Spekulatius

Really? - Please elaborate a bit, Jurgis. I don't believe I add value through my investing decisions. And it probably would be more useful to society if I spent more time on projects in my primary occupation rather than trying to get extra return by actively investing. This is probably correct for 95% of the population and probably 80% of the posters in investment forums as well. I know I underperformed this year and only matched the index last year. I don't think I had much alpha during the last 5 years, so at that jars stick, I think one is better off taking a step back and check if things that one had been doing still make sense. I do think that index investing can be bad advice too, if the whole world goes nuts, like what happened in 1999/2000. During 2000 and he following years, I was able to outperform. That has proven to be more of a challenge lately. I don't think that going passive investing is a balaclava and white thing, you can attach yourself to some great minds and just own what they are owning. BRK comes to my mind. Best idea that Inhave regarding active investing is to look more how to avoid mistakes, that finding home runs. The oil disaster was knew that probably was avoidable, although I got sucked into that one as well to some extend. I was trying to go this way this year already, but got sucked in into oil morass and some other interesting "opportunities". 8) Most likely I'll just dump most money into BRK/Fairfax/Malone and couple more "forever" holds. I've been going in this direction already. (And before we have religious argument that this is also "active" investing - yes, I know, next question 8) ). The counterargument to this is that putting money in BRK/Fairfax this year would have been even worse than my oil-dragged portfolio. :o But this is for 2015 results thread. 8) Peace.

I bought OKE bonds ( the 2022,2023 maturities), WMB and added a bit to SE and WCC the last 2 days. The MLP midstream sector looks way oversold and is due for a bounce, imo.

I think it is an untimely investment, as I see headwinds in the aircraft business for a couple of years. This is similar to buying ISCAR shortly before the Great Recession. I do think that the multiple will turn out to be a bit rich, given he near term performance. However, I think in the longer run, this is a good business, with the opportunity to bolt on more via acquisitions.

The fund got pretty big due to a good performance in 2013, so I think a lot of new investors were performance chasers that did not really know what they owned. Then came the crash in crude late 2014 that tanked many of their energy related investments. They dealt one trashiest segment of the bond market and the recent rush on junk bond debt did them in. http://seekingalpha.com/article/2904666-third-avenue-focused-credit-tackles-distressed-debt 3rd Avenue tells a good value investor story, but they seem to suck in terms of performance. Read their shareholder letters and buy what they buy 30% lower, or maybe better don't buy it at all.

We will see how the share price goes. What I can say is that one can now build your own BRK buying business like UNP , relatively cheap industrials like PH, ITT, ETN, selected utilities and possibly some other stocks and have a similLar value than just buying BRK - the recent pullback in stock prices made that possible, despite the overall indices looking fairly healthy still. What I do like about buying BRK rather than individual stocks is the discipline in capital allocation that I see with BRK, which I think alone is going to give an extra 1-2% of annual performance. We also get the deals that only Buffet seems to be able to get like the GS/BAC preferred and more recently the Heinz deals. So these special deals probably will give us another 1% of outperformance. Take this together and you hAve. Pretty sound chance of beating the index buy a couple percent each year over the long run. That is a very sound value proposition. If you can buy it really cheap at 1.2x book (or whatever price Buffet would buy back) than you can tack on another one time 10% revaluation going on this, that you likely will get. That's even better. I think Todd and Weschler are very important now and will deeply influence investment decisions. Maybe they will be more important than Buffet soon. I think this will take BRK also in a different direction, but hopefully the culture will stay intact.

Bulls should note that BRK's main business aren't doing so hot lately: BNSF - declining revenues and earnings if UP is an guide Insurance earnings have been weak lately Industrial demand has been weak and the strong US$ does not help (Mormon, PCP, Tungsten tool business) Utility earnings impacted by low NG prices I think here is a reasonable chance to get BRK at $120/share.

So someone takes a loss on my 2% cash back card? The 1.5% fee is net to Visa though and there are other layers on top of that. I think merchants pay 2.5% of the transaction value on average, but I could be incorrect.

Decades ago, smartphones were not available. Smartphones run on either IOS or Android, so there is already a huge network of users. Layering a payment system on top of it would not imply building a new network, it would ride on top of an existing network, so would cost may less. So, I think in terms of network buildout and network effects (critical scale), the possibility to take market away from V/MA is there. Will it happen or will Apple/GooG decides it is just easier to ride with Visa/MA? As far as P2P usage is concerned, I don't think he consumer has much power to make a change. I get zero benefit , if I start to use P2P now, instead of using credit cards, but lose all the CC benefits. bye Be, cash back, extra insurance etc. Why would I do it, unless the merchant gives back the savings? Right now, I pay the same using a CC than I do using cash or P2P, except in gas stations. If merchants wood break out the cost of using CC as anextra item (similar to VAT) and let me pAy for the privilege (which merchants are not allowed to do, per Contractual terms), then I switch A hardbeat and so will many others. Come to think about it, legislation that allows merchants to tack on the CC cost on the bill is probably a large thread to CC companies as well and would immediately impact their business model. Does not seem to be likely, but one never knows.

