krazeenyc

I do as much tax loss selling as I can -- specifically to keep capital losses short term. I often have a decent amount of short term capital gains due to special situations, event driven, and arb opportunities that are not confined to tax advantaged accounts. So let's say you have $100K position that gets smashed and is worth $40K. If you sell while it's still a short term loss you "save" $30K in taxes (assuming ~50% bracket). Let's say, instead, you hold the position, and in a year it rallies 40% from the lows and you sell it at that point. Not bad. You've made back $16K. Now you can report $44K in long term losses, but since they are now long term losses you are only "saving" (~30%) $13.2K. So... even after a pretty darn good year you are actually better off just taking the short term losses when you can. I understand that everyone's tax situation can be different, but I think it generally makes sense for me to aggressively prevent short term capital losses from becoming long term capital losses.

SILK ROAD Creator's Plea for Leniency https://www.documentcloud.org/documents/2086668-gov-uscourts-nysd-422824-251-1.html

http://news.yahoo.com/california-water-cuts-move-those-century-old-rights-070906782--finance.html Eric should be doing a happy dance somewhere! The water rights system is interesting.

SHOCKER.... http://sports.yahoo.com/blogs/boxing/rematch--floyd-mayweather-says-he-s-open-to-idea-of-fighting-pacman-again-165858758.html

I love Eric's rants against alfalfa and almond farmers.

I guess what I'm asking -- is there a cheap way to short the German 10 year where you can just sit on it for a long time? I have no idea on how this kind of trade would be structured and what it would cost.

For me? Nothing. Since you did not first share with me how to get involved in the first place. ;)

http://www.marketwatch.com/story/bill-gross-says-german-bund-is-short-of-a-lifetime-2015-04-21 With the German 10 year at an 0.1% yield I agree with Mr. Gross. How can we as individual investors get involved in this potential opportunity?

First of all, it's a great problem to have, but I would say it definitely depends on your circumstances (for example do you have a day job and how much do you earn in that job relative to your net worth). IMO, thinking about investments in terms of percentages is only part of the equation. I never minded being pretty concentrated (~10 positions -- I consider that to be very concentrated) when I was younger, had less money, less responsibilities, etc. Earning back a 10% portfolio loss through work or other opportunities could be done in 1 or 2 years. Now, I have kids and a wife AND our income comes solely from our investments. Our net worth is such that if we both worked, it would take the rest of our lives to gross what our net worth is today. Obviously I try hard to generate market beating returns, but preserving capital is #1. I still occasionally put on a 10% position (whereas when I was younger that might have been 15 or 20%), but it's quite rare and only when I think it is a "no-brainer".

If I didn't have kids I'd sleep 10-11 hours a night for sure. Instead I get 6 on a good night.

As value investors we care about the shareholder and shareholder value. The author is progressive (and by the way an extremely successful entrepreneur) he is not talking about maximizing shareholder value -- he's talking about doing things to help the general U.S. economy and the average worker. If you have a company that had the option to 1) buy back $2B of shares at a 50% discount to intrinsic value or 2) Invest the $2B in a new venture that say had only a 10% chance of being successful, but the possibility of creating $30B in value as well as creating short and long term employment (if successful) -- I think most value investors would choose #1. The average American worker would probably benefit more if companies chose #2. I don't think it's crazy to think that maximizing value for shareholders is not to the benefit of the average American.

How did the conversation devolve into another thread on buybacks vs dividends? The author is simply making the statement that deploying capital into buybacks is bad for GDP growth, average American worker, and the American economy as a whole. He is not claiming that buybacks cannot generate value for shareholders.

Can we merge this thread with the newer NOV thread?

Do you know of any well established consumer brand companies that primarily sell into these fast growing markets that are trading at reasonable valuations?

Here's a seeking alpha article on caretrust http://seekingalpha.com/article/2828796-caretrust-reit-deeply-undervalued-spin-off

Regarding #4... Are you sure there isn't memory bias going on here? There is no logical reason that over a large sample size this would be a problem -- unless you're strategically doing something very wrong. In fact -- I'm pretty sure waiting an extra week or month possibly to convert a short term capital gain to a long term capital gain is going to be a net positive over the long run for most people. Like everyone I've had a couple of these bite me in the butt, but over the long term (in taxable accounts) it has been quite profitable to pay the long term capital gains rate instead of ordinary income tax. I'm sure people forget about all the times they delayed a sale for tax reasons -- and stock increased another 10-15%.

