NeverLoseMoney

Trinity Bank (OTCMKTS:TYBT) seems like a well run, micro-cap bank. The CEO writes very informative letters as well.

I've read some chapters from The Snowball multiple times, mostly about Buffett's partnership years. I skip all the personal stuff. Nassim Taleb's books as well. And I like to do some counter-cyclical reading every year: reading about crashes and bear markets when stock markets are up a lot for the year and about about bull markets when they're down. Some suggestions here: The Great Crash - Galbraith, Bull - Maggie Mahar, The Great Beanie Baby Bubble - Zac Bissonnette (must read for investors in CryptoKitties and ICO's), The Funny Money Game - Andrew Tobias. Fiction: The Shadow of the Wind - Zafón

There are a lot of exchanges trading BTC for USD, as well as foreign currencies, as well as other cryptocurrencies. I'm not saying fraud can't take place, but it would take hundreds of millions if not billions of dollars spread across multiple currencies (both fiat and crypto) in dozens of exchanges to fix the price of BTC right now. I think what you are seeing isn't fraud, but simply increased demand. https://coinmarketcap.com/exchanges/volume/24-hour/all/ There seem to be some questions about the printing of Tether to inflate the price of Bitcoin: https://www.bloomberg.com/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange Whatever is going on at Bitfinex, it looks very shady to me. And this is a major exchange, so any manipulation could affect pricing on other, smaller exchanges I'd think, inflating the "bubble".

I'm a Bitcoin noob. How can you tell if/how many of these transactions we see on Bitcoin exchanges are "real", as in arm's-length transactions? I'm pretty sure there is a ton of fraud in the ICO space from the few things I've seen there and this makes me question cryptocurrency pricing as well.

It could very much be anti-fragile if you have the expertise to pick a few 1000 baggers from time to time. This can't be done without also picking a lot of losers. And again, the portfolio is not devoted to (in the sense of concentrated in) these investments. It would be a tiny sliver of a total portfolio. The overwhelming majority of the portfolio would be in cash or treasuries. I'm amazed there is even any debate about this. Taleb literally talks about this in his books. He made his own money by seeking extreme payoffs with a small portion of his portfolio.

Interesting. Reasonable thesis and good play on specific knowledge you have. In this case you are making the argument for a macro event and placing bets that it may happen. If there is another "great Recession" unrelated to a plague, it's unlikely that this pharm company may get stronger. It might not survive the downturn. R&D may get halted. Due to recession, drugs won't be bought on patent....Thus, whilst the investment thesis may be sound, it wouldn't be part of an "anti fragile portfolio" in my view. I think biotech, venture capital, etc. are all areas where one could find anti-fragile investments with massive potential pay-offs. That doesn't mean that you are able to identify these investments yourself or that most of them will succeed. 95%+ of those investments will probably be zeros. That's why you don't put your entire portfolio in extremely risky stuff like this, but only a small portion at most. Personally, I think this whole idea of seeking anti-fragility in financial markets should be left to the 140+ IQ folks. I'm not able to make millions or billions the next time the market crashes, like Taleb and Michael Burry did. Most of us should just focus on being "robust" and not blowing up when the shit hits the fan. I think that can be achieved by seeking out companies with strong balance sheets and where investor expectations are already low. Perhaps increase your focus on special situations and workouts as bargains dry up, or else raise cash levels.

I think most of the examples given so far are more in the "robust" category, not anti-fragile. One stock I held about 6 years ago was Alpha Pro Tech (APT). Its market cap was $24m at the time, tangible book value was ~$36m and it had net cash of ~$6m. The company was profitable, but only marginally. The company sold disposable protective apparel and infection control products. Any time a pandemic breaks out, or the flu season is particularly severe, their sales and earnings tend to increase significantly. Just the threat of a major outbreak could make the stock spike as investors speculated on earnings increases. I think that was an anti-fragile investment at the time. At a big discount to tangible book and with a large cash balance, you were unlikely to lose much, but you stood to gain significantly when (the threat of) an epidemic appeared. And major epidemics are certain to occur from time to time. The company benefits from disorder. Any company with a large inventory of potentially vital products that are only rarely scarce could be a candidate.

