DoddDisciple

Here's something else I don't really understand. People compare bitcoin to gold, saying they are practically indistinguishable. Gold's been banned in the past. Bitcoin might. Store of value and all that. But isn't the value of gold, particularly to goldbugs and collapse of civilization types, lost if it's just held as a paper asset? The fluctuations in the value of gold therefore are purely speculative, since they're not trading in the actual situation where they have value: hand to hand transactions. Like physical gold, bitcoin can be stolen and is untraceable. With these big thefts at exchanges, don't they convert to altcoins and back to fresh wallets since otherwise you can see that the coins are marked in the bitchain? Are people actually able to benefit from their large thefts are are they undertaken by "for the lulz" types who just do it to see if they can do it? Look at this: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/1920s-germany-hyper-inflation-and-stocks/. During 1920s hyperinflation in Germany, the shares of the publicly traded stocks actually kept pace with inflation. I haven't investigated, but if the same or similar occurred during the fallout of WWII, that would make a pretty strong argument that stocks and business ownership are superior to either bitcoin, gold, or anything similar at the very function these "stores of value" are supposed to be good at.

Housing has historically grown at about 1% above inflation according to Shiller, so 4% p.a. I wouldn't have a problem renting, but owning just made sense where I am. That being said, I assumed a 1% per year DECREASE in the value of the house and barely rising rental costs and the numbers made sense for me.

I haven't read good things about the ASIC producers. Mainly they produce shoddy products prone to overheating. I've read that Butterfly Labs has management that engaged in prior financial misdeeds and uses the machines to mine first and only sell them after the difficulty has risen where that model isn't as viable. The question is at what stage are we in on the bubble. Unlike say the dot com bubble, I don't see main street investing in this yet. I think having a little of every coin is the optimal way of doing it. Dogecoin came out of nowhere and is a joke product, yet it's in the top 20 by market cap. I don't know how accurate it was, but it was briefly $400 a coin on coinmarketcap. Maybe just a data error though.

In regards to wachtwoord, maybe what I said is bullshit. I'm not an expert by any means in either bitcoin or payment processors. It just seems to me that much of the technological capacity is spent on the blockchain which is rapidly growing and to me, is redundant. Why does someone need to have the entire history of bitcoin transactions in a file? I know they've talked about separating the blockchain and end users, but then we have a situation where there only a few large miners who can then be easily regulated and controlled. Additionally, the miners have to solve cryptographic puzzles, not just look at the pure data. How much of the technological resources are spent on the puzzle solving part and the actual data storage and processing? I really don't understand the appeal at all of these cryptocurrencies. You have to have the fiat currency of where you live. I know I couldn't find a way to spend bitcoin in my local area for anything. If someone doesn't trust a particular country or currency, they can just convert to a basket of fiat currencies they store on their own if they are paranoid or they can go on Interactive Brokers and for $2-$3 a trade get into 18 different currencies. You have two stage authentication with the USB thumbstick and then, if the money's stolen, you can get it back. There won't be a case of throwing away a hard drive with $6M-$7M in bitcoins. That being said, I'd be really interested in seeing where this bubble goes. I'd like to buy a basket of all crypto coins, but unlike going into IB and making a few clicks, the functionality isn't there to hold all this in a secure web wallet or to easily build this as an offline paper wallet.

Such constraints probably make working on the newsletter tough. I remember someone compared StocksBelowNCAV's index to the newsletter and the index was up ~40% while the newsletter hadn't moved overall. I think the best easily accessible support for a net-net strategy is on Old School Value's screener page. From 2000-2012, it registers 18% annually for the NNWC method. These are probably the worst NNWC stocks since they have to be in Compustat (meaning they are larger), have high-ish liquidity requirements, and were rebalanced every 6 months with 1% slippage; yet they still clock at an obscene rate. I agree that there are fewer of these in the US that are appealing, but you can go out right now and build a 30 stock portfolio using value-investing.eu and some pretty stringent criteria. Z score above 1.81 and F score above 4. And, this screen is fixed to only look at 66% and less NCAV. If you relax the NCAV constraint and just look at "net-nets," you could raise Z score above 3 and F score above 6 and still be able to build a basket. Like I mentioned earlier, Gannon did something similar with the Compustat data and got a 30% possible return for ranking by insider ownership and 20% for ranking by F score. So returns may be 18%-30%; let's just lob off half for problems. I think most people would be thrilled with 9% per year for the last decade.

