frommi

I was obviously wrong here, there are forces that want a war. It looks like some big players in the US (and probably even russia) have a high interest in a destabilized europe where everbody needs more weapons. Its really sad to realize that the weapon industry has such a massive influence on the politicians.

0.1%, its just a gamble with good odds. But i forgot to look at dividend paydates, wednesday is the ex-div date. The last time i did these kind of things was 3 years ago, but i was not very successful doing only this. (Because i was too greedy, let my profits run away and overtrading.)

I don`t know if this was a great idea, but i just bought a lottery ticket. I bought BP 52$ Calls for 0.04 that end on friday next week. When BP rises by 8-10% this is a 100 bagger which is possible when it breaks out through its february top next week. Slowly my old demons are coming through again, but i found this a good risk/reward scenario. Anybody out there who likes to punch me in the face for throwing my money away gambling?

I know a lot of people in here will roll their eyes when they hear the name Timothy Sykes, but he wrote an interesting book about this topic. I just read it for entertainment, its title is "An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund". He describes very good how hard it is to raise capital for a small fund.

Hi frommi - what is your thesis on this? It looked cheap to me, is growing and pays a healthy dividend. I first bought this at 13 and sold 30% @23, thats the part i just rebought because it got hammered pretty hard without reason in the last two weeks. My fair value was around 25$. Its possible that the business model sucks and will be killed in the future, but its not visible in the numbers and i will only sell when i see it there. I think it popped up in a magic formula screener. But i have to admit that i feel really bad for not selling the position completly at 23 and than forgetting about it. Right now i am pretty feared that it collapses completly perhaps thats the reason i bought more. :o

Added to my position in WSTG @ 16$.

I don`t think gold or metals are a good idea at the current prices. http://i57.tinypic.com/vfxro6.png

Wrong thread!

Paderborn, Germany

Thats one of the reasons i have only a very small portion of stocks in the EU. Its just a matter of time that the ECB has to print money or that whole things collapses with people rioting on the street in spain and greece. The situation in these countries has not really improved, but nobody talks about it and the going back to the capital markets in greece was much to early in my view. In some years they have to be bailed out again. And germany has a massive problem with its pension system that will come to the surface in 10-20 years. For me that are enough reasons to avoid the euro zone. But thats probably because i am living here, the grass is always greener somewhere else. :)

Way too kind, original mungerville! :) Thank you very much, Gio Yes, i am sorry. I apologize for my harsh comment.

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.