frommi

2% currency +-0% (made money on USD, lost some on JPY) longs +20% shorts -18% really fucked up on the short side, but made some mistakes on the long side, too. On the long side i sold some things too early, like OKE, RGLD, BAC-WT or AHPI. On the short side i really need to stick to my rules, 10% of the loss were because i started shorting in early March instead of the end of April and i was at -150% net short exposure at times. Next time i will just go to cash if i have the need to be out of the market outside my short-window and i will not go over -100% short exposure (which is scary enough when i think about it). I am now at +-0 on the short side after 3 years without a true bear-market, so no reason for me to give up shorting in the summer for now. Maybe i am not that much wealthier than at the beginning of the year, but i learned a lot. (especially about international netnet investing, which i started in september this year)

Are you talking about STR Holdings? It's delisted right? Curious why you think they'll come back from the dead. Yes, its delisted. Its just the cheapest stock in my portfolio (price/intrinsic value) and i think its time that mean reversion kicks in. Maybe the closing of the malaysian factory is finally visible in the income statement or they get a big cheque from the insurance because of the fire in their factory in china or they simply fix the money leakage somehow. At 15% of NCAV there is a lot of negativity priced into the stock already, even if there is just a 30% chance of going back to NCAV its a very good bet. But i wouldn`t bet the farm on it.

STRI and 8148.JP I have that nagging feeling that cash will outperform ~95% of all mid or largecap stocks in 2017.

Sold WFC/MSM and bought MON.

At the current point in time the best investment for a young person is probably knowledge, so tell him to buy some good investing books instead. If that is already part of the plan i would pick a small cap stock with a business model that is easy to explain and follow. I believe that AMNF or CSVI are good picks for that.

Na, this is too simple to be working, it has to be a compounder with ROIC > 50%! And look at all the crap that you have to buy!! ;) Seriously, i think its better to buy a stock where cash, receivables and inventory are evenly split and it trades at a 50% discount to NCAV than to buy a shell company where there is only cash on the asset side of the balance sheet and the discount to NCAV is small. Therefore i would argue that a large discount to NCAV (<50%) and current assets/liabilities>2 is one of the best strategies out there and also delivers roughly 50%. At least there are some studies that have found that to be the case. I still wonder if its a good idea to exclude companies that have issued a lot of stock in the past because i have not found any studies researching that. Most studies probably include all these stocks and still return 30-50%, thats pretty damn hard to beat. Currently most netnet stocks i found are in Japan, Singapur and Hongkong.

Thanks again, very helpful. Looks like leverage has gone up a lot the last 3 years. ev/ebitda for the whole index is 21 right now? Are the forward earnings/ebitda a joke?

Thanks, can you attach a picture of the balance sheet, too?

Jan 2018 IWM Puts Strike @120

BAC.WTA

+1. But margins are already contracting, so its unreasonable to assume they will widen further from here. Foreign countries are a little cheaper, but its unsure if you will be able to get the returns of the foreign markets without hedging the currency and you have have other risks there, too.

I am not so sure anymore if BEN and BBBY are valuetraps. And because i hate to be unsure i sold the positions.

Isn't the real risk for buying real estate with large amounts of debt that the bond market has it right and we get a long period of deflation and a recession?

russel 2000 futures, ev/ebitda for the index is above 19 with high leverage and shrinking earnings, this can't end well. But may take a while to play out.

And covered the rest of my shorts.

IBKR, MIICF

Sold RGLD, TGT. Bought LILA and covered most shorts, now 50% net long.

IBKR is growing, but is it because it reinvests its capital or would it grow without it? For me this is a business that doesn`t need to reinvest its money, because the business scales so well (at least in theory). The problem is they reinvest it into higher wages and more developers. Is this necessary (and what is the return on investment here) or could the money be used for higher returns on other uses? The problem with ROIC is that it masks the real "return on investment", it is just an accounting number. You don`t know why earnings were growing, it could be inflation, price increases, a consumer fad, higher/lower commodity prices, organic volume growth etc. It doesn`t necessarily come from reinvestment of earnings.

Yes, but a qualitative assessment is subjective. For example i wouldn`t put CMG into that basket. My problem is that everybody talks about this subject and thinks that for example BRK belongs into that pocket. But its nothing special to compound capital at 10% like BRK or MKL did during the last decade, in fact i have plenty of companies on my list that did that and 10% is the long run average ROIC for american companies. Most of the time it will be better to just get the money out as dividends or sharebuybacks where i can invest it at higher rates. And for the companies where growth was higher in the past there is always a question mark if they can sustain that level of growth. If the answer is yes fine, but often when the answer is no and you find it out too late the investment results can be a disaster. In the end when you want to invest in companies with growth of >20% most of the time you are a momentum investor. Theres nothing wrong with that, but you should be aware of that fact.

+1. I don`t know if it was Buffet who said that, but the best investment is one that grows without reinvestment of capital like See`s Candy and throws of a lot of free cash on its way. This whole compounder stuff is way overrated since ROIC is mean reverting. Number one determinant of future rate of return is price paid, every backtest that i have seen confirms that. ROIC doesn`t even have an impact on returns, this was highlighted in "Deep Value".

They don't support companies that are trading OTC. I have several alerts there for OTC companies and they work.

conferencecalltranscripts.org

Sold VTR,MPW,OKE,UL,NSRGY,FAST and bought LICT (new position), CHRW, AFL, BEN.

What i took from the book was that 25 holdings with a value framework lead to the best sharpe ratio, the rest is just for entertainment and for me only 2 of the stories were new.

more CHRW,AFL,NXRT,BBBY,CSCO,AMNF. But still net short 80%.