crastogi

So, I plan on acquiring another real property, and I am torn as to how to acquire it. Option 1 - pay cash. However, the unlevered returns are not so attractive. Option 2 - Buy with a mortgage. cost about 4% Or option 3 - get a margin loan. IB has great rates. Loan would be about 1/4 of portfolio in this account. The caveat here is markets are high. I could also build a bond ladder with the cash and margin out and may have a +ve or small -ve carry, haven't checked. What would you do in this case? Any thoughts welcome

thanks!

July 2002. Brk. Return 330% I usually hold stocks for 2 to 5 years (till it reaches my estimate of fair value, but have never sold BRK. )

I did use a firm for my detroit rentals, and they did bring it down significantly. Keep in mind savings accrue every year, while the fees are due only the first year, so the savings do add up.

Enjoyed it! Must say, it must be fun for the Google guys to have all these great investors coming in.

thanks for sharing!

Annualized return from may 05 till date about 19.5% but I did have a 55pc peak to trough drawdown during the crisis. Avg holding time is about a year and a half. No leverage or options

Thanks to the value investors at google for making these fantastic videos available to all of us!

Nice discussion, but I wish that someone would have asked how he quantifies "risk adjusted" and what is his favorite valuation method? Maybe Saurabh, Rishi or one of the google guys who had an offline discussion can shed some light. Thanks to this group we get to see alot of these talks!! Chetan, Yacktman has talked about this in the past. Basically, they buy when current FCF yield + reasonable growth rate is in double digits. For the types of businesses they buy, forward growth rate is easier to estimate since these businesses have a narrow range of outcomes. Thanks Rishi. You are right. I first came across that a few years ago. I think Gurufocus had a nice interview on it. I guess the part that is ambiguous for me is how do you adjust for risk. ie, how do quantify how risky a company is. BTW, nice call on PCP!! I bought around 200 this summer, was hoping for it to go down some with the weakness in the oil space. But Buffett beat us to it. You have good taste :)

Nice discussion, but I wish that someone would have asked how he quantifies "risk adjusted" and what is his favorite valuation method? Maybe Saurabh, Rishi or one of the google guys who had an offline discussion can shed some light. Thanks to this group we get to see alot of these talks!!

I guess I need to find some other way to easily track my portfolio. Many of the other free online options don't do foreign stocks, pinksheets, or options. Yahoo worked rather well until today, it even did bitcoin. I use Google Sheets with calls to import stock prices. I have to manually input any dividend data. Splits and spin offs are also potential problems.

congrats Packer! Nice Interview

Someone suggested to me via PM to start as investment advisory instead of a full fledged HF manager. The cost would be much lower and I would only provide services to manage individual accounts. I log into their accounts and trade, instead of asking them to send me their money. This will be much easier to earn trust than asking people to send me money and just trust whatever I do with their money. IB has an automated feature to support this and it sounds like it can automatically withdraw fees from client's account into my advisory master account. I've considered this, but what bothers me is that the client can see all of the trades being made. What's stopping them from just copying everything you do in real time, while giving only a small amount of money? Also, I fear giving access to real time portfolio value, with all of its ebbs and flows can cause distress to a client, and in turn problems for the portfolio manager. I think this is why Buffett reported account value only once a year, but I might be wrong on that. Not to mention that they will second guess you every step of the way. Value investing often in practice means investing in the shunned and the ugly. Your clients may be calling you every day asking you why you are holding what you hold. Too much hand holding needed, in my opinion I have invested some of my money with a manager who does the IB-managed-account thing. I don't copy his trades. I don't secondguess him. So don't bark on the clients. 8) One issue with IB setup from the client point of view might be the taxes. The trades and foreign currency exchanges that may be horrible to deal with at tax time if I can't get them automatically into TurboTax Online... You are an enlightened client, Jurgis :D

Someone suggested to me via PM to start as investment advisory instead of a full fledged HF manager. The cost would be much lower and I would only provide services to manage individual accounts. I log into their accounts and trade, instead of asking them to send me their money. This will be much easier to earn trust than asking people to send me money and just trust whatever I do with their money. IB has an automated feature to support this and it sounds like it can automatically withdraw fees from client's account into my advisory master account. I've considered this, but what bothers me is that the client can see all of the trades being made. What's stopping them from just copying everything you do in real time, while giving only a small amount of money? Also, I fear giving access to real time portfolio value, with all of its ebbs and flows can cause distress to a client, and in turn problems for the portfolio manager. I think this is why Buffett reported account value only once a year, but I might be wrong on that. Not to mention that they will second guess you every step of the way. Value investing often in practice means investing in the shunned and the ugly. Your clients may be calling you every day asking you why you are holding what you hold. Too much hand holding needed, in my opinion

Wasn't it when he liquidated his funds and offered partners choice of holding on to Berkshire stock?