Visa and MasterCard don't grant credit, the card issuers do. Visa and Mastercard bear no credit risk, except maybe some small float from transactions. Google and Apple as well as Paypall have already a huge customer base as well as the infrastructure to handle huge amount of transactions and it is fairly easy to replace the functionality of a comparatively dumb credit card (even with chip) in a smartphone. Even though handling transactions is not their core business (except Paypall) it is quite conceivable that they gain market share and put pressure on the profit margins in this space, which could be a huge hit on V and M bottom line. Buying V and M at 30 X earnings is pretty much a bet that this won't happen for another 20 years or so, not a bet that I would be willing to make. Edit:20 years

I guess I am one of these guys who seem to know less about investing than 20 years ago - all I have learned is humility and a healthy respect for Mr. Market. I am a diversified investor and typically have about 40 stocks in my portfolio. I did not find that my "best" ideas necessarily performed best in the past. I often had secondary ideas where I bought just a small position and those outperformed my best ones, (or those I considered best when I bought in). I like to be diversified as an insurance against my lack of knowledge and more so against my hubris. Being diversified has advantages. I found for example that when I have large positions in a stock, my judgement tends to me less rational. i think what happens is that a large position becomes not only a matter of money, but also a matter or ego (you got to be right) and due to the large stake involved (both financial and emotionally) the decisions about buying and tend to be less rational than with smaller stakes. I view diversification as "cheap" insurance against blow ups ands keep sound sleep at night.

+1 cant find much. Looking at what I can find with google search very asset rich company. Have nightmares though of holding it for years/decades with value never being monetized. Here is an older annual report. https://www.amstock.com/proxyservices/Files/AR16728.pdf I have concerns about fraud and companies imploding because changing business environment, but never about a company/stock just sitting there and doing nothing. If company is doing nothing, I just sell the stock at a somewhat opportune time and move on. Other than opportunity cost, I should not have lost money. No investment is worth having nightmares about it. If I were to have nightmares about and investment, it's a sure sign that I own either too much of it, or the stock is not suitable for my situation. Better to sell down the position or sell it out entirely and get the sound sleep back.

No it wasn't me. However, it is clear that the value of the ranch exceeds the book value by far. I also think that based on the rent income (roughly 2.1M$), the value of the RE exceeds the book value of ~16M$ as well. If and when the value is realized remains a big question, but I think as long as the assets are well managed and appreciate in value, the stock price should just appreciate likewise, plus there is a chance of a huge payoff, if the company decides to monetize some assets.

Spek, do you still hold QUCT? Yes, and I added a chunk at 1080$ a few days ago. They only publish number since a year and that is it. Last years profit was down, because the costs in the trust business were growing faster than revenues, supposedly a result of a branch expansion. QUCT bought a decent chunk of commercial RE last year for 8M$ (~160M$/ share), but I don't think that this increase GAAP earnings although it my improve intrinsic value over time. They still should have a decent amount of net cash even after this investment. OK, this is probably a value trap, but I don't think I will lose money on that one. I estimate the asset value at least twice the current market value and maybe more, if they indeed would find a buyer for their ranch (I don't think they are looking to sell the ranch actually at this point). Overall, the assets are getting more valuable, the trust business throws of cash and the insiders as far as I know don't rob the company, so I think this illiquid, but safe.

QUCT, obscure company that runs a trust business, owns a huge ranch in central CA, commercial RE and a bunch of cash and bonds. Trades on appointment only. The folks running it are the same folks that own and run FMBL, a southern CA business bank.

I look at asset quality and asset quality trends first. i won't buy anything with a high Texas ratio. Typically a 40% Texas ratio is my limit. I look for a combination of low PE and low price/tangible book ratio. I look at pot. Vulnerable assets like construction loans, how assets held up during the great recession and generally I like to see the potential to earn at least a 1 % ROA, without risky endeavors. I think nowadays, one should look at the duration of their loan and securities portfolio as well (interest rate risk).

It's one if the cheapest aerospace manufacturers/suppliers in the US stock market currently, if the earnings forecast from management comes through. This is not a sure thing, because they disappointed in 2013. I think the issues are fixable and if management isn't able to fix it, somebody else will do it for them.

