randomep

It's him, though I guess he is a really bad actor cos he was told not to move a muscle......

Do it! I think this forum lacks more breadth in investment ideas..... thanks

secfilings.com has all the filings converted to pdf (in letter size)

Heh, who should be believe? This guy or Goldman Sachs or this guy: http://www.bloomberg.com/news/videos/2015-10-21/are-oil-prices-on-the-verge-of-another-major-selloff- C'est la vie Come on, nobody knows what the price of oil will be next year, everyone is just making a guess.

The following are my holdings that are family owned / operated: IEHC, MCRAA, SEB, HK:234, HK:878, ATH:KARE, Installux You can find links to stuff I wrote about them on my blog: bovinebear.blogspot.com

On a similar topic: Warren Buffett and Leob made a $1M bet as to whether a group of the top hedge funds can beat the S&P 500 index over 10yrs. Looks like Buffett is going to win. From 2008 to now, the index is up 63%, hedge funds? 20%.

Listened to a story on NPR just yesterday. Employees at many small companies in the USA are getting screwed because the owners of these companies don't seem to know/cannot negotiate lower fees in their 401K plans. One of the companies featured in the NPR story paid 2%, yes, the same as what the hedge funds charge. The key difference is that these employees cannot afford to see upto half of the performance of their life savings being eaten up in fees. Hedge fund companies may be able to afford to lose, but really? Whether it is mutual funds, value mutual funds, hedge funds, PE, financial advisors...it is the fee stupid. Can everyone overcome the obfuscation that goes on to prevent this simple fact from reaching those that need to know it the most? In some ways, I would like to see Bogle and Buffett turn up the decibel level a bit as they speak about this. Makes for a great legacy for them. It ain't happening in the media. I tell everyone in my circles that in investing it is not about the clever stuff(like knowing or using arcane investing buzzwords or picking stocks) , it is about the fee, some listen but most are numb to it. Won't stop though. This is large scale theft. Dashachory: WEB was saying that for his 25% over 6% in his own fund (like Pabrai) he didn't get paid if his clients didn't get paid. But 2/20 funds today aren't incentivized to outperform. In face if I had $20B to manage I would just try to match the market (after 2% fees). Longinvestor: Ya I heard that too. But funny thing is for a brief while I worked for a tiny contractor agency that didn't have a 401k and I pushed for one, and I insisted that it be cheap and the owner found one available to him as a Costo member (from my cloudy recollection). And I believe the employees pay all the fees from their account and the fee was very cheap. So there is a competitive market for offering 401k s. But of course when there is ignorance the ignorant will be gouged. What can we do? Legislate limit on fees? Ya the solution could be to legislate more and more in the financial industry, but that can't be good either.

Well I never heard of this angel investor till now. It seems like he just invested that $500k and he thinks oh well good luck to her she is a lottery ticket. Did you notice that the first question was do you stand behind theranos and would you invest again in them? And jumped on the first part, ya we stand behind them, we love her.... but he never answered the latter question except to say "that's a good question!" So the thing I gather from this is, if the first investor doesn't know if it is a fraud, then the new investors in the last round of financing don't know either. Because how can potential investors be privy to information that existing shareholders don't have. So if all these shareholders don't know, then does Henry Kissinger and the rest of the board know something that the shareholders don't? possibly, or possibly nobody knows if this is all smoke and mirrors.....

Here is another interview about theranos. Steve Jurvetson is the first investor in Theranos. He is very supportive and very impressed with Holmes, 11 years ago and to this day. But when asked is it a fraud? He says, "that's a great question that I cannot answer, I just don't [know]" Wow, that is quite profound, your first investor cannot vouch for you.... many different people can read that different ways..... if anything it is another datapoint... http://www.bloomberg.com/news/videos/2015-10-19/early-theranos-investor-remains-supportive-even-without-answers

Innerscorecard, I don't think anyone implied that value investing is timing the market. We can consider value investing alone without timing factor by assuming a manager invests 100% at all times. I admit it is very hard for managers to beat the market value investing, but I think that's because a lot of managers are just puppets being pulled by their investors. They will do whatever their clients want to preserve their jobs and almost always clients are thinking short term. I find it very interesting WEB can make statements that others were afraid to say publicly. WEB in a recent interview at the most powerful women conference said managers make money with 2+20 compensation without the need for the 20% component. The 2% fixed is enough, you manage $20B you get 400M already.

