adesigar
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Posts posted by adesigar
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Someone I know is rolling over a 401k into an IRA.
The funds I recommended were
US - FAIRX, BRUFX, LLPFX, GOODX, YACKX, FPACX, DODGX, FLPSX, FCNTX.
International - WGRNX, SGENX, DODFX, OAKIX.
Does anyone know of any other good funds? Especially international funds.
Thanks.
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Mine is currently <5%. 10 years ago it was 80%.I've switched more jobs in the last 5 years than the previous 15 and though it was for professional and personal reasons, the ability to rollover to an IRA & convert to Roth was a nice kicker to quit. Over the next 10 to 15 years, the difference this would make in my networth is stunning. 401K's are shackling indeed. When I hear some of my friends leaving their 401K with their former employers, I go into top gear trying to get them to pull it out! Can't believe how naively misinformed folks are about finances. One of them is a PhD!
What do you mean, they quit before their 401K is vested?
No, left the money in their former employer's 401K plan. Kinda like an orphan, unattended and under the watchful eye of plan administrator fees.
Depending on the state you live in keeping money in a 401k provides better protection of assets than an IRA.
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Thanks for sharing.
Prem Watsa recommends watching the following BBC documentary:
"How China Fooled The World"
http://www.youtube.com/watch?v=HUSjMnmS5lI
Watched the BBC documentary. Didn't get what the point was.
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I read latticework so i think Charlie Munger
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Most people buy homes more as a place/community to live in and not as an investment. Sometimes you end up losing on the investment but it because you are paying to live in a low crime rate area, send your kids to great public schools, live near friends/family, close to the beach or a hub of activity and you don't have time to wait.
That said I drove my wife crazy looking at houses in our area for almost 2 years. We ended up buying our first home in Q3 of 2011, Refinanced Q4 2012. Now the Mortgage+HOA+Taxes+Insurance+Maintenance for our 1700+ Sqft house is less than the rent for a 1100 sqft apartment in my area. Home prices are up 35% since we bought it. Lady luck helped and so did Berkshire Hathaway. Used Berkshire Hathaway subsidiary Homeservices and it was an excellent experience.
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Sorry if there is already a thread on this. I did a quick search and didn't see anything.
Looking at the spread between AT&T or something like that, and 15yr fixed rate mortgages, do you think it would be worthwhile to take out a mortgage on a fully paid off house that has a pretty solid, stable value, and just sticking the money in AT&T. Would a bank let you do this, if it was for like 20% of the houses value?
Thanks a lot.
P.S. This is probably the market top sign everyone is looking for :)
Do you need the money? Are you just bored and need something to do?
Since you are thinking of a 15 year loan and think that AT&T is really stable could you look up the Price of AT&T 15 years ago?
I believe in the “Don’t risk money you have and need for money you don’t have and don’t need.”
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500 pages per week would be extremely low. Im really surprised people think 500 per day is a lot to read. 500 pages per day sounds about right for someone who spends a major part of their day reading.
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Suppose the US had their only permanently unfrozen and one of their largest naval bases in a territory that was largely inhabited by English speaking pro-American people which used to be part of the United States. For geographical comparison, let's say the territory in question is the States of Florida and Georgia, with the base in question being in Florida. Then, the Florida/Georgia government becomes bankrupt and starts shopping around a deal to bail them out. Seems like the best deal is what the Cubans are offering so they decide to become indebted to them.
Then of course all of the pro-American citizens in the former US territory (Florida) become enraged and demonstrate and oust the leader who is contemplating this deal with the enemy. Now the territory is in flux and control over their largest naval base is in jeopardy and all the pro-American english speaking citizens in the zone containing said naval base start getting worried about the anti-Americans who are on the other side of this argument and are also citizens of the same territory but in a different region.
What would the American response to this situation be?
Would they be hailed as heroes in the press for looking out for their own, restoring order and showing strength in light of political upheaval?
Why is Putin compared to Hitler for a similar response?
