randomep

It exists where you are also? I thought it only shows up in my machine because they've learned my habits from looking at my cookies/history.

Well, someone who has your problem and is rational can use any strategy in the Bogleheads forum and get much better returns, don't you think? Come on now - keep it civil Sorry I truely am

Well, someone who has your problem and is rational can use any strategy in the Bogleheads forum and get much better returns, don't you think?

Exactly! WEB's greatest contribution IMHO, is to teach us that we don't need IQ, education, inside information to get above average returns. He has demonstrated, educated and preached that point for 30yrs. The world is creating more and more millionaires by the day. Most of whom did not get it through value investing. All the more power to them. But I am also very skeptical that someone can trade short term and make above average returns consistently. The literature has documented ordinary folks who have accumulated many millions in the IRA (or equivalent). We even have our own in this forum: Ericopoly. I wish someone can point me to a person who accumulated 5million dollars in their IRA through momentum trading, if not, I am going to assume that it can't be done. Or name a fund manager that makes billions using that strategy. Well..... there is Raj Rajaratnam, and Steve Cohen, but they are in jail or going to jail soon, I meant someone who does this legally....

And perhaps how have your returns been? Since 20% (random) or 50% (yada) returns seem not to be rocket science. :P Ok if you want to know more about me you can get some ideas of my portfolio: http://bovinebear.blogspot.com/2013/09/my-2nd-annual-schedule-of-investments.html I honestly don't know exactly what it is and I wouldn't publish it anyway. But you can see from my holdings and I do own all of them still what kind of returns I am getting. But yaya we are in a raging bull market. You can also see my age on my blog. I have been investing for 16+ yrs. I have seen a lot. For example, if you read my other entries (I am flattering myself probably) I have mentioned STZ (bought 9yrs ago missed a 7 bagger). PM/Altria (bought 14 yrs ago). CVX (bought 10yrs ago). Cisco bought 15yrs ago at 50. I have done stupid things through the worst 10yr stretch since 1930s. But I am a new person now haha, wishful thinking. Believe me I am not a braggard, I just want to call a spade a spade. I am not saying my net worth will go up by 20%, I just expect the stock portion of my portfolio to go up by 20%. It is what I think it doesn't fact. You know, I have seen two crashes, I have a mentality like a concentration camp survivor: what can they do to me???

Great topic. First off I want to digress about value investing. I read somewhere that many people have heard of value investing, but the observation is that few can apply it well to make money. So question arises, why? Well my theory has been that we just aren't patient. i rarely hear people mention holding stocks for years, let alone decades. Maybe that is also a function of age of people I observe. But the article says the biggest reason is that people just cannot act different from the crowd. Well I have no problem with that aspect. Many people have said I am weird. So I am used to being a black sheep. But I have more problem with being patient. I have tried various way to cope with market gyrations and hold for the long term. 1. "Enjoy Pain", that's my favourite motto. It means to me that when things are bad, know that is a good thing, it is flushing out the other weak players in the market. It is an inevitable part of investing. Of course that has its limits, you must know when you've made a huge mistake and get out (like OiBr recently). 2. Be active. I update my portfolio in a spreadsheet. That means I have to update 20-30 numbers everyday. And it looks like I am doing something to make my portfolio go up, when the market is rising. When I do trade I trade in small amounts, over several days. When I want to buy a block, I buy small bit at a time, so I am a more active trader for the same amount of stock I want to trade. 3. Have a job. I tried not working for a while and focusing on my investments. It was more than I could handle. I cannot handle having my working life be stocks, too stressful and too boring. that's my main coping techniques.....

That's what you get if you started investing after 2008... Ya and past is no indication of future performance...... I was quoting Buffett on 50% who was saying his expectation is 50%, and I have dialed it down to 20% expectation for myself. And with the caveat that I have a net worth in real estate, cash and stock. The first two are hedges for my stock portion. I am saying 20% in the stock portion. It is misleading, similar to some other tread about Hussaman doing great on his stock picks. Ya he picked those stocks with wild abandon because he had the protection of his hedges, yet overall his results were lousy. Like another poster said, it isn't that hard if you do it a particular way that the master (WEB, Graham) have taught.....

