james22

Convinced me to nibble at both.

Dominic Cummings: how the Brexit referendum was won http://blogs.spectator.co.uk/2017/01/dominic-cummings-brexit-referendum-won/

Thanks for the recommendation, finally got around to reading and liked it.

The Utility of Cash In a world where cash and most liquid assets that are easily convertible to cash earn a zero return, the utility of cash would seem to be zero. But we would argue that cash is becoming increasingly valuable, given that we are nearly eight years into a bull market, and the fixed income markets are near highs. This is because cash becomes extremely valuable in one circumstance in particular: when financial accidents happen. It certainly feels like we are closer to the place where cash will be more valuable than we have been for eight years. Because of all this, we have continued to liquify our balance sheets, sell assets, pay down bank lines and start to accumulate cash. As a result, at the margin, we will experience lower growth in our operating results in the short term than if we were putting this cash to work productively. But over the longer term, we believe the advantage of having liquid assets when the market turns will far outweigh any drag on short-term cash flows that may otherwise occur. It is during market downturns that very special assets can be acquired. That we are now one of the largest asset managers globally is largely the result of our patience and staying power. Having liquidity at the right times is a big part of this. During periods of illiquidity in the past, we did two things: we protected our franchise, and we acquired many of our greatest initial stakes in assets. Most of these assets would never have otherwise been available at reasonable prices. Our Olympia & York New York office portfolio, our General Growth U.S. mall portfolio, our Canary Wharf London property portfolio, our Babcock & Brown Australian infrastructure portfolio, our Reliant Energy northeast U.S. power portfolio and more recently, investments in emerging markets, namely Brazil, India, Colombia, Peru and China, are all examples of this in action. This does not mean that we have stopped investing. It merely means that around the edges we are becoming more conservative today than we have been over the past eight years. In 2009/2010, we had many attractive opportunities to invest the capital at hand because there were so many deep value opportunities generated by the financial crisis. Today we are being much more selective. And, while we have deployed $20 billion in the last 12 months, our cash resources have also been building over this period of time. Bottom line: cash only matters when it matters. And when it matters, it really, really matters. https://bam.brookfield.com/en/reports-and-filings/financial-reports/q3-2016-letter-to-shareholders

Nope, nope. I didn't vote for Trump because I thought he was an avatar of conservative values; I voted for fucking revenge. :)

All were down bigly 2007-2008 (and could have been bought with cash then).

Ms. Schroeder argues that to Mr. Buffett, cash is not just an asset class that is returning next to nothing. It is a call option that can be priced. When he thinks that option is cheap, relative to the ability of cash to buy assets, he is willing to put up with super-low interest rates, said Ms. Schroeder, who followed Mr. Buffett for years before she became his biographer. “He thinks of cash differently than conventional investors,” Ms. Schroeder says. “This is one of the most important things I learned from him: the optionality of cash. He thinks of cash as a call option with no expiration date, an option on every asset class, with no strike price.” It is a pretty fundamental insight. Because once an investor looks at cash as an option – in essence, the price of being able to scoop up a bargain when it becomes available – it is less tempting to be bothered by the fact that in the short term, it earns almost nothing. Suddenly, an investor’s asset allocation decisions are not simply between earning nothing in cash and earning something in bonds or stocks. The key question becomes: How much can the cash earn if I have it when I need it to buy other assets that are cheap, versus the upfront cost of holding it? http://www.theglobeandmail.com/report-on-business/streetwise/for-warren-buffett-the-cash-option-is-priceless/article4565468/

FRFHF @ $459 If no longer a hedge, attractive with recent moves (Allied World acquisition, pre-election bond shift, private equity moves, investment emphasis, etc.) and at 20% off 52-week high.

That's one way to look at it, yeah. I'm holding a lot of cash and really kicking myself for not having taken greater advantage of BRK a year ago. What is a target price that you have in mind, now? You appeared to have bought at $125 to $130 during early 2016. I also bought for a relative at those prices then. I have some limit buy orders for 10-15% down from here, again for that account. May not fill, but wanted to give it a try anyway. Depends if BRK falls because out of favor or with the (overvalued) market, of course. But yeah, about 10-15% down. I've a limit order in at $140, but might consider (if the former case) once at P/B 1.3.

That's one way to look at it, yeah. I'm holding a lot of cash and really kicking myself for not having taken greater advantage of BRK a year ago.

What is your current cash position?

It's also a question that anyone who bought "right after the dip" in 2008-2009, then saw their holdings go down another 30-80%... and likely did not have cash to make a meaningful purchase after second and third leg down. The smart money who bought after the market first dropped 50% in the Great Depression went on to lose 90%.

From the article itself: ... Hayman Capital’s Master Fund finishing the year with an estimated net-performance of 24.83% ... Since Hayman’s inception in 2006, the fund has returned 436.75% and an annualized return of 16.7%.