Interesting. I think this is just the domestic $300 premium membership with access to US screeners and newsletters (speaking of which, how is the net-net one doing?) In regards to yadayada, you can easily develop a high quality, non-pinksheet global net-net basket right now. The US net-net offerings aren't the best now, but there are enough that there would be at least some representation in a 30 stock basket. In regards to risk, I've never understood why a $50M market cap is considered too small or subject to scams. It's certainly large to an individual, just look around at most small businesses. People buy and sell those with a lot less information than we have on even the smallest listed stock. Most small businesses would be terrible stocks, but somehow, operating at say 1% net in comparison to total sales, provides tens of peoples with jobs and keeps the business afloat. By looking through stocks instead of local business listings, you at least gain a method of quick liquidity though exchanges (you may not get the price you want, but you can get a price) and can avoid all the small businesses like restaurants and gift shops that routinely pop up and disappear a year or so later. If you see a company with large insider ownership, you can at feel more confident that greed and self preservation on the side of owner-operators will make them not want to screw themselves (as stockholders) over. Can outside minority holders get a raw deal? Sure. But at least you're getting a deal at all and more than likely, when something like this happens, you are in the green on that particular deal.

College is one of the most intelligent businesses out there if you think about. On an economic level, you can and a lot of students do use federal loans to pay for food, housing, and resort (oops, I mean college) amenities. Teaching doesn't even enter the picture. One of the recent offerings at most schools are 24 hour "writing help." They don't want anyone to leave and lose out on that government gravy. Oh, and I really like how most schools are requiring students to have insurance via Obamacare and, guess what, they can buy through the school and use student loans :) The beauty is that I know PhDs in vector borne pathology who could have done their labwork with just a few undergraduate classes or some on the job training. STEM definitely isn't excluded from the fluff. Maybe they'll start offering PhD's in janitorial science soon. The fact of the matter is that as a society, there are at least 3 landmines that are drilled into our heads through advertising: automobiles, accommodations (housing), and academics. Screwing up and overpaying on anything of these can either set you back significantly or retard your economic power for life.

Pffft. This is nothing like the guy who "invested" $15 in bitcoins like 2 years ago and it's now worth on paper $500k :) However, he was able to convert at least $200k into an apartment building, so he's locked in a hell on a gain.

Interesting. Value-investing.eu does seem to be the easiest global screening I've come across so far. Their NCAV template is fixed at 66% and less however. I've checked them against screener.co and a few hand calculations on F, M, and Z score metrics and they seem to be close enough to be useful as a group investing tool.

I can't find the quote now, but I recall that the illustration was replacing every current car with a fuel/energy efficient one. We don't have the resources to merely make the tires for 1 billion cars, much less the car itself. It was also in reference to a growing middle class in emerging countries that would want a vehicle. The resources may not be there if they want to replicate the nature and number of vehicle ownership in developed countries. All that may be wrong of course. I also remember, possibly from the same book, that if everyone in China wanted an extra teaspoon of rice oil, it would exceed current worldwide supply by 100%.

Hi, Orange. Do you have any screeners to recommend? The most cost effective ones seem to be screener.co and value-investing.eu. I know GuruFocus recently updated for international screening, but I'd rather not toss $1k their way with no free trial. Any idea of general data trustworthiness? I've done by hand and by the screens and the aggregate differences make it seem not worth doing by hand analysis. Just check validity of it being a net-net, maybe look at 1 - free float/shares outstanding as insider ownership proxy, and trust in the screen's generated FMZ scores.

