Rabbitisrich

I even feel the same way when I see people saying "That isn't value investing. This is value investing." At a certain point, it doesn't matter if you call it a hill or a mountain, just give me the topography.

I'm surprised that Tilson's long term results are so poor. His presentations are generally thoughtful and he surrounds himself with very smart people. His current porfolio seems undervalued. Is anyone familiar enough with his portfolio moves to explain his results?

That seems unlikely. Weschler supports Planned Parenthood and has donated to democratic and republican candidates. Conservative/liberal categories are broad past the point of usefulness, but he doesn't appear to have an intellectually servile political mindset.

I started following Massey today because of the same letter. Even before looking at his returns, it's obvious that he is a smart and studious investor. Mohawk is undervalued because of purchase accounting and a focus on revenues vs. operating profit, which understates the international operations. Some analysis seems to excessively reduce future margins in Unilin and Dal-Tile. Mark Lorberbaum has been selling fairly aggressively in August and September, and investors should expect volatile operating profits due to the large contribution of european operations. It's probably best viewed as an asset/distribution play, where the cash flows will take some time to realize. Of course, that same logic impaired smart investors like Meryl Witmer, who recommended the stock in $70s due to an overly optimistic outlook on housing (thinking that existing home sales would jump above the million mark by 2009).

Those guys seemed a bit hasty, or perhaps Lewis simply didn't portray them in a flattering light. Michael Burry was the only character who seemed to think matters through before acting, and he was the only guy who demanded mark-to-market collateralization for the CDSs. Where is the line for hast, I want some of that stuff. I mean making a few hundred million while starting out of a garage with 100k has to show some sort of competence inmo. I found them fascinating and really liked the ways they thought about things. Being young and inexperienced makes anyone look hasty. They didn't take care of counterparty risk, and, according to Lewis, they didn't understand the contractual details of their bets. Burry also seemed to be the only character to justify the timing of his bets. Given the severity of the market dips, and all the second and third chances it provided to investors, I'm skeptical of any young investors who made a ton of money with a limited track record. In March of 2009, you could have invested in Gymboree or DineEquity and enjoyed a 7-bagger in each case. But focusing on the return ignores the that one bet was much smarter than the other. Short track records might not expose the difference.

Has Sprott elaborated on his short thesis?

Those guys seemed a bit hasty, or perhaps Lewis simply didn't portray them in a flattering light. Michael Burry was the only character who seemed to think matters through before acting, and he was the only guy who demanded mark-to-market collateralization for the CDSs.

I've seen Tilson make calculation errors or use slightly outdated information, but his presentations are useful and thoughtful. He didn't flip flop on his Netflix short so much as he updated his thesis to include momentum. If you put out a solid thesis, one that many people seemed to agree with, and the stock price runs over it, then you have to delever the trade. It's not the same as information trading.

Thanks for the links. Whoa, these videos are long. Are they worth the time, or mostly generalizations?

The Fortune/WSJ articles on the sale of MSRs raise more questions than they answer.

My guess is that the protection of Berkshire's negotiating makes up for the loss of the TRH opportunity. It is an advantage for Berkshire dealmakers to be able to reference decades of behavior when saying, "This is our final offer."

Speaking from my own experience and those in my circle, college seemed like such a foregone conclusion that high school became extended childhood before the jr. adulthood of college. Grades and SAT scores aside, college could become much more productive if children are trained to aggressively search for their interests and talents at a young age.

It looks like McDuff Ken Fishered his clients. Instead of tailoring portfolios to client needs, he sought return. If true, it's definitely unethical, but not necessarily in such a way that it casts doubt upon his stockpicking ability.

Good stuff, but what are the Cramers doing on that list? It's incredible that Seth Klarman managed funds from age 25, and not from friends and family! Does anyone know of written material from Klarman's under-30 period?

