frommi

I was always under the impression that you can learn from the good investors like Kraven, Packer, Nate or Schloss. You could do it when you really would like to, but you just gave up before you tried it and learned nothing in the end. Perhaps an index fund is the right decision for you. :) Why not look exactly what these investors do and imitate it with a small part of your money?

Thats pretty easy. He choose a moving average of 39 weeks why not 20, 40 or 50? Because he has done curve fitting. http://philosophistry.com/notes/the-backtest-fallacy

My experience and numbers tell me that it works where nobody else is doing it, but doesn`t work where everybody else does it. And this makes sense to me because it is a pure alpha thing. But for the global indices you have much too much competition to make correct timing calls consistently. It is like the physical problem with schrödinger's cat, where you change the outcome of the experiment when you look into the box. When too many people see the crash coming, they prevent it by not being invested and investing when the market goes down by 5%.

1. What Berkshire or any other insurance company does with cash has more to do with their need for liquidity for their business then with being liquid when the market falls. It should not guide you what you do in your own portfolio. 2. You can ignore all studies that show that low P/B, low EV/EBIT or smallcap stocks outperform the market or that holding cash dampens returns, but i doubt that you will be able to beat the market without that knowledge and usage. 3. I have never seen a study where you could identify a good manager after the fact is widely known and profiting from it and outperform the market with this knowledge by wide margins. I would bet that you get the same results like investing in the best mutual funds of the last years, and that is severe underperformance. 4. Market timing on a portfolio level doesn`t work, basta. Thats proven ad adsurdum, so why do so much people still do it? (It is not rational.) .... 5. The market will crash next week! :D (But i will still hold 107% stocks!)

Thank you! Now that leaves just one question, what is the optimum leverage for a given maximum portfolio drawdown? :)

Perhaps its a better idea to focus on your own capital allocation skills, because that is something under your own control. You never know people 100% and you can only say in hindsight that someone has allocated capital really well. But is he/she able to do it in the future?

When you are really interested in technical analysis to detect stock bottoms you should learn about Elliott Wave Analysis, Fibonacci and Support/Resistance. Candlesticks work best for trendfollowing. Theres a trading technique a lot of successful daytraders use, which is called Ross trading/1-2-3 setups. This works in stocks to detect momentum turnarounds, too. But i guess that for the 99.9% members of this forum this is unnessecary hokus-pokus. :D (and it is, when you can replace it with experience.)

How do you come to that number? I can only "see" that it has a high chance of falling further, but i don`t "see" yet how far. At 20 there is a massive support, but that doesn`t mean it drops that low. After looking at this again, it has now a high chance of turning when the daily high of yesterday is beaten. But probably its best to ignore me with so much stupid shit that i post. :)

How do you come to that number? I can only "see" that it has a high chance of falling further, but i don`t "see" yet how far. At 20 there is a massive support, but that doesn`t mean it drops that low.

Most value investors that apply a long/short strategy are probably doing it this way. But what you are doing is hedging a value strategy with a -growth strategy. But you have to admit that these two types can be strongly correlated at times. When you are levering this up, you will not get a better risk adjusted return. Its better to diversify across asset classes, world markets and interest/inflation sensitive/insensitive investments and then levering this up. In the end what you earn is the geometric return of all your uncorrelated investments. But shorting has most of the time a negative return and when you multiply that with a positive return the end result will not be greater than the positive return alone. The argument that you have cash available when your value investments tank is only true when your investments are 100% perfectly negativ correlated. But in this case (which does not exist) you could just take more value investments and lever it up for the same result.

Its very dangerous to think that you reduce volatility or your maximum possible drawdown and then lever the whole portfolio up. Look at the numbers JEast has posted here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/benjamin-graham-quality-dimension-of-value-investing/ The drawdowns for long/short portfolios were in some backtests higher than a normal long only strategy. That was not done with obviously fraud stocks, but i have seen pumped pennystocks going up 20 fold before they crashed. On margin your whole account can be killed with one such stock. And it just has to happen one time in x years to kill all your profits you made on the long side. And when options are available they are most of the time so expensive that you will not make money in the long run, even if you are right. For me long/short strategies are fragile and therefore not something that is prudent to do, but i understand that there is a demand for that kind of hedgefunds.

Thank you, i love these kind of papers.

NWH.ASX

I doubt that there is a link between time spend on an investment and return. And when there is one its probably the other way round, the longer i need to convince myself the worse the opportunity. When good things come around you know it the second you look at the numbers.

Just read all threads. :) I learned the most by posting some ideas and reading the Ask Packer and Ask Eric Threads 10 times.

Completed my buys of RSXJ today. Bought kholy and rsxj last week and hoped to complete it this week, but kholy has run away. I am now at nearly 25% allocation to emerging market, with 10% russia and 10% china.

Looking at some gangsta rap vids with hot girls i am under the impression that these are some really great tips!

And there is pressure onto european and us politicians, too. Last week managers of Siemens and other european companies went to moscow to speak directly with Putin and after their talks they attacked the sanctions and the reactions of the eu politicians. And i don`t think that Mastercard and Visa are really happy when russia builds its own credit card system, so i think they are already talking to Obama to find a quick solution to this crisis behind the scenes. And did you know that none of the russian oil companies is hit by the sanctions? I would bet that is because the us oil companies are working with them, like every major eu oil company. They will do what they can to de-escalate this crisis. In this end in my eyes the most likely outcome will be that europe and the us see crimea as a part of russia and russia agrees not to attack the ukraine and perhaps allows NATO troops on ukrainian ground.

Enough pressure? You must be referring to this: http://www.newyorker.com/online/blogs/borowitzreport/2014/03/us-freezes-putins-netflix-account.html :D. Its not pressure from the US or EU that i mean, but the pressure from inside. Do you think the oligarchs are amused about their networth crunch and not being able to live their "normal" lifes with holidays abroad? And now think about what their wifes are crying about all day, not being able to go shopping in Milano, Rome, London or New York? And I don`t think Putin will let the russian economy take a big hit again after the last weeks. That will be food for his russian enemies.

+1 My wife is my emotional counterpart, when i am euphoric she brings me down to earth and when i am depressed she makes me smile. Both emotions are the enemy of a good investor, so i would say my wife makes me a better investor. :)

Sorry but this whole thread is full of bullshit. Nobody has an interest in going to war, and when nobody has there is no war. Putin is not stupid, there is enough financial pressure that forces him to talk to the other nations and he said already that he has no interest in the eastern ukraine.

When 90% of the portfolio is in low beta stocks, its logical to outperform the market in down years. Especially because the index has stocks of companies that go bankrupt in these "down" years. In his first years it was probably that in crashes normally high valued stocks correct more than cheap things. You see this effect live in the last week, growth stocks have plunged while most value stocks have performed well or gone sideways.

Yes i looked myself but i was wrong it hasn't worked there.

I looked it up myself on multpl.com. Very nice. I can`t wait to see it. :)

The beauty of numbers and statistics is that you don`t have to argue with them. ;D