ragnarisapirate

Maybe with a governmental bankruptcy, they will get more efficient and let us be more free! :-) A wise man once said 'it isn't the lack of representation that I mind, so much as it is the taxation', in regard to the phrase "no taxation without representation".

I am gonna go along with suggesting you read the intelligent investor... The one with the commentary by Jason Zweig is one of my top 3 favorite books; without a doubt, it shaped my view of business/investment more than anything else. I remember reading it in some of my college classes, instead of listening to the lectures- despite the lower grades and strange looks that I got, it was totally worth it. On another note, you should probably try to get away from using P/E ratios too. Earnings are, by and large, meaningless (Enron manipulated the shit out of their earnings-but not cash flow). I am not saying that cash flow or book accounting methods are the the end all be all, but certainly, earnings suck... WFC, in the quarter ending dec 31st, had cash flow of almost 11 billion, but had an earnings loss of around 3 billion. When calculating intrinsic value, you should look at companies you understand, and then figure out what you would be willing to pay for the business as a whole.

True, unless you do a good job at buying undervalued properties or there is some sort of shortage, relative to demand in your area...

Phil Fisher's 'Common Stocks & Uncommon Profits'/'Paths to Wealth Through Common Stocks' really spoke to me (especially the later of the two) I thought that 'The Snowball' was pretty good too, which I am under the impression a ton of people were disappointed with. 'Tulipomania' was pretty good for showing the absurdity of bubbles. I also really liked Hagstrom's 'Investing: The Last Liberal Art' Obviously, anything by Graham is great too.

ditto... a slumlords landlord's life is a fun one. :)

Craftsman is a great brand... They are virtually the only hand tools that I will buy. Not only are they of good quality, but the unconditional warranty on them is awesome too. As a result, I am willing to pay 30% more for a better tool, that, in the event does break, probably won't be that much for them to replace/fix... on the flip side of that, their power tools, for the most part, suck. Not saying that is what gives the company value, or anything of that nature, but I think that the craftsman brand is worth a decent portion of their market cap. I find it ironic that BDK trades for about 1/3 market cap as SHLD... If a good marketing person came along, I would imagine that they could turn craftsman into a contender with BDK in just a few years. For what it's worth, I think that people overestimate Kenmore and Diehard, yet underestimate craftsman... but maybe I'm partial.

If you need to break out a calculator, the deal probably isn't good enough... ;-) Not that you are citing a specific example, but the doubling of price in 5 years alone is pretty good.

As Lampert hit on in the recent SHLD letter, naked shorting is should probably be considered a violation of property rights. On another note, I would really like to see a 'down-tick' rule for going long on a stock... it might curb the effects of bubbles (which is part of the problem with the market now)! partly serious, partly in jest, -jeff

What I am gathering from some of the discussion is that we should be forced to look into the financial statements of companies that we own, as a part of analyzing their books... Not that there is anything wrong with that-we need to look into the books. It seems to me that the financial statements should be as transparent as possible-especially when being given to the owners of the company-maybe publish balance sheets and income statements with an asterisk that says "HEY, LOOK AT ME! these assets were worth x when we bought them, but if we were to liquidate them right now, would probably sell for y." I have always been astonished that a mere accounting rule, that before taxes, doesn't actually change the intrinsic value of a business-should be thought to fix the banking industry's problems... Charlie Munger: "when you mix raisins with turds, you still have turds."

Frito-Lay/Gatorade (owned by PEP) and Vitamin Water/Power-aid (owned by KO) are examples of product diversification... HFCS may well be the next tobacco, but that doesn't mean a bunch of cash can't come out of the company in the mean time-with that said, I own no shares of KO, PEP, or any other company of the like... though, I will say that JSDA and DPS seem interesting at recent price levels-but there are a bunch of other things out there that I would rather buy at the moment... I would think that the MSG in doritos (from frito-lay/PEP) would be illegal first. Hell, MCD, YUM, and SNS should be illegal before KO and PEP-as far as health effects-hi fat diets kill more people than sugar and such-heart disease is the #1 killer in the US (which I would assume is also true for Canada) I know that I for one, will hang on to my bottle of coke till the day I die. I would really like to see what Taleb has to say about moats, I am sure that he could come up with some interesting thoughts on the matter. Krispy Kreme arguably had a moat, though, the low card diets came out and destroyed the company... and heck, who doesn't like Krispy Kreme doughnuts? They are freaking delicious! I would imagine that alcohol companies probably have pretty sustainable moats... for similar reasons that tobacco companies do-and probably won't ever have their product made illegal (again).

I can count on one hand the times in my life when someone ordered a Coke in a restaurant and the following dialog happened: "I'll have a coke." "Is Pepsi OK?" Did not end in "Yes." And I do have a fair number of data points. Personally, I don't drink either anymore, though I did like RC Cola for a time. I was going more in the direction of when people have the choice between the 2 products... I don't remember the last time I bought Pepsi in the store-even if it was on sale. Granted, if KO stopped advertising for 5 years, things might change-as has been pointed out, you need to defend your moat by putting crocodiles and sharks in it!

Moat is not necessarily domination of a market. Buffett talks of giving someone a billion dollars and seeing if they could do damage to a company. for example: 1)Coke and Pepsi are not products that people are generally willing to substitute with other drinks, let alone colas (I for one LOVE Coke, and will virtually never drink Pepsi) 2)Motorola used to have something like 1/3 the cell phone market, and now, they are down to something like 5%... 3)Alta-Vista is now unheard of (I don't even remember using it as a kid), but used to rule the search market. 4)FNM and FMC had huge, government sponsored moats-they just screwed it up because management (and the government) were/are inept. The bottom line is that you need HUGE barriers to entry; things like a government created monopoly/duopoly (even though legislation can change quickly), great management, and the hearts/minds of the public (which still, can change). Infrastructure to make your product isn't enough. A billion dollars could not do a thing to example 1 and 4. Obviously, the iphone and google screwed the middle 2 examples. This is not to say that you NEED a moat to invest-cigar butts, for example, are generally the antithesis of a moat stock... SNS is an example of a company that has great brand recognition, but if it would go under, wouldn't cause the end of the world-even though I am a shareholder of SNS, I wouldn't say they have a HUGE moat. With that said, all good things will come to an end-and eventually, even Coke will not be a company anymore... 50 years ago, GM did have a moat, but it was eroded in a way that you could have seen pretty readily over the course of time-selling out your position at a moment of overvaluation, and if nothing else, when it was trading over 30 bucks a share roughly a year ago-when it was the most painfully obvious that they had a negative moat!

there are still a ton of deals out there... don't get down, because your long term gains will still be stupendously high if you buy the right stuff.

As far as communications goes, it seems that RIM has become to management of all sorts (be it gov't, business, etc) what MOT is to the guys in the field (firefighters, police, etc). just an observation...

W Holding Company... I didn't understand the economics of the bank, and looked at the 'cash' they had on hand, and their p/b 'value'... despite reading their reports, I rationalized that their bad loans (which they talked about before the restatement) were not that bad. Basically, I talked myself into thinking that they were a decent company, when they weren't. I wouldn't change it for the world though. I learned more from that experience than just about anything else. I just sucks that it was so costly!

basically, the best anti inflationary investment would be buying a company cheap enough that the return on it would compensate for your inflation risk... if the company is "fairly priced" then, I would say a company that provides a product or service that everyone needs and can pass its rising expenses along to the consumer. Phil Fisher talks a lot about this in both of his books.

having taken a relatively unconventional approach, how would he suggest an aspiring fund manager start?