jschembs

Also, what kind of trust would this be? If it involves multiple beneficiaries and/or trustees, you'll certainly want to be as explicit as you feel is warranted to mitigate arguments down the road.

My only experience is transferring a property my sister and I inherited into an LLC I created to rent the property on a short-term basis. I believe the process would be similar: 1. Create the entity, secure the tax ID (unless it's a revocable trust, in which case I believe the trust uses your SSN); 2. Proceed with the property acquisition 3. Make sure all required signatories execute all of the documentation However, this certainly is an instance where an hour or two of legal advice from a trust & estate attorney is worthwhile.

I'm rereading Confessions of a Wall Street Analyst, written by Merrill's former telecom analyst, largely focused on Grubman and the transgressions of analyst conflicts up to and through the dot com era. Good look into the myriad conflicts of interest and incentive structures that in many cases remain in place today - albeit now with a few pages of disclosures at the end of each report.

Why would you use NI/EV? Numerator is influenced by capital structure, denominator isn't.

M&A/corp finance advisory for privately-held businesses.

I believe it was a Munger quote/philosophy about investing, but I don't have a source handy.

Is this intended to create a list of existing and new candidates for The Outsiders? This is one of the toughest questions I've struggled with over the last year, as these opportunities create incredible long-term investments, but they are frequently most obvious after the fact, and excluding periods of market turmoil, it's nearly impossible to acquire interests for what I tend to think are reasonable prices. How does convince themselves they've found the next Henry Singleton?

I'm surprised CRM is as easy and cheap to short as it is. I suppose that's largely because of its overwhelming institutional ownership. Now if it would just become a profitable short.

CapIQ, this board, Seeking Alpha, Edgar, SEC Form 4 (great way to quickly view insider trading for a given company), and, increasingly, Twitter.

Great summary. Buying puts may seem like the better alternative, but you must be right on both magnitude and timing in a way that outright shorting doesn't require.

Long: AIRT - we have an activist shareholder now on the board with a plan to extract value from the disparate business segments. Also think we'll see ~20% upside in SODI on an activist campaign, and I'll be curious to see how owner/managers at JCTCF deploy cash. Short: CRM - http://seekingalpha.com/article/1776782-salesforce-com-the-underpants-gnomes-of-wall-street (shameless plug) Also believe strong shorts are WDAY and FNGN

Also, economic growth brings up an idea I've been kicking around for the last year or two. The only reasonable argument I can muster vis-a-vis social media/SAAS/internet 2.0 valuations is the dearth of growth exhibited by more traditional businesses. One can argue whether the growth has been partially manufactured by excessive sales & marketing spend, but that's a different discussion. Anyway, the idea is now that consensus is forming around widespread economic strength, if the AMZNs, TWTRs, LNKDs, CRMs, and other large, rapidly growing, unprofitable enterprises will no longer be given a free pass, since growth will be seen (or will be expected) from the non-sexy pockets of the market. Thoughts?

Don't fight the fed has certainly worked over the years. Given the onset of taper, is that not the shift towards tighter policy? I know the Fed is jawboning on how tapering isn't tightening, but what matters to the capital markets is typically one, two, or three levels of abstraction from the whatever you see on CNBC (a la the Keynes beauty contest). ZIRP and related policies were obviously unprecedented, so wouldn't you expect similarly unprecedented outcomes via the great unwind? Saying nothing is going to drop because rates will remain near zero for the foreseeable future seems like common perception, which as we know can be wrong from time to time.

Does anyone follow the CBOE's SKEW index? From CBOE's 2011 white paper: "Similar to VIX, SKEW is calculated from the price of a tradable portfolio of out of the money S&P 500 options. This portfolio constitutes an exposure to the skewness of S&P 500 returns and its price encapsulates how the market prices tail risk...The probability of a return two standard deviations below the mean gradually increases from 2.3% to 14.45% as SKEW increases from 100 to 145." Going back to 1990, previous peaks occurred in June 1990, October 1998, and March 2006. Currently nearing a multi-year high approaching 140. I don't buy into the bubbles everywhere view of the world, but there certainly is some ridiculously priced sh*t (social media, SAAS, big data, 3D printing) that could see some 2+ sigma drops (on highly volatile assets) and still not be "cheap" according to more traditional metrics.