I believe the exchanges have written the guidelines for the range of the minimum investment. It might have been something like a 50k Yen minimum up to a maximum of a few hundred k. The Japanese are unlikely to make sweeping rule changes, it's all pretty gradual. They have taken some small steps in the right direction.

Correct. I believe there are also some guidelines for the minimum investment required for a 100 share lot, I forgot the exact amounts. This is why you're seeing the reverse splits in conjunction with the change in trading unit size. If they hadn't done this, some of the stocks I own would have gone from a minimum investment of $5,000 to $8,000 for one trading unit to a minimum of $500 to $800. The reverse split lowers the previous minimum investment, but not as dramatically. I think September 27th is the date most Japanese companies use for going ex-dividend, so it's probably convenient to also make the switch to a 100 share lot at this date. I wonder if these stocks will become more attractive to retail investors due to the lower minimum investment. Some of the smaller companies are just too small for institutional investors and seem to be mainly owned by insiders and retail investors.

Michael Burry bought Deswell in 2000 for $13.75: http://web.archive.org/web/20000815073003/moneycentral.msn.com/articles/invest/stratlab/5747.asp?Strategy=3 I think he bought Deswell earlier as well. I remember reading it was a net-net at some point and he had put 10% of his portfolio into this. The company is still around, but is having a much tougher time now. Burry's forum posts at SiliconInvestor can be found here: http://www.siliconinvestor.com/profile.aspx?userid=690845 (requires free registration to view). Apparently there were lots of small foreign companies that were being ignored by investors and could be picked up really cheap. A couple of other names he mentioned in forum posts were New Holland and Telebras. These were some comments I found from another forum member (not Burry) about New Holland: It's also worth checking out John Hillery's letters from this period: http://hilleryvaluecommentaries.com/Commentaries. He discusses a number of very cheap small caps as well. He was also a Deswell owner IIRC.

That's the optimistic scenario. I give it a 20% probability. Migrating structured data this simple is a piece of cake for Google. This Marketwatch article has some more details: http://www.marketwatch.com/story/google-finance-as-you-know-it-is-going-away-here-is-what-will-remain-2017-09-27 It sounds pretty horrible: RIP.

I use a Google portfolio as well. I have a long list of stocks I follow and Google's solution was very useful at keeping an eye on price movements. FT.com has a portfolio feature as well and I'll probably be using that in the future, as well as a Google spreadsheet. This is just typical Google behavior by now. It seems that anything that doesn't add to the bottom line gets eliminated. And that is fair to some extent: they have no obligation to continue to offer features that don't make money. I do think they should then stop introducing other free services/features that have no shot at ever making money. The value of free services for Google lies in the information that users hand over. Gmail is valuable to them, because they scan your e-mails, which helps them to target their ads much better. A list of stock tickers doesn't really help them in that regard and this was clear from the start. So why offer a portfolio feature in the first place if you can't charge users and the data you receive from them isn't valuable?

I bought the 6th edition on Ebay a few years ago as well. I don't think there's much supply anymore though. Honestly, I don't think the manual adds that much value anymore. The financial information is 15+ years old now and roughly half the companies aren't around anymore. You can create your own treasure hunt quite easily by going to OTCMarket's company directory, selecting "OTC Pink No Information" under "Tier" and then going through the list. It is pretty safe to ignore all the companies that are trading below $0.01. I don't think I've ever found any reputable company trading below a penny in the time I've browsed the website. Then try to get financial information. Some companies post annual reports and press releases on their website. The most interesting and cheapest ones don't. For those, buy one share or a few shares and contact the company. Some respond, some don't. You might start receiving annual reports in the mail forwarded by your broker. Make sure you have/get a broker that forwards mail or provides these materials electronically. A few bargains might turn up from time to time. I must say that even among dark companies the pickings seem pretty slim right now. I think it is currently easier to find cheap companies in Asia and Australia that are fully public.

This is from Berkshire's 2014 annual letter: Buffett himself thought in 2014 that a price approaching 2x BV was "unusually high". Semper Augustus thinks that 1.8x BV is fair (using the figures from their "Two-Pronged Approach"). FWIW: I'm long Berkshire, but I've decreased my position recently. It looks reasonably valued to me.

