NeverLoseMoney

I'd stay away from anything connected to DeGiro: - http://www.amsterdamtrader.com/2015/09/degiro-clients-as-counterparty-for-hedgefund.html - http://www.amsterdamtrader.com/2015/09/degiro-ignores-the-elephant.html - http://www.amsterdamtrader.com/2015/10/how-degiro-screws-clients.html I signed up there before this story emerged to get access to some markets (Greece, Poland) that were not available to me elsewhere. It looks I'm pretty much stuck with them at this point, because the stocks I own are pretty illiquid and I don't know to which broker I could transfer my positions. If I could (at a reasonable cost), I would though.

Gerald Ratner, the former CEO of British jewelry company Ratners Group. He ran a successful family business that later went public. At some point he made a speech at a conference and said this: And about a pair of earrings that were It was all said jokingly and he basically meant that people shouldn't expect too much when they buy very cheap jewelry. He said this at the Institute of Directors in the UK and his audience consisted of company directors and entrepreneurs. I think there was not supposed to be any press coverage of the event. Unfortunately for Mr. Ratner there was a newspaper reporter present and he produced a story that Ratner called his products "crap". It became a huge story nationwide and the entire jewelry chain was tainted. People began calling it "Crapners", customers left in droves, it was a total disaster. In the end he was forced to leave the business and the Ratners name had to be dropped, because the stores could never become successful again with him or his name attached to the business in any way. It's a great example of how one dumb statement can completely screw you when your business is strongly dependent on customer perception of the products. He has written a book about his experience called "Gerald Ratner: The Rise and Fall...and Rise Again": http://www.amazon.com/Gerald-Ratner-Rise-Fall-Again/dp/1841127868/ I thought it was an excellent read and felt he was pretty honest about the whole thing. He really had a passion for the jewelry business and worked in the family business as a young kid, helping out his parents and starting at the bottom. The book is just as much a business history as it is about the speech and its consequences. I did feel a little sorry for him after reading the book and I didn't expect that would be possible when I first read his story on the web. He made a dumb statement / bad joke, but the consequences for him were enormous at the time. Also, it will never be forgotten. Another lesson I got out of it was that if you are a well-known person, if you do fail, it is best to blow up spectacularly. Ratner was able to get back on his feet financially by making speeches about the whole affair. People were interested to hear his story and he was paid nicely to give speeches at conferences. If he had failed in a conventional way nobody would have cared. He would not have had the negative attention, but also no way of monetizing his failure.

I've owned PBHC from that list, but sold it recently. I stick to a few rules for investing in community banks to protect myself since I'm not a competent bank analyst. MSVB has 4.0% non-perfoming assets which is too high for me, I don't touch banks with NPA's > 3%. One bank with a MHC structure that I like and still own is Gouverneur Bancorp (OTCMKTS:GOVB). The company doesn't post annual reports on its website, but you can piece things together from their press releases on OTCMarkets and old SEC-filings from when they were still a reporting company. If you own shares you should receive future annual reports and proxy statements. The stock is very illiquid, but that doesn't bother me. Here's some data about GOVB: Market cap: $30.4 million Shares outstanding: 2,223,931 MHC ("Cambray MHC") owns 1,311,222 shares or 58.96% of the shares outstanding Adjusted market cap: $12.5 million Shareholders' equity March 30, 2015: $28.3 million GOVB's return on assets has been greater than 1% since 2010. Their NPA's have been below 3% in this period. Their equity to assets ratio was 19% at the end of 2014. I've bought GOVB some time ago when the stock was trading around $10. At that point I think it was trading below book value even without adjusting the market cap for the MHC shares. I figured it was worth a bet, even though I still didn't (and don't) understand many things about investing in this space and how to think about valuation for banks with a MHC structure.

BeyondProxy had an article in 2014 that listed a bunch: http://www.beyondproxy.com/sifting-thrifts/ I've looked at a number of these and also found some other ones. What I've found is that they seem to trade in line with other small community banks without a MHC structure. The partially converted thrifts don't seem to get a higher price-to-book multiple by the market. If you adjust the market cap for the true number of outstanding shares some of them are trading at huge discounts. My question is why that is and whether it is justified. Is it because this is a completely overlooked part of the market? Is it also somewhat justified because there is no way to know when a second step conversion will occur and your investment is more or less "dead money" in the meantime? I also thought directors might have an incentive not to convert, because they probably control the votes of the MHC shares and will be in control of the entire company as long as they control those shares. If they convert, bank activists could show up and threaten their position. Does this make sense? Are there other reasons? Community banks and MHC's are still unfamiliar territory for me and I'm trying to understand it a little better.

