bargainman

I agree in general with this approach.. Who says you need to buy all at once. One guy at the fool I used to listen to, who had years of experience and was very successful at holding many many stocks over years, talked about buying in thirds. I think it's a good approach Buy a core, never sell position. Then buy another third when it reaches a good valuation, and another trading position. It's averaging in. You never know if the stock will come down to your required valuation, and if you like the manager, time is the friend of the great business...

I think there has been plenty of rational discussion. But, the message you just wrote does not fall into that category. The original message does.

I have just learned that the bill probably lied! :-) Here is what just happened. My doctor sent me a 'prescription' to a MRI place. I noticed that this place was not 'in network' in my insurance. I called them up and asked them about it. They said that the MRI price was $2700!!! I asked them what my insurance would pay? They said probably $2100! Amazing.. Then I called up a few of the "in network" MRI places which agreed to the Insurance 'contract pricing'. When I asked them the price they said the same thing about $2500. But then I asked about the cash price and one place quoted $500! Then I asked them about the insurance contract pricing and they said it was $475! (called 3 places and they were all within that range.. list price 2500, contract price 475) So like many things, it seems that the 'list price' or "MSRP" is a bunch of baloney. I still can't believe that the out of network place would cost $2100 vs $475. I suspect I would not know the actual price unless I actually went through with the procedure, but I'm not going to tempt fate. I will go "in network".

Care to guess how many times Buffett has punched his card? Saying things in an interview as a public figure is fraught with peril. Almost anyone can be quoted arguing against themselves, even Buffett.

Well, you left out the options strategies ;-) But wrt Meditation I would encourage you to look at HRV training. Here are a couple of interesting ted talks: It's basically a biofeedback device that gives you some hard data on what the state of your biology is while you're meditating. The problem with meditation in general is that it's very easy to do it 'wrong'. With realtime data, it's a lot easier to get yourself into what's called a 'coherent' state.

Definitely do some studying on options. You can always find something to do with them regardless of the market's bubbliness. One example is to hedge by doing a ratio spread (or backspread, I forget the exact term). For example you can usually buy 1 put at the money, and then sell 2 put options at a lower strike, for net of zero or a slight credit. That will basically hedge you part way, but give you some downside protection if the stock/market tanks. Up until the lower strike price, where you will be forced to buy a stock at that price (since you sold 2 puts). But if the market stays stagnant or goes up, the hedge doesn't cost you anything out of pocket. But it does cost you buying power (It's not free for sure). Anyway there are a ton of credit or debit strategies that wlll keep you busy and let you profit in whatever scenario you choose. Just make sure you don't use all your cash or buying power, or you wont have money to take advantage of the eventual swoon.

It's impossible to achieve the returns in the screens since they are theoretical, rebalance monthly, don't take slippage and liquidity into account, etc. The Shadow Stock portfolio, however, is a real money portfolio. If you follow the trading guidelines, you have a good chance of replicating the results. Beware that it is a very volatile portfolio, though. Their screens performance is flawed, although in the grand scheme of things it shouldn't matter that much. Their performance assumes that each stock in a screen is purchased at the beginning of the month based on the end of the prior month's closing price. However, the screen itself doesn't come out until the middle of the month (each screen is updated on the 15th day of each month). So they have assumed a purchase based on "future" information. Of course the screens are just representative in a sense and it could be argued that it all evens out over time, but still it feels wrong to me to publish data that would be impossible to actually replicate. I think this is true if you go for the standard subscription, but if you get their 'pro' product, then you get to run the screen yourself whenever you want.. I wonder what the slippage is on a real implementation...

Does anyone out there follow AAII's screens and/or shadow portfolio? Their returns are pretty phenomenal, but I wonder how easy/difficult they are to actually follow, especially in a taxable account.

Just FYI: Investment Objective and Strategy The investment seeks to replicate, net of expense, the Morningstar Wide Moat Focus Total Return Index. The index contains companies that have sustainable competitive advantages and that trade at discounts or Morningstar's determination of their fair value. It contains approximately 20 companies.

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich. Eric, Excellent observation. It is what I live for.. freedom! Thankfully freedom can be had for much less. 8) Reminds me of the story of the businessman and the mexican fisherman: http://www.wanttoknow.info/051230whatmattersinlife

mpauls, Couple of things that should provide some food for thought to you (and the other detractors): 1. Which set of investors have been with Sardar the longest? 2. How have they responded to the incentive agreement and Sardar's subsequent actions? Best, Ragu 1. Lion fund investors 2. they don't care since they always paid him the pound of flesh he's requiring of all SNS and BH holders now. A few of questions for you. You have 70%+ of your portfolio according to another post. Why? Also, there are several members on this board who have interacted with and done direct business dealings with Sardar, have you? Those members have left Sardar and concluded he's arrogant, has an enormous ego, will not listen to anyone else's opinion, the board has no governance, he's not to be trusted by shareholders, among other things. What makes you discount those opinions of direct contact by very smart and high integrity individuals enough that you would risk most of your portfolio capital with this man? Disclosure: I own BH, but very low single digit percentages. I would put giofranchi's 5% as the upper limit of any portfolio amount to go into BH given his history.