The military-industrial complex requires only one fuel - an enemy - and without it would wither and shrink.
Invert, always invert.
Maybe you should have mentioned in comparison that the territory got freedom from decades of being treated as second class to the main country or that they gave up their defenses on assurances of protection from the people Invading them. That their country has been meddled with since it was formed. So imagine it from the points of view of the Ukranians like you said Invert, always Invert.
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If the US/EU don't defend Ukraine's sovereignty do you think any other country will trust a treaty signed by US/EU providing them protection? Do you think any other country will ever consider giving up existing nukes or plans/ability to develop nukes?
Have you thought about what it means to "defend Ukraine's sovereignty"? We are talking about a country which they used to call "little Russia" a century ago. And you think the EU and US would draw the line here, on Russia's front porch, and threaten to go to war over it? What would they have to gain and would it justify the risks? Should the US have some jets circle over Ukraine to project force? What if one got shot down? This is a high stakes game with potentially terrible outcomes and it's very easy to maneuver yourself into a corner. Best not to buy into the game if you're not prepared to see it through to the end (which nobody in the West is). I can guarantee you every actor in this play has carefully considered what they are willing to wager. And Putin's conclusion has been he can make a move. That should tell you all you need to know.
I would also reiterate that Crimea is a sideshow because it's pretty clear that it's Russian now and will remain so (nobody can force them to leave by force and they will get a majority of the people to vote to split from Ukraine). The real question is what will happen to Ukraine East of the Dnieper river (and Kiev which sits on top of it..).
Just my opinion but in my mind its simple. Every country bordering Russia/China/etc is watching. If Russia gets away with this, it will say to the countries watching that their only defense is Nuclear Weapons and assurances/treaties/documents from the US/UK/France/EU are meaningless. The world can forget Iran/N Korea ever giving up nukes. Rather other countries will try to obtain them for deterrence purposes from countries who have developed such capabilities.
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What about the international treaty signed - Ukraine gave up nukes for sovereignty guarantee from Russia.
What about it? Do you think the US will go to war with Russia over Ukraine because of a treaty? Do you think the EU will?
I think if/when Russia makes a move on Eastern Ukraine, the West will get serious with economic sanctions to put pressure on Russia's oligarchs. What else could they do?
If the US/EU don't defend Ukraine's sovereignty do you think any other country will trust a treaty signed by US/EU providing them protection? Do you think any other country will ever consider giving up existing nukes or plans/ability to develop nukes?
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As shown by the fact that a lot of people found discussing Buffets Farm purchase as the most interesting topic from the annual letter there was nothing much in the letter, same old same old. Nothing about failing his 5 year period (Its obvious to us why it happened but he should have mentioned it). No explanation about the reason for 1.2x book for Share buybacks. Only points of any interest was Todd and Ted have 7 billion each to manage and they outperformed him by a lot. 3 Billion in bolt on acquisitions was good. Hope for a nice Warren and the 3T's (Todd, Ted, Traci) interview on Monday.
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Sears in Dubuque Iowa (Kennedy Mall) -- Lease not renewed. Closing Late April 2014.
http://www.kcrg.com/news/local/Sears-Closing-Dubuque-Kennedy-Mall-Store-in-Late-April-241382241.html
They're averaging 1 per business day this year. Me likey.
56 closings in the first 53 days of 2014. I like that pace. I don't expect that pace to stay at 1/day, but it is nice to see Lampert making significant moves.
We cant be sure that every Sears/Kmart closing is being reported online. It might be higher than 56 closings in 53 days. We will find out more in 4 days.
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I've seen a lot of small businesses ($500k- 2 million price tag) selling for 3-4x owner earnings. At those prices it seems like if the business and industry is sound and the manager is able and honest you're bound to make above-average returns. But I'm suspecting there are as many horror stories from these situations as there are happy outcomes. If that's actually true, what separates the two?
I've never wholly-owned a business myself, absentee or otherwise, so I'm just trying to figure out how much I don't know.