OK. Just for the hell of it ... Pretty sure that a priori, WEB, Munger, etc. are better than we are - even after fees. Theoretically we should just give them our money, & they should accept it, making us both wealthier. Pretty much everyone on this board should all be holding Berkshire Hathaway - but we don't because we're never going to get to be that good unless we practice, & the opportunity cost is our annual tuition fee. But we're greedy - & hold a hedge fund with a 3 & 50 fee structure ;D No way this fund can get away with the 50% fee unless they are taking far more risk than their 2% & 30% fee counterpart - & either winning by luck or manipulation. The SML tells us that for more risk, we need a higher return - excluding the jail possibility. So ... after a great year, our fund charged us 3% + 30%, leaving us with a 27% return. In the same year, our alternate (WEB) made 22% & the market was up 15%. If I want an additional 10% for the additional risk our fund is taking, the fund had to return 32% (WEBs 22% + the 10% risk premium) to us. The bums only made us 27% - so we fire them. .. we also say a very big thank you that they didn't blow up while we foolishly held them! SD Woah, Woah again! We all know WEB, he says he can do 50% on 1 mil (which is our little guy's range), you can knock that down a bit to 30%, 40% whatever. Brk as I last heard lagged the S&P 500 for the last 5 years. WEB if he managed my portfolio like his partnership in the 50's would NOT have lagged the S&P 500. Therefore, conclusion........... Berkshire Hathaway does not equal WEB a money manager. If I invested in BrkB (actually I still own some but only because of tax reasons) I am getting the world's most brilliant investor to basically manage a large cap fund like vehicle. Pit WEB running a large cap fund against Prasad investing in mircocaps, you would bet Prasad right? I mean that's the rationale of people on this board investing with Prasad instead of (or more than ) Brk. I also got a thought, if Brk grew at 25% it would be $2 Trillion in 10yrs, and more than 10% of US GDP, wow!

He has been around a long time, so what are his fund returns like?

Ok then, we are talking single stocks. I just find it hard to imagine holding on to a mispriced stock for 5-10yrs. Mind you I had STZ for 3-4yrs then sold for almost nil profit... fast forward to today? it is at 7x!!!! I think the scorpion was referring to something that I always struggle with. I put a chunk into a stock, I feel good about my thesis, NOW WHAT? Well, I remind myself it typically takes 2 yrs for things to play out (if I am right). That's not a deadline, it is the expected realization time for a correct thesis. It is mental preparation for the strains that will inevitably come with investing. For example, right here we have a thread about Hanover Foods, it is a cigar butt trading at about 1/2 book. I just bought it. Posters are fretting about oh how it will be perennially this cheap. I don't necessarily know better than the others, but if they asked me I'd say, heck wait a couple of years, odds are something good will happen and the stock will move closer to book.... just a practical example of my viewpoint. I've always felt that 2-3 years was practical and 5 years was about the most before throwing in the towel. This time range seems well supported by Graham, Schloss, Lynch and others who aren't buy and hold investors like Buffett. Funny you mention Hanover. I purchased them when they were in the $80s per share and a few people told me at the time it was dead money that will NEVER appreciate. Someone went as far as sending me a strongly worded email saying it was a bad decision and that it's likely the shares would be trading in the $80s 15 years from now! Seeing as how the price is up 45% since my initial purchase I'd say that person was off. There are a few companies that are actively working to keep their value hidden, ones like Vulcan International. I'd suggest you stay away from those. But for most others within 2-5 years the price will likely appreciate towards fair value. I want to echo Tim, I've rarely had to wait that long. I hear ya Oddballstocks. I started my blog touting my biggest holding WLP, and one of my first responses was "TOTAL GARBAGE". Of course it didn't sway me, in fact, in confirmed the potential of WLP. 2 yrs later it is 2x. So, my only comment to such hysterics is from Einstein: "Great spirits have always encountered violent opposition from mediocre minds" Now I am not saying we are in the same league as Einstein or Newton, but we are still original thinkers.... whatever brilliant original idea you have will inevitably attract comments like that you described.

So it looks like the rich do not always get richer, it does take some skill to keep and grow the riches....

woah, you can predict a priori who is better than you? Assuming an investor knows himself, his floor is the market (by buying an index fund). So I presume he invests because he thinks he can beat the market. And so you know someone who can beat the market by more than you by managing your money? Can you give me a name of someone who will invest your money and beat the market? The only person I can think of who will take my money and beat me is Prasad. I believe various bloggers can beat me but they won't take my money...... This is all before fees, if this is a close call then of course fees would sway the balance in our favour. My assumption is that all of use in this forum are all above average investors who have found a niche by buying what we know or smallcaps or whatever, so we can beat the experts. And what do you mean risk adjusted? thanks

Ok then, we are talking single stocks. I just find it hard to imagine holding on to a mispriced stock for 5-10yrs. Mind you I had STZ for 3-4yrs then sold for almost nil profit... fast forward to today? it is at 7x!!!! I think the scorpion was referring to something that I always struggle with. I put a chunk into a stock, I feel good about my thesis, NOW WHAT? Well, I remind myself it typically takes 2 yrs for things to play out (if I am right). That's not a deadline, it is the expected realization time for a correct thesis. It is mental preparation for the strains that will inevitably come with investing. For example, right here we have a thread about Hanover Foods, it is a cigar butt trading at about 1/2 book. I just bought it. Posters are fretting about oh how it will be perennially this cheap. I don't necessarily know better than the others, but if they asked me I'd say, heck wait a couple of years, odds are something good will happen and the stock will move closer to book.... just a practical example of my viewpoint.

