frommi

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

They have done it with 1% spread costs and stil came out ahead. Today you should not have a lot of spread or transaction costs. Taxes are surely a concern, but i don`t intend to hold my value investments forever so its a good hint at when to switch to cash and you have a good timing method to hedge with puts to avoid taxes. It worked in 1974, 1987, 1999 and 2008 and it makes totally sense, when i would time the market i would do it exactly that way and i think WB did it that way either when he has done it. Why invest in a risky asset when the riskfree asset gives a greater return? The short spread (S&P Earnings yield - tbill yield) under -1% looks like a good barrier to act and at 0% we should start to be very careful. This implies that we are currently in safe waters and are at least 1-2 years away from a major downmove. :D

Thanks, thats my evening lecture, that was exactly what i was searching for. :)

Thats a classical example of curve fitting. You won`t get the same results doing this going forward. The best example is where they do it with the dividend yield. When you switched out when the dividend yield goes below 1.5% you make more than the buy and hold investor. But hey, there was just one point in history where they would have switched out and that was 2000. So does anybody think that will repeat exactly? Surely not :).

Interesting paper, but they probably should have compared the earnings yield with the t-bill or 10 year treasury yield instead of a fixed yield. It should be obvious that the switching points depend on current inflation.

This summary of letters is really great and highlights one point which is critically in my eyes. You have to be able to put an expected rate of return number on every investment you can possibly make and choose the ones which offer the best returns. It looks so simple but i have only seen a handful of people doing this and i think this is the key factor to ignore macro and every other noise.

When you search for the next 10 bagger just go to pennystocks. But the problem is for every tenbagger you find, there are 8-9 bankruptcy stocks and in the end you would have been better of concentrating on the 2-3 baggers in 3-5 years.

Jack Schwager has written a really good book about successful traders (Market wizards). There are plenty of ways to make money in the market and i would never say theres only value investing. But value investing is the simplest one, its the one that nearly everybody can manage to do. And if you are bad you are probably not beating the market, but there is a good chance you are still making money. The most other methods have a high entry hurdle because its very hard to break even. One mistake and you are often back to zero. I read about successful option sellers (>30% per year even in 2008), successful penny stock daytraders (from 1500$->1.7million$ in 3 years.) and successful technical traders. But for all these methods you are the factor that determines if you are successful or not. And that only works when you have lots of discipline and are in full control of your emotions. You have to permanently work on yourself. And everyone was able to admit that he/she is sometimes wrong and correct themselfs in some way. And value investing has another "advantage", because nearly every other successful method requires you to sit in front of the computer as long as the market/your position is open. I tried this for some time but working 8 hours a day and than 8 hours as a trader was not working. Perhaps i try that again when i am retired.

There is a difference between not working ie not beating the market and not making money at all or losing money. Market timing is nothing that sometimes work and sometimes not, it depends on you if it works AND you make money of it. And when you do it, you are not an investor anymore but a trader. And a trader has to admit that he is sometimes wrong and correct his path. When he doesn`t do it, he usually ruins his account. 95% of all traders lose money in the market, but everybody thinks he belongs to the 5%. I was no different :). Read "Reminiscences of a Stock Operator", than you get a really cool look at how market timing can work. But be aware that even the genius Livermore was more than one time broke. Holding cash because you can`t find investments anymore can in my eyes only happen for a money manager that is bound to restrictions like only us stocks and/or managing huge amounts of money. For everybody else its probably not enough time spend searching or the circle of competence is too small. (But even then you can coattail other investors.) But i respect when somebody holds cash to reduce volatility, because in the end thats what it does.

I don`t know if it was prudent, but i had to buy Bank of China (BACHY) today. Reduced my KMI holding back to where it should be.

What are you looking at? I think SUSQ looks cheap. I looked at the numbers quickly, it seems they permanently issue shares, is that normal for a smaller bank?

From my understanding when you look at foreign numbers in $ over a longer timeframe you already have the same inflation "base". So you only have to account for inflation when you look at the numbers in the foreign currency, because normally the inflation should reduce the currencies value. But there are exceptions like china, and its possible that my theory is flawed. :)

I use 3 accounts and use margin debt in one of them up to around 30% of its value. Thats comes out to an overall leverage of 10%. I can see nothing wrong with that, when it cost me 1.6% to buy equities yielding a lot more. Options are a good alternative, but you have to understand the cost involved. (Bid-ask spreads, volatility going down when the stock goes up, raising dividends that are not priced into the option, forced timeframe, etc.). When you are not disciplined you can overleverage yourself a lot faster with options. (That is especially true for people buying far OTM calls or warrants)

Mispricings happen everywhere where people sell because of emotions or the current news and not because of the companies numbers. This can lead into a stampede. When i started as a value investor and researched a company everytime i looked at great numbers and after that looked at the headlines, i thought oh no i don`t want to invest here. But thats exactly the reason it is cheap, so i started to view the headlines as a contrary thing. The more negative headlines, the better. With small caps its often better to find the ones nobody has ever discovered before you. But this is much harder at the moment, because everybody wants to be a value investor and its enough when 2 people buy a stock to drive it to fair value. Look at how many netnets currently exist in the US, i have seen my screener getting fewer results every month. And with netnets in nondeveloped countries there are a lot more risks, so you have to diversify more to reach the same result. But that is a butload of work where you don`t know if it pays off.

Sold TEVA and DE, bought more KMI and Lukoy.