randomep

There's always someone ;) But me, I'll take modern technology. That is really subjective when you make a statement like that. For example, I am not saying you... suppose someone failed in college, is bitter about not graduating, is white, and think well his life 50 yrs ago he has much higher relative socio-economic standing. However, as a typical person he has a lower life expectancy, has no access to computers, cell phone, etc. Heck he can probably beat up his wife and get away with it and his wife will put up with it... nowadays she'll dump him cos she can very well support herself on her own. But for the masses, for example a black person, or a chinese person, America today is better hands down, for the chinese person, 50yrs ago he couldn't have gotten in because they were just a few years past the chinese exclusion laws. I am going off in a tangent probably, but one last thing. Something really interesting I saw on TV, it was a doc on a escapee from a N Korea prison who is now in S Korea, and he said in some sense his life was easier back in the prison, out in S Korea everything is about money. So in some sense, he was happier in prison..... You guys might be over thinking my point, which was simply that material quality of life has improved dramatically over the last 50 years. You probably didn't read my entire post, I am agreeing with you buddy.

There's always someone ;) But me, I'll take modern technology. That is really subjective when you make a statement like that. For example, I am not saying you... suppose someone failed in college, is bitter about not graduating, is white, and think well his life 50 yrs ago he has much higher relative socio-economic standing. However, as a typical person he has a lower life expectancy, has no access to computers, cell phone, etc. Heck he can probably beat up his wife and get away with it and his wife will put up with it... nowadays she'll dump him cos she can very well support herself on her own. But for the masses, for example a black person, or a chinese person, America today is better hands down, for the chinese person, 50yrs ago he couldn't have gotten in because they were just a few years past the chinese exclusion laws. I am going off in a tangent probably, but one last thing. Something really interesting I saw on TV, it was a doc on a escapee from a N Korea prison who is now in S Korea, and he said in some sense his life was easier back in the prison, out in S Korea everything is about money. So in some sense, he was happier in prison.....

I thought I was quite clear, roughly speaking, the stock spiked up to $17B, the money is made by the insiders. If the company goes public tomorrow at this valuation, and if it falls back to earth one day, for every $1 dollar of gains, whether realized or unrealized, there is $2 of losses on the way back to sanity. So a trader's odds are 2:1 against him, Soros is that kind of person who gets the gains, all the more power to him, but ordinary folks like me will likely lose, with 2:1 odds. I want to play where the odds are in my favour. Munger and Buffett keep preaching that if you keep things simple swing only at the clear strikes investing is easy, i.e., the odds are in your favor. So I am ordinary and I want to go in where the odds are in my favor. That's all folks....

Well, ya like Kennedy who said he cashed out of the market when the shoe shine boy was recommending stock picks, I am now looking for something that'll be my tipoff to abandon this market. This is starting to be insane when rational people talk about investing based on the greater fool. Or use slippery slope arguments, like they will take away the taxis, then charge peanuts on each car, then run ads on the app, then this then that and voila it will be only trade at 55x earnings. I don't understand why people want everything to be rational. The market multiple is at 16x right now. Who knows what the right multiple is and what is the limit on the upside or downside? All we know is that the average is around 15x. George Soros is the master of human psychology. He is happy to ride any bubble and gets out when he sees a shift in psychology. After a stock gets to its fair value, watch how people react to earnings surprises, watch the strength of price momentum, and act accordingly. No need to get attached to anything both long or short. Value investing gives us the courage to buy high quality companies during panics but it is not designed to tell us how to get out close to the top. For comical relief: http://www.thereformedbroker.com/2014/06/09/turn-down-for-what/ We want to be rational because this is a value investing forum. I think about it this way. Even if a gambler want to play the great fool game, this game will end badly. Someone mentioned that Uber could double so it could go from $17B to $34B. But suppose it eventually comes down to earth and all stocks will eventually be judged on fundmentals, then suppose that it will eventually go to $500M. So if a gambler wants to take that ride from $17B to $34B to $500M, the stock will go down $2 for each $1 it goes up. In other words, the odds of making money betting disregarding the fundementals in this scenario is 2:1 against him. But of course everyone thinks that they will only be on the ride up and know when to get out. And this scenario has played out many times a decade ago: VA Linux, Netscape, JDS Uniphase, Pets.com, and the list goes on and on.....