hi there, I think you are talking about a different thing from what scropion is discussing, or at least what I was discussing. In general a fund manager's result deal with many macro, market etc etc issues. But regarding a single security, that is undervalued, assuming that the thesis is correct, in general markets that would take 2 yrs or so, that is my belief and Greenwald and Lynch. This case is different from the buy and hold quality stocks where Buffett says the holding time is forever. I mean he has no choice he cannot flip $1 billion dollars of a single security. But when he was running his partnership in the 60's his turnover was quite high, probably 2-3 yrs, my guess.

That's a great question and the only person who addressed this that I know of is Peter Lynch. I read one of his books many years ago and I don't remember the details but he said his experience is that it usually takes 2-3 years for his thesis to play out. That is something that I always keep in mind. I agree with the 2-3 yr case where you own an undervalued smallcap and it languishes with no significant bad news, then by 3 yrs it should turn, that's my experience, in fact my experience is 1-2 yrs.

What about Russian stocks? or Greek stocks?

Hi all, Just thinking of the madoff case and saw an article in Forbes (or Fortune). In it, the author claims SIPC at times doesn't protect you because of clawbacks. That is, if a broker is fraudulent and suppose they took your money and never traded the securities that you wanted to trade, you are only entitled to the money you initially put in. So suppose you invested $1mil a long time ago and it became $2mil due to your own trading of securities. And many years ago you withdrew $1.5mil. Now suppose the broker has gone bankrupt and we found out they never traded anything for you. Then, even though you have $500k left and that is the maximum amount covered by sipc, they claim you got more money that you put in and so you won't get a dime from them. Is my understanding correct? that seems to the implication of clawbacks..... thanks in advance

Let me take this time to say thanks for this forum!

Hi Folks, please help me here. I am looking at the aforementioned Buffet holdings in 1962. But the handwriting is hard to read (and I may need to get a kindle copy for better resolution), Can anyone tell me what are the following holdings? BCP TNP LNC (I doubt it is Lincoln National Corp because the price is too different) Murray ??? There are many companies that start with Murray, but Murray what?? Thanks! ps. these are not trivial holdings, all are more than 1% of portfolio.

Yes that's all very good points. I think the student (Buffett) was better than the master (Graham) back when the student was 21 or something. Buffett took value investing to the next level. That's his biggest contribution to us common folk. My intention is to get a hold of the OPV, copy that list of 75 stocks, and track down the financials of all those stocks on Moody's or some equivalent and see what he saw in them. Then try to replicate it on the set of all global stocks. Because I believe these stocks still exist, just not in the US but they exist somewhere, in some land far far away.... And I find it too hard to find growth at a reasonable price, I find cigar butts much easier!

There is a chapter one of the editions of Permanent Value authored by Andrew Kirkpatrick that shows a snapshot of the Buffett Partnership holdings in early 1950s. It's a copy of the hand written ledger used by Buffett. There are probably 70 stocks listed with prices and share information. Great! That's exactly what I was looking for! I got a hold the 1994 edition at the library (the author wants me to buy it as 3 kindle parts of $10 each, too greedy!) It's probably in the 2008-2010 version or somewhere that timeframe. I can probably send it to you, as I have the pages at home. You might be able to locate the pages on the free book preview on Amazon. Oh dang, I was dreading that, well if you can send me the pages with just the table of holdings I would be grateful. If that is not feasible, can someone give an idea of which page/section that table is in? I ask because the kindle version is broken into 3 parts so I'd like to buy just the part I need.

There is a chapter one of the editions of Permanent Value authored by Andrew Kirkpatrick that shows a snapshot of the Buffett Partnership holdings in early 1950s. It's a copy of the hand written ledger used by Buffett. There are probably 70 stocks listed with prices and share information. Great! That's exactly what I was looking for! I got a hold the 1994 edition at the library (the author wants me to buy it as 3 kindle parts of $10 each, too greedy!)

Thanks for the article, but I am not convinced by the thesis. In the 50's and 60's buffett invested in 400 companies total so the majority must be cigar butts. They must all contribute to his overall results, because if he was getting 30-50% a year he cannot have laggards in his portfolio.... I'd love to have list of his holdings back then (not just the 5 or 6 mentioned in snowball and other books)

Added ITIC to my position. I am doing what good value investors do, buy a stock I think is cheap, and if I am wrong and it is not cheap and it drops, BUY SOME MORE.