is can you do X (feel free to insert your X here). The only way I know if you can do X is either if you have done X or something very similar to X before. Its not really a threshold of truth, its a threshold of capability. So you are perfectly entitled to reject a test of GCMs that requires them to make 100 year climate predictions. What you are not entitled to do is then later claim that they can make 100 year climate predictions. If you want the test to be: GCMs can match past climate warming. Great you passed the test! But all that entitles you to do is match the past not predict the future. My point is that whatever GCMs have successfully done repeatedly we have confidence they can do again. Whatever they have never done we have no basis for believing they can do. So you might have a baby and you bring him to me and say : "My baby can solve Calculus problems" And I say: "Oh ya, why don't I give him a calculus problem and he can solve it" And you say: "Hey no fair!!! That is an artificial threshold. How did you come up with that?! Obviously, my baby will fail since he hasn't even had the time to learn to read/write/speak. But if he could communicate he could solve any calculus problem you gave him" And I say: "Well I don't have any reason to believe your baby is capable of solving calculus problems then"

Unfortunately, the farther we get into specialized sciences, the more we should listen to the experts. Your examples show that sometimes the general expert opinion is wrong. And sometimes people who are not mainstream experts are right. But in most cases that is not true. And in most cases non-experts can't even decide whether expert arguments are right or wrong - and whether people objecting to experts have a clue or are spouting complete nonsense. Let's take you as an example. Maybe what you said is completely correct and mainstream models have drawbacks you indicated. However, nobody on this forum can know this. They can take your side or take opposite side, but they don't know the science and they cannot know whether you said something meaningful or spouted nonsense. It seems meaningful, but that doesn't mean much. I can write up ten paragraphs in areas where I'm an expert that are completely meaningless and nobody here will be able to say whether it is or isn't (apart experts in the same areas). So ... sure ... there might be climate scientists who do not agree with mainstream opinion ... and they might be even right ... but they have to discuss this with experts and convince them rather than going populist and presenting their theories to people who cannot judge their correctness and can only use their feelings and ideology to agree or disagree. This are ways to resolve this. And indeed questions like this have to be resolved all the time by everyone. I can view all science as a series of black boxes that I don't understand and indeed don't care to understand. I then I can ask an elementary question: These people that are claiming they can do X with their black box thingamagigy. How many times have the successfully done the thing they are claiming they can do? We do this all the time in areas where we don't have expertise. For instance, you hire a pilot name Burt to fly a plane. Now you are not the world's leading expert on Burt. You did not get a PhD in Burtology. So how do you know Burt can fly the plane? Well you base it on how many times he has flown a plane before. For instance, if he was a charter pilot for 13 years and flown 1 thousand flights and has 10000 hours of flight time...well then you have a basis for believing Burt can fly a plane. The question for climate science is: How many times have climate scientists successfully made 100 year climate predictions. The answer is zero. I can judge every science in this manner even if I don't understand it. I for instance don't really have any understanding of how planes fly...I"m not an expert in it. I base my trust in planes on the actual fact that planes successfully fly thousands and thousand of times in the past not on a study of aerodynamics. Similarly I have never studied the structural physics keeping my home standing and I probably never will but I do know that Greenpark has built tonnes of homes successfully and my home has been around for >20 years. But lets say for the sake of argument you decide you are going to trust the climate experts with their 100 year predictions. Fine. But what exactly are you going to trust them with? Are you going to trust them to tell you whether invest in Microsoft. Obviously not. You will obviously trust them in the area they have expertise in. That is climate science. HOWEVER they do not have expertise in policy or economics or good/bad outcomes. Thus they may be able to tell you what will happen with the climate. But they can't tell you what to do about it or even whether the outcome is good/bad/catastrophic. Because physical science has no concept of good or bad. Or what is the best course of action to take. Thus even if you trust them you are still left with two big problems: How bad is the problem? What should you do about the problem?

Ya we should never listen to some unemployed, loud, obnoxious guy living with his parents like this guy: https://en.wikipedia.org/wiki/Oliver_Heaviside Or some crazy lunatic that was put in an insane asylum: https://en.wikipedia.org/wiki/Ignaz_Semmelweis Naw just keep listening to the experts. So you are claiming to be at the level of Oliver Heaviside or Ignaz Semmelweis? Please read what I wrote. I didn't claim anything about myself at all. You are the only one who has done that. I just pointed out the absurd implications of your argument that we should only listen to experts.

