jberkshire01

Book on the topic: http://www.amazon.com/Corrupt-Cities-Practical-Guide-Prevention/dp/1558155112

Compilation attached. The_Best_of_Charlie_Munger_-_1994-2011.pdf

Chris Bloomstran's follow-up interview with Kate Welling: http://www.valueinvestingworld.com/2016/04/kate-welling-talks-with-chris-bloomstran.html

I've found some of the most useful bit of history, in the context of becoming a better investor, are in books that are essentially business biographies. Some are specifically a biography of a certain business, and some are of the founder of the business that go in depth about the business. I've been collecting good titles at the following link, and if anyone has any others that are worth adding, please let me know: http://astore.amazon.com/valuinvewor0c-20?_encoding=UTF8&node=54

Oldie but goodie (need to buy a cheap used copy since it's out of print): http://www.amazon.com/gp/product/0671228498?ie=UTF8&camp=1789&creativeASIN=0671228498&linkCode=xm2&tag=valuinvewor0c-20 Insurance accounting book (PDF): https://www.dropbox.com/s/rxspk05oanhkey7/Insurance%20Accounting%20Book.pdf

I didn't go through this whole thread, so I apologize if this Munger clip from CNBC a year ago has already been posted, but as always, Charlie is to the point: http://www.valueinvestingworld.com/2014/04/berkshires-munger-high-frequency.html

And if you haven't seen the biography by Carl Van Doren, I highly recommend it too (also available as an audiobook): http://www.amazon.com/gp/product/0140152601/ref=olp_product_details?ie=UTF8&me=&seller= Of the biographies, it is 1 of the 2 (the Isaacson one being the other) on Franklin that Munger has recommended.

I think high valuations (largely because of Nifty Fifty thinking) and high inflation expectations were two big culprits. Sequoia specially pointed those things out in the attached letter (from April 1974). Sequoia_Fund_-_April_1_1974_letter.pdf

Dylan Grice's latest: http://www.edelweissjournal.com/pdfs/EdelweissJournal-014.pdf Edelweiss_November_2013_-_The_Language_of_Inflation_–_By_Dylan_Grice.pdf

For those interested, attached are the two letters Grantham wrote on resource limitations from a couple of years ago. The second one especially gets into potash, phosphate, etc. Jeremy_Grantham_2011_-_Resource_Limitations_Parts_1_and_2.pdf

Grice's Latest "On the intrinsic value of gold, and how not to be a turkey" http://www.edelweissjournal.com/pdfs/EdelweissJournal-013.pdf Edelweiss_-_31_July_2013.pdf

Hussman with a related comment this week: "In nearly every effort worth pursuing, I think the secret to eventual success is the same. Find a set of well-informed daily actions that you’re convinced will produce good results if you follow them consistently. Then follow them consistently. In a world where randomness, frustrations, and events outside of one’s control play an enormous role in day-to-day outcomes, the best measure of day-to-day success is whether or not those daily actions were followed. Over time, the results take care of themselves. But Arnie was right. There’s not a single road to easy street that doesn’t run through the sewer at one point or another." And this Steve Jobs quote which I came across this weekend is kind of related as well: “That’s been one of my mantras—focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”

Mark Hanson thinks so, and has some interesting thoughts on the subject: http://mhanson.com/archives/1329 The conclusion: In closing, during the “Bubble-Years’ of 2003 to 2007 not everybody took out an exotic high-leverage, stated income, 100% HELOC, 5/1 Interest Only or Pay Option ARM. But it doesn’t matter, as real estate “prices” using the “comparable sales valuation methodology” are moved at the margin. And when the incremental buyer has the firepower to pay whatever it takes to buy the house using high-leverage, exotic loans, as homeowners and speculators did from 2003 to 2007; or the cheapest money in history thanks to the Fed like PE firms — who regularly paying 10% to 20% over appraised value/list price using other metrics like UST yields, cap-rates, and “forecasted” house price appreciation as guides — they push up the prices of ALL houses. Again, all it takes is 3 comparable sales to change the value of all houses within a one square mile area both lower and higher. Based on the data presented above on the typical homebuyer that must use a mortgage to buy US housing is back in bubble territory. Obviously, some regions like AZ, CA, FL, NV are extremely over-heated, back in bubble-territory relative to 2003-07, and will correct sharply on the “surge” in rates and some regions may just slow down. But make no mistake about it…a 150bps jump in rates — or 43% increase — will have serious consequences to house sales and prices in Q3, Q4 and beyond to a market that has been completely reliant on the lowest rates in history for the past 2 years. Just remember what happened to housing when the 2010 Homebuyer Tax Credit sunsetted in June…sales fell over 30% month-over-month in July…the middle of the busy home buying season! And the “surge” in rates took far more leverage out of this housing market than the loss of the $8k tax credit…that’s a certainty.

http://www.amazon.com/Nontechnical-Petroleum-Exploration-Drilling-Production/dp/1593702698/ref=sr_1_1?s=books&ie=UTF8&qid=1369342234&sr=1-1&keywords=Nontechnical+Guide+to+Petroleum+Geology%2C+Exploration%2C+Drilling+%26+Production%2C+3rd+Ed.

