AchilliesValue

What a dominating fight! I can't believe one of the judges had it as a draw. Boxing, the one place more corrupt than Wall Street! Cheers! Same guy who gave Bradley a win over Pacquiao. What a joke.

Maybe cities will finally take note that hosting the Olympics is economically a disaster, but I doubt they will. Chicago should be counting their blessings. Can you imagine with all the problems that city and state already have.

Plan hit the nail on the head w/ Europe. Spain can't push nominal GDP growth above the effective rate because they don't have control of their own currency. Bridgewater put this out awhile ago about the history of deleveragings that's worth a read. http://www.bwater.com/Uploads/FileManager/research/deleveraging/an-in-depth-look-at-deleveragings--ray-dalio-bridgewater.pdf

Hold your nose and go look for good businesses that are selling well below their IV. While the market looks expensive I think there are still bargains to be found in the sub 300 mil area. Also I thought the best question was about the counterparty risk. Defiantly some food for thought.

Interesting to hear him speak positively on Canadian housing which a lot of people are worried about

I have a detailed Schloss record until '95 and when he retired in 2001 I have an article that says limited partners returns were 15.7% or 721.5x from 1955-2000. He took 25% of profits w/ no hurdle so that implies a gross return of 20.9% vs 11.2% for the S&P. From 1984-1995 he "only" returned 18.8% (gross) vs 15.3% for the Dow and limited partners actually under performed after fees. Back on topic my current portfolio is BOBS CSTR DRAD MAG SAND SHLD STTYD TWMC 20% Cash Buffett-Letters-on-Walter-Schloss.pdf Going_out_on_Top_Walter_Schloss.pdf

It's a lot of fun to watch especially if your on the sidelines like me. Bass' thesis makes a whole lot of sense but I'd prefer to not be on the other side of a trade that a central bank bank is manipulating.

Also because a lot of those paper companies have substantial hidden asset value. A lot of the ones I thought of initially have been mentioned but a few more publishing (dying), healthcare dependent on medicare, government IT contractors and gold miners (particularly junior minors)

Meryl Witmer who was recently named to the Board of Directors recommended it at the most recent Barron's Roundtable.

Link: http://www4.gsb.columbia.edu/filemgr?&file_id=7222906 Interviews are Preston Athey of TRowe Small Cap Value, Li Lu of Himalaya Capital, and Paul Isaac of Arbiter Partners. Plus the student pitches are back. I've skipped ahead and only read Li Lu's interview thus far which was fantastic. Some gems. There are plenty more but I'd probably end up just copying and pasting the whole text if I continue.

http://www.forbes.com/sites/stevenbertoni/2013/03/27/carl-icahn-unleashed-wall-streets-richest-man-is-on-the-attack-just-ask-michael-dell/ Found this piece interesting where he actually referenced Graham and Dodd as influences. Also attached are a few old articles and the Lazard presentation on the case to break up TimeWarner via CSInvesting which I highly recommend reading if you don't already. I don't admire him as a person but I can't argue with his track record. Icahn-Articles.pdf IcahnLazard_Time_Warner_CS.pdf

Was watching near mile 25 when it went off. So far haven't heard of anyone I know injured but we're all very lucky. The explosions were on the same block as my office and favorite watering hole. Unreal.

I've read several articles over the last month or so pointing out the current Schiller PE along with its flaws and have a couple of thoughts. 1) The corporate margins at historical highs has been discussed at length but I haven't really seen an analysis of what's driving the historical highs. Is it record low interest rates? Because then we have a serious problem if / when they rise (lowering corporate profits while increasing required earnings yields yikes!). Is it a improvements in tech / efficiency that have allowed laying off workers? If so we might have a serious structural employment problem meaning unemployment isn't going to get much better. Is it taxes? I mean were looking at after tax profits when our tax rate has gone from 53% (1946) to where it is now. Or is it something else and is it sustainable? I started to think about any sustainable reasons for the margin expansion. Other than the tax rate (which I think is a big factor when we're talking about a 2% deviation from the long term average and a tax rate that is probably at least 7-8% lower than the long term average) one thing that jumps out is the changes to GAAP accounting over the years and whether or not its even worth comparing "Earnings" now to historical data. I mean a few things off the top of my head I can think of that could skew the data includes Taxes, amortization of intangibles, accounting for leases, stock compensation, inventory / cogs reporting, etc. There are examples that would raise reported earnings and others that would lower them and frankly I don't know if it's a wash or whether or not it explains the margin expansion. I just think it merits pointing out that the "earnings" in 1939 are very different from the "earnings" today. 2) Are the piles of cash sitting on corporate balance sheets right now being accounted for in Schiller PE (I don't think it does)? I've been looking for historical data on cash as a % of market cap and haven't found anything recent. It seems to me that corporations are sitting on a ton of cash as a % of market cap vs historical but I may be wrong. I suppose you could also make the case that much of this cash is parked overseas and needs to be discounted for taxes but again how much vs the historical data. I think having some sort of a EV / EBITDA ratio would be best but there'd still be a lot of flaws. Along with the accounting which I mentioned you've got to also look at how leveraged companies have been over years which is a factor of availability of financing, trends in D/E ratios, and interest rates. I'm saying this as someone who is a big fan of history and a big believer that history repeats itself but I think when it comes to numbers in a dynamic changing field(financial reporting) its extraordinarily difficult to compare over a long period of time and sometimes even in a short period of time (like the tumultuous 2 decades we've had). And eventually it all comes back to risk free interest rates (if such a thing still exists) which is the almighty anchor on all other financial assets. At these rates what's an acceptable earnings yield? 5%? 10%?

I like the way Tweedy Browne thinks about it starting on pg 37 of the attached document. "At Tweedy, Browne, we generally sell a stock when its price reaches our estimate of intrinsic value, or sooner if we have a better investment to replace the investment that we have decided to sell. In considering the possible sale of a stock, we calculate the effect of capital gains taxes that would be paid if the stock were sold, and consider the net valuation that would be received for the stock after the payment of capital gains taxes. This net-of-tax valuation for the stock that we are thinking of selling is compared to the valuation of the prospective new investment that may replace it." Of course this methodology applies only to taxable accounts. Investing_for_Higher_After_Tax_Returns.pdf

http://www.pimco.com/EN/Insights/Pages/A-Man-In-The-Mirror.aspx Was in his monthly outlook. Personally can't stand listening to him or El-Erian but CNBC doesn't seem to mind...

Government only has til July to flip Martoma before the statute of limitations expires and his defense is being paid for by SAC. Doesn't seem like he's gonna flip but we can always hope. Anyway that's only one of many insider trades I'm sure the guy hass made so hopefully they'll be able to get something soon.