+1 People use numbers to give them a sense of security or confidence in their thoughts, a good investment can be described in a few paragraphs, that's it.

Well, ya like Kennedy who said he cashed out of the market when the shoe shine boy was recommending stock picks, I am now looking for something that'll be my tipoff to abandon this market. This is starting to be insane when rational people talk about investing based on the greater fool. Or use slippery slope arguments, like they will take away the taxis, then charge peanuts on each car, then run ads on the app, then this then that and voila it will be only trade at 55x earnings.

Cool, I didn't realize this thread existed. Minimum wage at $15 is a sign of how prosperous our society is. Can you imagine how much a fast food worker makes in 1960, in real terms? That person probably is living in a shack with no remote chance of getting decent health care. In the 1960's a week would have 100 deaths in a far off war in southeast asia. Can you imagine if we have 100 deaths in a month? This is a bit of a tangant but our society values its people much much more than two generations ago. And I scanned through this thread and noticed something said there will be unrest? How so? The US has not had a major riot since LA 20yrs ago. Where will the next riot happen? (well we had a big problem in New Orleans a decade ago but that was just bad planning and could have happened in any generation) The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier. The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

Great job, it looks nice. Any reason you don't want to make money off of this? I think you could very easily mine this and tie footnote changes to declines or advances in stock price. Then you could take it a step further and then send out alerts when a new filing comes in that matches a condition that you've linked to a decline or advance. That could have a lot of value for active funds, the types of customers you want to court. Are you pulling from the real time RSS feed? I am very cheap, but this is great, I would pay for this service.... but free is great too! BTW what does footnote changes mean?

Whoa, back up the train here, what are we talking about? Brk.A or Brk.B? you mentioned 12,15,19000, 620.......

Dang. He should run an unhedged fund. Those aren't bad returns at all. 9.4% vs 3.68% for the S&P 500 and 7.21% for Russell 2000. But this is the first time I have ever seen anyone publish the results of his fund and then publish the results of a portion of his fund. Kind of reminds me of Greenspan saying well the lassez-faire free markets worked very well for the last 20yrs, except 2008.

OH ya, good point.

And what is the return then? And would you be satisfied with that?

Actually as I recall, and I don't have the source to back it up, but he wrote that he knew in 2009 the market was cheap and it would return 10% over the next decade BUT he had a fiduciary duty to avoid a depression style scenario, so he didn't go long. So, in other words, he thought the market was cheap but it was going to get cheaper, so he waited for cheaper, AND he is still waiting 5yrs later.

Buy buy buy before BRK-A is at $100,000,000,000! I sold most of my Brk.B.... because I ask myself, comon, how high can it go? Sure it'll do fine, but I don't think it can beat the market averages by much. If it can, soon it'll be the largest market cap in the world. I remember when I started investing, cisco beat the street every quarter for like 30 quarters, and I bought it at $50, 14yrs ago! I learned the hard way, don't blindly trust streaks. I know, I am like that other poster who isn't going to value investing heaven..... Just in case it wasn't clear. I was kidding. I have you beat, once upon a time (August 2000 to be precise) I bought Cisco at $66. seriously, this question was going out to all the fund managers and others who are long Brk, period. Cisco at $50 or $66, whatever, so long as we learned our lesson.... that's what's important. right?

Yes thanks. It really puts things in perspective. I like to analyze people who are wrong to see if I can purge myself of whatever defect that caused the error. I see Hussman as being too rigid. He is a big time bear but no matter how bad things got (like 2009) he found a way to rationalize his bearish views. Truely great investors can see the reality and be flexible..... others have mentioned call the same things something else, which I forget...... But for example, I think it was Paulson or Burry or both who wanted to go long on banks in 2008, which would have been a good call.

Buy buy buy before BRK-A is at $100,000,000,000! I sold most of my Brk.B.... because I ask myself, comon, how high can it go? Sure it'll do fine, but I don't think it can beat the market averages by much. If it can, soon it'll be the largest market cap in the world. I remember when I started investing, cisco beat the street every quarter for like 30 quarters, and I bought it at $50, 14yrs ago! I learned the hard way, don't blindly trust streaks. I know, I am like that other poster who isn't going to value investing heaven.....

