ZenaidaMacroura

So basicly large 10% investors buying says very little. 0.7% outperformance. directors is like 3.6%. Officers 4% or something And top level executives 4.5% I think. This is all market caps, and all over one year. It kinda levels off in the second year. But Market caps make a huge difference and the amount bought. If larger amounts are bought for example by high level executives in companies with market caps of 25 million $ and less (adjusted for inflation that is now over 30-35 million $ already) then the outperformance was a whopping 12%. So you could make close to 18% if you buy and sell after one year after top level executives buy stock in their microcap companies. For huge market caps outperformance was very small. This was all over pretty big samples. Seems to me that setting up a screener to warn you everytime a microcap CEO or CFO buys a decent amount of stock would be great. Even with directors you probably do more then 10% I think. Is probably a great way to generate idea's. This is all from that book btw. Summarized it for you guys ;) There is also underperformance after insiders sell, follows the same patterns as above. But less dramatic. Also usually the selling was followed by a outperformance of the stock the previous 1-2 years. What would be the most effective way to screen only small/microcaps?

one step ahead of ya! http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/vprt-vistaprint/msg169541/#msg169541

I think it can be done if you're the "boss" (per warren's case). I mean if you determine it's your job, and it's something that you enjoy, why not day in and day out?

Watchout tough, Berkowitz has the best approach in regards to crisis stock. Ask yourself if the business has an actual value for society. You might have been lucky with your tobacco picks. Banks = Yes Offshore Drillers = Yes For profit education = No so much Tobacco companies = No I think that approach is too subjective to provide much value as a litmus test. In the same vein I would argue that coca cola and krispy kreme's don't provide much value to society either...

Malcolm Gladwell discusses this topic in one of his books. Maybe it was in Outliers. It's in the context of the luck component of success in life. How when you are born (and where you are born) is a large factor in what one is able to accomplish. He talks a lot about people like Steve Jobs and Bill Gates and how it isn't a coincidence that they were both born in the mid 1950s. That they both came of age at a time when computer availability was in its infancy and in a place where they both had access. So if they were born maybe even a year or 2 earlier, they come of age prior to that time and if a year or 2 later someone else beat them to it. The other thing I remember about his discussion is how he looked back at how very few of the "most" successful people were born I think in the 1910s or 1920s because they would have come of age during the Depression and there wasn't the opportunities around, but someone born in the 1930s came of age after the Depression and WWII during a period of expansion. He talks about Canadian hockey players and how most great ones are born early in the year because of how leagues are organized and how, for example, 8 year old boys are grouped together, but there is a big difference between one born in January and one born in December (almost a year older). Anyway, Gladwell is just pop science, but it's always interesting and applicable to the topic you raised. Jim Collins posits an interesting counterpoint - specifically to the hockey example. In his book "great by choice" he says that although an overwhelming majority of hockey players are born in the earlier part of the year there is about a half and half split of hall of fame inductees (half born in the early part of the year and half born in the latter). He goes on to mention that this infers that a player born in the latter half of the year who IS in the league has a greater chance of ascending the ranks into the hall of fame. His point being that time, place and luck can enhance someone's own ability and produce "good" performance but that truly exceptional performance may owe it's origin to consistency and discipline... (coupled with innate talent).

It always depends how much you pay and the location. Real Estate can far outpace stocks IF you buy at the right place at the right price. Example of my current house. using numbers adjusted to 100,000. Purchase price - 100,000 Down payment 10,000 Current price - 140,000 So equity went from 10,000 two and half years ago to 50,000 Assume it increases at 2% ie 2,000 per year that's 20% on my initial investment. Mortgage+HOA+Insurance+Maintenance is less than rent so principal is accumulating as well. Explain how that's a bad investment? I think you may be taking for granted the assertion that "Mortgage+HOA+Insurance+Maintenance is less than rent." I find in many places the mortgage already surpasses rent by a fair amount (15-20%). I find that when the rent is more than the mortgage+et al then appreciation is pretty stagnant 5 years going out. Just empirical though, not a huge sample. Then you have to lump in the frictional costs of buying and selling, as your property value increases so do the corresponding taxes etc... You may have chanced upon a rare case. Incidentally there are (at least to me) more bargains in equities and distressed debts than there are in residential real estate because while some people will shun stocks until the absolute zenith of the bull market, almost everyone is in the market for a house if the price is right.