My question is: what is "the index" exactly? Which assumptions are you baking into your decision by investing in a particular index or by measuring your performance against it? Is the S&P 500 the right benchmark for your portfolio and why? For example: I think Asian countries are likely to grow faster than the US and European countries over the next few decades. Should I therefore seek out investments in Asian companies and compare my performance against an index that also has a substantial exposure to Asia? Am I making a mistake by focusing too much on companies listed in the US, just because they've had a good century? Charlie Munger mentioned at the latest DJCO meeting how he made a bunch of money on a particular stock / security and then gave it to Li Lu who turned it into, I believe, five times that amount by investing in Chinese companies. Munger didn't put that money into US stocks or an S&P index fund, he gave it to someone he saw as highly talented and who probably had a lot of knowledge about a much faster growing part of the world. Should we perhaps be looking at that part of the world a bit harder as well? Are we partly investing in the things we are investing in, because it feels most comfortable given the historical results, or because it is part of the standard offering of our brokers and therefore easiest? I think the question of what your index / benchmark is exactly, is complex and you can't help but make certain assumptions and macro judgments in answering it. I don't think I even believe in the whole concept of "passive investing". You're always making a judgment call at some level when you're investing. For one thing, most people have a huge home country bias. Someone from the US might think that "beating the index" means beating the S&P 500, while someone from the Netherlands might think that it means doing better than their national index (the AEX).

I think #3. From the Bloomberg article: So the investment in the airlines is "in large part" Buffett's decision. The Sept. 30 filings showed relatively small investments in the airlines. I therefore thought they were Ted or Todd picks, but we now know it is mainly Buffett's decision to invest in them. Looking at Dataroma, the airlines were around 1% of the portfolio at the time. Buffett wouldn't have bothered if the amounts invested would remain this modest. I think they bought a lot more of the airlines.

I think you need to be careful about how you frame something like this and the language you use to describe it. While it is true that some shareholder activism could be described as causing some inconvenience to management to get them to do something you want, you should never use the word "bothering" in a thread like this or on a blog if you want to achieve something. That immediately gives management an excuse to ignore you and others, because they can basically dismiss you as a bunch of spammers. I believe you're mainly talking about dark companies that are reluctant to provide information to shareholders. Some of them simply ignore shareholders who ask for the financial statements of the company. Some of them keep promising to give you something, but don't keep that promise. A company that completely ignores its shareholders just looks bad and unreliable. Not only to shareholders, but to (potential) customers as well. I think it could be a good idea to organize shareholders in a situation like this and use a blog or message board to do so. The main problem I see is that some of these companies might be extremely cheap. It could be a bad idea to share information about very small companies with illiquid stock, because you might destroy your own opportunity of buying a meaningful position by sharing the name publicly. So, I think most people who invest in small, dark companies regularly would prefer working informally with a few like minded investors that have a lot of knowledge and contacts in that space and to try to get some information that way.

Thank you! It is exclude by default and there is no way to change the default to include. Try setting up a custom search engine for Chrome / Firefox: https://glennchan.wordpress.com/2015/11/22/edgar-tips-and-tricks/ Make sure you change "owner=exclude" to "owner=include" in step 4 (for Chrome). Works like a charm for me. I just type "sec" followed by a space in my address bar and I can then type the ticker, hit enter and it will bring up the SEC filings for that stock.

Watsi: https://watsi.org/ Donations fund healthcare for people around the world. I like the idea that healthcare costs are quite low in the countries that their medical partners are active in. A few hundred dollars can often fund a medical procedure that will have a very positive impact on the patient's life. Watsi also offers a transparency document that shows you where the money goes.

I do think there are far fewer opportunities in the market today than a couple of years ago, so yes, there is less to write about. Other reasons that could cause bloggers to stop: - Some very successful bloggers get hired by investment firms or start something of their own. That usually stops them from posting or dramatically reduces posts. Clients are obviously number 1 for them from then on and good opportunities are scarce. Also, a goal of the blogger might have been to build a public track record to obtain a position at an investment firm. Once that goal is achieved there is no more need to maintain a blog. - You're not going to make much money from running advertising (like Google Adsense) on a value investment blog. Visitors are going to see ads for forex trading and other speculative trash like that. To monetize a successful blog you either have to put up a paywall, start an investment newsletter or switch over to SeekingAlpha which offers a premium subscription model for authors. - It's hard to get many visitors to a blog that presents obscure investment ideas. That means it's hard to get any feedback on your ideas initially. Only when people find out you're actually offering valuable ideas do they start to comment and e-mail more frequently. To reach that point can take a lot of time and effort though and most people will give up well before that. If you get little feedback from visitors, are not making any money and have no intention to start a career in money management, what reason is there to blog? Some of the above has been true for me. Additionally I noticed some authors on SeekingAlpha taking ideas from certain websites and blogs and presenting them on their premium offerings. Reproduced in their own words of course, so they are not violating copyrights or anything. I'm not going to present investment ideas so some guy on SA can put "his idea" behind a paywall and charge his subscribers for it. I decided that I'm either going to put up a paywall myself or put my time into something else. Burdensome EU regulations concerning VAT rules has so far stopped me from launching and continuing to publish new ideas on my blog. I'm still figuring out what to do.