You are joking right? That's Buffett's worst investment, but there are hundreds of thousands of money managers who are dumber than Buffett, their worst decisions must be worse than Brk? no?

Well, I don't follow their strategies exactly, I don't know how an ETF will do, specially if it starts getting big. Most of the most interesting companies I find have relatively small volumes. But it is a very interesting compendium of what works and what doesn't. You can use their results to build you own screens or to modify existing ones. They look in detail at the MF performance, and I love their study of Graham's very simple, p/e<10, debt/equity < 50% strategy: "Graham's simple strategy sounds almost too good to be true. Sure, this approach worked in the 50 years prior to 1976, but how has it performed in the age of the personal computer and the Internet, where computing power is a commodity, and access to comprehensive financial information is as close as the browser? We decided to find out. Like Graham, we used a price-to-earnings ratio cutoff of 10, and we included only stocks with a debt-to-equity ratio of less than 50 percent. We also apply his trading rules, selling a stock if it returned 50 percent or had been held in the portfolio for two years[...]Graham's strategy turns $100 invested on January 1, 1976, into $36,354 by December 31, 2011, which represents an average yearly compound rate of return of 17.80 percent—outperforming even Graham's estimate of approximately 15 percent per year " In their approach they "clean" their investable universe by eliminating questionable stocks (bad accrauls, Z score, beneish score, etc) It is a little hard for a small investor like me for replicate as it requires a sophisticated database and a ton of programming to trim the universe. crastogi, I think you got the idea. I understand Buffett when he said finding stocks is easier now because information is much more readily available. And as the above quote points out, the market hasn't gotten that efficient. The key is how to process that information. I am from a tech background and I have applied some of my software skills to automatically process financial information. But I don't think it is "a ton of programming", I think it is a lot of very creative programming. The world has I estimate 60,000-80,000 common stock tickers that we can easily get information for. And we can also buy them easily. Anyone else do programming to mine stocks?

Ok there is my question. I am unclear about how unrealized capital gains are treated. In general I understand that when an asset is for short term trading, the unrealized gains are more likely to be included in the income statement. However, I have seen real estate marked to fair value with the unrealized gains counted in the income statement. What is the general rule for this? Is it up to the company to decide? Or is there a rule under US GAAP? IFRS?

That's a great question and I am not an accounting expert like some of the others. But I can give a simple layman's explanation. I have followed Cisco for a long time and the company is a stock option printing press. So before the days of accounting for options as an expense, look at their earnings, it is huge. But then again, look at the book value per share, it is not growing anywhere as high as it should and they pay zero dividends. So the dilution share holders suffer is where you realize stock options suck for shareholders. I think that's basically what other posters have said in more technical terms....

http://money.cnn.com/2014/06/01/luxury/rich-wealth-gap/index.html?iid=HP_LN This doesn't spell it out precisely, but over $4 million should get your fairly close. That seems to say $4mil per household is the cutoff, so I assume $2mil per person?

While the press often speaks about "wealth" of the top 1% in terms of income, if you were to actually look at it in terms of net worth the most recent research I saw indicated around $6mm. HOWEVER, much of this research is often very nuanced to me and not clearly specified. I did email capgemini regarding their wealth survey and they clarified that it does refer to INDIVIDUAL net worth, not HOUSEHOLD. So for you and your wife to be counted as a HNWI, you need 2mm jointly in investable assets (not net worth), as opposed to a single individual needing only 1mm. I've read some studies also and I have seen the 99th percentile networth being from $2mil to $8mil. but I am very skeptical of the high end of that range. If it is 6-8 mil it means that if you look at a typical specialist doctor who works his way up from college to intern to specialist with a loan to pay off, there is not way he/she can accumulate that much with a normal lifestyle assuming that he/she has savings growth say at the rate of inflation. And specialists are probably like what? one in a thousand? I personally think it is $2 mil.

Has anyone ever wondered what it takes to be in the much-publicized top 1%? And therefore conclude how many of us are in that category?

well what the hell was he doing on a value investing board, he should be preaching on a like-minded board.....

So the article is basically gambling.