Thanks. Selling shovels I see :) Are you doing pretty well with this? I understand the mechanics of setting up a secure BTC wallet, it's just that I would rather hold equal weighted portions of all cryptocurrencies, but honestly don't feel like being paranoid and setting up all the separate wallets in a secure fashion. The only site that allows easy exchange between the currencies is cryptsy, which honestly seems scammy as hell to me. Absolutely agree. It's sort of sickening to be honest. The combined computing power of bitcoin is more than 256 times that of the largest 500 supercomputers combined. It's things like this that remind me why we don't have flying cars. We'd rather foam at the mouth when an iPad is released with 128GB than actually make anything useful.

Thanks for the link. Honestly I still don't see bitcoin as anything more than a bubble. I wouldn't mind playing in it, however, but the whole procedure of buying and securely storing the bitcoins looks like a pain. I do like that Winklevoss's favorite thing he bought with coins so far was a sriracha lollipop. I looked at the places accepting bitcoins for now and it's just a bunch of junk. I may be mistaken, but I don't see what problems bitcoin solves. I like being able to chargeback a transaction if needed and not needing to worry if my card number is stolen and if it is, being compensated for it. If I was a merchant, I wouldn't accept bitcoin for anything serious due to the volatility. Today it's down 4.1% That's a larger fee than what most people would pay for processing. In about the last week, another 10 coins have been added to http://coinmarketcap.com/. Some are specialized in use, like Sexcoins and Craftcoins. Overall, this whole crypto stuff just reminds me of store reward programs, which are annoying as hell. I still wouldn't mind putting some into each coin if I could find a way to easily and securely do that for 50+ altcoins. It's a complete gamble, but maybe it's time for another bubble.

A strategy like that is more likely to experience the problems that most people bring up in regards to a quant/mechanical style. I had a professor who did something similar and I just don't see how it makes any intuitive sense. He looked at 10 different asset classes, many of which were stock index funds, but I recall several commodities. He'd rank them, invest everything in the one with greatest momentum, and hold and redo a month later. It's likely the same strategy. That seems like actively participating in greater fool theory to me. Many of these ETFs are composed of 1000s of positions. How can we make a meaningful prediction over the short or even the long term? Additionally, it is very easy for institutions and large funds to game the strategy. The different variants of the Vanguard Total Stock Market alone are what, $500B-$1T?

Personally, I wonder if whenever looking at increased efficiencies and cost savings, the government takes into account all the equipment and supplies it's new "bureau of lightbulb management" will require. A lot of these green movement things are mere kabuki theater based on what I've read and are too little, too late. For example, if we had cars that were 100% energy efficient, we would be unable to take advantage of that since there isn't enough oil worldwide to simply make the tires! I don't know how true it is, but weren't incandescent bulbs made with planned obsolescence in mind? Like there are reports of some incandescent bulbs from circa WWII that still work. Overall, it'll just end up costing me a little extra when they switch. I already use whatever cheap CFLs they have at Aldi's. I've bought the more expensive bulbs and the numbers just don't work if you don't use them for their entire useful life due to animals or humans destroying them. I use them for reptile lights now due to the heat production, and they are cheaper by a factor of 25-50 or so.

I may not be understanding correctly, but the problem is this is a foreign stock held in an IRA that should have a tax treaty in place, yet they are withholding taxes? I looked a little more into the foreign tax credit and it honestly looks like a lot of hassle in most cases. Does anyone have any ideas on what to keep in mind for this? We are supposed to have tax treaties with these countries: Australia, Austria, Bangladesh, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Portugal, Slovenia, South Africa, Sweden, Switzerland, and the United Kingdom. I'm not worried as much about taxes on dividends as I am on taxes on say cash distributions/company liquidations. I wouldn't have a problem paying more on dividends if I'm saving the $100 brokerage fees at Fidelity. The 2% of AGI to itemize (and I think it's per country) is something I'll probably never meet.

