bargainman

Speaking of Friendlys, they filed for bankruptcy: http://www.reuters.com/article/2011/10/05/friendlys-idUSL3E7L51GD20111005 Also when he took over SNS they were apparently very close to bankruptcy as well. He basically dodged the bullet through some creative maneuvering, but he admitted that he had underestimated the danger going in.

What I found interesting is the lack of mention of MBI. If you look at his smaller fund: http://portfolios.morningstar.com/fund/holdings?t=FAAFX&region=USA&culture=en-us MBI is his biggest percentage holding at 30+%. One can perhaps infer that this is his greatest conviction holding for a smaller investor... AIG in this port is about 20%, although he also has 2% in warrants...

Except in practice, both parties end up making decisions that lead to very similar outcomes (ie. despite the rhetoric, republicans bloat up government size - and thus money printing - via f.ex. wars, and limit individual liberties via things like the patriot act and war on drugs). So I agree with you; both are atrocious. That is my beef with the Republican party. They seem to say one thing, stand for one thing, preach it endlessly, and then go out and do the exact opposite! Listen to Ron Paul rant against the Republican party and you'll understand. That's frustrating. It seems that neither party is fiscally conservative, even if republicans claim to be, but it seems to me that the democrats are less hypocritical. I just can not understand how Republicans claimed to be fiscally responsible, but in debates have said they would not back a plan that called for 1 unit of tax increase for every 8 units of spending cuts. (I don't remember the exact numbers). To me that's incredibly fiscally irresponsible. Not raising taxes does not equal fiscal responsibility!

Just like the debt ceiling was a non issue? Everyone knew that they wouldn't put the country in financial danger just over a debt ceiling debate,right? I wouldn't write off a fiscal cliff disaster yet. If Obama wins he'll have to deal with the fillibuster happy Republican congress. If Romney wins he'll have to deal with the Democratic Senate. All in 2 weeks time right before the holidays...

Send it my way and I'll take care of that for you ;) What was that quote about being worried about the return *of* your capital vs *on*? ;-)

Ha! I doubt I need a book. What needs to be done is very simple and could fit in one sentence. It's the execution I have trouble with. ;) Hmm how about a support group for those with too much cash? I'm sitting at about 50% cash :-P

I think linkedIn is a different beast from FB. Facebook has admitted in their prospectus what their purpose is, and the fact that they are a public company is secondary and a vehicle for them to accomplish their 'connection of people' of whatever their stated purpose is. LinkedIn on the other hand is a networking tool for professionals. They know a lot about you and in particular your professional profile. If I remember correctly they are starting to sell mined data and advertising to very targeted groups, professional groups. They are also linking groups in actually useful forums related to specific technologies etc. I haven't done a valuation at all, but their money making model looks a lot more promising at first blush. The fact that Theil sold his FB shares, but I think he continues to hold his LinkedIn shares says a lot.

I'd be interested in the answer to this too. I know for a fact that for adwords (Google's search based ads), an advertiser definitely has to pay per click (sometimes big big bucks...). I wonder how adsense works especially for revenue sharing. Is it per impression, per click, per conversion?

MVP, it's definitely and 'alternative investment'. My yield is about 7-8%, which looks like it's on the lower end of average: https://www.lendingclub.com/public/diversification.action and most of my notes are 3 years (they have 5 year notes too). Generally speaking you can't get your money back right away. There is an 'aftermarket' where you can sell your notes, but the last time I looked at that it didn't look particularly appealing, but that was at least a year ago, maybe it's improved since then. https://www.lendingclub.com/public/mainAboutTrading.action In theory the aftermarket makes sense since some people want to wait a few months or a year before investing so they can get notes that are more stable. But in practice I remember seeing more notes that had failed to pay.. That said, I've found that at least some percentage of notes you 'bid' on don't get issued, and that there are probably enough people who buy out their notes early. As such, I'm always rolling over some portion of my portfolio. I could guess it's 5% a month turnover. Also I focus exclusively on Credit card/debt consolidation loans, since as I mentioned, those actually reduce a person's payments which in my eyes makes them become more credit worthy than they were before. But that's just opinion, not backed up by any serious research :-) That said, I totally agree that it's not for everyone (even for me :-) I sometimes go back and forth on whether I should jumped in or not.). The taxes are a bit of a hassle too.. But it's kind of nice to have one part of my portfolio earning a steady return, never fluctuating with the market!

Well i wouldn't write them off on the basis of one borrower. I think most of the loans are credit card/debt consolidation in which case you'd actually be lowering the person's monthly payments. See here: https://www.lendingclub.com/public/steady-returns.action We approve fewer than 10% of the loan applications, based on stringent credit criteria designed to focus on the most creditworthy borrowers. The majority of our members use the loans to pay off high interest rate loans, most often credit card debt. As of August 14, 2012, the average Lending Club borrower shows the following characteristics: 715 FICO score 14.25% debt-to-income ratio (excluding mortgage) 15 years of credit history $69,274 personal income (top 10% of US population) 2 Average Loan Size: $11,750 Here they have a graph of all the rates and how they set them based on FICO scores https://www.lendingclub.com/public/how-we-set-interest-rates.action They give an example of how they evaluate a borrower at the bottom. Here are some more stats: https://www.lendingclub.com/info/statistics.action "71.34% of Lending Club borrowers report using their loans to consolidate debt or pay off their credit cards.1" The other thing is that these are 'real loans' in that they will do collections, and they will report the person to the credit rating agencies if they don't pay. They also use all sorts of historic & industry date to calculate their lending rates. Anyway, I've been investing with them for about 2 years I think. It's a small investment, in the alternate/just for fun category :-) And it hasn't had a single down month since I started! If anyone wants $300 on their initial 10K notes investment pm me. I'd be happy to send you a referral which will give you that. (of course that 300 will have to be in notes, so it's not like it's cash up front, and I don't get anything for the referral either.). Oh and if you think lending club's borrowers are bad, you should get our prosper! Although I think they've cleaned up their act in recent years. Here's an article on the way lending club calculates things vs prosper: http://www.doughroller.net/p2p-lending/prosper-vs-lending-club-smackdown-who-has-the-best-interest-rates/