I think Graham's Intelligent Investor (Zweig revised edition) offers a great way to think about investing, while Zweig's appendices help refresh some of Graham's language and examples.

Congrats to Kyle/GrizzlyRock!

Has anyone looked into puts on the ETFs designed to deliver leveraged daily returns for the underlying? My understanding of the math is the volatility decay dooms most of these to nearly worthless over the long run, so am I missing something that buying longer-dated puts at a certain price is almost a no-brainer?

presuming he means recognizing the value is zero for tax purposes.

There is (or was, when I worked in wealth management) a procedure called "penny for the lot," where the brokerage firm acknowledged the shares effectively had no value. I presume interactive brokers has something similar.

FWIW, I saw a headline earlier that Klarman is returning $4 BN to investors. That certainly says something about the current dearth of opportunities.

Prior to heading to the retirement home, he and his wife lived in Magnolia, one of the nicest neighborhoods in Seattle, so I don't know what your "fake poverty" references. Further, unless you believe material goods wholly define happiness, I imagine he generated plenty of happiness knowing what his gifts would yield for their beneficiaries after his passing.

I was satisfied with the argument that you don't buy stocks today for their earnings 10 years ago. You buy them for the next ten years' and beyond. What happens when your estimates of their future earnings power is incorrect? I thought this was a value blog.

Now there's some irony - JPM sponsoring a "Robin Hood" conference.

Good points by both of you. I certainly see benefit in social media and SAAS (our company shifted to Google as our email host a few years ago and would never consider going back to on premise), but nothing seems revolutionary. Having better-targeted ads improves the efficiency of advertising, which actually might argue companies would be able to decrease their ad/marketing expenses. I think the thrust of my original point remains, however. Except for the marginal software seat or incremental ad sale, social media and SAAS don't create new markets or new customers en masse. Both are much more zero sum in their economic impact than the railroads, autos, PCs, etc. For investors, I think what this means is that because the circumstances are more zero sum, these companies will face much more significant competitive dynamics than people envision. For example, if in fact Facebook is largely stealing ad dollars from more traditional advertising channels, one would expect those venues to compete much more aggressively on price. Facebook appears to have a phenomenal business model (high network effects, minimal capital requirements to grow, effectively free content), but their ability to grow revenue without facing significant downward pressure on ad rates (not just from newspapers, television, and radio, but from every other social media platform) is difficult to envision. Facebook has not magically created some new set of circumstances whereby businesses will allocate "new" dollars to a brand new expense line in their P&L. Those Facebook dollars come out of the pockets of Viacom, the Washington Post, et al, who will aggressively fight to recapture those dollars.

Revolutionary industry creations (railroads, automobiles, telecommunications, PCs, the internet, et cetera) create new markets and consumers that never previously existed. Railroads, for example, required massive labor and capital, building a tangible infrastructure that fundamentally altered commerce and transportation. There was some displacement of horse-based and other travel options, of course, but largely this new industry created its own customers. The personal computer, similarly, created consumers out of thin air, with obvious gains in productivity, efficiency, and spillover effects into other industries. Social media and software as a service, on the other hand, largely are just rearranging the deck chairs of the economy. Social media companies competes for existing ad dollars. There is no incremental consumer being created. Similarly with SAAS. These upstart software companies are essentially stealing market share from entrenched software vendors. Are there vast new, incremental markets and consumers being created by social media and SAAS that my myopia can't see? I'm not saying some of these companies do not have interesting business models or will not create substantial cash flows in the future. Something just seems awry in the last 5-10 years of capitalism, whereby the notion of creative destruction appears to be more zero sum than it has been in the past.