700 billion$ is basicly inserted in the economy in the form of government debt. 1/3 of that comes from outside the US on average, and the rest from savings inside the US in the form of insurance flaot and pension money. So that is about 230 billion $ / 16800 billion $ = 1.4%. Population growth that is dwindling and at 0.7% in 2014. Which adds up to roughly the 2.5% in 2014. Now savings have to come in here somewhere. If they are increasingly tapped, that would mean a growing GDP too. But I cannot figure out how to calculate that. But on average over longer periods, that should not matter right? Net savings is like 400 billion$, so there is not that much room there. So please correct me if im wrong, but my theory is that real gdp growth in the past has come from mostly 2 things, population growth (which was closer to 2% a long time ago) and debt growth. Everyone provides a certain amount of value to the economy, so the pie can only grow if the number of people who can provide value is growing. So if the deficit would close at some point (which it has to if you dont want a default), Real GDP growth will almost grind to a halt to below 1% unless fertility rises and population will grow faster again. And it will become very difficult for the governemnt to pay all those older people their pensions and health care since they cannot be inflated away? And the debt/gdp number and debt/tax revenue ratios will become worse. And where increasing productivity (for example fusion energy would be nice right about now) would come in is that a larger % of that GDP number could be spent on paying off debt, because that would increase spending power of the dollar by lowering costs as fewer people have to be paid for the same thing. Like how oil is cheaper now, more money can be spent elsewhere (on deleveraging for example). It seems at the end of the day this is a balancing game, and something has to give. Every move you make has consequences. And technology and increasing human ingenuity (which would result in massive increases in productivity) is the wild card here that makes macro economics so incredibly difficult to predict. Just a comment on population growth. I think you're missing something regarding U.S. Population growth forecasts -- Immigration. (This is off the top of my head, numbers may be slightly off) While the U.S. birth rate, around 1.8, is under the replacement level of 2.1 -- the U.S. population growth is still projected to grow faster than most of the developed world through 2050 -- due to the massive immigrant inflows. (Of course, the projections could turn out to be wrong, or I could've read some bad research). Also, due to immigration inflows, our median population is expected to age slower than the most of the developed world as well.

HumbleBrag! 35% compounded over 5 years is quite nice! Yes I am very happy with my 5 and 10 year performance (actually about 9 3/4 years), but I was talking about the sub-par 2014 return. 29% compounded over 10 years even more of an achievement! ;)

HumbleBrag! 35% compounded over 5 years is quite nice!

What do you like about RSG? I noticed some big recent buys by Michael Larson and couldn't figure out the appeal. FWIW, I really like RSG (I don't own it right now). It used to be a core position of mine many years ago. I think they're in a good business that has a lot of tailwinds over the long term -- mainly that we create more and more garbage! Scale is also crucial in that sector and basically only RSG and WM have enough scale -- I expect that over the long term consolidation in the sector will only continue making their business that much better. One good and bad thing -- every time RSG drops even a little bit, it seems that Cascade (Bill Gates' investment vehicle) buys it by the boatload.

I think ones personal situation has to be taken into account here. Let's say you're an unmarried young anesthesiologist (28 years old)? making $250-$400k a year, have some med school debt and $100K in liquid savings in IRAs. If you really know what you're doing I wouldn't see anything wrong with being super concentrated and own just 1-5 positions (of course if you're going to be doing this -- I would expect you know what you're doing). I'm in my mid 30s and married with young children -- I don't want to even ever have to contemplate about working for someone else because of money. My wife has a PhD in neurobiology, but wanted to stay home with the kids while they're young. She's thinking about working just b/c she wants to have a career. Our net worth far exceeds 100x what her gross salary would be, so given our ability for earned income I'm just not in the same position to be super concentrated. Although of course, you could always employ Eric's strategy and be 100% hedged.

I'm not suggesting oil is going to bounce back in a speedy fashion. I have no idea if it'll recover quickly enough to profit in some of these smaller names. If it does I'm sure there is profit, but I think it's quite risky. What I am saying is that the guy who has owned XOM or CHV for the last decade and plans to hold on to it for 2 more decades really doesn't care what the price of oil is going to be over the next 2-3 years. In fact, it's likely that even if XOM or CHV lose profitability in the short run, the booms and busts in oil likely benefit them over the long term as they can buy nice assets on the cheap during times of distress.

To some degree the opposite may be true. When I was younger (and had less money and responsibilities) I was far more concentrated and aggressive. In my opinion as you get older, build more wealth, have kids, etc. it becomes a more daunting task to reset/start over. Once upon a time I had position sizes of 30-50%. Now, my max starting position size is 10% and that's rare. When I was younger I almost always tried to achieve the best returns. Now, even though I don't really need to worry about money, I worry more about protecting it than ever. Now I try to make a decent return, but the primary focus is on reducing risk.

We've seen this story before. Maybe this time is different but you're going to have to prove it. In 1990 the price per barrel of oil averaged $23 due to the gulf war. Over the next few years the average price fluctuated between $15-$20 -- in 1997 the price per barrel was $19. The next year Oil prices plummeted, with the average oil price at $11.91. We had articles like these : http://www.economist.com/node/188181 http://money.cnn.com/1998/11/30/economy/oilprices/ Sound familiar? Oil was heading to $5 a barrel. I remember hearing about how technology would leave oil worthless and useless. Funny thing we're still using oil. How did Exxon Mobil do during this time? It was roughly up 350% including dividends. How did it perform during the drop between Jan 1997 to Jan 1 1999? It was up 50%. Drillers and the oil equipment companies were bloodied... just like they are now.

18% Significantly under both my 5 and 10 yr CAGR. But I'm pretty happy with it. As my money has grown my conservatism has grown as well. I was more concentrated in the past -- but still fairly concentrated. This year I was concentrated in cash with a greater than 50% cash position for the last 3rd of the year. I think one thing to note about the successful (over a long period of time) very concentrated vs diversified successful investor is that a lot of it is based on personality and skill set. Lucky to avoid the O&G collapse this year.