PatientCheetah

Well, I don't follow their strategies exactly, I don't know how an ETF will do, specially if it starts getting big. Most of the most interesting companies I find have relatively small volumes. But it is a very interesting compendium of what works and what doesn't. You can use their results to build you own screens or to modify existing ones. They look in detail at the MF performance, and I love their study of Graham's very simple, p/e<10, debt/equity < 50% strategy: "Graham's simple strategy sounds almost too good to be true. Sure, this approach worked in the 50 years prior to 1976, but how has it performed in the age of the personal computer and the Internet, where computing power is a commodity, and access to comprehensive financial information is as close as the browser? We decided to find out. Like Graham, we used a price-to-earnings ratio cutoff of 10, and we included only stocks with a debt-to-equity ratio of less than 50 percent. We also apply his trading rules, selling a stock if it returned 50 percent or had been held in the portfolio for two years[...]Graham's strategy turns $100 invested on January 1, 1976, into $36,354 by December 31, 2011, which represents an average yearly compound rate of return of 17.80 percent—outperforming even Graham's estimate of approximately 15 percent per year " In their approach they "clean" their investable universe by eliminating questionable stocks (bad accrauls, Z score, beneish score, etc) It is a little hard for a small investor like me for replicate as it requires a sophisticated database and a ton of programming to trim the universe. crastogi, I think you got the idea. I understand Buffett when he said finding stocks is easier now because information is much more readily available. And as the above quote points out, the market hasn't gotten that efficient. The key is how to process that information. I am from a tech background and I have applied some of my software skills to automatically process financial information. But I don't think it is "a ton of programming", I think it is a lot of very creative programming. The world has I estimate 60,000-80,000 common stock tickers that we can easily get information for. And we can also buy them easily. Anyone else do programming to mine stocks? indirectly through portfolio123.com - easy platform to play around with, like you said, creativity/ideas are the keys. its universe is much smaller - mostly US and Canadian stocks. out of curiosity, where do you get your fundamental data?

He has 3 funds. Is it possible that you only found the 13F for one fund? Or is it aggregated? There are different entities but I only found a current 13F for 1 entity (Abrams Capital Management, L.P. ) Abrams Capital LLC Abrams Capital Management, L.P. [ formerly Pamet Capital Management, LP ] Abrams Capital Management, LLC [ formerly Pamet Capital Management LLC ] Abrams Capital Partners II, L.P. Abrams David C http://www.insidermonkey.com/hedge-fund/abrams+capital+management/150/

The negative rates are for the bank deposits at the various central banks. The aim is to force more bank lending which contradicts with shoring up capital ratios. This is what happens when you have a decision body with members representing vastly different interests.

isn't he very similar to Schloss and Graham? very asset focused?

SZYM - Solazyme Haven't done much work on it, financial statements look terrible, founders are not scientists, but it potential does have a revolution array of products and some JVs with credible partners/government agencies. It somewhat reminds me of TSLA - economics are not obvious from the financial statements, revolutionary products, great reviews on its initial products, small capitalization, etc. Not a high conviction buy candidate but could be good for a 1-2% position due to its high optionality

They are too entrenched and capital rich - like in the example of instagram, whatsapp, diapers.com, etc. if they can't destroy you, they will buy you out. To courage innovation, natural monopoly should be given free rein for 10-20 years, then they should only make regulated rate of returns. What Google charges is an invisible taxes on all consumers.

The type of companies that you want to own = unregulated local or national natural monopoly is bad (e.g. utilities, health insurance, Google) - stuff you learned in intro econ class.

Hi Steve, can I get a job from you? I promise I can destroy value quicker than you can.

Not much to add, we all share many overlaps for good reasons 1) The Intelligent Investor - the book that started all, more useful than Securities Analysis IMO 2) Competition Demystified - how to understand moat 3) One up on Wall Street - finding value in a variety of situations 4) You Can Be a Stock Market Genius - special situations 5) The Most Important thing - cycles and risk management Honorary mentions - The Gorilla Game, Common stocks and uncommon profits - good perspective on growthier names

He was able to accomplish during his active years was nothing short of incredible - achieving very high rate of returns with a very large asset base and a highly diversified portfolio. He was wise to retire early because he was clearly aging prematurely. His books are definitely in my top 5 investment books.

frank, thank you for the insights. I also come to the same conclusion that 2013 is anomaly. For a country that needs to import most of its basic needs, devaluation is a dangerous path to continue for an extended period of time. Its government lacks the fiscal flexibility to do much on its own and its corporations have shifted large portions of their assets overseas. Once Abe fails its enact his third arrow, I am not sure how much Japan has changed. What Japan really needs to do is to reset its social safety net to realistic levels and tell its retirees that the government bonds need to take a large haircut. But this is tantamount to political suicide and won't happen anytime soon.

I followed the 2011 euro crisis closely. Here is my 2 cents: Why would the regulators say anything different this year vs 2011? Many European countries rely on their banks to buy their government debts in order to finance at a reasonable rate. By telling the capital market that these same banks are under capitalized, which they are, those countries would be shooting themselves on their own feet and cause them to pay higher rates for any new debts. Similar to Japan, there is not enough political will to enact substantial fundamental changes to the economy and social policy. The financial game that they play will buy them time and years of painfully slow growth. Government and banks are both complicit in their attempts to maintain the status quo.