Great post and comments: http://www.viewfromtheblueridge.com/2013/05/17/dumb-dumber/

Seth Klarman's thoughts: [HBS] Do you set an annual return target? [Klarman] We think it’s madness to target a return. Return lies in some relationship to risk, albeit there are moments when it’s out of whack, when you can make a high return with very limited risk. My view is that you can target risk versus return. So you can say, I’ll take the very safe 6 percent, I’ll take the somewhat risky 12, or I’ll take the enormously risky 20, knowing that 20 might actually be minus 20 by the time the actual results are known. We just don’t think targeting a return is smart. http://www.alumni.hbs.edu/bulletin/2008/december/oneonone.html

The complete 20-minute clip is here: http://www.bloomberg.com/video/bass-sees-beginning-of-the-end-for-japanese-bonds-a8rY8kSZQlStZey5hO2kug.html

Not updated, but here is a list as of the end of June 2012: http://www.mebanefaber.com/2012/07/09/global-stock-value-model/

Manias, Panics, and Crashes: A History of Financial Crises Devil Take the Hindmost A Short History of Financial Euphoria Tulipmania Panic of 1819 The Panic of 1907 The Great Crash of 1929 The Go-Go Years Bull: A History of the Boom and Bust, 1982-2004 Speculative Contagion Mr. Market Miscalculates A Decade of Delusions

Dylan Grice Essay Collection from 2009-2012: http://www.valueinvestingworld.com/2013/02/dylan-grice-essay-collection-cred-and.html

Klarman's thoughts from the 2008 Graham & Dodd Breakfast: “It seems to me that, as we know, you diversify most of the diversifiable risk away from a portfolio by owning 20 or 25 positions, and that if one is able to tell a good investment from a bad, one should be able to tell a great investment from a good. So I see no sense in having the same size position with your best idea and your hundredth best idea to round out a 1% idea type of portfolio. When we take a concentrated position, I’d say a dozen times over 26 years, we have had a 10% or so position. It also depends on the definition: Is a position in a type of investment a position or is it only a particular issuer? So a little definitional clarity might also be needed. But in general, in one particular company’s securities, every 2 years or so we have a 10% position. Most of the time, we have 3, and 5, and 6 percent positions as our most favorite ideas. We will take them higher when a cheap position becomes much, much better a bargain or when there’s a catalyst for the realization of underlying value. We favor catalysts because it gives you a much shorter duration on the investment and greater predictability that you will in fact make money on that investment and aren’t subject to the vagaries of the market and the economy and business over a longer period of time. So we would not own a 10% position in a common stock that was just plain cheap unless we had a seat on the board and control, because too many bad things can happen. But we’d own a 10% position in a senior, distressed debt investment where there was a plan in place, where the assets were very safe – either cash or receivables or something where we could count on getting our money back, and where we saw almost no chance of principal loss over a couple of years and a chance of a very high, meaning 20% plus, type of return. So that’s how we think about it. I think when people make mistakes, it often is on both sides of diversification. Occasionally, new managers especially, that aren’t that experienced in the business, will have a 20% position or perhaps even two in one portfolio. And those two might even be correlated – [i.e.] same industry, [or] the same exact kind of bet in two different names. That’s absurdly concentrated; maybe not if you have enormous confidence and it’s your own money, but if you have clients, that’s just not a good idea. But 1% positions also are too small to take advantage of what are usually the relatively few great mispricings that you can find. When you find them, you do need to step in and take advantage.”