Thanks to oddballstocks for raising some excellent points. I would say that net-nets as well as other similar strategies work in an odd part of the investing spectrum where you have to have accounting and financial knowledge above the average person and at the same time be willing to knowingly ignore aspects any analyst would look at. You could say such basket strategies operate on two twin, opposing concepts: logic and faith. Additionally, I don't really get a sense of pride from any particular company. I don't care how large or respected the company is, I can guarantee some people there hate their job and their negative relationship spills over to other parts of their life. I know I'm a little odd in this regard, but whenever I see say a movie or similar time-based experience, I can't help but briefly consider the aggregate human suffering that had to happen to bring us say an hour or two of entertainment. Anyway, I just brought the post back alive since I had been investigating the actual mechanics someone could employ to cost-effectively develop a global portfolio and wanted to provide an update. It's not the ideal solution and the data isn't always exact in places, but it's there if anyone wants to use it. Most people are pretty restricted with how they can manage their retirement assets, so being able to do something odd outside of them may be an option.

So was there tax withholding on FFRHF or FFH.TO? I don't see how or why there would be withholding on FFRHF since its an OTC/US stock. In regards to Fidelity, does anyone have experience on when the $50 foreign ordinary shares trading fee will be charged? I'm trying to avoid any gotchas if I continue to hold IRAs at Fidelity instead on IB as a result.

I agree. 1 year is not long enough to make any real judgments, but I am still amazed at the outcome overall considering these were perhaps the lowest quality net cash stocks out there. The larger the market cap, typically the worse the stock does with strategies like this.

True, but as recent counterpoints, both Gannon and Oddball Stocks's net-net Japan portfolios trounced the market. Perhaps there is a size constraint for Pabrai? Then again, Greenbackd's 1 year results of his net cash / negative enterprise portfolios are up and I was really surprised to see upwards of 70% returns on such large market cap stocks.

I'm not NormR, but I recall reading somewhere (maybe on here) that Bloomberg is around $14k per person, and you may have to start with a 2-3 person subscription. A case of if you have to ask, you can't afford it. If you can't get Capital IQ or Compustat through a school or library, here are some other sites to consider: Portfolio123 uses the Compustat database. It's just US stocks. I recall it was around $100 monthly for the plan with data going back to 1999. Value-investing.eu has about 30k stocks around the worth and is about $400 yearly. GuruFocus has a similar offering, but it's around $1k yearly. Screener.co is $25 monthly and uses Reuters for data I think. It seems fairly accurate for the most part. If you use another screener, you can always give bloomberg.com a quick glance to see how their free snapshot data compares to your own.

Looks like I forgot my summary. Using Screener.co: - Last Interim Filing >= 12/31/2012 - Total Current Assets (I) - Total Liabilities (I) > Market Cap - Zscore TTM > 3 - Piotroski TTM > 3 Ranking Criteria: - 1 - (Free Float / Total Shares Outstanding) * 9 = Insider Ownership Proxy - Piotroski TTM Thoughts: - Anybody check Screener.co data for Z and F score datapoints? - Will have to isolate stocks by exchange/country upon basket development

