randomep

Can anyone post his recent letters? thanks

yes good article. Looks like he makes the same mistake a Gross at PIMCO. That is the market returns higher than GDP growth, then the rich investors must be getting richer.... But investors can exit the market and consume their proceeds without re-investing: for example, dividends and stock buybacks.

Floyd Mayweather is an interesting example to use because he exemplifies different expressions of arrogance. You are referring to the "Money" Mayweather cartoon that we see between fights. But in the ring, he is a more disciplined fighter than past talents like Sugar Ray Leonard and Roy Jones Jr. Every move he makes between the ropes in intended improve his odds of winning. And, of course, he is always in shape. So you see the practitioner's humility in knowing that he is only exceptional in so far as he behaves smartly, and not due to some inherent characteristic of being special just because. Yes I think a much better example is Mike Tyson, who thought he was exceptional just because, and in the end showed the world that he is just a flesh eating rapist who should've never left the ghetto.

Those that are long SODI, I haven't followed it too much, but when I was looking at my first US small cap, I compared it to IEHC. So tell me how is it better than IEHC considering SODI is not shareholder friendly ( I heard about oddballstocks and some others here confronting management at board meetings). I mean if the management is not shareholder friendly, then GET OUT! Ok for my highest convinction: WLP. I have owned it for a long time but I increased my position significantly 2 yrs ago. I wrote about my thesis on yahoo boards and I recall I got flak, comments like "total garbage". BTW if you haven't noticed it has almost doubled in that time. So my high conviction story is something that is working out. But looking back 2 yrs ago, I learned something. When someone on a lousy board like yahoo tells you that your idea is garbage, you are probably on to something good!

My only european investment is Installux which returned 50%, hmmmmmm, is this article a contrarian indicator? I really don't know much about french macro. But an article that refers to anecdotal evidence do not convince me of much. France may be going down the tubes as the article says, but the article doesn't convince me of it. What do you think? considering you are from france?

Would you say the same about momentum-driven strategies? Palantir: what do you mean "say the same", say what? I have never looked closely at momentum or day trading, but I GUESS momentum requires some underlying knowledge of the security, but nonetheless it is a strategy that is based a lot on the quoted price. So you are trying to outguess what they think, so it needs the "sucker" and is similar to day trading. Its not guessing. Its a statistical tendency - positive/negative information tend to cluster together/exhibit autocorrelation. Sort of common sense - well run companies in good industries tend to expand in value and badly run companies in declining industries tend to shrink in value (e.g. Google vs newspapers). Why are you dissing quoted price? You don't think long term price trend convene information (5 to 10 years charts)? Of course quoted price determines our actions, whether to buy or sell. However, reading too much into it is looking for patterns in noise. Look that's how I operate, I only sometimes look at the charts. That said, I am guilty of looking at the prices of my portfolio too much. Like every 15min when the markets are open. I can't help myself, but at least I don't act on it. How about you guys on this forum. How often do you look at your stocks?

I was looking at the hk real estate companies but decided against pulling the trigger in the last min.... the key thing is: corporate governance, or protecting minority shareholders. Until I have a better understanding of their corp governance I will consider HK in the too hard pile. I think you have little say in operations, but it is pretty much impossible for insiders to take it private at some cheap valuation if only 10% of shareholders doesn't agree. So if management does a good job why is this a problem? Why is it a problem? I didn't know about the 10% law. That's why. Thanks. Although I recall, looking at Wheelock or some company and they did try to take it private and failed. But a second issue about minority interests is excessive management compensation. Do you have any comments about that?

the guy probably lost his shirt and wants to take it out on Dr. Burry

I was looking at the hk real estate companies but decided against pulling the trigger in the last min.... the key thing is: corporate governance, or protecting minority shareholders. Until I have a better understanding of their corp governance I will consider HK in the too hard pile.

huh, you sure about that? I distinctly remember Munger calling EBITDA bullshit earnings (I presume you mean EBITDA) And I am sure Buffett feels the same but would be so explicit in his description.

