bargainman

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.

I think we agree in principle on many things, especially what you wrote, even though it may not seem so (I can't write everything I think and neither can you), so I think we write about what we disagree on. The question you're getting at is how to best address accountability. I don't think that government is completely useless in that regard, but clearly their record in many areas is dismal. I guess it's partially like that old quote: "Democracy is the worst form of government, except for every other one"? If there was no government who would keep corporations in check? Do you think the health insurance industry would cover people with pre existing conditions if it weren't mandated by law? The foundation of the US is the checks and balances the founding fathers wrote into the constitution. I don't have a solution, but while there are many good things about the US healthcare system there are also many awful things. Look at the cost per capita vs amount of coverage vs outcomes. It's less of a meritocracy and more of a plutocracy. I wonder if there is a way to drive more transparency and drive out the inefficiencies. When I lived in Canada I couldn't believe the number of times people went on strike complaining about the conditions or this benefit or that one! I also can't believe the sense of entitlement some people have and the massive pensions some government workers get. It's unsustainable. I remember reading an article by John Mauldin on Sweden, where the Swedish people were pissed off that they were held up as the nanny state. Apparently their equivalent of social security is tied to a percentage of GDP! what a novel idea! People get in payouts what can be afforded by the size of the economy that year!! Imagine if they tried to implement that here!? I think most of these programs should be capped by some % of the GDP. That would help address the sustainability issue. With regards to abuse of the programs, that's a really tough one. There will always be those who figure out how to game the system. The question is how do you make the system so that those who need it can access the help without so much pain... it's a tough problem, I don't have a solution. IMO recently some of the ones who have gamed the system more so than not are the top 1% with their tax rates.. I'm sure there are plenty of others in the 99% who have gamed the system too. I've seen all sorts of things that don't make sense. One guy used to be a teacher for 30+ years, now he can't find a job cause no district wants to pay him his 30 year experience salary, so he just gets Social Security instead of finding a job! wtf? Another person who's 2 degrees away worked for the gov for 20 years, got a 50k pension, then took another gov job and got another 50k pension! wtf? Anyway, my post was in reaction to the implicit comparison of Obama and Chavez which I've seen too many times to not say something about. One is a moderate democrat, the other is basically a medically certified mad man. And here is another tidbit. Apparently 2 years ago the black market Bolivares rate was 11!! Now it looks like it's closer to 20... So that move from 4 to 6, not so close to reality...

A few things: This devaluation is a joke because the Bolivar traded on the black market at a devalued price for a long time and always has. (that's not to say it's a noop, but it's just 'officially' moving closer, although not exactly to, its 'real market' ahem, 'black market' value) What is not a joke is that the bolivar has been currency controlled/pegged to the dollar for a number of years. It has also been "limited". By that I mean, people could give the Venezuelan gov Dollars, and they'd happily hand over Bolivares, but you couldn't give them Bolivares and get dollars. Citizens of Venezuela were allowed to exchange a certain amount out as dolllars if they travelled out of the country via their credit cards, but this was limited to a small amount. There was at some stage a way of exchanging by buying bonds in Bolivares, then selling them in Dollars, but Chavez and his buddies cracked down on that and closed all the trading houses that were doing this. With regards to the left vs right debate, I'll say this. Comparing Chavez to 'Obama and the democrats' is borderline ridiculous. If you took everything Obama wanted to do (remember he's a moderate democrat) and implemented it, you'd get nowhere near the madness that is Venezuela. Heck, if you took everything these 'ultra left' democrats you're referring want to do, you'd get nowhere near. Take a look at these charts: http://en.wikipedia.org/wiki/File:Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg http://en.wikipedia.org/wiki/File:Chart_of_US_Top_1%25_Income_Share_(1913-2008).svg http://en.wikipedia.org/wiki/File:US_high-income_effective_tax_rates.png We are nowhere near the highs for taxation in this country, and as the last chart shows we are near an all time low for tax rates for top income earners. The problem is that the conversation always tends to be relative to today, not to history. So people react to raising taxes on highest earners today as if they were raising them to some new high, when in reality they'd be raised to a historic low, just not quite as historically low as today. Chavez is/was reportedly manic depressive and on medication. He was a paratrooper in his previous life, he led an attempted coup. He had a show where every week he would speak on radio for an uninterrupted 4 hours straight! Obama is an ex harvard law professor. The gap between the two countries and the two men is as massive as the grand canyon.

