ukvalueinvestment

I'm not sure asking "anybody in the US whether prices are falling or rising" is a better way of measuring inflation than "theories from academics".

17% is probably low compared to London ;)

Did he currency hedge the basket of Japanese stocks?

But you shouldn't be in business unless you believe you can deliver substantial outperformance, should you...? And any good business plan should enable you to survive through periods of underperformance (cash buffer). To my mind, if you are confident in your abilities you should have zero management fee and high performance fee. Why should you get paid anything for under or equal performance?

Why would you feel uncomfortable about the GP not being able to cover expenses unless there is substantial outperformance? Buffett fee structure: Didn't he guarantee to make good any losses as well?

Take a look at Bestinver in Europe. Great track record. You will see their website references Buffett and Graham and they see themselves as Value Investors. They publish their main holdings on the website.

I agree that when the Chinese Real Estate bust happens (if it does), there will be opportunities. To echo what you said about Rochester, I had great success buying a UK RE company which concentrated on London Apartments around 2010. Anyone on the ground could see that London was holding up well. My concerns are: 1) Do we have the local expertise? I guess that's what research is for. 2) Surely it's too early in the cycle? While we are talking about bust sectors, I'm going to throw out ITE PLC, a UK company that gets over 50% of its revenues from Russia. Exhibitions are a low Capex high quality business, with brand loyalty and highly visible recurring revenues. You get Russian exposure and western corporate governance. It fell 9% today. For me, the likes of Yukos are uninvestible except as a basket, perhaps. The reason is that profits and the shareholder are very often not the management's No.1 priority.

Can you expand on that? Surely parenting comes with an ROI - the happiness of seeing your kids grow up as well rounded individuals, successful in their own way?

Zorro - take a look at Deutsche Annington. I believe that's one of the biggest residential landlords in Germany.

There is a discussion thread on this on Value Investors Club - 13/2

No, and I never have. I like to keep it simple - around 10% each. I am watching the Dominos Pizza franchise in Poland. One day I may swing big at that.

As long as they allocate capital well, and don't try and fight the downward trend (in the west) they'll be fine...

Yes

If you pick something near the all time high for any stock, returns will look less good (google finance tells me 1998 was the peak). I don't think anyone can argue that Coca Cola has been one of the all time great wealth creating companies - can they?

What the Kelly formula taught me is that if you are confident you know what you are doing (and you should be, if you're not indexing), 10% is not that big a position. Kind of gave me comfort that 8-10 stocks is the right amount to hold, and if ever a high quality business comes along that is screamingly cheap (eg AMEX in the 1960s), it's ok to put 20-30% in it.

I really enjoyed Mohnish Pabrai's book. Talks a lot about making infrequent and big bets on stocks with little downside and lots of potential upside. He calls it "heads I win, tails I don't lost too much". He gives business examples (Indian Motel Owners, Richard Branson), as well as some case studies. Finally he has a section on other approaches and where to source investments - eg Magic Formula. He also has a section on Kelly Formula. I would recommend this book as it's a little different to the others - a valuable addition to the investing armoury. For those of you outside the UK, you may not have heard of: "How to get rich, slowly", by John Lee. Basically it's by a private investor and FT columnist who was the first person, allegedly, to become an "ISA millionaire". As ISA is a UK savings vehicle where you can invest £15k per year, tax free. It used to be more like £10k. If you are a married couple, you can save £30k per year now, and if you know what you are doing, this is an extraordinarily powerful long terms compounding vehicle. John Lee's approach is to look for small and niche companies, with dividends and family ownership. He believes that the family ownership means that fewer risks are taken, leading to better long term returns.

But there is no correlation between GDP growth and stock returns.

This is how he valued it: He asked his investment banker what the highest bipd might be. He added half a billion to ensure he got it. When you've spent 35 years building one of the great businesses, you can allow yourself a vanity purchase. Ellison's had a few as well.

I think I shall be happy if I can give my kids enough money that they can value invest their way to being rich, should they choose. For me, that is £0.5mln, at the age of 18.

What is the point of this? I participate in this board because I want to discuss intelligent investment ideas. Value Investing, for me, involves an element of modesty. A net worth poll is meaningless anyway, given it will be distorted by all sorts of factors - inheritances, job, investment success etc. Should we all start posting pictures of our cars, of our houses, our spouses jewellry. Would you like to know how many times I flew first class last year?

Who is OP?

There is a separate thread discussing what will make owners rich over the next twenty years. In my opinion, delivery pizza will still be going strong in 20 years and the economics for the franchise owner are incredible. People in the west may be becoming more health conscious, but this is more than offset by desire for convenience and the tailwind of emerging markets. Dominos seems to be emerging as the global winner. I am investigating Jubilant Foods (india), Taste Holdings (South Africa), DP Poland. These are all sub franchisees who are developing the brand in their countries. I would be interested to know if anyone else has thought about these kinds of businesses. Alternatively, you can buy the US entity which is the master franchiser. They get a payment every time a Dominos Pizza is sold, anywhere in the world. Has anyone else thought about this business? To anyone who says it is expensive, I would say that it has most of the traits of the "perfect" business, and if you do your due diligence, this is a stock that can pay for your retirement in decades to come.

All of the above .. try and discuss it with like minded people, including at this website. Ask the usual questions like: If stock markets shut for ten years, would I come out of this having made money? If stock markets fell by 50% tomorrow, would you be comfortable still owning this?

Why wouldn't you?

Totally agree. Was going to mention it as well. Didn't realise it was 9*FCF.