frommi

On page 3 or 4 there is this stuff from Jim Rogers where he talks about russia, and i was at that point in time under the impression that the political situation gets better over time. But it has not improved, it got worse and this is just 10 months ago. So when you discounted the political system with 20%, don`t you think you now have to use a higher discount? And since this discount is not really quantifiable, why is the market wrong with the current discount? The problem here from my point of view is that when the business gets under pressure the political system gets instable, too. Reminds me a bit of buying on margin. But it was clearly my fault to not see this problems earlier, and i don`t want to blame anyone except me for that. So keep up the good work, i learned a lot! At BP i underestimated the fines and open business claims, so again this was my fault not anyone else`s.

Thanks for posting. The CAPE chart with 20x and 5x earning lines makes me even more fearful than i already am. Please help me! Can somebody please post something that paints the future in rosy colors?

When you meant me, there is nothing to be sorry about :). Look at the lukoil thread to see how the world in russia looked like 7-8 month ago before the Ukraine crisis. It looked like Putin would be a lot more business friendly in the future etc. And now look at the current dilemma. I see my investment in russia as a failure that cost me no money, so everythings fine. Think about what will happen in russia with oil prices a lot lower than today. I doubt that any private asset in russia is safe from Putin in such a scenario.

i can understand you. also sold last week my posco to buy some stocks with more Price potential When you look at normalized earnings at Posco they are still pretty cheap. In the next steel bull cycle they should be able to earn 3x-4x of what they earn currently. And i doubt that Monish would buy something with 20% upside. :) I will probably look very stupid at the end of the year but i bought more puts today and have now around 50% in cash. And some of west`s Japanese picks have found their way into my portfolio. (Thanks!)

I revisited my investment thesis for russia in the last days and came to the conclusion that a lot of things have gotten worse in the last six month. I freaked out in the end and sold all russia related investments (BP,Lukoil,RSXJ) because i have no trust that things get better again as long as Putin has the lead.

From my limited knowledge the option market is a zero sum business. On average the seller has an advantage because the tails of the volatility distribution are rare. But when they happen the buyer gets everything back that the seller has won. (Think about Oct. 1987) But there are times like the end of 2008 where implied volatility was so high that you couldn`t really lose that much by selling options because you where in the middle of such a rare event and it was literally priced into the options as a permanent state. You can get an edge through the mean reversion of implied volatility and that means sometimes its the buyer that has an advantage and sometimes the seller.

High investment income (p/e) / low interest rate environment (float is not that valuable therefore low p/b)?

1.) Are you able to admit that you were wrong on some of your shorts and cover with losses that exceed your initial investment? Otherwise its only a matter of time to go bust that way. 2.) In my eyes a good idea, because you can play it as a volatility/mean reversion bet. 3.) Don`t know. 4.) Cash helps to sleep at night, good idea. (Even if racemice will say something else, but its the only asset that nobody likes at the moment) Personally i am beta hedged with S&P500 and MDAX puts since june and i am very pleased with the results so far. I had my biggest mistakes in june this year when i tried to short with futures and individual names and i was not mentally prepared for the consequences. With the puts i always say to myself that my problems get smaller with every further upmove.

There is a huge political shift from using coal to using nuclear/gas/solar because of the polution caused by coal powered plants. That is something you shouldn`t underestimate and will drive the future away from coal, regardless if new technolgies will enable cleaner coal power plants (Because coal=polution is in everybodies head). And from a grid stability standpoint its even better to have more gas plants because you can switch them on/off a lot faster than coal plants. Most countries use nuclear power for the base load already, so there is no case for using coal at all for power generation. And my hopes in this regard for the very long term is that fusion power plants will replace nuclear power plants and solve all energy problems for a very long time. (But thats probably decades away, current estimates are for commercial fusion power plants around 2050.) Some links: http://www.forbes.com/sites/christopherhelman/2013/09/12/the-war-on-coal-goes-global-china-bans-new-plants-as-obama-epa-plans-killer-regs/ http://en.wikipedia.org/wiki/Fusion_power So in essence not solar/gas will replace coal, but nuclear energy will do it in the next decade in china and fusion energy in the very long term worldwide.

Its a lot easier when you just compare your forward rate of return, that is something you can compare over all asset classes and different valued stocks. Then its just distance to fair bookvalue/holding period in years + dividend yield + bookvalue growth (everything in percent). But perhaps its just because i never understood which discount rate to use and i never found a good explanation for that. :)

http://www.gurufocus.com/news/229743/2013-pabrai-investment-funds-annual-meeting-notes--chicago The two names mentioned here have doubled from 2011 on, so i think he was just not patient enough.

Yes i think so. And i found more http://zaplog.nl/zaplog/article/osce_bociurkiw_we_saw_signs_of_heavy_machine_guns_no_sign_of_missle. I think the day the truth comes out, russian stocks will surge a lot. (If that ever happens)

I think its adjusted to the recent past and since the last 3 years were not very volatile, it goes to the extremes with very little volatility. Like all indicators its not very useful as a tool to time the market. I bet that when the market goes sideways the next 3 days its in the "normal" range again.

http://www.anderweltonline.com/wissenschaft-und-technik/luftfahrt-2014/shocking-analysis-of-the-shooting-down-of-malaysian-mh17/

No discount factor and no terminal value, that makes it easier. But just 4 years, because that way the difference to fair value still has a big enough impact and that is my intended holding period. Something at fair value growing at 19% has for me the same forward return than something that has 100% upside but no growth/dividend. The logic for me is that after 4 years both have returned 100% when it plays out, no matter how that result was achieved. In my list the stocks that have good growth and a distance to fair value >50% rank highest.

I really don`t know if my approach works in the long term ( and i am a fighter for spreadsheet investing ;D ), but i look at P/B and what could be a "fair" P/B giving the history of the bank and their current RoA. Then i look where book value can be in 4 years given their past growth (always thinking about if history can repeat here) and add the dividend yield. Out of the three components (diff to fair P/B+dividend yield+book value growth) i get my forward rate of return, which i compare to all other possible investments. I value most non-moat smallcap investments the same way.

We probably have to wait 3 month for the real numbers, given what happened to Q1 GDP. :D

I agree with you. Its easy to get on the wrong path by using it, regardless of whether it works or not.

I invert this, is it not a good idea to buy stocks in a falling market? Don`t be too friggin long at the moment. :D

I am. And i think that everything that works in TA has to do with human weaknesses/psychology. The anchor effect for example is a simple explanation why support/resistance levels work.

LMAO, i didn't know that Invert, always invert. :D

Breakouts are in my experience often false breaks, so i ignore them. And when you are a value investor breaks to the bottom are not really important because the value will "protect" your downside. But they are often turning points because a lot of big limit orders are waiting at these points and soak up the sell orders.

Everything mining related in australia. BOL.AX, NWH.AX and CDA.AX were mentioned on some blogs.

Yes. BBBY is a good example, too. But that`s only for the short term, in the long term the fundamentals have to work.

I use Elliottwave analysis and resistance/support levels for entries and exits. EW is very good to find turnaround spots, you just have to remind yourself from time to time that it works on probabilities. It won`t work every time, but from my experience you can roughly time the market in 60-70% of all cases. But don`t believe me, everybody will tell you the opposite. :) My single best pattern in that regard is an ABC-correction (Zigzag) where the length of wave C is roughly the length of wave A. When there is a support near the end of wave C you have the perfect entry point where it is very likely to get a reaction upwards.