frommi

ENTJ

Yes but that is history, you can`t be sure to get these results in the future.

Gio by your logic Senvest Capital should trade at 1.5-1.8x bookvalue, too. But it doesn`t, has never and probably will never, despite the fact that it has a similar fee/expense structure and CAGR like FIH.

One in five years. So 0.005 to 0.4 5 to 80 It has to drop that much in 1-2 months, so that happened not that often. When you do it every month you are sure to lose money in the long run, because implied volatility is higher than realized volatility. So to be effective you have to have rules in place to not do it every time, but then of course you are market timing.

Maybe :)

And who doesn`t know that? :) Anyway its irrelevant for the pricing of FFI relative to its NAV. What should matter is the fees, arbitrage and the possibility to sell it any day and based on that it deserves to trade a slight discount to NAV or at NAV. Its the same reason Ackman can talk all day long that PSH deserves a premium to NAV, but probably will never get it. (Except in times of exuberance)

Yeah thats fine, after some years of operating and buying private businesses it might trade at a premium to NAV because NAV doesn`t reflect the reality anymore. But not in the first years of operating and surely not before they bought the first business.

No, sorry. :)

Can FFI only invest in public stock holdings in India?... or does their prospectus say they can also buy private businesses and do joint-ventures, etc? Does it matter? They will certainly pay a premium for growth and that is already reflected in the NAV. A premium on FFI is like a premium on a premium. (And you pay fees for that luxury, so in reality it should trade at a slight discount to NAV.). Otherwise FFH could just setup a hedgefund on a hedgefund on a hedgefund on a hedgefund and in the end you pay a 1000x premium on the original business. The stock market crash of 1929 came through this type of packaging.

I can understand that there is some premium (3-5%) because its hard to invest yourself in india without being an indian person yourself, but a premium for public stock holdings? For me this sounds like wishful thinking and FFI looks at the moment like a hyped investment that comes down to NAV when the first official report is public.

Don`t you think this is a bit expensive since the market has to fall at least 12% from here just to bring you to beak even?

There are different ways to use leverage. 1) Buy companies with debt, that way is most similar to a mortgage. 2) Buy call options/warrants 3) Use margin with puts to create synthetic call options, the Eric way. This is similar to a barbell strategy, Nassim Taleb describes this very well in Antifragility. 4) Use margin without protection, probably the dumbest method. I use method 1 and 2, but limit 2) to 5% of the portfolio.

Sold my PKX stake and bought more SEC.TO. I want more exposure in businesses that i can hold for the long term and short term prospects for SEC look more promising, too. Munger, Pabrai selling PKX have influenced me and its possible that their low cost advantage is eroded by the currency wars. I feel that my insight/edge into SEC is a lot better than in PKX. SEC is now a 20% position.

I share your opinion about germany, but in the case of italy i think a default in a number of steps with a central bank program to support the banks is the most probable outcome. No country really wants to leave the EU, you can see this in the case of greece. The politicians will try to kick the can down the road for the next decades, because all they are interested in is that the next bomb doesn`t explode in their legislative period. There is no incentive for a politician to think long term.

Thanks, good questions! Looks like i have to read more.

Try thinking in probabilities, regarding the future nothing is certain. And valuation is always about the future.

There is absolutely no evidence to backup any of your assumptions. When i recall it correctly than the real estate bubbles in Netherlands and Spain popped because of a recession, not because of rising interest rates. I can imagine that under rising interest rates inflation is rising, so house prices/wages possibly rise too.

Does it make sense to short canadian banks based on this insight?

I can fully understand why the greeks voted this way and i am pretty sure when you are unemployed or barely make a living because of high taxes you vote the same way. As a german i am more upset about our own governments inability to act and think long-term.

Bought some more NWH.AX.

Mr. Market does not like your jokes apparently. Yes it has this brutal way of telling me that i am a fool. :) But aside from that i still don`t know if nobody watches rental DVDs anymore is now true or not.

Ok i agree with you, i have a risky portfolio. Please don`t copy me, looks like i will probably blow up next year because at the same time we get earthquakes all over the country wiping out Toronto and New York, the stock market will decline by 50% and the euro will appreciate by 40%. Steel is now worthless because everything is build of aluminium and japan will get nuked by china erasing the country from the map. Oh and there is a wonder drug against cancer, nobody watches rental DVDs anymore and online gaming/lotteries are prohibited worldwide. All in one year! ( Just kidding :) )

Same experience here, MMM has really changed my life for the better. Jacob of ERE is in my view a hardcore optimizer of money usage, i respect him for that but i know that would be too much for my life. (too much stress with my spouse, even though she is already frugal). As a single or with very little income i probably would give it a try for some time to get a headstart.

The funny thing is that the author has just done a backtest with statistical data. No reading involved, so there where probably value traps in the list that you could have avoided by reading the reports and thinking about the businesses. And still 5 stocks were enough to diversify that risk away and gave the maximum returns.

Thanks for your honest words, but how exactly do you quantify risky? From my point of view there is no single risk that i know of that is able to erase more than 25% of my portfolio in one fellow swipe. I mean look at Monish Pabrais portfolio of BAC,C,GM,FIAT,PKX. Thats cars, steel and banking. All are heavily correlated to the US/world economy, i would call this at least double to triple as risky as my portfolio.