I think a lot of high end labels - especially in fashion/clothing are not worth the price. They are just marked up more to create a perceived exclusiveness or veblen goods essentially. But there is a certain genteel allure picking the exact fabric from which a suit will be cut - and for the finished product to fit perfectly as only something made specifically for you can. Ditto for the footwear.

When I was in school I worked 2 part time jobs and saved every penny. I subsisted on mostly canned Tuna and Pasta. Eventually I started working for the dorm I was staying and and fulfilled my daily calorie requirement with my complimentary employee meal. This frugalness was not motivated by necessity as my tuition and living expenses along with a hefty allowance were paid in full by doting parents. I think I had one of the most miserable college experiences imaginable (for which I hold myself responsible)! My college career started in 2008 and ended in 2011 and coincided with my investing the money I saved from my income/allowance. Due in no part to astute timing (it was all luck) I hit 2009 perfectly - at times leveraging to the hilt. When I started working in 2011, I think I spent just about everything I brought in in terms of my working income. Looking back it seems silly but I spent money on extravagant things such as bespoke clothing (cifonelli suit, hamilton bespoke shirts etc), St Crispins/Corthay/John Lobb shoes, and a similar calibre car. Along with the usual young adult expenditures on weekend outings etc. I can't say it wasn't a blast. The (poorly conceived) rationale was that if I could compound the windfall derived from the finacial crisis at a moderate rate (leaving the principle and appreciation untouched) then the annual appreciation would eclipse my regular income. For the most part this has proven true to date. But since early 2013 or so I have come back full circle. Although I have kept and continue to enjoy my previously acquired material possessions I think if I had a do-over I would opt to save the money. It's very easy to get lost indulging in the finest of the finer things in life. It is definitely worth aspiring towards and I think in a strange way the experience helped to redouble my efforts in investing/work...

I don't feel like they could mount an effective resistance being confined to overhead oxygen masks.

Thanks

I work in chemical engineering and absolutely loathe the profession. I figured in a decade I would be ready to take the leap as I'm in my mid twenties and have a mid six figure PA, no debt etc. In the last 3 years I've compounded at a greater than 40% clip per annum. But recent circumstances have changed my view of my potential end-game. My mom got diagnosed with stage IV NSCLC (lung cancer). She doesn't smoke (nor secondhand smoke) and it wasn't environmental - just an unfortunate genetic disposition. It is fortunate that my father (who works for the same company as I do) has a very beneficent corporate health insurance policy. If the cost had to be procured out-of-pocket one would have to compound my portfolio at a greater than 50% rate. Additionally, the company is extremely accommodating allowing him take time off without notice to be with her whenever she's receiving treatment. I think it would be a bit much to have to worry about performance while enduring such an ordeal, high cost of medical expenses nonwithstanding. Something to think about. :'(

hmm I feel that the presence of cheap chinese goods helps hold down the cost and improve the (perception of?) standard of living in the U.S. The U.S. is always trying to export more, but as the domestic economy struggles to improve I think this may spur economic activity. Rising tide lifting all the boats and such.

Outperform, but not necessarily return positive right (at least in recent years)? Early in his career I imagine workout-type and special situations played a significant role in never experiencing a down year (as well as a little calendar-date luck).

Wait they backward adjust the calls for dividends?

In the short term this should lead to a pickup in economies that import goods from China? I don't see how this smooth things out for the chinese longer term, but it seems good for the U.S. economy in the interim...

I've always wondered this; To what extent is Putin (or any other person in a position of perceived power) acting of his own volition as opposed to taking action out of necessity to ensure their own survival?