I started buying individual stocks in '99, 2000. My impression - at that time there was wide dispersion in the market and plenty of value stocks to go around. Now it seems almost everything is pricey.

I did not purchase the property. As time has progressed, it is apparent that Michigan has even MORE problems than what I initially thought. Crime is terrible. Taxes are bad (income, property, gasoline, sales). Auto insurance is 6.5X what I was paying in Texas, and is the highest in the country. It is highly likely that gasoline tax will increase $.40/gallon over the next 3 years resulting in the 2nd costliest gas in America. Most public skewls are a joke... The demographics are terrible. Winter is silly/brutal. People still believe/think of global warming? It was SNOWING during the tigers game on April 23rd. And to top it off, I missed getting killed by 5 minutes the other day. A truck plowed into the lobby of a business that I had been in 8 minutes earlier. One of the wildest things I've ever seen! I am seriously considering leaving the state at the end of summer/fall. Time for me to move! Sorry to hear that things are not getting any better over there. We need to have some sort of special economic zone there where there is a federal tax exemption for any start up or sub 100m annual revenue business for the next 10 yrs. the infrastructure is built, it just can't be maintained etc. Lots of social problems that have roots in economic problems. Interestingly the western part of the state is doing fine, more like a Wisconsin economy. Very pretty as well. Reading this thread I feel like I really need to "defend" Michigan and point out that Michigan isn't Detroit. There is a lot more to this state then what is happening in Detroit and Flint. I live on the West side in Holland Michigan and the entire economy around here is going along just great, less then 4% unemployment and there is a housing shortage around here, all the realtors are complaining that they can't get any listings. my brother in law put their house on the market not really serious about selling but just put a high price on it and within a week had a full price offer. I work with a lot of small businesses in the area and they are having hard time finding employees. The downtown areas of the cities around here are thriving and wonderful places to walk, eat and shop. crime is low and the geography is beautiful. I live on the west coast of the midwest and interestingly there are many parallels to the west coast of the US. The lake provides a moderating effect (not enough because the winters are still too cold and gray) so there is a large fruit belt along the lake that helps the agricultural output and diversity. the weather is simply awesome for 6 month of the year, questionable for the other months. This ended up being a #pureMichigan advertisement but when you come to Michigan be sure to check out the west side of the state and when you do feel free to look me up. I live in Oakland county (Detroit metro area). Business is growing here. There is a definitely a sellers market in housing. South of 8 mile is a different story.

I have found that as my portfolio has become larger, it becomes harder to remain concentrated. My number of positions has gone up, and the results suffer. It is hard to buy a position that is a large percentage of your portfolio, esp when a "large percentage" could be equivalent many years of your current income.

Thanks!

Matjone: Yes, it is quite insane...The cost of insurance for slightly less coverage in MI is about 6.5X what I was paying in TX. Mind you, I have a PERFECT driving record, no accidents, no points, no DUI's, nothing... I also don't live in Detroit, but I could walk to the city limit if I had some time & were so inclined... When I last lived in Detroit in the late 80's you simply could NOT get insurance for some high end luxury cars & sports cars. Insurance on mid-range sports cars like Corvettes was likely to exceed your monthly note (if you financed the car). I asked some of the people I work with how they deal with insurance...they have their cars registered in other states. They have cars registered with their elderly parents. I strongly suspect that some of them drive without insurance. I work with attorneys. I can't imagine what "regular" people do. Insurance goes down the farther you get from the city of Detroit. I've heard estimates that over 50% of people in Detroit do not have valid drivers licenses and insurance on their vehicles. So you have a HUGE pool of uninsured motorists driving around not paying insurance, not paying for registration, not paying for licenses. That drives up the cost of insurance. The higher insurance goes, the more drivers go without. It quickly becomes a negative feedback loop. Don't even get me started on the condition of the roads and high taxes we pay for them. The Detroit area EASILY has the worst roads I've EVER seen. It is a real problem as some roads are almost impassible and there is lots of damage to vehicles (blown tires, damaged rims, alignment, shocks, etc). Michigan has a lot of problems... I am not sure it is that bad. But then again, I haven't priced other states. I am in my 40s with a teenage driver (3 people) and we pay 4200 a year for 2 suvs (mid-luxury) and a midsize luxury car. This is in metro detroit

Their value fund did 12% from March 2004 until Aug 2013 according to an article I read a while back. I can't remember where I read it though. But their wheelhouse seems to be semi-conductors according to Barron's. thanks Augustabound!

Speaking of activist funds like Starboard - does anyone have access to their track record?

Very Nice. Thanks rishi and saurabh

Here are my returns. Taxable Portfolio 1 - 11.98% Taxable Portfolio 2 - 45.6% Tax deferred portfolio mine - 44.95% Tax deferred spouse portfolio - 22.63% I have a total of 29 positions spread across these 4 portfolios. about 10% of the total is in BRK.B

Thanks Sanjeev!