This is Joe from Chanticleer. As you might expect, I can’t comment too much on things, but I did want to make a couple of points. On the stuff in the 8-K, it is kind of a weird situation, but as was mentioned in the filing, we believe “this matter should have no effect on any of the current stores in operation, stores under construction, or it's development schedule.” As we learned from Buffett the importance of jumping on any negative news right away, our CFO here in the U.S. was on a plane to South Africa the morning after we found out about this to investigate ourselves and, as Sanjeev also mentioned and one might expect, look into tightening up the accounting controls. My guess is that Mike will release much more detail as he and Eric get everything sorted out. As fuluvu mentioned the start-up nature of things, I wanted to link to part of an interview we did with The Manual of Ideas that is a good description for anyone who might be new to the company: “At this point, second round venture capital stage is probably a better description of Chanticleer Holdings the public company than Berkshire Hathaway! The main drivers of the business are the restaurant operations and the asset management business. We think we’ve figured out what works and what we can do well, but we still need additional scale on both sides of the business. And we’re not sure a precise value can be put on those businesses at this point because they are still much smaller than we hope they will ultimately become, but the basic valuation process would be to look at the potential earnings stream of the two sides of the business in addition to the assets on our balance sheet. Most of the shareholders that we keep a more ongoing dialogue with have really invested with us because they wanted to make a bet on Mike and the team he’s assembled. We hope we are still in the early stages of what turns out to be a long and successful journey.” As Sanjeev has much more eloquently described on this Board before, we were very close in 2008 to having a substantial deal done that would have brought profitability and free cash flow to invest in other places. The credit crisis brought that deal down and nearly brought us down too. As Sanjeev has also mentioned, very few people would have put personal guarantees and done what Mike did to keep the business alive during that time. We’ve progressed since then but certainly still have a long way to go. It was the RCG/OneTravel merger that freed Mike up to start Chanticleer. From what I understand, it was an extremely difficult business (online travel) that was made even more difficult after 9/11. Mike agreed to the merger to try and give the business a chance with the bigger scale that was necessary and try and give RCG shareholders a chance to exit if they wished. As a result of that deal, he agreed to step down and let the other management team take over. Whether its eventual fate was the result of being too small of a player in a tough industry or the new management’s ineptitude, I don’t know, though it could have been a little of both. Matt and I joined Mike to help him get Chanticleer going, so I don’t really know much about the people and business involved with OneTravel. As of today, there are basically two main businesses: 1) restaurants; and 2) investment management. Mike spends most of his time on the restaurant businesses, and Matt and I spend most of our time looking for cheap stocks and trying to grow the investment management business, though there is plenty of overlap in between. I hope some of that helps. For those that might be new to the company, the Chanticleer fund mentioned by fuluvu might have sounded like the same thing as Chanticleer Holdings the publicly-traded company. But the fund is managed by a subsidiary, one of several subsidiaries of the holding company in which the main lines of business are either restaurants or investment management operations. And here’s a link to The Manual of Ideas interview for anyone new to the company that wants a better overview of its beginnings: http://www.chanticleeradvisors.com/files/107293/the%20manual%20of%20ideas%20-%20chanticleer%20interview.pdf

Another example of the difficulty of prediction. From Cooperman's November 2006 Value Investor Insight interview: “When the rate of inflation has been between 1% and 3%, historically the S&P 500 multiple on forward earnings has averaged over 17x. Inflation is now in that range, but the current S&P multiple is around 15x. In this type of environment, we think the idea of buying a 10-year government bond at a 4.6% yield makes no sense relative to the stock market…..We’re heavily invested, about 82% net long. Since we started Omega, our average net exposure has been closer to 70%. We don’t short in order to call ourselves a hedge fund, but when we think we can make money at it. With all the liquidity and buyout activity out there, we haven’t seen a lot of profitable opportunities on the short side with equities. We do think fixed income is overvalued, so we have a short position on 10-year Treasuries.” And an August 2007 Fortune interview: “In defense of my notion that the equity market is unlikely to fall sharply from current levels, I would note the following: First, bull markets do not die of old age, they die of excesses such as accelerating and above-trend economic growth, rapidly rising inflation, and interest-rate hikes from a hostile Federal Reserve. Those excesses are simply not with us today, nor do I expect their arrival anytime soon……Despite credit worries, Bank of America (Charts, Fortune 500) is still a favorite. It has $1.5 trillion of assets, a 10% deposit market share in the U.S., and more than $21 billion in net income. I believe the company is attractively priced with an above-average dividend yield of 5.4%, vs. the present 4.7% yield on ten-year U.S. governments. It's hard for me to believe that Bank of America stock won't outperform ten-year government bond returns over the next decade -- the company raised its dividend 14% in July. Bank of America is currently trading at roughly nine times earnings, a 20% discount to large regional bank peers. The financial sector has been hit by subprime mortgage problems, an inverted interest rate yield curve, and by a widening in credit spreads. I expect these constraints to lessen over the next several months.” And a June 2008 Value Investor Insight follow-up interview: “We still believe the economy won't be in a recession this year. If we're right, we'd expect the market to be higher at the end of the year than it is now….I think U.S. government bonds are a terrific short. The monetization of every financial mistake that’s been made in the last decade doesn’t square with 10-year government bonds at 4%.”

It’s hard not to think of Buffett’s ‘financial weapons of mass destruction’ quote when you see numbers like this: NOTIONAL AMOUNT OF DERIVATIVE CONTRACTS JPMORGAN CHASE $70.2 trillion CITIBANK $52.1 trillion BANK OF AMERICA $50.1 trillion GOLDMAN SACHS BANK $44.2 trillion Source: http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq411.pdf Whether at JP Morgan or elsewhere, it's hard to believe there won't be a few more large cockroaches still hidden in the kitchen that may find there way into the open over the next couple of years.

Sorry if this has already been posted, but I didn't see it anywhere: http://www.forbes.com/sites/steveschaefer/2012/04/03/buffett-plays-paperboy-at-omaha-press-club-video/?partner=yahootix