often I'm able to repeat it through multiple cycles on the same stocks...the stock may be even flat over a holding period, but I end up with gains in the IRA and losses in the taxable account. Just make sure you don't sell in taxable account, then buy immediately in the IRA. I believe you'd run into the wash sale rule here even though one is in a taxable and one is not. Not 100% sure but I'm pretty sure...

I think there is still a lot to be said for EMH. Vanguard and Bogle have been preaching low cost index investing for decades, and honestly you, and the average Joe investor, could do a lot worse. Consider that the vast majority of all fund managers don't beat the index over the long term, and also that with fees and taxes they'd have to beat the index by a large margin to even match a simple index fund strategy, and as I said, you could do a lot worse. Also note that Buffett has said he thinks the average investor should just diversify widely and buy the S&P 500. Add some simple dollar cost averaging and some asset allocation, and you get a reasonable return with some reduced volatility, and you beat the vast majority of managers out there. Plus how do you account for all the time you spend researching companies, there's an opportunity cost to that... Even with value managers I suspect you'd have a hard time consistently beating the index. I think you'd need to not just look at the 'long term' but look at rolling long terms, since just picking this date and subtracting 10 years from today is really just taking one random 'long term' sample. WRT the BRK vs SP comparison I'm not sure if that's completely valid. It is valid in that a retail investor can only buy BRK. But really you'd want to either compare just Buffett's equity investments vs the S&P, or you'd also maybe want to somehow account for the extra leverage that BRK gets from its float, and maybe do some risk adjustment.. not sure.. maybe not..

Like this caption:

Well it looks like in their recent update they've changed their mind.. They're still unranked but here's an interesting quote:

I don't know, if you're going to buy a basket you may as well invest in their instruments if you can, no? FAIRX, BRK, FFH proper. Then you don't have to second guess sales. Plus in the insurance cases you get the benefits of the float. WRT software you can probably look at Stockpickr.com to help you track these portfolios. The other one that's kind of interesting is Morningstar's ultimate stock pickers portfolio. They use a number of expert portfolios to copy cat, then analyze big sales and purchases, and conviction positions... Somewhat useful although I'm not sure what their performance has been...

As always very interesting. What I would like to see however is an article discussing the US healthcare system as compared to other countries'. There are already a lot of other countries not necessarily using high tech innovations that achieve a high quality of care at significantly lower cost for larger percentages of their population, possibly without control centers and the high tech available to the US. It would be interesting to read his perspective on that. What amazes me over and over again, both in medicine and investing is how fallible we are as humans. We seem to make so many mistakes and misjudgements, and there are so many systems out there based on trying to remove or minimize them.. It's really fascinating...

Perhaps I'm not remembering right, but I distinctly remember him saying that he will *not* backstop/support the stock. Just cause he'll purchase aggressively doesn't mean he'll hold the fort if people sell enmass. After all he might have other better deals to chase with that money if the bottom really falls out...

This one on AIG has more meat to it IMO.. Although perhaps it's already been posted.. Good read none the less... http://www.fairholmefunds.com/pdf/CaseStudyII180612.pdf

Well Prem is at a far earlier stage. When BRK was a much younger company, and Buffett had less mula to play with, he was definitely a Graham, cigar butts kind of investor...

Well that leads to the next question. Historically how accurate have Valueline's 3 year predictions been? I don't see any data for it. I remember a long time ago I saw Hulbert's take on their timeliness ranking, and basically it beat the market but was more volatile, so their risk adjusted returns were the same as an index fund.. I wonder if their 3 year projections are any better... Remember, these analysts don't necessarily have any skin in the game. I think M* has the same opinion of AIG. I suspect they are both trying to play it safe.

Just wanted to point out that this choice: "Short equity or writing put options or whatever other way you bet on their demise" Is not quite correct. If you are writing put options you are getting money to buy their stock at a given strike price. As such, it is a bullish not bearish position. Now buying puts would be a bearish position.

So says Bove! http://finance.yahoo.com/news/crazy-not-own-regional-bank-161411585.html Can't remember if people on this board like or dislike him..

The sad thing is that MSFT was actually first to market with both the phone and tablet! They had Windows CE and Windows tablet years ago before the iPhone and iPad. They could have owned those markets. It's not like search, gaming, and the iPod where they were/are trying to play catchup. They squandered their massive lead.

One way to measure developer interest is to look at programming languages: http://www.readwriteweb.com/hack/2012/06/5-ways-to-tell-which-programming-lanugages-are-most-popular.php C#, which is for the most part exclusively MS is still pretty high on the list (top 5 in most lists). Most of the other languages at the top can be used on Windows, but don't have to be (with the exception of Objective-C. So it seems like MS is still attracting interest from programmers. Remember that developers will go where the demand is. No one wanted to learn Obj-C until Apple created iOS and opened a huge market for developers.

Well... one could actually argue that it is the Greeks who are screwing the Germans by refusing to pay them back! But that's just more salt in the wounds...