Would you say the same about momentum-driven strategies? Palantir: what do you mean "say the same", say what? I have never looked closely at momentum or day trading, but I GUESS momentum requires some underlying knowledge of the security, but nonetheless it is a strategy that is based a lot on the quoted price. So you are trying to outguess what they think, so it needs the "sucker" and is similar to day trading.

Well it is a VERY important issue! Because, to know that you can make money consistently in the future you have to have an understanding why. With value investing you are taking advantage of the fact that the market will return something positive on average (5-10% take your pick) and on top of that you are taking advantage of inefficiencies. As many have commented above, the inefficiencies can be due to suckers or just someone who is going into the trade with eyes wide open. In the latter case, you can say it is a win-win for both parties. In this case I don't have to believe I have special God-given ability above all others. I can say that I can virtually be an average value investor and still do well. But that is not the case with day trading.

I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. The value investor is calculating the price of an investment for trading. That's how the NYSE got started on wall street under a tree. After that reached some critical mass, day traders came in and traded off the noise. Value investing is price discovery, and in times of panic create a floor for the market (say in 2009). Value investors don't necessarily need suckers. For example Hanover Foods, a well-known security on CoBF. We area creating a price at which the insider bickering family can sell. Without us, capitalism just won't work as well, cos the founding family cannot get a decent price for their grandfather's investment.

I disagree with you..... Look at SAC, they turned out to be a insider-trading scam. I think the ones you quoted that are successful are making money off other day traders. That is like the pro poker players in vegas making their living off the "dead money" that comes in from amateurs.

KCLI

The NYSE is the world's largest casino, we're all gambling in a roughly zero-sum game, but which in the long run can put the aggregate gamblers ahead by a small 5-10% per year.

Thank you for the compilation, much appreciated! Welcome. This forum has given me so much, I am glad to contribute my bit.

Paragraph 4 on page 2; "How do I determine the discount? I usually focus on free cash flow and enterprise value (market capitalization less cash plus debt). I will screen through large numbers of companies by looking at the enterprise value/EBITDA ratio" haha, you got me there! You must think I am full of it! thanks for pointing out the error of my ways.....

Burry was paid $1 a word to write for MSN money. I think it is useful to read his thought process for his actual trades. He didn't calculate ratios like EV/EBITDA or do writeup like in VIC. see attached. mb.pdf

Ya I totally don't see what Berkowitz meant. Can you give a source..... value for society, what does that mean? And if something doesn't have that value, in times of crisis, they will go bankrupt?

I think this is a great topic and I am still absorbing the article. From this article and others, I am crystallizing my rationale for investing during times of very negative sentiment. I wrote (link below) that my best gains have been running into very unknown negative news. First example is in 2000 when US tobacco lost a $200 bil decision in florida. Unless overturned, the decision would bankrupt us tobacco. Fast forward today, MO and its spinoffs are up 7-10x. Second example, WLP dropped to $50 after the supreme court upheld obamacare. Today it is $100. Obamacare and the Engels court ruling are both huge unknowns, so people just jump off, but to me that seems like the time to place my bet (with guidance from sources like the Harvard paper).... Anyone else got other examples from recent memory? ...... My latest bet BTW is ERUS on Russia..... http://bovinebear.blogspot.com/2012/08/why-i-own-wlp.html

+1

+1 best by far.... and to clarify, title insurance also applies to refinancing transactions....

Next: what are you buying and selling?

Hedging has been on my mind but I really don't know how. You can buy or sell Yen futures but then are in blocks of $100k USD. But let's say you have $100k invested in Japan, you can sell the futures. These futures are available a few months or a year out or maybe more. But if you do that I feel you aren't hedging you are actually magnifying the currency effect. Let me explain. For the last year, the yen has fallen, this has caused the market to go up, so the market and yen move in tandem. The yen has a dampening effect on the market return for us thinking in USD. I figure I gained 50% on stocks in yen but only 30% in USD. But if you sell yen futures, in that case, then your gains would be magnified by the futures gains. On the flip side though, if the yen rises, then the market drops, and your futures value drops, you are screwed. So I think I'll just leave my stocks as it is unhedged. BTW, does anyone know of how to hedge in smaller quantities than $100K usd? for any currency? thanks