ALLY, NN.AS and TGI

Paychecks are pretty rare nowadays, pay is mostly done with direct deposits. It is possible that business with a lot of empoloyee turnover do a lot of payroll using Paychecks. In any case, this has nothing to do with MA or V's business. FWIW, I came back from a vacation and had a hell of a time to get a 100$ note "broken down". Most transactions are done using credit cards or debit, so business don't have much cash in their register, maybe a few twenties, few tens and one $ notes, but no more.

SPND - a small E&P microcap run by a husband and wife team. They are mostly buying stakes in drilling ventures around Fort Worth and are very very good at it, as they have been hitting singles for more than a decade now. Think they can do another 10x in ten years. OTCadventures has a post about the stock a while ago: http://otcadventures.com/?p=300 Needless to say, this stock is illiquid and hard to buy. I own some, bought in the low 2's, but not enough...

As far as the process if selecting/eliminating is concerned, I have over time gained a basic feel what to look for in various industries, like banks (FDIC records), insurance companies (book value growth, loss triangles), E&P's (reserves), which saves a lot of time. Once I research a company, In not only look at the financial records of the companies itself, I equally spent time to look at the records and presentations of direct competitors as well. This has proved very valuable to me, to get a different perpective, and often a liked a competitors stock more than the one ai initially was researching. I also like to read the shareholders letters and look at what metrics management looks at and how consistent the message is over the years. 10k's are valuable to look at somewhat hidden timebombs like pension or asbestos expenses or other liabilities that analysts often spent very little effort on, despite the fact that they can be a significant part of the EV and is not shown in any screener. All those things work well in situations where reversal to the mean is more likely, not so much in trend business like retail or tech (unless it is very mature in nature).

I have not done detailed calculations with the inflows/outflows recently, but I beat the SP500 most years. The biggest outperformance was during bear markets, in bull markets I generally perform more inline with the market. In my last detailed calculation in 2012, the IRR in my IRA started in 1998 was around 18% I believe the outperformance in bear markets is due to the fact that many stocks are "multiple pillar" stocks, backed by earnings and assets, with little correlation to the general market direction. I have also used volatility to my advantage with short term trades in my IRA. This works best in bear markets when volatility is very high, but not that well recently. I think a Graham like approach works, because one avoids doing stupid investments, where the risk of permanent impairments is very high. I acknowledge that a concentrated approach can yield better results, but there is also a higher tail risk and many will blow up over time. That said, I have been following a more concentrated approach in the last few years as well (via position weighting).

I am more of a Graham type investor. I keep a watchlist of a few hundred stocks (in yahoo) sorted by industry lists, countries etc. Those are all stocks that. I found to be interesting at some point. Once something becomes cheap and looks overly depressed I do a bit research and find the underlying cause for the price decline /depressed stock price. i look for low valuation metrics and reasonably solid balance sheet and a management that does not seem to screw over shareholders. I do accept low liquidity and in some cases low profitability, if I think the assets are worth way more than the current EV. i look for stocks that trade at less than 80% of their value, as determined by easily discernible metrics (RE valuations based on rent multiplier, cash and current assets,P/Book EV/EBIT metrics in some cases). My favorite areas are real estate, E&P's, banks, insurance and manufacturing. I avoid retail and tech (in most cases). I own a diversified portfolio with typically 30-40 positions at all times. I think of investing like farming, I seed some, grow some and harvest some at all times. My desired holding period is 1-3 years, similar to Grahams 2 years, but I do hold some shares longer and don't mind opportunistic short term trades either.

Wexboy has a series of posts on German real estate companies and ended up buying BIW.F (KWG). Although not a Reit, I like SPB.F (Sedlmayr Grund und Boden). They own commercial and residential RE in Munich and Stuttgart ( via Dinkelacker). They are good owner operators and have been building their RE holdings over more than a hundred years coming from the Brewery business (Spaten). My mom (who is ultra conservative) bought some on my advice, more than a year ago, at lower than prevailing prices. I will probably inherit them at some point. I also owned some Vastned (a dutch shopping center Reit) a while ago but sold, as the discount to NAV was closing. Generally, i found Reits in Europe not to be particulary well run. I do have a significant part of my portfolio invested in RE related stocks, but mostly in thr US and not much in Reits.

1. Andre Kostolany : Geldgeschichten (Kostolany did more to popularize stock investing than anybody else in Germany in the 80's) 2. N Taleb: Fooled by Randomness 3. Buffet/Munger: Berkshire shareholder letters and other writings (Their writings are better than the books about them,imo) 4. Greenblatt: Little book that beats the market 5.Kindleberger : Maniacs, Panic and crashes

There was no recession in 98 in Europe or the US per say, but there was a severe and short lived bear market in many tech stocks. Of course there was a severe bear market with asian stocks and even quality companies could be bought for a song. This was similar to 2010 (Europe crisis) or 2011/2012 (Japan, Fukushima). Bottom line is that there are buying opportunities at least every 5 years in major stock markets.