james22

You know he argues he's *not* a permabear, yes? The reality is that my reputation as a “permabear” is entirely an artifact of two specific elements since the 2009 low, but that miscasting may not become completely clear until we observe a material retreat in valuations coupled with an early improvement in market internals. http://www.hussmanfunds.com/wmc/wmc140929.htm Contrary to my inadvertent mischaracterization as a “permabear”, I’ve responded to that opportunity by adopting a constructive outlook after every bear market loss in three decades as a professional investor. http://www.hussmanfunds.com/wmc/wmc160502.htm A quick note on my reputation as a "permabear." The most recent cycle required us to seriously contemplate Depression-era outcomes, and that presented us with significant challenges. I still believe it would have been reckless to ignore Depression-era data as irrelevant, and I also believe that investors invite ruin if they pursue approaches that are not robust to that data (or worse, restrict their attention to data that primarily includes the bubble period since the mid-1990’s). http://www.hussmanfunds.com/wmc/wmc130107.htm Reminiscences of a misidentified permabear http://www.hussmanfunds.com/wmc/wmc140324.htm In recent years, I've gained the reputation of a "perma-bear." The reality is that I'm quite a reluctant bear, in that I would greatly prefer market conditions and prospective returns to be different from what they are. There's no question that conditions and evidence will change... http://www.hussmanfunds.com/wmc/wmc130204.htm When we shift our outlook over the completion of the current market cycle and begin encouraging a constructive or even leveraged stance, those who’ve incorrectly inferred that I’m some sort of “permabear” may become bewildered, or even believe that I’ve abandoned my investment discipline. The permabear label may be satisfying in a sort of “kick him when he’s down” kind of way, but it doesn’t explain the success prior to 2009. http://www.hussmanfunds.com/wmc/wmc150713.htm People often like the idea of being part of an exclusive club, sometimes the more exclusive the better. As Groucho Marx put it, “I’d never join a club that would have me as a member.” With the percentage of bearish investment advisors recently plunging to just 14%, investment bears are certainly a rather exclusive group, mostly representing advisors who are considered “permabears.” What’s odd is how little affinity I feel with members of that group. Though I seem to be one of the better-identified members, those who actually understand our narrative in recent years should recognize that I stumbled into this clubhouse quite unintentionally. The fact is that I’ve become constructive or aggressively bullish after each bear market retreat in the past quarter century. The main difficulty began with my 2009 insistence on stress-testing our methods against Depression-era data, which cut short our late-2008 turn to the constructive side (see Why Warren Buffett is Right and Why Nobody Cares). I continue to view that decision as a fiduciary necessity (as 2009-like valuations were followed, in the Depression, by another two-thirds loss in the market), but it was unfortunately timed. ... There is a problem with both permabears (among whom I feel decidedly misclassified) and permabulls (who would never call themselves that, preferring instead to extol the virtues of buy-and-hold, but who rarely advise investors to consider their investment horizon and risk tolerance, or to temper their expectations about future returns when valuations are elevated). http://www.hussmanfunds.com/wmc/wmc150406.htm Despite my reputation in recent years as a “permabear,” I’ve actually had quite a variable relationship with equity risk across three decades in the financial markets, and that relationship has always depended on market and economic conditions. It’s difficult to judge stocks as “good” or “bad” investments without reference to valuations and other factors. For example, after the 1990 bear market, I had a reputation as a “lonely raging bull” and advocated a leveraged stance in equities for years, based on a combination of reasonable valuation and strong market internals. http://www.hussmanfunds.com/wmc/wmc140908.htm Etc, etc. Instead: Our investment discipline remains focused on accepting market risk in proportion to the return that we expect to be associated with that risk, on average. But carry on.

Cynicism is cheap. How many marketing hucksters share their reasoning like Hussman? Maintain intellectual consistency in face of redemptions? How many marketing hucksters have earned a PhD and made meaningful contributions without renumeration? http://fortune.com/2011/04/26/john-hussman-cracking-the-autism-code/ http://www.hussmanautism.org/ http://www.hussmanfoundation.org/ http://tunews.towson.edu/2013/11/07/hussman-stinars-among-those-honored-for-philanthropy/

2016 http://seekingalpha.com/article/3832656-one-preferreds-overpriced-another-bargain http://seekingalpha.com/article/3861386-tempting-bank-america-preferred 2015 http://seekingalpha.com/article/3376045-a-non-callable-6_3-percent-yield-from-wells-fargo http://seekingalpha.com/article/3564116-6_7-percent-non-callable-yield-bank-america

BAC-L and WFC-L

... the shares carry the same risk that any long-term fixed income security carries, which is the risk that long-term interest rates will meaningfully rise, forcing prices to adjust downward to create competitive yields. But these securities, at their current prices, offer three features that can help mitigate that risk, at least partially. First, at 6.15% (tax-equivalent: 7.26%, 8.28%), their yields and YTWs are already very high, higher than essentially any other similarly rated fixed income security in the market. Conceivably, in a rising rate environment, their prices won’t need to fall by as much in order for their yields to get in line with other opportunities. Second, if their prices do end up falling over time, they’ll be accumulating a healthy 6.15% yield during the process, helping to offset the losses. That’s much more than the 2.5% to 3% that long-term treasuries will be accumulating. Third, as discussed earlier, increases in long-term interest rates will tend to increase the profitability of Wells Fargo and Bank of America. The realization of interest rate risk in the shares will therefore have the counterbalancing effect of reducing their credit risk. Granted, the market might not see the shares as carrying any meaningful credit risk right now, and therefore the credit risk “relief” that comes with improved profitability might not help prices very much. But if the shares do not carry any meaningful credit risk, then why are they trading at a yield of 6.15% (tax-equivalent: 7.26%, 8.28%)? Is that the kind of yield that risk-free securities normally trade at in this market? Obviously not.

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.