I agree that a lot of funds aren't great investments. I was just so surprised out how poorly the "Goldfarb 10" performed. I'm assuming a lot of value managers (hedge funds included) haven't done all that well. I'm not saying it would change the thesis any, but it may also help to realize that we've been in a market that has treated value stocks poorly for the last several years. Value as a whole (defined as low P/Es and low P/Bs) has underperformed the market for the last 3-4 years. I think you have to give the cycle more time to complete to see the full result. The end result may still be the same though. I totally agree with two cities. I think there is a lot of money chasing yield in the markets. And definitely value investing is the flavour of our era. You can see that by the way WEB is almost defied. So there are a lot of individual investors chasing value stocks through these funds. And these fund manager are smart and original thinkers but they are making a crowded trade. That coupled with the fact that value is out results in the above mediocre results. I've given a some thought to curreen capital. Did you know the fund at last count had 5 (!!!) stocks. There are a lot of guys running small value funds like that I think their trade is crowded also. That said I think value investing is the right way to go, but you just have to apply it in more original ways. And it being crowded you have to wait longer........ How can value investing be crowded and out of favor at the same time? HMMMMMMMMMMMMM, looks like you caught me in a contradiction. Hey I am formulating these thoughts day by day and my thought process isn't the least bit perfect! Thanks for the catch. I believe value investing still works. I also feel the hedge funds and value funds are mostly doing the similar things. Their results correlate. And you can see this in the average hedge fund results mentioned in the media. The average YTD is below the market index and many managers like Einhorn and Ackman are negative. I also took a gander at the 13F's one time and a lot of position and sectors seemed similar. So I think a lot of value funds are suffering a rough patch for whatever reason. The reason is the same though.

I agree that a lot of funds aren't great investments. I was just so surprised out how poorly the "Goldfarb 10" performed. I'm assuming a lot of value managers (hedge funds included) haven't done all that well. I'm not saying it would change the thesis any, but it may also help to realize that we've been in a market that has treated value stocks poorly for the last several years. Value as a whole (defined as low P/Es and low P/Bs) has underperformed the market for the last 3-4 years. I think you have to give the cycle more time to complete to see the full result. The end result may still be the same though. I totally agree with two cities. I think there is a lot of money chasing yield in the markets. And definitely value investing is the flavour of our era. You can see that by the way WEB is almost defied. So there are a lot of individual investors chasing value stocks through these funds. And these fund manager are smart and original thinkers but they are making a crowded trade. That coupled with the fact that value is out results in the above mediocre results. I've given a some thought to curreen capital. Did you know the fund at last count had 5 (!!!) stocks. There are a lot of guys running small value funds like that I think their trade is crowded also. That said I think value investing is the right way to go, but you just have to apply it in more original ways. And it being crowded you have to wait longer........

On a different topic. I am surprised that no one has mentioned we are all debating an interview by Jim Cramer. I've always thought his show was drivel and I haven't even glanced at it for half a decade, is he always doing this kind of interviews now without the clown act? I really hope he sees the way and becomes an honest news person.