So the article is basically gambling. This strategy could work using Kelly Betting System. You always bet half of your bankroll. So let's say you get 5 good years and then 1 bad year - at the end of 6th year, the CAGR is 35%. At the end of 12th year, the CAGR becomes 22.4%. At the end of 18th year, the CAGR is still 22.4%. The big question is if these levered VIX ETFs will still exist at year 18th.

1 hour for straight forward companies 2-3 for more convoluted ones. In full disclosure, I do not read every single word. I mainly focus on risk factors, industry dynamics, and enough context on the business to understand the financial statements.

It's almost June now, should we make this quarterly or semi-annually?

Everyone has his/her opinion. I found it much more simpler and profitable by looking at the long term market moving averages. I remember her last few market calls on Barron's, pretty useless IMO. These perma bears somehow can justify their years of wrongs by getting one crush right. We are not seeing an acceleration in consumer spending because QEs disproportionately benefit the wealthy and they spend lower share of their increased wealth. On an aggregate levels, macro data will look fine and I don't see why this can't continue for a few more years until stock buyback becomes less accretive relative to capital spending due to high valuations.

Adidas' market cap is ~22B$ vs UA's ~10B$, so even if UA catches up to them, it's not going to get you far. I think it is pretty far fetched to find a stock that makes you rich based on buy and hold right now, given, extended valuations and a pretty extended economic cycle (5 years into a recovery). Once we head into a recession and the market turns down 30% or more and some baby's do get thrown out with the bathwater, things will get easier. I agree completely. I still see some doubles but anything more than that I have to use very wildly optimistic assumptions. We can take solace in that we are getting smarter and we can and will capitalize the next cycle much better.

I think between $500 mil to $2 bil mktcap moderate to high growth companies are the sweet spots for potential 10-50x baggers. They are small enough to not run into law of large numbers for a number of years. They are also large enough to have some access to the capital market and have some track record to do research on. For tech companies, they need to have a revolutionary product that can build up moat relatively quickly. For non-tech companies, they need to have a repeatable recipe to expand on a national schedule - rollups or restaurants/specialty stores fit the bill. Moderate to reasonably high valuation based on 2-3 years out projections is ok because most of returns will come from unexpected growth and reinvestment opportunities.

Good overview on the state of MJ market

Randomep, You knew this was coming. lol. Your wrong about the options , or the thinking behind them, at least. I can only speak for myself. I only buy Leaps on stocks I perceive as being significantly undervalued. I have analyzed, and in some cases (Ffh, Bac, Wfc, Jpm) held the stocks for some time already when a dislocation appears. Options are simply leverage. However, when you take them on, you have to think short term in the context of that undervaluation - if short term is considered less than 2 years. You also, have to be prepared to take gains when they arrive, and re date the options as necessary, should they lose value. Probably it can best be described as a short term strategy within a longer term goal. I can absolutely guarantee that if Buffett were starting out now he would use Leaps. And FFh trades frequently. The only time Prem likes " the guys in charge" is when they are left holding the bag for a few years. That said, when I come across a company I really like for the long term, that pays a dividend I will keep it. i.e seaspan for 5.5 years. I am very interested in learning how you gauge timeframe. Do you think in terms of upcoming events? Business at an inflection and early signs of improvement are present? Abnormal stock behaviors - e.g. breaking from a long term downward trend? Thank you for the input.

I blame the lack of opportunity to Sarbanes Oxley/the rise of late stage VCs/the lack of antitrust vigor/and the shortened price discovery process. MSFT was at one point a microcap. Disney was traded on pink sheets. Many great companies used to take many years to become recognized instead of being priced to perfection right out of IPOs. In the name of protecting the public, our politicians also deprived us of some of the potential tickets to riches and enriched many accountants and lawyers in the process.

that's why they are reforming - starting with a more market based interest rates. IMO, the next 10 years will be great for the on-the-ground entrepreneurs, a second round of privatization/breaking the back of many state monopolies is very likely. Similar to investing, you should always stay open minded when new information emerges and make decisions not based on perceived notions but on objective analysis. The overall long term trend is toward a more liberalized market based economy, can't say the same about the U.S.

The government panicked during the 09 crisis. Like everybody else, they had no idea how bad things could go. The heads of state banks were commanded to open the loan spigot. The one head who didn't follow order out of concern for future non-performing loans was demoted as a punishment while his peers all received promotion. In hindsight, the surge in construction loans was excessive but how many people had the foresight to go all-in in 09.

Another cultural difference - the best and the brightest actually want to work for the government in China. Many EM fail to emerge because they do not have competent managers. Due to its large population and historical ties to a large expatriate community, China probably has the best human resources among the EMs.

Certain segments will suffer, I wouldn't want to be shareholders of Chinese commercial banks, property developers, or construction material manufacturers. Tempting as they are, there are reasons that these stocks sell for single digit P/E while companies with consumer exposures go for double digits in the Chinese domestic stock market. The source of aforementioned article is from India Times and its target audience has certain inherent bias. I wouldn't take it as seriously as something from the IMF or the Economist.