KCLarkin

I am saving my post until Jan 1. But I agree that there is a real danger of readers developing envy based on some of the outliers in this thread. I almost succumbed to this temptation last year. If you didn't do greater than 15% this year remember a few things: - In any normal distribution, there will be people who get 50%+ returns from luck alone - Most people who are listing 40%+ returns are using (possibly dangerous) amounts of leverage - In a world of 2% interest rates, compounding at 10-12% is phenomenal I frequently see posters dismissing people like Yacktman because they only outperform by 2 or 3%. Keep your expectations reasonable and you will be happier and safer.

Well I agree that there are bargains in O&G juniors, this is nothing like 2009. A quality company like CNQ is only down 27% peak-to-trough. In 2008/2009, you had companies like BRK and AAPL down 50% from their peaks. Most of the bargains in O&G juniors face real financial distress.

Thanks Vinod. I need to start doing this for my investments. I did one on Vistaprint and it was very helpful to validate my thesis after the price changed dramatically. The price rose well above my initial sell target but I had the confidence to hold on because of the report. Looking back at my winners, most had a "negative catalyst". In other words, there was some temporary problem that allowed me to purchase the stock on sale. I see you have "why is it cheap" in your recommendation section. I think this deserves it's own sub-heading.

Jawn, here is a riddle for you: IBM's mainframe business grew 72% YoY in Q4 2010. How did a nearly 50 year old technology grow 72% YoY? My guess: They introduced a new model (System z), so people stopped buying the old one and waited for the new one to come out. ;) Sales of System z mainframes were up nearly 70 percent in the quarter: http://www.eweek.com/c/a/Finance-IT/IBMs-Q4-2010-Profits-Driven-by-Hardware-Software-Growth-Markets-433045/ Okay, so let's say that Mr. Market believes that IBM's revenue is down because the cloud is killing their mainframe business. Mr. Market doesn't pay much for dying businesses. But what if revenue is down for other reasons? Maybe they are in a soft spot in their mainframe product cycle? What happens when they launch the next model of System Z? My point is that you (Jawn) are presuming that IBM is a value trap because the stock is down. It might be a value trap but you can't rely on Mr. Market to make that decision for you. http://basehitinvesting.com/thinking-differently-the-most-important-contrarian-behavior/

IBM

Conference calls and investor day presentations are also great places to find these "hidden values". If something is statistically cheap, everyone can find it easily. But qualitative information that is not yet priced into the stock is harder to screen for.

Not sure I believe he would be buying on open market. Seems like a conflict of interest? But there was a confidential disclosure in the last 13F so maybe they were buying THI?

Jawn, here is a riddle for you: IBM's mainframe business grew 72% YoY in Q4 2010. How did a nearly 50 year old technology grow 72% YoY?

Read as much as you can: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/which-5-investing-books-have-been-the-most-influential-to-you/msg175475/#msg175475 Mistakes are inevitable -- you are making bets on an uncertain future. But as David mentioned, you need the ability and confidence to distinguish between a mistake and a paper loss. For example, I bought AAPL in 2013. It dropped 27%. I bought more. I'm now up 67%. This year I bought Vistaprint. It dropped 30%. I bought more. I'm now up 74%. Also, investing is like poker. Sometimes you make a bad bet and win. Sometimes you make a good bet and lose. All you can do is tilt the odds in your favor

http://static.squarespace.com/static/5321e6f2e4b00845275006cd/t/53a1ceb2e4b0742559048cdb/1403113143484/?format=1000w Energy tends to have good returns but very volatile.

I guess you missed the resurgence in railroads?

Recent VIC writeup on RRX (Raging River): http://www.valueinvestorsclub.com/idea/RAGING_RIVER_EXPLORATION_INC/131659

Most of the quality small caps won't be E&P, they'll be energy-related products and services. I haven't done any work on most of these but here are a few Canadian small caps from gurus I follow: CEU DEE POU RRX SES SCL TOT HNL HWO

Why bother with a basket if you are buying big, quality names? If you are buying a basket, there are plenty of quality small caps that have 2x or 3x potential. If you are playing it safe, you can buy CNQ or similar and sleep well at night but with limited upside.

I really like Montier's work but it is intellectually dishonest to compare IBM and JNJ. Burroughs or DEC might be a better comparison for IBM. Pfizer, Merck, or Bristol-Myers would be a better comparison for JNJ. I'm not convinced "Maximizing Shareholder Value" is the problem. "Maximizing CEO's Wealth" and rewarding short-term shareholders is a bigger problem.

Does anyone know the answer to this for Canadian or US investors? Will be PSH be making capital gains or dividend distributions or will all income be reinvested in the fund tax free?

Jeremy Grantham had some interesting thoughts on oil: http://online.barrons.com/articles/jeremy-grantham-u-s-stocks-can-gain-at-least-10-before-crash-1416334236 Summary: he has no clue what happens in the near-term.

Looks like he dumped IBM too?

If you are buying good businesses (earnings are growing, ROE is strong and stable), then you can wait out the market. If you look at IBM, EPS is up substantially since 2011. Valuation has compressed so that means: - risk is reduced - potential reward has increased - Dividend and Buyback yield has increased I usually go one of two ways: a) Sell aggressively for tax losses b) Add to position as it drops I have a mixed record with (a). I've had great success with (b).

Interesting but a long/short fund would normally be part of the "alternatives" portion of the portfolio. The timing of the max drawdown (internet bubble) and the low correlation to the SP500 would make it a very attractive hedge. In a diversified portfolio, with re-balancing, the results would likely be spectacular for that time period (internet bubble).

If I am reading this correctly, he is saying that the studies had a time horizon of five years not a holding period of 5 years.

My top 5 is probably the same. I prefer concentrated portfolios. Berkowitz would be in my top 6.

The alternatives matter because some methodologies will be more appropriate for longer holding periods. Momentum, for example, would not be a good choice for longer holding periods. To answer your original question, I haven't seen any research on longer holding periods. I think the sample size becomes too small for most academic researchers to use. I have heard that MF works well with 2 to 3 year holding periods. I've always suspected that quality (ROC) matters more for longer holding periods but have not found any research that confirms this.

QVAL was discussed here: http://www.cornerofberkshireandfairfax.ca/forum/books/quantitative-value-gray-carlisle/

Your recollection is correct. I do remember Greenblatt saying that about MF specifically.