I have a question. If someone is selling a business for 3-4x owner earnings. Why are they doing it? Wouldn't it be better for them to just hold it?
This reminded me of a guy I know. He starts restaurants, gets them running till they are doing awesome business and then sells them around 3 years later. Then he starts another restaurant. He is the reason his restaurant does so well. People buy his restaurants but I don't think the restaurants do as well as they did when he was running them.
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Sears to close Sodo store, ending long run in historic building
http://seattletimes.com/html/businesstechnology/2022962507_searslayoffsxml.html
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Facebook is after the installed base. Whats app has 1B users. It is very popular in India. Everybody uses whats app there.
Yup a lot of my friends and family have moved from away from using facebook to stay in touch and share pics/videos. We use whatsapp. We like the individual and group conversations we have, instead of dumping everything on one wall for everyone to see. I personally post and share very little on facebook primarily due to their policies and frequent changes to try and push people into sharing more with everyone. With Whatsapp I know exactly who sees my kids pics, not someones friends and friends of friends or some stranger just because someone hit like.
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So I've been mulling over this question for a while now. Probably not applicable in real life but just a thought experiment...
Say we've got a public company that, like most other public companies, trades on forward EBITDA and/or earnings. This company is unique in that previous quarters' financial performance don't have any bearing on future ones.
Now my question is, say this company missed both EBITDA and earnings estimates by 100%, as in, they generated $0 in EBITDA and net income. Would this company's stock price:
1) stay constant
2) drop slightly
3) drop significantly
I'm learning towards #1 and #2... I feel like since past financial performance has no effect on future ones for this company and if you measure the stock by forward earnings or intrinsically with a DCF, the stock price should theoretically not move (hence #1). However, a case can be made for #2 since the company misses out on the forecasted free cash flows, and thus on a NAV-basis, the cash/AR balance is lower by a proportionate amount.
What do you guys think? Also, are there businesses out there that may such characteristics?
I would say it would be 3 for me.
If previous quarters have no bearing on future ones we already have very little info to predict future earnings. The info/method that we did use to predict current quarter earnings was flawed since the company missed by 100%. Since the ability to predict forward EBITA/Earnings is gone as shown by the large miss we have to build in a higher margin of safety so the price must drop.
The exception to this is if the miss is explained by 1 one time event and I mean a real one time event. Not the kind of one time event that some companies regularly have.
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I don't have much to add to this discussion except. I tried to search a single thread (the SHLD one) with mixed results so what worked for me was. In google I use the following in the search field.
<Words/Phrase searching for> <Thread Title> site:www.cornerofberkshireandfairfax.ca
eg : "guarantor/non-guarantor structure" "SHLD-Sears" site:www.cornerofberkshireandfairfax.ca
Limitations are
1. I don't think Google indexes COB&F often so latest posts don't come up but then again i am searching for older posts anyways.
2. Sometimes there will be a link to the thread you are searching for in a different thread that has the same Word Phrase but that's very very rare.
Hope it helps people searching individual threads.
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You don't blindly take rules designed for uncomplicated things (unleveraged strategies) and apply them to complicated things (leveraged strategies).
Isnt that obvious? Like what happened in Volkswagen. A margin call could turn a 5% exposure shorting Volkswagen into a 100% loss on the whole account.
Personally I never use leverage/margin so its simple for me. I also don't think the person who started the thread was thinking about weighting using leverage.
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I have a friend who is facing this dilemma - he works for wells and wants to know if he should liquidate his WFC shares to contribute to his mortgage:
I have an inactive 401k whose only future changes in value will come from reinvested dividends and the price of Wells Fargo stock. If withdrawing the full balance of $20,420 will eliminate approximately $22,000 in interest on a mortgage for a total mortgage balance reduction of $42,420, would you recommend pulling it or holding on to 410 shares of Wells Fargo stock. This WF stock is currently 91% of the 401k balance. The contributions total about $550 in reinvested dividends per year. Thank you and any legitimate advice will be eternally appreciated,Seems like on a 15/yr mortgage wells would just have to return 5% or so a year (dividends plus share appreciation) for him to be better off not touching his 401k?
