abyli

Keep it quiet please.....

Why do you think Facebook is a bubble? Have you checked Facebook's P/E ratio? In yesterday's Q4 2017 report, Facebook made $2.21 per share a quarter, revenue grew 47% last year. It does not need to be a genius to know Facebook was trading at teen multiples yesterday, very high profit margin, almost a monopoly. Where is bubble?

2017: 55.5% 4 US companies, 4 China companies, hold the same 8 stocks for the whole year.

NTES

Charlie Munger：I think it is perfectly asinine and even pause to think about them. You know it is one thing to think gold has some marvelous store value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more Bitcoin. They tell you they are not going to do it, but they mean they are not gonna do it unless they want to. That is what they mean when they say they are not going to do it. They have their rules and they cannot do it , don’t believe them. When there is enough incentive, bad things will happen. It’s bad people, crazy bubble, bad idea luring people into the concept of easy wealth without much insight or work. That’s the last thing on earth you should think about. If it worked, it will be bad for you you could try to do it again. It is totally insane and by the way I just laid out a wonderful life lesson for you. Give a whole lot of things a wide birth, they don’t exist, you know. Crooks, crazies, egomaniacs, people full of resentment, people full of self-pity, people who feel like victims, there is a whole lot of things that aren’t gonna work for you, figure out what they are and avoid them like plague and one of them is Bitcoin. And the worst thing would happened if you won because then you do it again. It is totally insanity and it is so easy to simplify life from all these things there beneath you.

In 2002 I began to think how stock market works. Tried technical analysis for 6 months, never felt comfortable, then someone told me Warren Buffett, so I bought the book "Security Analysis", bought Fairfax and found the board Jan 2003. Followed Fairfax down and up for 10 years and finally got out in 2013. Made tons of mistakes, finally turned into high-quality high-growth value investor. :-)

wow! how much did he manage at the end? found the answer: $75M, if he takes 2%/per year that is still $1.5M per year Kudos to Tilson for taking the high road and graciously choosing to close his fund. But $1.5M a year...and I believe he may have started with more capital...for an 8.4% cumulative return over 7 years?! Mohnish didn't get paid a nickel for 10.25 years, and he's still called a bum by some. I think all fund managers should be operating using the "Buffett Partnership" model. Cheers! http://www.ria-compliance-consultants.com/2016/07/sec-revises-performance-fee-rules/ Unfortunately in US, you can not charge performance fee unless your clients are rich. "Under the revised rule, in order for an investment adviser to charge a performance fee, the client must have $1 million ($1,000,000) under management at the time an advisory contract is entered into with the investment adviser to satisfy the assets-under-management test or the investment adviser must reasonably believe that the client has a net worth of more than $2.1 million ($2,100,000) at the time the advisory contract is entered into to satisfy the net worth test. " It is now illegal to setup a buffett like partnership for regular people in US.

Yongping Duan

Nice summary!

IB's Account Management system is the worst application. It is soooo hard to use.

I don’t get it, where is his own thinking? On one hand he is talking why it is always better to focus on compounders, then he said he look for cheap and good companies.

I wish the melting last longer so that I can accumulate more "bubble" shares...

Now we became day trader value investors? :)

I do not understand why CoBF board hate technology stocks. Warren owns IBM and Apple too! Every annual meeting he's been talking about Amazon and Google. :-)

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider. Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters. Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money." Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100? When Google went public in 2004, it was around P/E 100. From there, it went up 1800%.

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell. MSFT, CSCO, INTC, ORCL were all printing money in 2000, though they weren't such great investments. To say tech is a bubble, we need to estimate their value first. Take Google as an example, market cap is $665 Billion today. Q1 2017 Free cash flow was $7Billion (a quarter), revenue was growing about 22-24% per year. So how much it is overvalued?

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

I do not get it. He owns Google and Baidu and he obviously gets FANG wrong. (A is not Apple, but Amazon)

I'd like to hear: "why you think those companies are overvalued?"

I would say undervalued. :-)

I guess it all depends on your style of investing. Investing is all about knowing the businesses and management team in and out. When you feel you really "know" the company, sec filings are useless; if you do not "know" the company, sec filings are useless. Know the company means you know the business, know how the CEO thinks, how do the management team make decisions, how is the company's culture, the business model, etc., you can pretty much guestimate what the company looks like in 5-10 years. Sec filings are the results, what we need to look for is the cause of the results. To me, sec filings is the place to get the numbers.

+ 10 : Awesome story. I met a lady way back who was retired from running a "Chinese" restaurant with her family. She owned all the buildings on half a city block in the downtown of a smallish city in Ontario. Dont how the rest of the family fared... the cheap labour portion. She was probaby from Hong Kong or from the mainland via Hong Kong. Thanks for that BG. I grew in SF Bay Area. We are immigrants from outside of Xinhui. Much of my life was similar to yours except we didn't own a Chinese restaurant. I wished we did though! My mom was seamstress and my dad worked at Chinese take out places. They worked 6 or 7 days a week, no vacation. Mom was paid less than minimum wage at the time and my dad made a bit more than minimum. Somehow they managed to save enough to buy a home in a nice town. Long story short, my brother and I are doing just fine nowadays. He works hard in blue collar as general contractor and I work in an office. He owns a home as well a rental and it is the same for me. My family are grateful to have all these opportunities to succeed in this country. But honestly, most Chinese came in 1990s to US regret they did. The opportunities of last 17 years in China were unbelievable!

Nice story. I am Chinese from HuNan. Where are you from?

Obamacare: If you do not buy health insurance, you pay tax penalty; if you buy health insurance, no doctor will accept it.

I never understand why all those value managers focus so much on Macro in their annual reports. Buffett said many many times: out of your circle of competence! :-)