abitofvalue

But.. but.. but... I want my free ice cream and I want it with hot choclate and nuts god damn it... :)

Hadn't heard of this before - Warren reached out to IKEA about potentially buying them in the past http://www.valuewalk.com/2015/05/mohnish-pabrai-did-warren-buffett-try-to-buy-ikea/

well looks like its a life sentence

Why the hell do the teams play with a different set of balls?! because Tom Brady (& Manning) petitioned the league to change the rule so visiting teams can bring their own balls to games.

Looks like a series of negative articles are about to be coming Berkshire's way, Re: Clayton Homes http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/ http://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-mobile-home-empire-preys-poor Hard to know what to make of it - if the examples are true and actually representative of even a tiny tiny percentage then this could get a little ugly..

US Concrete, Vulcan Materials & Texas Industries are the big ones in the US. Probably finding a couple of initiation coverage reports on them should provide a good starting point. BTW - Monarch Cement (MCEM) trades at 4x EV/EBITDA right here in the US, don't know too much about them but they seem to have done ok through the crisis based on a cursory look on Bberg

I have only seen clips of the interview and not the whole thing but I thought it was strange to bring in Winters to a question that Bass asked. Pretty weak specially since Buffett is usually the first to say two wrongs dont make a right. His reasons for opposing Bass' repurchase recomendation were good enough so it was just like he went of on a tangent there... It was like he was itching to go after Winters and so just brought it up when he got a slight opening with Becky's follow-up. I thought his answer to Harry Wilson's follow-up comment defending himself as being long-term was pretty interesting in the amount of specificity Buffett got to just off the top of head to point out that Wilson was basically being compensated on a 2-yr position so it wasn't long-term.

I have seen lots of places (heck I've even worked at one) that do exactly what you are saying - it's the boss' opinion that matters and everything else is secondary. But I have also seen & worked at places that welcome disagreement and are open to changing their views. I think it's a folly to make the leap that because one person was looking at it for a year, he had confirmation bias and / or is unlikely to disagree with the boss. Also, I would guess that for someone who has been on Bb's investment team, career risk isn't so high that they cant disagree with him. Do you really think it would be that hard to land on your feet after that gig? Is it possible that the analyst had confirmation bias or didn't want to disagree with BB? Sure. But given his track record and what I've read about ex-fairholme employees (e.g. the Goodhaven guys)- I just think it is more likely that BB is open to people who disagree with his ideas than the counterfactual that BB is so arrogant that he just dismisses everyone who disagrees with him. As far as SHLD goes, I actually agree with you (I suspect). I don't see ESL actually ever willingly winding down retail to extract real estate value. I don't see anything SHLD has done that suggests retail can turn around. I very much think that BB has probably got it wrong here and the opportunity costs of waiting around have been and continue to be huge.

It isn't exactly uncommon in concentrated value shops to have one analyst spend most of their time on one investment especially if its a hairy situation. Doesn't Pershing Square do this too - thought I saw Ackman talk recently about how they like hiring from PE over another hedge fund because they want their guys to be able to look at one thing for a year if necessary and most hedge fund guys don't have the patience to deal with that. Have heard of other firms that do this too. Also, I recall an old Klarman interview where he talked about having one analyst who spent all his time on Enron post-bankruptcy. Iirc, the analyst ended up spending over a year going through various Enron debt covenants and disentangling that mess before Baupost even took a position. The analyst ended up spending the next couple of years dealing with the various cases and Enron exclusively. Baupost ended up making multiples on the bank debt the analyst recommended. Why do you assume the analyst would be out of a job if he says sell. He could just as easily be asked to move on to a different investment? Finding and hiring good analysts isn't exactly easy. If Bruce trusts him with this kind of responsibility, it must mean that Bruce respects his ability. How likely is it that Bruce would say nope not the answer I wanted, you are fired. I mean yeah i guess there are firms like that out there, but I imagine if you can get hired by Bruce, you aren't a slouch.

I just liked it better, but think he's generally boring and long winded. He reminds me of writers from the 19th century when people had nothing to do other than read a book that was 3 times longer than it should be and was a combination of story, travel guide, etc. In Business Adventures, the Edsel chapter almost killed me. About 60 pages and nothing happens. Here's the synopsis - it was a crappy car and they didn't research it properly or roll it out properly. Lol - I got this book for Christmas and read the Edsel chapter last night. You are absolutely right - man oh man was it a tough slog. Had I not discovered this thread today and seen some of the other good reviews (and that its recommended by Buffett / Gates), I was ready to just leave the rest of the book unfinished after finishing that chapter. Guess I will give it another couple of chapters and see if it gets better.