You also haven't given a lot of relevant info eg
1. How old is your friend decisions are different for a 20 year old vs 60year old.
2. Is the 20,420 account value or it what he will get after taxes and penalties?
This is not advice its just an example of how I would think of this situation.
Withdrawing 20,420 now will eliminate 22,000 in interest over how many years? say 10 years left on the mortgage(just a guess).
Will the 20,420 in WFC stock with dividends reinvested for those 10 years be more than 42,420?
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I think weightings is more complicated than it looks on the surface.
You could have a 10% weighting in Sears, or a 26% weighting in BAC. For the same amount of capital at risk.
Reason? The at-the-money $35 strike SHLD put trades at 26% of strike, and the $17 strike at-the-money BAC put trades at roughly 10% of strike.
I think without looking at the options, it can be a bit misleading to announce what your limitations are for weightings. It is much more nuanced than it looks.
Saying you have a 10% weighting limitation doesn't take into account reality. It doesn't really make sense.
I don't understand fund managers who claim they have this limit of 5% to holdings, or 10% to holdings. You can see that 10% in one holding equates to 26% in another. Get it?
I don't get why weightings is complicated. Out of 100% of your portfolio how much are you allocating for each security?
What has weighting of security in a portfolio got to do with capital at risk?
From your example. I can have 10% in SHLD and 10% in BAC and that's my weighting.
You can have 10% in SHLD/BAC + Puts at 26% or 10% of strike so your weighting is 12.6% for SHLD and 11% for BAC.
My risk for both is I can lose 100% and your risk is you lose 26% and 11% so what.
The question asked by the person who started this thread was "How you weight your holdings" ?
1. Equal weight like Mohnish Pabrai
2. Weight by relative Value or upside like Bruce Berkowitz
3. Weight by sector
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My weighting is based on
1. What is the downside protection.
2. What I feel is the upside.
I stay highly concentrated currently top 5 holdings are 92% of portfolio. Cant keep track of too many things.
Current weighing is 27%, 26%, 20%, 11% & 9%.
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With this pace of closing, I expect another brutal quarter for Q1. The revenue will likely get a hit.
I am curious if Eddie simply waited until these cash burning stores' leases to expire to close? He could have closed these stores 3-5 years earlier.
People were saying that the stores were not aggressively closed because Eddie has to wait until RE value goes up. But that is for owned stores, not leased ones, right?
Well if you have a lease on the store. You need to pay the lease till it expires. The annual loss from the store may be same as or less than the annual lease payment. Just a guess.
How cheap are you outside investing?
in General Discussion
Posted
A lot of times the cheapness is inherited or because of circumstance. In my case like in the case of a lot of others it started with parents. Grandparents and Dad started out as refugees when he was 10. When dad started working could only afford one meal a day for months. Used to walk 10 miles a day because couldn't afford the bus. A ton of other crazy stuff. My 1st job was in 1998 and salary was $100 per month. Makes it really hard to spend money. Amazing luck with wife
Cheap about some things
1 - Small house (relatively speaking).
2 - Old Car.
3 - Flip Phone.
4 - Using Slickdeals.com and FatWallet.com when I want to buy something.
5 - Stocking up on kids toys/books during Christmas to give during the year.
6 - Ikea furniture (Quality has improved)
7 - Clothes from Clearance, Costco, Outlet shops
8 - Netflix+Hulu+Amazon Prime instead of Cable
9 - Generic vs Brandname for a lot of items
Not with others
1 - Classes for the Kids - Learning a ton of things is the best investment
2 - Eating out - Even though wife is amazing cook one person cant be an expert on Japanese/French/Malaysian/Mexican/Thai
3 - Travel - Memories are always of experiences you have and never of things you buy
4 - Groceries - Organic, non GMO etc
5 - Charity