THis was a really inspiring talk:

Watched this talk, and apparently he is controversial.. I'm certainly not qualified to render a good opinion. http://organicfarms.wsu.edu/blog/climate-change/savory1/ "Savory is a controversial character amongst the scientific community, both deservedly and undeservedly. From my perspective, there are three basic reasons: 1) the scientific literature supporting HM is considered by many of his peers to be inconclusive, 2) HM includes some unconventional approaches, and 3) Savory can be less than flattering in his commentary about other scientists and scientific institutions. Savory has been the target of some fairly harsh criticism within the rangeland science community, none more critical than a paper by Briske et.al. (2008) concluding that the experimental record for short-durational grazing systems (that they consider equivalent to HM) was inconclusive and therefore doesn’t support HM recommendations. They conclude that most of the science used to support management recommendations for these systems is either anecdotal or statistically inconclusive because the experiments were poorly designed (they didn’t isolate single variables for analysis). Savory and his closest proponents (Teague et.al. 2008 – strangely, a co-author on Briske et.al. 2008) have provided rebuttals arguing that Briske et.al. mis-represented HM in their study sample and that their conclusions are, consequently, not relevant. While I don’t think that critiques are necessarily a definite dismissal of the legitimacy of HM, I do think they raise an extremely valid question … “Where’s the data?”"

Take a look at the first message in the thread. The ROIC example shows how to do it. You need to get the information from Yahoo since Google finance doesn't give yield for stocks (they do for Mutual funds for some odd reason..)

Just wanted to point out something, maybe obvious. But remember, the person who buys has the right, but not the obligation to the contract. (Call == right, but not obligation to buy stock at strike price at any time between now and the end date - for American style options. Put == right but not obligation to sell the stock at strike price at any time between now and the end date). The seller of that option is basically the opposite side of the buyer. So they have the obligation to buy/sell the stock at the strike price at any time between now and the expiration date. Now, as stated, usually the buyer will not exercise their option if there is any time value left in the option unless there is something else going on. But as the seller you must be prepared to to fulfill your obligation at any time. (For american style options. For European style, the obligation is only at the end date) So if you own the option you can force exercise at any time by telling your broker. If you sold the option, you can't do anything if this happens other than close the position asap or keep the stock/short.

4 decades? seriously? wow.. At the pace things are changing, and that change is accelerating, predicting anything 4 decades down the road seems kind of out there. Think of where technology will be 4 decades from now. Read some of the wild stuff proposed by Ray Kurzweil who has studied this extensively, then try to make a prediction... I agree with a later poster that here the jockey bet might be the best... Solar looks like it's following a Moore's law-like trajectory: http://blogs.scientificamerican.com/guest-blog/2011/03/16/smaller-cheaper-faster-does-moores-law-apply-to-solar-cells/ Cloud computing gets applied to new fields. Genomes will be sequenced at lower and lower costs. Driverless cars might make driving more efficient. The availability of the cloud and the future application of Moore's law to all sorts of fields will cause really unforeseen changes. I think that trying to project out 4 decades is really really hard if not impossible... Sorry if this seems like a tangent to commodity prices, but I don't think it is...

I agree that EMH is probably one of the best ways for the average investor to invest. Even Buffett says most people should just buy an index fund. People could do a *lot* worse than buying a cheap index fund via dollar cost averaging. In fact many people do do a lot worse by trading in and out of stocks and mutual funds. There are countless studies showing that the average manager underperforms, in fact I think it was 70-80% who underperform. So if you go that route you're stuck trying to discern which 20-30% of managers will outperform. There are also studies showing that the average mutual fund performs better, by a large margin, than the average investors in the same mutual funds, since people pile in when the MF outperforms and get out when it tanks! I think the market is very efficient, just not completely efficient. For most people if they are taught EMH which IMO is about 90-95% correct, I think that's just fine. I don't think it's 'asinine' at all.

I think the 'official' Loews thread now resides here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/l-loews/ Might be a good idea to post this there instead?

Saw this a few days ago. very impressive.

There's also the built in advantage of their AAA/AA credit rating. A friend worked for Clayton homes, and he said they could basically access credit at insanely low rates since they were part of BRK. Their competitors had no such advantage.

One good reason why I can't convince myself to pick up GLRE...

What are you talking about? selling calls is bearish. buying calls is bullish. (although selling covered calls is mildly bullish) How much options trading/investing have you done?

I agree with relatively stable stocks, but disagree with the 'aren't moving too much'. Options premium is determined by volatility which does not always equal business risk. As such you will get relatively small premiums for companies with low volatility. Personally I prefer stocks that are pretty volatile where I believe there is reasonable downside protection, either in the way of assets or recurring revenue and moat. Your premiums in those scenarios will be much higher. The other thing I usually do is sell puts right after a stock gets dumped. Usually near the 52 week lows. In that case you get 2 benefits if you fundamentally believe in the stock. 1. the stock just dumped and is near lows meaning chances are there's a margin of safety, plus at a supply/demand level, the people who were going to sell are already shaken out to some degree. 2. due to the stock drop, usually you get a spike in volatility driving put premiums up, sometimes through the roof (check out EBIX's latest options. you can get something like an 8% return in less than 2 months)

My wife has the older Amazon eink Kindle and it's fine. The screen is great for reading, even more so than the Kindle Fire HD which has a much higher DPI. It's not a tablet for anything like web browsing or apps, it's just for reading. For that it works great. Apparently the paperwhite has an even better screen. Well Apple is apparently supply constrained, at least for the iPad mini, so that would imply that they couldn't even sell more even if they wanted to right!? Which would imply that their pricing, even though it's still premium, is not too low..

Nice article touching on housing and computing... (not related, just in the same article :-) ) The pace of computing and power increases is amazing: "Over the past two years, IBM's researchers have shrunk Watson from the size of a master bedroom to a pizza-box-sized server that can fit in any data center. And they improved its processing speed by 240%." http://www.fool.com/investing/general/2013/02/15/8-fascinating-reads-10.aspx oh, also talks about B of A and it's exposure to 10 year+ bonds.