So civilization didn't exist before health insurance? Or is it before majority rule? I guess you don't consider China civilized then.

Ya we should never listen to some unemployed, loud, obnoxious guy living with his parents like this guy: https://en.wikipedia.org/wiki/Oliver_Heaviside Or some crazy lunatic that was put in an insane asylum: https://en.wikipedia.org/wiki/Ignaz_Semmelweis Naw just keep listening to the experts.

I guess, the difference here is, there's only one plane, and we're all on it. ::) That obviously increases the urgency of action but it doesn't tell you what to do.

Wow, we should stop wasting all that money on traffic lights, air traffic controllers, IT security. There's so much waste in trying to avoid disasters. Don't bother to maintain those dykes and dams to prevent flooding. Just buy a bunch of mops! Heck, forget exercise or healthy eating--just install personal defibrillators. Short Gold's Gym! Buy Coke! Buy Defibtech! If we follow your suggestion, I imagine we'll be able to free up at least 10% of the capacity of the economy, leading to golden age of prosperity. Nearly every example you have given is for stuff where we have an abundance of empirical data and we have actually seen the disaster happen repeatedly. In fact I think every single example is one where we have enough data that we have seen the event happen thousands of times (traffic accidents, deaths due to heart disease, plane crashes). We only started developing ways to prevent each of things you alluded to AFTER they had already happened hundreds of times. How many plane crashes did we have before we developed air traffic controllers? How many accidents before traffic lights? My comment was in the context of the discussion which was referring to risk events that happen once in 30 years or once in 100 years. Very low probability events that we have poor information on and poor models of because they almost never happen or if they did happen would be catastrophic. So if we lived in an intergalatic civilization with a billion planets and on these planets we had empirical data about the long term effects of 100 years of global warming then we could devise a preventative solution like traffic lights. The problem is that we don't have that. We have poor models, poor data and poor understanding. So none of what you wrote applies.

You can't get something from nothing. You can't derive a policy action from ignorance. For all we know the C02 could be preventing an ice age from happening. If we adopt your framework the biggest fear of all is NOT global warming. Its global cooling. And in that case we should be doing everything we can given the huge and horrific damage of an ice age to warm the planet to prevent it. We also don't know what "high" quantities are. You say high quantities of C02 are 400ppm. I say they are 1000 ppm. We are just guessing. And I can equally argue that NOT emitting C02 puts us into uncharted territory given that we have been emitting C02 for decades. And there could be potentially massive consequences for NOT emitting C02. Your assumption is that this planet is a safe place as long as we do nothing to interfere with its natural process. But this assumption is false. This planet has undergone mass extinctions and ice ages. The no interference strategy is no guarantee of safety. C02 isn't a pollutant. Its actually necessary for plant growth and it acts as a plant fertilizer. Plants have these small holes in their leaves and when they try to get C02 they lose enormous quantities of water. So what plant do is they suck up large quantites of water every year to replace the water they lose when they try to obtain C02. This process is called transpiration. When you increase levels of C02 in the atmosphere, plants are able to obtain C02 more easily and so they close their small holes (stomata) more often and thus lose less water. Thus increased C02 => plants need less water to grow and this contributes to the greening of the Earth which has already been observed. This also means plants are increasingly able to grow in very dry areas of the Earth like deserts. BTW, If C02 levels are too low all the plants on this Earth will die...so I might want to keep C02 levels extra high just to avoid this potential disaster under the framework you propose. And finally if you really want to adopt a risk management framework based on ignorance my view is that the mantra should be: Be Adaptable. The tail of probability distributions is filled with all kinds of unlikely events you can't predict and won't see coming. THe problem is almost never the thing you plan for or are concerned about. Its the thing you never saw coming. You say the problem is global warming...I say you have no clue what the problem is. In that case you want as much adaptability to unexpected events as possible. That means you need technology and you need increased investment into robust technologies, backups, food storage, water storage etc. You want to ask questions like: How would we function if plane couldn't fly? Suppose all electronics stopped functioning tomorrow? Suppose the electricity system were disabled? Suppose the internet broke? Suppose plants stopped producing food? The idea of avoiding disaster or trying to prevent it is stupid. Disasters are low probability events and they come from places you never see. You want your systems robust enough to adapt AFTER they hit.