I think you mean to say that he has stayed within his circle of competence not that the circle has not increased. Although he has been a very prudent investor, his circle of competence has most definitely increased! (To paraphrase Munger, he is a learning machine.) n He bought See's candy then, he bought Wrigleys now He bought Geico then, he bought General Re now He did not buy IBM then, he did not buy Microsoft later, Google now He did not buy health insurance biz then, he does not buy them now And then he bought commercial airline stock once and swore never to touch them again....he admits to have strayed outside his COC. The "learning machine" he was, has allowed him to firm up his circle of competence to be an exact circle. To stay within the circle he waited for years/ decades for things inside his circle to become available to him at attractive prices. So I am saying that his circle of competence as it had to do with how he acted buying businesses changed little. Actually Munger, Lou Simpson, Ajit Jain, et al have bought stuff on their own. Not everything bought by BRK was Warren's decision, especially in the past 10-15 years. The world will probably never know but my wag is that Munger's enchantment with the first principles of engineering lead to the BYD, ISCAR, LUBRIZOL and BNI purchases. The problem of having too much capital to deploy started two decades ago, not now and BRK has been expanding the collective circle of competence since then. Tuck-in aquisitions at the operating companies is clearly a new phenomenon at BRK and that is part of enlarging the collective circle. I don't have quite the same take on those business lines. Gen Re and Geico don't have much in common aside from being insurance companies, and the long-tail insurance lines have hugely expanded in the last decade. Among the other companies you mentioned, BYD stands out for being an small outlay and predominantly discussed by Munger. Without the appreciation, and the ties to Li Lu amidst the successor speculation, it didn't bear any marks of being a Buffett pick. Munger also pushed for the Iscar acquisition. But the merger documents show that Munger had nothing to do with Lubrizol, and BNI required less engineering knowledge and more conviction about the direction of energy prices, efficiency, and the roles of California and coal amidst Chinese growth. You could say that Buffett stayed within his COC in the sense of hewing to first principles of business, but he has successfully (and unsuccessfully) applied that knowledge to new fields.

Thanks for the link. Pretty spectacular returns considering the period reported. Perhaps Alice Schroeder will find another anonymous commentator to report that Weschler is actually really dumb.

Is he R. Ted Weschler of Peninsula Capital Advisors? If so, his 13-F follows Munger's views on concentration.

Packer16, you seem to be confusing the theory of evolution with the evolutionary explanation for the formation of man. Evolution is reconfirmed everytime you spray a bacterial growth and it returns. Science is a Bayesian process and while evolution does not "disprove" god/creator models, it renders those factors unnecessary.

I am long PNC, but Rohr oversaw the transfer of nonperforming assets to SPEs at inflated prices in 2001. He's crazy like a fox.

HP just released its latest 10-Q. The current market cap doesn't apply much value to old cash cows like imaging and printing, and continued strong results from enterprise servers/storage/networking. Is there an Apotheker discount, or simply too much attention devoted to declining consumer computer pricing? Imaging and printing doesn't get much media attention considering its profits relative to the market cap.

Interesting meeting. I like the speed dating program... just enough time to exchange ideas, not enough time to be infected with someone else's enthusiasm.

Where is Gross' evidence that credit supply is constrained due to low reference rates? Mortgage lenders have been dropping interest rates and points to little effect, and NFIB surveys consistently show demand expectations as the major concern. If people won't borrow at current rates, why would they do so at higher rates? Instead of focusing on yield twists, collateral pricing provides a better explanation for limited loan demand and the relative rise of C&I loans. And general deleveraging, of course.

I am no expert in index construction but the Barclay's Systematic Trader's Index contains a few biases. It accepts firms with a minimum 4 year history, but then equal weights the return. The number of index participants grew by 5% a year over the last 10 years, and by 6% from '01 to '08. According to Sol Waksman, the overall CTA index shows 15% to 20% annual turnover. We would need more information to tease out survivorship bias, but one possibility is that younger firms, with presumably smaller capital, significantly contribute to index performance due to the lower starting point. Also note that performance numbers are voluntarily reported and consists of around 1/3 of the index coverage universe. When a manager decides to stop reporting figures, the performance record is recorded as 0% from that date until the end of the reporting period. The index might also benefit from the momentum benefits of survivorship. For example, currency trading participants jumped from '03, which means that the included firms started from at least 1999, following the volatility of the IMF crisis and russian default. Again, when they stop reporting, their results are simply recorded as 0% until the end of the reporting date. One counter argument is that all indices possess some degree of survivorship bias. But S&P movements are replicable and the transaction costs are fairly easy to model. Without more information regarding the money flow policies of the participants--are taxation policies disclosed or controlled by Barclays?--a direct chart comparison to the S&P is of limited value.

Uccmal, self-exercise would be equivalent to cancellation. The strike price would just flow around and back to the balance sheet.

There isn't enough information in the sale to make an informed judgement of Tilson. You would have to look at the sale + use of proceeds. From the letter, it looks like he sold an insurance company at 1.1X book to buy things that looked cheaper in his opinion.