ScottHall I think you are really misunderstand what I said. Some of it was my ineffectual explanation. I may not be correct in what I said but I just wish you can attack what I said after you understood what I meant. And what you misunderstood can really be explained very simply. Firstly, great leaps can be made in our end result, like the polio vaccine. But I don't think it is through breakthrough in understanding, it is like what Newton said, if I have done great things it is that I stood on the backs of giants. He (no doubt a great man) i saying his contribution is a small part of many. If holmes succeeds in what she claims it is a great leap but it is one of many advancements. She is a small part of a big huge train, that is progress. To me, you make it sound like without her, this technology would die or we would not have it for another decade. I simply believe that if this is possible (and that is a big if) someone else would come along and make it happen if holmes was run over by a truck tomorrow. Secondly, I thought what you said earlier was nonsensical. I am paraphrasing here, ScottHall: if anything, she should get more hype and glory that what she is getting because it would encourage others to follow in her footsteps..... Ok so this would be my sarcastic response: so a paper billionaire isn't enough glory? My imagined response from ScottHall: no me: ok so you think she should go IPO and get 1 billion cash? You see my condenscending statement had nothing to do with holme but it has everything to do with your statement that $1B isn't enough profit motive to encourage people to further mankind. I know you'll say money isn't everything, but I was just my insulting way of reminding you that society has made her a billionaire, paper or real, it is a BIG DEAL. I should have a picture of that guy beating a dead horse here. Honestly tell me, what should we give her, financial or recognition or otherwise, that would make you think is sufficient for her potential contribution?

ScottHall, what you said makes no sense to me. All progress of society is about incremental improvements, in technology and math and science. When was there ever a giant leap forward? Let's take physics for an example, I guess Newton's principles of physics is groundbreaking (though it was replaced centuries later). But calculus, which Newton gets 90% of credit, was being discovered at the same time in Germany. Also maybe Einstein's papers on relativity. And things like vaccine for polio were known ideas with competing implementations. All these people had tons of help, people help each other with experiments and sharing ideas. The biggest exception I can find right now is the wright brothers. Society makes great improvements based on time and lots of hard work. Nobody is indispensible. If any past great scientist or mathematican was run over by a truck at 8yrs old, society will have the same technology today, with a few exceptions. And those exceptions probably just means that we will reach some point a few years later. Now lets go back and look at Holmes. She is making something she is doing very public, but she is keeping the details very secret, which means lots of very dedicated and smart people cannot share ideas with her. Which actually increases her chance of failure. With your idea of great leap forward, are you saying that if she died tomorrow this potential technology is not going to be able to benefit society and die with her? Now suppose she can bring the cost of blood testing down from $100 to $7, that's great for society, it will reduce the cost of medical care and decrease our debt burden. But as soon as she gets traction and proves herself there will be a hundred copycats. How does she even legally protect her technology? If not then how can her investors make money with her? This is a money forum and so I am primarily focused on her investors. What were her last round of financiers thinking! I bet with more and more details the optimists will think she is going for the moonshot, like you are saying. So, say she has a 1/10 chance of success. Even if she somehow gets a monopoly on her business after she proves it works, they must expect it to be worth $90 to rationally make an investment. Of course Holmes is a businesswoman, she is here to make a buck. And society has given her vastly more reward than 99.9% of successful scientists before her, society has made her a paper billionaire despite her being so tight lipped and NOT proving that she can do blood tests for $7. The only greater encouragement we can give her is let her go IPO w/o lockup window so she can be a real billionaire. If you want to encourage progress, I think we should reward more grad students who are toiling away getting not even minimum wage, with no hope of immediate financial reward.

I would be shocked that Theranos delivers even a fraction of what they claim. The little that I know about the company makes me very suspicious. Here is a company worth $9B and I cannot wrap my head around what is their competitive advantage let alone what is their secret technology. They have machine(s) that will revolutionize blood testing....... no one is on to this? consider health care is 20% of our economy..... Why is it that I have no clue how they do it from what I have read? do they just keep their product's blueprint a secret? if so how easy is it for the former employees in that article to spill the beans to someone who'll pay money for the knowledge? Do they have patents? if so what are they, let's take a look and have scientists do a peer review...... with patents of course they should then advertise their technology blueprint to quell all doubts...... If find it very troubling the fact that we can even speculate that it is a "fraud"......

Why is BRK an exception? Now and then, I keep finding nugets in Charlie's Almanack and one of them was a quote from Buffett talking about how everyone else is taking his words as facts where Charlie wouldn't. I think it's hard to concentrate into one idea because no one knows all the risks including BRK. Who knows maybe one day, after Buffett left, they did an Exxon or something. Because Brk is now a conglomerate, it is very diversified in a look-through basis (I think that is the term used on this board)... buying Brk is like buying a mutual fund. And the results would be similar to a good mutual fund (I'll get ripped apart for this but I can take it). If one of Brk's wholly owned subsidiaries like BNSF blew up a town, I don't think Brk itself is liable.... yes/ no?