Investegate is a site I find helpful as well: http://www.investegate.co.uk/

Found it! It's in French: tête à baffe Here is the quote from the book:

Some more information about Mr. Read's holdings and strategy in this WSJ article today: http://www.wsj.com/articles/route-to-an-8-million-portfolio-started-with-frugal-living-1426780320

The company was delisted on Dec. 25, 2014: http://www.tse.or.jp/english/news/07/141128_l.html Quote from that page: Not sure if I'm understanding it right, but perhaps a squeeze out of minority holders is in process? I found a document from PWC that also describes minority squeeze outs in Japan: https://www.pwc.com/jp/ja/advisory/research-insights-report/assets/pdf/tra_0706_01.pdf

As an aside and because it ties in with the theme of unconventionality, today there are many people who play and live stream video games for a living. The most popular site (I think) for watching these streams is Twitch.tv. Some of the most popular streamers draw tens of thousands of viewers every day. The streamers make money from people who subscribe to their channel, from donations and from ads. Some of them make a very good living. The most popular ones probably also get paid by game studios looking for a channel to promote their newly launched games. Twitch takes a cut of subscription revenues and also makes money of the ads. Amazon bought Twitch last year for about $1 billion. To me it is amazing how a site like this pops out of the ground and becomes an alternative to television for many (young) people looking for entertainment. It has allowed some entertaining gamers to make a career out of their hobby.

I mostly own net-nets and I sell those when they reach NCAV. I have also sold some a bit earlier when I could find a significantly cheaper stock. It makes sense to stick to the numbers in my approach, because I know little about the individual businesses.

I don't know, I've seen this with a few of my other Japanese net-nets as well. People just warm up to them from time to time I guess. I owned a very small position in KG Intelligence, but sold a few days ago. Meanwhile my net-net screen for Japan is down to a record low number of hits and for the first time in two years I'm actually having some trouble to find good replacements for positions I sold in Japan.

Investors belonging to the "cigar-butt" and "quality" schools of thought will never agree on this. They will forever be cherry picking quotes from Buffett's writings and "proving" they are right. Both can work well, that's the most important thing. Here's the quote that discusses the cigar-butt strategy in the annual report (page 26): The best decade of Buffett's investment career was dominated by cigar-butt style investments. Major problems are the lack of scalability and that it is not a good model to use for building a permanent structure like Berkshire. Another interesting detail is that Buffett implies that the major mistake in his investment in Berkshire was not the purchase itself, but not tendering his shares when Seabury Stanton offered a slightly lower price than they had previously agreed. He got mad, his ego got in the way and this led him to buy more instead of tendering his shares and accepting that you rarely get a perfect outcome in cigar-butt investments. These free puffs come from soggy butts after all. Yet, even after this letter, you will forever read quotes that the purchase of Berkshire was Buffett's biggest mistake. That is just not accurate. People will read what they want to read and forget the nuances.

I have bought a number of Greek small caps. No idea how the political / macro situation will work out, but I think very few people can predict this anyway. Unless you're of the caliber of George Soros it's probably a mistake to even try. It's easy to get caught up in the negative sentiment and make bad decisions. Unless someone has "skin in the game" (money at stake) or lives permanently in the country in question, I heavily discount anything they are saying. Fairfax did decide to invest in Greece and I believe Prem Watsa's view on Europe and deflation doesn't sound very bullish. So despite their negative views they did decide to take the plunge here. The same story with the Bank of Ireland investment. Why? Because they invest bottom up and things simply got cheap enough. The way I deal with uncertainty in my portfolio is to make sure I can survive if things go very wrong. In the case of Greece I've capped my exposure to around 10% of my portfolio and I have diversified by buying a handful of positions. If they do end up leaving the Eurozone and reintroducing the Drachme, I will probably have a bad year investment wise, but it won't kill me. It's my personal portfolio and I don't have to worry about redemptions or some boss firing me for underperforming some arbitrary benchmark. Besides the difficulty in finding a broker, I think the illiquidity is also a problem for most investors. The cheapest stocks I can find in Greece are in the small cap space (<€50 million market cap). There are some family controlled businesses trading at cheap valuations. But they also have a low float and hence tend to be illiquid. For small investors this should not be a major problem though. One company I like and currently own is Kleemann Hellas (KLEM.at).

It's probably just a misunderstanding. Geoff wrote: I think what he was trying to say was that his portfolio consists of some Japanese net-nets and these four companies. I was confused myself when I read his post.

No catalyst, no chance. Edit: actually the "wave of rate increases", leading to higher 1952 earnings was a potential catalyst. :-) I do think that ideas without catalysts do deserve to be published on VIC more and I have the impression that these ideas tend to get overlooked. Greenblatt is biased towards ideas with catalysts, because that has worked so well for him. It does not mean it is the only way to go and that other approaches to value investing cannot work well.

Not recognizing the opportunity and doing enough work on the spin-off by Spectrum Group of A-Mark Precious Metals. The situation was described in more detail in this post on OTCAdventures: http://otcadventures.com/?p=1213 I saw it mainly as an opportunity to get cashed out and to receive some value from the A-Mark shares, but the A-Mark spin-off was where the real value was. I sometimes give up too easily when something looks a little complex. Perhaps I could not have figured out A-Mark's value anyway, but I should have spent more time on it.