He does give off a sort of megafund honcho vibe on Bloomberg/Cnbc but I assure you Tepper is brilliant. He is a tried and true value investor in his distressed debt positions and if you've ever heard him speak in person (and take questions - answering "of the cuff") you wouldn't have trouble seeing why. I think he's easily one of the top 5 investors living today.

I work in this industry! Among diversified Chem producers the biggest boom since 2011 is in the ethylene cracking plants- it seems everyone has a few 1mil+ short ton facility coming online in 2015-17. There is an unbridled optimism due to the cheap shale/natty gas feed and everyone is scrambling to up their capacity. We've had to re- apply for a permit to break ground 3 times because the c-suite wanted the design capacity increased (the latest iteration is capable of twice the original capacity). It seems there is pricing power now but once everyone's post financial crisis facility comes online in the next half decade the business may become more commoditized. Some of the more "specialty" stuff such as spvc might maintain their pricing power but it is difficult to keep the product spec and the capex is quite high. East Asian producers took it to the chin as they don't have the pipeline infrastructure nor ready availability of cheap shale gas... most of the margin is captured in the downstream processes but these plays really embrace vertical integration. So it's somewhat hard to determine whether its the specialty nature/R&D aspect that is driving the high multiple - or if it's just firm's anticipation of being able to produce their end products at a fraction of the cost of competitors (located in Asia/Europe). I'd say still highly cyclical but about to enter the boom phase.

I think he's on to something. With more things utilizing broadband data (cars, phones, laptops, tablets, appliances) the demand should only rise. Another angle might be to buy QCOM. Even my cable internet had pricing power on me- comcast, time warner aren't losing pricing power considering regional monopolies

I've been hoping that this EM thing pulls MercadoLibre down to ~$70. That's a multibagger a few years out...

Not to derail, but I've been wondering how essential it is to have access to one of these data sources when researching potential investments. I remember having them available in college but is that level of depth wholly necessary for value investing? It would certainly be nice but is that level of nuance a pre-requisite for good due diligence? *sorry end rant/question*

http://www.washingtonpost.com/wp-dyn/content/article/2007/10/30/AR2007103002292.html It always struck me as particularly prescient that he was able to make money on Freddie but was not enticed to stay around when the clock struck midnight. It's one thing to not want to be involved in an investment at all but to look at Freddie's earnings growth and return on equity in 1988 and 1992 and to take a substantial position only to subsequently sell it into an apparently strong housing market is lost on me. He cites in the article that he sold primarily because they diversified into an unrelated line of business - anyone know what he's referring to? Also, given the reaffirmed earnings growth Buffett alludes to, would anyone here sell an investment that was showing stellar returns and guiding mid teens earnings growth just because it happened to diversify some? I mean if they were good at utilizing retained earnings before why expect that to change?

I was wondering if there was a site that you guys use to access recent hedge fund letters? Most notably Appaloosa, Third Point, Greenlight, Baupost etc? I'm not opposed to a membership/fee site if they have "timely" letters (say Q3 or Q4 of 2013). Not necessarily for trades but more for the information...

I will pass the information along, I tend to agree that it makes more sense to keep the 401K intact given the relatively low interest rate on his mortgage. Thanks everyone.

Seems like on a 15/yr mortgage wells would just have to return 5% or so a year (dividends plus share appreciation) for him to be better off not touching his 401k? You also haven't given a lot of relevant info eg 1. How old is your friend decisions are different for a 20 year old vs 60year old. 2. Is the 20,420 account value or it what he will get after taxes and penalties? This is not advice its just an example of how I would think of this situation. Withdrawing 20,420 now will eliminate 22,000 in interest over how many years? say 10 years left on the mortgage(just a guess). Will the 20,420 in WFC stock with dividends reinvested for those 10 years be more than 42,420? You're example is actually quite close - I figure that means wells has to return better than 8% (dividends plus appreciation) to make up the difference in the 10 year left scenario... He's 26, married and although as aforementioned though it is not a "wells or nothing" decision, he does get to acquire the shares at a discount. I think the impetus of his question though is, as you say, whether to liquidate the tax-advantaged retirement account in order to pay off the mortgage.