I am not sure exactly how you come to this conclusion. If the climate system has very small sensitivity to C02 then climate change is not a major problem. If the sensitivity is high than its a big problem. So its not like pregnancy at all. There is a continuous range of possibilities and all of them depend on the climate sensitivity. There are two mechanisms of heat energy transfer in the atmosphere: radiative transfer and convective transfer. Radiative transfer is basically the transfer of energy by light or infrared between layers of the atmosphere. Convective transfer occurs because of flows of air, for instance warm air rising. Now suppose you completely suspend all convective transfers of energy with a magic wand and in addition there are no clouds in the sky, no change in water vapour, no aerosols, then all you have is radiative transfer between layers of the atmosphere. In this situation, if you add C02 into the atmosphere, it will warm and this piece of physics is basically very well understood, well known and not under dispute by anyone including well-informed skeptics. Now the amount of warming you get for a doubling of C02 given this clear-sky assumption is 1C (more complicated but reasonable assumptions about the atmosphere give you 1.2C). Current concentrations of C02 are 400ppm and the current rate of increase is 2ppm per year. So for C02 to double it will take 200 years if we maintain our current levels/mix of fossil fuels consumption (replacements of coal with nat gas lowers this number, economic growth may increase this number). And after that 200 years, based purely on the clear-sky assumption above, we should have temperatures increase by 1.2 degree. This is not catastrophic. To get 2.4 degrees you would have to go from 400ppm to 1600ppm ... you need C02 to double twice. To get catastrophe you need much larger increases in temperature when C02 doubles and to get those you need to incorporate various feed-backs. Here scientists rely on GCMs where they create grids of cells for the atmosphere and within each cell they assume all state variables are constant (pressure, temp, wind velocity, water vapour etc). However the problem with GCMs is that the grid cell sizes are on the order of 100kmx100km. This means that you can't properly simulate convection processes with this size of grid cells since storm processes occur on scales below this cell size. You also can't properly simulate clouds both because of the size of the cells and additionally because cloud formation processes are not well understood. The way GCMs deal with clouds is they guess. The basically use the pressure, temp and other variables in the grid cell to make some guess as to what type and extent of clouds you will have. The guesses are based on empirical studies of clouds and are essentially statistical models of what type of clouds you tend to observe given temp, pressure, water vapour etc. Of course this isn't real physics...its fake bullshit but its the only thing you can do because we can't model clouds. As far as the convection process going on below 100km, the GCMs have no way of dealing with this and just kind of assume it doesn't matter. However anybody competent knows it does matter enormously but again we don't have any way of modelling this due to computational constraints. As far as I am concerned the GCMs are a piece of shit. The code is ugly, badly written, and looks like shit. The assumptions are ridiculous and would never be accepted in any other area of numerical modelling. There are important processes we simply can't model. And nearly every scary prediction comes from these models: more droughts, more severe storms etc. The worst thing of all is that the models don't even have the ability to model storms at all. SO HOW THE HECK CAN THEY BE USE TO SHOW THAT STORMS WILL GET MORE SEVERE WHEN THEY HAVE GRID CELLS SIZES OF 100KM THAT MAKES MODELLING STORMs IMPOSSIBLE. Its garbage like this that makes me angry. But all the catastrophic predictions come from these models. And what is really interesting is that the models are running too hot. The actual increase in temp we see don't match most of the GCMs except for the ones that predict the smallest temperature increases. So the least scary models have the best match to what we are currently seeing. The only part of the science I really place trust in is the 1.2C warming per doubling of C02 which comes from the clear sky approximation I discussed earlier. And to me that just isn't a big deal. And finally lets discuss sea level rise. Sea level rise used to occur at about 2mm/ year and now its basically 3mm/year. So instead of rising 30 cm over 100 years they would have risen 20 cm over 100 years if we didn't have global warming. Big deal. A additional 10 cm rise over 100 years should be easy for anyone to adapt to.