BAM, cash.

Pretty happy with 15% returns from a real defensive portfolio (50% bonds/cash). Helped out by precious metals and energy funds. Other than monthly 401k bond buys, only one trade this year (bought BRK several times in Jan at $126). Hoping 2017 will offer up a fat pitch or two.

Non-Recourse States Alaska Arizona California Connecticut Idaho Minnesota Montana Nevada North Carolina North Dakota Oregon Utah Washington Recourse States Alabama Arkansas Colorado Delaware District of Columbia Florida Georgia Hawaii Illinois Iowa Indiana Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Mississippi Missouri Ohio Nebraska New Hampshire New Jersey New Mexico New York Oklahoma Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Vermont Virginia West Virginia Wisconsin Wyoming http://www.forecloseddreams.com/recourse_states.html

Setting prices is better than a controlling prices?

18% BRK 8% FRFHF 6% MKL 12% PM&M 9% ENERGY 36% STABLE VALUE 10% CASH (7 figure portfolio) Would add to BRK or MKL or take a BAM position if fall, otherwise waiting for the market to correct.

I do subscribe to the punch card strategy, but more so with respect to the general market than individual companies. Aligning Market Exposure With the Expected Return/Risk Profile http://www.hussmanfunds.com/wmc/wmc130506.htm

First: What should I do with my life? isn't just a productivity issue: It's a moral imperative. It's how we hold ourselves accountable to the opportunity we're given. Second: Your calling isn't something you inherently "know," some kind of destiny. Far from it. Almost all of the people I interviewed found their calling after great difficulty. ... Most of us don't get epiphanies. We only get a whisper — a faint urge. That's it. That's the call.

That may be. But the hack did walk away from a finance career to pursue his writing dream and did write a best-seller on this very topic. You've surely done something similar, Jurgis?

MONEY Doesn't Fund Dreams Shouldn't I make money first — to fund my dream? The notion that there's an order to your working life is an almost classic assumption: Pay your dues, and then tend to your dream. I expected to find numerous examples of the truth of this path. But I didn't find any. Sure, I found tons of rich guys who were now giving a lot away to charity or who had bought an island. I found plenty of people who had found something meaningful and original to do after making their money. But that's not what I'm talking about. I'm talking about the garden-variety fantasy: Put your calling in a lockbox, go out and make a ton of money, and then come back to the lockbox to pick up your calling where you left it. It turns out that having the financial independence to walk away rarely triggers people to do just that. The reality is, making money is such hard work that it changes you. It takes twice as long as anyone plans for. It requires more sacrifices than anyone expects. You become so emotionally invested in that world — and psychologically adapted to it — that you don't really want to ditch it. I met many people who had left the money behind. But having "enough" didn't trigger the change. It had to get personal: Something had to happen such as divorce, the death of a parent, or the recognition that the long hours were hurting one's children. (One man, Don Linn, left investment banking after he came home from a business trip and his two-year-old son didn't recognize him.) The ruling assumption is that money is the shortest route to freedom. Absurdly, that strategy is cast as the "practical approach." But in truth, the opposite is true. The shortest route to the good life involves building the confidence that you can live happily within your means (whatever the means provided by the choices that are truly acceptable to you turn out to be). It's scary to imagine living on less. But embracing your dreams is surprisingly liberating. Instilled with a sense of purpose, your spending habits naturally reorganize, because you discover that you need less. This is an extremely threatening conclusion. It suggests that the vast majority of us aren't just putting our dreams on ice — we're killing them. http://www.fastcompany.com/45909/what-should-i-do-my-life

I'm thinking about timber. What do you think of WY?

Dan Loeb: Nearly one year into this market cycle, a few truths of hedge fund investing are evident: ... putting money to work in equities and credit today requires a thoughtful perspective on global events. Macro analysis is no longer just for macro traders. http://www.zerohedge.com/news/2016-07-27/dan-loeb-compares-managing-money-2016-game-thrones-slaughter

agreed. rational behavior, not bubble behavior. there is a difference between being a value investor and lamenting that everything is too expensive, and crying bubble Return chasing behavior = bubble behavior. (Why expect antsy investors desperate for any return to act like greedy investors euphoric and offering stock tips?) Return chasing behavior ≠ rational behavior: A world where short-term interest rates are compressed to zero is also a world where economic growth is likely to run several percent below historical norms. The narrow gap between low expected growth and no growth at all implies an elevated probability of intervening recessions and credit strains. The extreme level of equity valuations also implies an elevated potential for steep cyclical drawdowns. In this high-risk environment, investors should be demanding larger-than-normal risk premiums on equities versus the returns available on Treasury securities. Instead, current stock valuations imply 10-year expected returns that provide no compensation at all for the additional risk. http://www.hussman.net/wmc/wmc160718.htm