One additional problem: I would not feel comfortable sending a broker in, say, Nigeria a copy of my passport and a proof of address. I feel the same about most other African countries. The damage that can be done by identity theft is so huge that it just seems like a bad idea to me, no matter how cheap the stock is that you're considering. You really need to be able to trust the people that have access to your personal information and be able to trust the security of their systems from outside attack.

Personally I like using cash, because I believe handing it over to others triggers pain mechanisms in the brain which will keep my consumption in check. Paying with a credit/debit card is different for me. Casino's like to exchange people's money for chips partly because chips flow more easily. Also cash is robust as Nassim Taleb uses the term. Technology is often fragile and with increasing user adoption, the network effects become stronger every year, increasing risks that have not surfaced before. A large bank in my country (The Netherlands) suffered from a major DDoS attack a few years ago, leaving me unable to access my online account for a few days. A family member had trouble accessing a widely used government system called DigiD for about a week, also due to DDoS attack. A lot of stuff is now tied to DigiD here, it is basically your online identity for the government and required to request all sorts of documents and services. These were relatively minor annoyances, but I do wonder how dependable these systems really are. Traditional, physical and often paper-based systems are being dismantled to save costs, leaving us more and more dependent on a single system with no backups in place, creating a single point of failure. I don't worry too much about cash in this regard, but it is happening all around us and will lead to some major problems. Here is a relatively recent example from my country. The article is in Dutch, but Google Translate will do a reasonable job for those interested: http://www.nu.nl/binnenland/4017331/luchtalarmsirenes-gaan-definitief-verdwijnen.html . It basically says our government has decided to stop the use of air sirens in a few years time. These sirens are tested briefly every month and that can be a bit annoying: :). They exist to warn people in the event of a major disaster. They are now deemed obsolete, because people can be warned through SMS, social media, radio and websites. The estimated savings: €3.6 million / year. I think this is a boneheaded decision. I would like to keep certain backup systems in place, especially those needed when disasters occur. Hell, I'd like a designated guy to start hand-cranking some siren on a nearby hill in case the other systems fail, but perhaps that is a bit too much. The first things to become unavailable when a major disaster occurs are mobile networks and certain major websites. When nothing happens for a long time, people become complacent and only see the benefits of new technology, which are great and wonderful. They tend to forget that certain legacy systems have proven their worth and can be essential to keep around, even if it costs some money to maintain and doesn't seem to ever be needed.

I think the times were different when he did it. He had an information advantage that doesn't exist today. Genessee Gas was one IIRC, selling for $50 with $200 in cash. He did the legwork that nobody else did to find these gems. Today every stock website in the world makes it very easy to find this kind of thing. In the '50's this worked like a charm for him but today the net cash companies don't always work out. But I think you're right that he wouldn't do that today but if he went back in time he would do the exact same thing. I would assume Buffett of 2016 would be a micro/small cap investor looking for a fantastic CEO building a business to last decades. Edit: Actually a quick Google search found this from the '99 meeting notes on doing it the same way or doing it different. Did some digging and managed to find the video: https://youtu.be/BPTz-jLkPOc?t=9m52s. He also discusses his South Korean cigar butt investments he made in his personal account 6-7 years before.

That if Warren Buffett had only a small amount of money to his name he would invest his capital primarily in ugly cigar butts, classic Graham style. Not in quality businesses. He has even said this once publicly when asked by a student (there's a Youtube video), but I think most investors still strongly disagree with this statement.

I like EconTalk: http://www.econtalk.org/