I disagree with Ridley and think the article is silly. Apparently the scientist he quotes believes you can forecast climate effects for the year 2080. Anyone who has ever looked at earnings projections by analysts or has fooled around with a DCF analysis should see the folly here. You can't forecast what will happen in a complex system like the climate. It's funny that Ridley positively reviewed the book Antifragile by Taleb: http://online.wsj.com/articles/SB10001424127887323353204578128872051100906. In the last paragraph he said he would have to read it again and again. He'd better get to it, because he obviously did not get the message at the time he wrote this article.

I agree. There are a lot of similarities between investing and fantasy sports. In both you are basically looking for mispriced bets. In fantasy sports these "bets" are cheap players that are misperceived by others. There are some psychological effects that apply to both areas as well. For example: I think most people probably trade players too much, just like they trade their stocks too much. They tend to become impatient when a player underperforms and not realize his performance could regress to the mean. If the market value of the underperforming player drops this also means they are buying high and selling low. I used to play Fantasy Premier League, but I was not very good at it. I'd perhaps finish somewhere in the top third of the rankings at the end of the season, but never managed to get a great ranking. I looked at past performances of some top ranking players and there are players who finish in the top 100,000 players out of 3 million+ total players year after year. No idea how they do this exactly, but it requires a lot of knowledge about the players and the scoring rules of the game. There are also commercial websites that can help you find bargains, perhaps they can be compared to stock screeners.

+1 Very disappointing so far. I mean two medical workers have become infected. Germany has been treating patients and none of their medical personnel has been infected as far as I know. They even released one patient that was treated from late August until October 3: http://www.nytimes.com/2014/10/15/world/europe/ebola-patient-dies-in-german-hospital.html It is possible to treat patients and not make matters worse by becoming infected. That said, I do have huge respect for people who treat these patients, especially those working in poor conditions in West Africa. That must be heartbreaking and terrifying. I liked this interview with Peter Piot who discovered Ebola in 1976. It describes some of the factors that have created this perfect storm for Ebola in Africa: http://www.theguardian.com/world/2014/oct/04/ebola-zaire-peter-piot-outbreak Perhaps some good will come of this and the world will come up with better measures to combat future outbreaks. Liberia had 51 doctors in 2010 and many of them have died from Ebola in this outbreak. I think developed countries need to be on standby to supply a lot more medical support and a lot faster than they have done here.

Apparently there were some things in the book that Buffett didn't like or agree with: http://www.nytimes.com/2009/02/04/business/04buffett.html?_r=0 But who knows (or cares)? Maybe he has simply seen enough of Alice Schroeder for one lifetime.

I'm guessing he was limited to the larger net nets, given the size of his funds and that these larger net nets underperformed. I remember when I read about his results in Japan and I was shocked about his results there. That was not a typical result of an investor in Japanese net nets during that period. Other investors who blogged about their picks, like Nate and Geoff Gannon, did fine I believe.

CYNK halted: https://www.otcbb.com/dynamic/marketwatch/mwsubhome.stm Halt Code U3: "Trading Halt - Extraordinary Event Halt Trading is halted because FINRA has determined that an extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC Equity Security or the security underlying an OTC ADR or has caused or has the potential to cause major disruption to the marketplace or significant uncertainty in the settlement and clearance process."

I have registered a few dozen domain names, but I usually register one so I can use it for developing an actual website in the future. When I think of an idea for a website I will try to find the best domain name that matches the subject and that is still available. Sometimes I'm able to pick up a nice one, but it is not my main business. The nicest domains I have are not very valuable, perhaps a few hundred bucks. Their main value is that they contain certain keywords that make it a little easier to rank for certain search terms in Google. My biggest "success" story is a domain I registered in the gambling area. A well known site was going to start offering a variant of a gambling game. I read their press release and was able to pick up a .com domain that best described what they were going to offer. I only paid the registration fee for the domain. About a week later I received a $1500 offer for the domain from a company (not the gambling site), but I decided to wait and perhaps develop the domain myself for an affiliate site. Before I got around to doing that, the gambling site got into all sorts of trouble (legal and financial) and went out of business. So the value of the domain is probably gone, but there is a small chance another site will launch this variant of that particular game and it might be valuable again at that point. It has now basically turned into a cheap option that I will hold for a while longer. BTW: if you're interested in domain names you could take a look at Tucows (TCX), they're active in this space. They're a "cannibal", but the stock looks quite expensive now.

The Intelligent Investor Margin of Safety One Up On Wall Street You Can Be a Stock Market Genius Free Capital - Guy Thomas The last book is about 12 private investors in Great Britain. I found it useful because it showed me there are many different ways to success in investing. So it was more a motivational book.

I have looked at some companies in HK, mostly industrial ones. One problem a lot of these have is that the minimum wage in China has increased significantly and that profitability has suffered. I'm worried that in the long run they will have to either shut down operations entirely or move production to countries with lower wages.