Part of Tepper's job is asset-allocation. His hedge fund does every thing from equities to distressed debt. So I imagine part of the decision making process for him is figuring out how much to put in a particular asset class. I am sure P/E is not the only thing he looks at but probably helps him figure out the zone of reasonableness. It's a useful short-hand when discussing the market as a whole. Maybe he thinks 14 is reasonable but 18 is expensive? all he does in the video is say 16 for current year and 14 for next isn't too out there.

I suspect the only reason the shares kept trading is that no one thought about it (i.e. oversight). It's similar to what happened with GM - iirc a few weeks after it was well known GM was going bankrupt, the shares continued trading and actually increased in value - at which time there were press releases and comments about how the equity was worthless and going to be cancelled etc.. With fannie / freddie, there was less press about the shares continuing to trade and essentially they just kind of hung around <$2 till BB started making noises. I am guessing that when treasury realized that they had the issue of shareholders getting dividends in the near future, they put the sweep in to avoid the political cost of rewards the same owners that had driven the company into the ground.

You got to be careful in what you discuss with other investors: http://dealbook.nytimes.com/2014/04/23/in-allergan-bid-a-question-of-insider-trading/

Thanks guys this is very helpful. On building / marketing your track record - I have seen a few of Buffett's quotes about getting an audited track record as soon as possible. Think he said that would be the one thing he would do differently (get an audited track record sooner) What exactly does this mean - is it just as it sounds go to a CPA with your brokerage statements etc? I assume you need to have a certain amount of assets for this to be worthwhile. Just wondering how far you went back - think I saw an interview with Guy Spier about this where he said he thinks of his track record as including his personal record from the day he started trading. Did you guys do that too? I assume you started off with your own personal trading account and didn't start off with an account in the name of your business. Do you use your personal trading history for this?

Phenomenal discussion in this thread. thanks a lot. How did a lot of you get started? Did you just take your personal account trading history and use that as your track record? I have had a few friends ask me to manage money for them but have been deferring till I can figure out how to make this work beyond the initial few friends. I suspect a few of you may have been in a similar position so any advice on how to think about it beyond initial clients? In terms of soliciting new clients when you were starting out and asked someone to invest with you did your personal trading account sit-in as a part of your track record? I presume a friend of a friend would want some information before investing with you. Also, how did you guys first set-up? the initial costs seem pretty daunting. anything you wish you had done differently that we could could benefit from? I am amazed by the number of people who started with sub $1mm AUM. Would love to learn more about how to do this.

actuarial consulting ---> micro-economic (litigation) consulting --> MBA --> Investment Banking; hopefully the next step will finally be an actual investing role.

Wow a lot of people with over 40-50% returns here. you guys are good. 15% for the year. hurt by holding approx 25- 33% cash for the year and a handful of poor picks on my part.. Not happy with the performance given how the rest of the market did but cant say I am sad either... 15% is pretty decent given the unforced errors I committed this year. Hopefully, I have learnt some (expensive and painful) lessons from this year. The key to long-term outperformance will of course be how we perform when markets fall.

thank you. this is useful..

Just FYI that I recently spoke with Jack McCall at PDRX. He said the $46.4m contract is a perfunctory renewal and will likely not change revenue. They expect to only receive a few hundred thousand dollars of revenue from it. I also asked him what some of the risks to the company would be. He said if they lost their DEA license the company would be over. I don't have a position, but it looks cheap even without the revenue from that contract. Thought I'd throw that info out to you guys. This is very useful information. thank you for sharing. Sitestar is another interesting micro-cap. Ragnarisapirate has some very good posts on it, not sure how much faith to have in the CEO's ability to be prudent in real estate investing over the cycle but company seems undervalued right now.

Nate - how do you find quarterly information on PDRX?

PDRX does seem interesting. Another one I like is Sitestar (SYTE) - Ragnar is a pirate has good information on this one. MRVC is good too GRVY - trades for less than cash but performance lately has been a bit disappointing (still below cash for a marginal business) Addvantage Technologies (AEY) - this has been widely written up.