For me personally the original question was whether I should shift to the smaller fund given the deadline. But I'll echo what another said, which is that I'm happy paying Bruce 1% to manage this money for me. You could copy cat, but you'd never get it perfectly correct. Not sure if that matters, you'd probably get a reasonably closely correlated return. Correct me if I'm wrong but MFs only have to make quarterly filings right? I'm pretty sure they also have to file right away if they own a significant portion of a company (>5%?) but not otherwise. So there would be a delay. Plus there is just the plain psychological friction. Every decision you need to make and act on takes energy and time, and represents room for error and deviation. I really wonder if someone has successfully implemented a copycat strategy while maintaining a full life and a job not in finance. Somehow I doubt it. I bet the failure rate for people trying copy cat strategies is about as high as the failure rate for startups. That's why Greenblatt opened up mutual funds for this strategy. Even he found it hard and tedious to run his own mechanical strategy in his kids' accounts. The one additional consideration for me personally is SHLD. It's too hard for me, and I haven't been happy with the spinoffs and the tax consequences of those spinoffs, so I sold the shares I have. I'm happy to hand the reins of that investment to BB.

I don't think anyone is making this assumption. nothing. But here's the thing. All we know is he is definitely closing the fund this month. We do not know whether he will reopen at all, ever. So we have a 100% known vs a complete unknown. As such you use what you know you know, and what you know you don't know to make the most rational decision possible. In this case, if you like BB and are comfortable with the allocation, it's 'open a minimum position so you can invest in the future as you like'.

I got into FAAFX. Get ready everyone, that means MBI will be crashing soon! along with BAC and AIG! You can thank me later when you get them at a lower price ;-) I sold some positions here and there that were approaching fair value or had other issues to lessen the impact. However I kept FAIRX for now. I do still like the stocks in FAIRX and plus I had acquired my FAIRX position over about 15+ transactions and didn't want to deal with figuring out the cost basis or fifo for them when I had other stuff I could sell which wouldn't give me a headache come tax time :-).

It's going to get worse. The rate of data generation keeps increasing and increasing at a massive rate. Terabytes of data, big data. Here's a fun stat: 72 hours of video are uploaded to YouTube every minute So it's basically impossible to watch all the video on youtube :-)

did see this posted yet, but maybe I just missed it: "Berkowitz is raising money for a partnership that takes minimum investments of $1 million, according to a January regulatory filing. He declined to elaborate when asked whether the new entity was meant to attract more patient capital." kind of sucks for smaller investors but I guess he has the mutual funds for that..

Some interesting screens: http://www.grahaminvestor.com/screens/ http://www.magicformulainvesting.com/ you might want to check out aaii too.

Just curious, would you mind breaking down your "48.5% Owner-operators" a bit?

Hmm I realized I kind of put the cart in front of the horse.. Let's back up a bit... to use google spreadsheet's built-in finance commands, here is what you need to know: http://support.google.com/drive/bin/answer.py?hl=en&answer=155178 Click on the "View a list of common attributes" link and you're all set to go. In my spreadsheet cells I have: for example: =GoogleFinance($A3,B$1) The column header "B$1", has "price", "high52", "low52", etc. The row 'header' "$A3", has the ticker, so "LUK" or JEF etc. In case you're not aware, the $ means it's absolute, not relative. So if you fill the cells from that cell, then that value will stay the same on an absolute basis..

After a great post by meiroy here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/aig-american-international-group/msg101959/#msg101959 I thought I'd start a thread to aggregate some info on google spreadsheet since I use it to track my investments too. First a copy and paste from meiroy's excellent post: Now just one substitution of my own.. I find you only need this in the case of options. In the case of warrants you can use the following: =ImportData("http://finance.yahoo.com/d/quotes.csv?s="&A19&"&f=l1") Where the cell A19 would contain: AIG-WT BAC-WTA BAC-WTB ROICW etc. I've also found a great resource for google spreadsheet imports from yahoo finance here: http://dubd.wordpress.com/2010/05/10/google-docs-stoxpage/ It gives the list of all values you can import into google. The one I probably use the most is "y" which is the dividend yield, which for some reason google finance does not give you. so an example is: =ImportData("http://finance.yahoo.com/d/quotes.csv?s="&A6&"&f=y") where A6 contains the ticker like say: ROIC

Thanks for all the good replies. I pretty much agree with what's been said. Agree that if they stay around, FAAFX is going to be better long term, but that the current mix is probably better for FAIRX short term. That said I've been buying up more aig warrants (wish I had loaded up more when they were down at 7 where I got my first set), and will probably buy some more BAC's too, so I think I'll get most of what fairx would give me short term. I'm thinking I'll sell at least half my fairx holdings and maybe move some other money around to get into faafx before the close. The fact that it's so much smaller should really give it an edge.. I mean we're talking 3.5% the assets! That's a very large difference.. Assuming he keeps the small fund going forward... I also think that it's true that this is closer to how Bruce would manage his money on his own. That said, I do share the concern that he will get rid of or roll over FAAFX into some other vehicle.. We shall see...