Yeah, except you missed the second part of what I said. If you don't have reasonable income mobility, you don't have justice. Why would anyone believe the system is just if it's basically impossible for the poor to become rich? Its probably never been easier for people to become rich in human history. The truth is that all of us are incredibly lazy and entitled. I include myself in that category. Reading the biography of Rockefeller I realized how much more difficult and harder people used to work than today and how much more disciplined they were. Its basically insane the difference. Rockefeller, after he became fairly wealthy, was horrified when his child ate a second piece of cheese, instead of eating just one piece of cheese. Its ridiculous. The problem is not that things are too difficult. Its that life is way too easy. And the funny thing is the easier life gets the more dissatisfied we become and the more we complain. The inequality we have is the result of too much opportunity. Not too little.

Right now they are too busy shooting each other to shoot the rich.

Well if you take Keynesianism seriously a large massive tax cut should massively stimulate the economy and lead to a huge boom. The greater worry now is inflation...not depression. Paul Krugman should love Trump...he argued against austerity for years and for more stimulus. Now he is about to get what he always wanted.

Just curious. Did you find out through the Microcap investors website?

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory.

Excellent thanks.

So basically a 25m receivable turns into 37m in Cash. Book value goes from 57 to 70. I don't see a huge catalyst here. The whole argument is that basically now they have a power to do a special dividend since they have cash but I am not sure if they will do that.

Do you not even realize that your idea violates the Constitution?? You can't tax certain groups for participating in the political process. The reasons lines are long is government is incompetent and doing even simple things such as holding an election. Correction. The AMERICAN government is incompetent at holding an election. The Canadian government holds elections every year. Everything is extremely orderly. If I were to guess the reason (because I don't really know much) I would suspect that the reason for this is that your election system is a legacy of your whole political culture. Your political culture is based on the idea of democracy, in particular the idea that the people should be running the government. In practice, what this used to mean, is that a large number of offices in your government were actually politically appointed. What used to happen is that you had a spoils systems in which political parties would reward members of the party by giving them political appointments. Over time this changed and more and more of the American government was professionalized. This meant that there was in fact a large number of people not politically appointed who would serve in government regardless of which party was in power. Your elections system though still follows the old model. Firstly based on your constitution the election system is not centralized...each state runs its own part of the election separately and your voters don't vote for the president..they vote for electors. This is bad. But what is worse is that the States often decentralize the election even further to the local level. This election processes differ even inside the State. Second many of the people actually in charge of the election are political appointees and are partisans of either the Democrats or Republicans. They game the elections to try and give their side the advantage. You basically have a really stupid system that is the legacy of your history and constitution. Contrast this with Canada. We have Elections Canada. Its non-partisan and independent of government. And it runs the election across the whole country. Simple, easy, effective. If I were to guess, I would guess that nearly every country in the developed world runs elections like this except maybe for Switzerland (since it decentralized and an old democracy). Its not a government problem.

I am still shocked that the most popular brand of shoes is made by Under Armour.

I am interested in reproducing Alon Bochman's study on Negative Enterprise Value. I want to understand the difference in returns between Negative Enterprise Value and NNWC since the differences appear to be quite substantial. https://blogs.cfainstitute.org/investor/2013/07/10/returns-on-negative-enterprise-value-stocks-money-for-nothing/ Alon Bochman obtained his data from Compustat and CRSP databases. What is the best way to get access to these databases? Should I collaborate with a professor? Has anyone done this before?

I don't really get how anyone can shop for clothes without trying them on. Unless you had some Kinect type device and custom fits which I suppose will eventually happen but hasn't happened yet.

I was looking for a comprehensive answer which is why I asked. But if I had to guess: 1) obviously when any stock gets removed or added to the index. Although I am not sure the actual mechanics of this. 2) by market makers of the etf. Who would be redeeming/creating etf shares in exchange for baskets of the underlying stock continuously each day. They should be able to arbitrage away small differences between the actual value of the underlying shares and the baskets of stocks. This would be done to balance supply/demand. So if tonnes of people bought the vfv then the vfv price would increase beyond the value of the underlying basket of stocks. Market makers would then buy huge blocks of the underlying stocks and exchange them with Vanguard for etf units which they would then use to satisfy market orders from retail customers who would be buying the actual etf shares. This would enable the market makers to obtain arbitrage profits equivalent to the difference between the price retail customers pay and the price of the actual underlying basket of shares. This should keep the difference between the ETF value and basket value small. This implies that the market impact of ETFs will be dominated by investor flows, and ETF removals/additions. Anyways the best understanding other than Jurgis I have seen so far of this issue can be found here: http://www.philosophicaleconomics.com/2016/05/passive/

When do they buy/sell?