That isn't the half of it. When British Columbia Power was about to be bought by the government, Munger put his funds money, his own money and every penny he could borrow into a merger arbitrage. Warren Buffett held the same stock at the time, but he didn't go to the extremes that Munger did. Thanks for the book mention. I didn't know Munger had a biography.

One thought I have: Imagine I did an analysis of oil majors in 2003-2004 and I picked CVX, great huh? I held till recently just before oil tanked. Brilliant?? I remind myself, I didn't know much about oil, and I could easily have picked BP! So I remind myself that I could've been a screwup even when I succeed. Same goes for FCAU, as I recall Pabrai has 40% position in his fund. But imagine.... for a sec.... if the emission scandal happened to FCAU instead of VW! Nobody could've guessed such a thing could happen right? I don't think any analysis could have hinted at BP spill of VW emissions scandal....... it could have happened to any company..... so I feel it is reckless to put so much of one's money in a undiversified company. Note that doesn't mean it is reckless to invest 40% in a Brk.

Couldn't have said it better.

While I agree with you that he certainly has the 2 problems you mentioned. I don't think you can argue against him that he has a good investment process and he will be a success. We don't know his portfolio except his ZINC and SUNE(?sp) blew up. You have to take his word for it that he made a mistake concentrating on his holdings........ I am assuming that a big chuck of his portfolio has suffered permanent loss of capital. The hedge fund world is crowded now like the mutual fund world. And like mutual funds by definition the majority will lag the market esp. when they charge such steep fees. So it is a fair assumption based on what he said and the normal that he is doing his customers a favour by leaving the industry.

Ya, I have to chime in on concentration. On the face of it, you can't argue with the saying that if you are sure of your best idea why not add to it as opposed to adding to your fith best idea. There is only one argument. You don't know if you are wrong...... It is similar to Howard's Marks second level thinking. Rumsfeld calls it the known unknowns, if you are good. You know what you don't know. If you are not good, well then you don't know what you don't know. That's the biggest danger in my opinion. I think it was Pabrai who tried to apply 2nd order thinking with the kelly theorem. To me that is ludicrus. He may have some bias with leads to flawed analysis and now he compounds the problem by using the bias to evaluate himself. The kelly theorem or any other math tool is only as good as the data in. No wonder he doesn't use it now. So with the article author appears he didn't calculate his odds correctly, and sized his positions wrong. So he didn't know what he didn't know. The mitigating factor may be that he is always under pressure to outperform so he took bigger risks than necessary. I think it is the wrong with many managers who blow up their fund. I am not saying the author blew up his fund, he just had a few years of underperformance. Now he says he will migrate to index funds for his personal money. which means....... he now knows what he doesn't know. That's what I admire about the people in the Bogleheads forum. They admit their limitations and hence they probably outperformed the author of the article! I am very uneasy about the 2nd order stuff, so I always have 20 positions. In addition, they are diversified in different countries in different industries. A portfolio of 20 commodity positions is not diversified. I started hard core investing late, so I have a decent nest egg but I cannot replace it. So I can play with smallcaps, obscure markets so long as I size and diversify conservatively. There is lots of time in a lifetime, if I convince myself I am good then maybe I will later have 5 positions, like the manager at Curreen Capital. Stocks are like the tide, only it goes up and down in years or decades so a lot of people with sexy strategies will do well in a bull market but then the tide goes out then we see the sexy people naked. I see a lot of people in blogsphere and hedge fund world who have outperformed starting in 2013 or so. I have a suspicion some of them will blow up when the tide goes out. Just my hunch.

I just signed up to his mailing list at the following url. And got access to a ton of monthly shareholder letters. I recommend it! http://www.curreencapital.com/

Yes he sounds very value oriented and competent. I'd very much like to know more about his fund. What is his AUM, anyone have his past letters (yes I signed up to get his letters on his website).

Can someone compile a list of who plays show? I first want to know who plays Michael Burry... he is probably the most interesting story in book.