Global Net-Net Search v2.0 I've been searching for a way to invest in a mechanical global basket of net-net stocks as an individual investor for a while now, and after a lot of tinkering, I'd like to present a strategy and hopefully hear some advice from those much smarter and experienced than me :) NOTE: I wasn't sure if I should post a new thread or resurrect this one. I did see that in spite of my input, it's generated 3k views so far. The most cost effective screener I've come across is Screener.co. However, value-investing.eu may be another option, but you can't manipulate the datapoints as easily on it. If you've read my other post on here, you see that I've wanted to employ something similar to Geoff Gannon's framework presented in: www.gurufocus.com/news/121824/how-to-pick-netnets. Unfortunately, I've noticed that the main component of his findings, insider ownership, is hard to find. For US stocks, you can use Yahoo Finance, SEC filings, or Compustat, but otherwise, you can't find it. However, I've noticed that Financial Times (as well as Screener.co), have data on "total shares outstanding" as well as "public/free float." While these numbers can't give us insider ownership exactly, I think they provide a good estimate. Take the ratio of free float to total shares outstanding and subtract from 1 to get a rough percentage estimate of insider ownership. Or, just reverse sort free float / total shares outstanding, with 1 meaning no or minimal insider ownership interest. As far as I can tell, this approximates insider ownership, greater than 5% holders, treasury shares, and restricted stock (say for options), but does exclude institutional ownership, which is what we want to avoid. Gannon saw that high institutional ownership is about the only factor that can really hurt basket net-net returns. This forms 1/2 of our ranking criteria for net-nets, using 1 - (free float/total shares outstanding) * 9. The 2nd half is TTM Piotroski F score from Screener.co. Screener.co offers two F score calculators. The 2nd one uses last fiscal year versus prior fiscal year. It seems to me that TTM is the more recent of the two. Here's where things start to differ between data sources. I've looked at screener.co, grahaminvestor.com, value-investing.eu, gurufocus.com, and done the numbers by hand, and we all get different numbers. On the one hand, I am worried about the discrepency, but on the other, I feel that since interpretation can cause the scores to deviate somewhat, I feel more comfortable with having a machine make the calculation. The ratios imbedded in the F score aren't hard, so if there is a mistake due to data, at least that mistake can occur across all stocks. These sites also offer a non-null parameter count, meaning you can see how many of the 9 data points were included in the F score. So if you have an F score of 7, and a non-null of 7, that means that, hypothetically, there are 2 other points the firm could have scored "yes" on and it could actually be a 9 stock. Here, you can do a cutoff of 3 or more if you want and then rank what's left just based on TTM F score. Therefore, combined rank is the insider ownership plug I mentioned earlier + F score. Beyond this, I've selected to only look at stocks with an interim file of 12/31/2012 or later. Utilizing this or an annual filing cutoff takes a full 20% out of the Screener.co database. There's roughly a 2k difference between this date and 12/31/2011 or later annual filing which I may investigate somewhat since I am sure some companies only file once a year and I don't want to exclude them. Screener.co also offers several ZScore calculations, and I've been using TTM with greater than 3. The other options are FY, 3Year, and 5Year average, but I don't feel they are as valuable. Using my parameters and not excluding any markets, and with net-net meaning just total current assets - total liabilities > market cap, resulted in 263 companies. Going by strong form Graham 66% NCAV gets 92 companies. Net cash stocks result in 34. From this, you'll have to go through and figure out which countries/exchanges you can trade in. Interactive Brokers only allows 23, so to ensure that as few stocks are left out as possible, you can go by each of those countries "exchange code" in Screener.co. I've noticed some Chinese companies, possbily some are RTO, and don't know if I would or wouldn't include them. A recent study showed that in aggregate, RTO's may not be as bad as they are made out to be. In my net cash screen, the first stock located in China is traded traded on the Signapore Exchange. The insider plug is 68.37% and the TTM F score is 6. It is also recent in its interim filings and has a TTM Z score greater than 3. Could it be a scam? No clue, but it may work in a basket. The only other data point I'd like would be the M score to detect earnings manipulation, but since it isn't coded in Screener.co, and isn't available on every stock in value-investing.eu, maybe I can do without. Anyway, thanks for reading. I set out with the goal of this post being a little shorter than my last one, but looking at it, I may have failed. Anyway, I really appreciate any thoughts, comments, critiques, or suggestions :)

I've really been struggling with data sources. I really want to implement global baskets of net-net stocks, but I haven't pulled the trigger since data quality has been lacking. I understand things should be hairy for some OTC stocks, but I'm honestly surprised that the quality isn't even all there with NASDAQ. Right now, the most economic solutions I see for global screening/data are screener.co and value-investing.eu. The first is $25 a month and the second is around $400 yearly. Gurufocus also has a global screener, but the cost is at around $1k a year. All can import to Excel. I want accurate F, M, and Z scores, but I have noticed discrepancies on all 3, and I'm not willing to go $1k on GuruFocus when their domestic data is suspect and they don't provide a partial trial. Does anyone know of alternative global screeners ($1k or more is fine, I just want better data)? Likewise, has anyone found F, M, and Z scores that are more or less trustworthy as a group? Thanks!

I'm not really sure what to make of the BTC phenomena. I was somewhat aware of them a few years back but never bothered buying any. Just $100 would have made me a BTC millionaire by now :P Going forward, I'm considering putting $1k or more in a basket of the 30-40 crypto currencies that are out right now, equal weighted.