DanielGMask

What's the thesis on that short? there is a thread on WTW - over levered, failing/being disrupted business model/similar to yellow page, not enough time for turnaround Yep, saw the thread and posted there, thx.

Margin of Safety is good but I think the Intelligent Investor is better. Security Analysis is a good valuation course but at this time it's no longer the only one of value. I think you should give the Intelligent Investor a second try, it can only make you a better investor.

What's the thesis on that short?

I think you are correct. Actually, years after Buffett's gone BRK may/should be a right place to invest for those thinking about indexing their investments since it has several companies in a wide array of industries and if Buffett did his job right (I think he certainly did), then those companies are going to outperform its rivals!

That argument doesn't work. Who should decide what is good or not for my body? You? The government? Bill Ackman? This is a major problem today. Most people believe they are responsible for the decisions of other adults. When someone tries to take away another persons ability to choose they are treading on dangerous grounds for me. Personal responsibility is a huge problem in the west. If you don't want to hold individual responsible for their health why are you holding Coke responsible? You can't have it both ways. I would say a lot of harm is done to individuals when the government tells them they are not responsible either. Let me be clear. KO doesn't hold a gun to anybody's head and force them to drink their products, yet you want to hold a gun to KO's head... and claim the moral high ground in doing so. WEB is free to make whatever endorsements he wants. Do you want to hold the proverbial gun to his head too? Ultimately who should decide? It is very freeing when you believe that everyone is free to make their own decision and that they are also free to face the consequences of those decision. The government is in the business of removing consequences, for bankers to Coke. Great discussion... Thanks. Same with crack and heroin dealers, right? That's not the same! Crack and heroin are illegal substances. If you think that fits in the same category of sugary drinks you are pushing the line too far. The point that "The government is in the business of removing consequences, for bankers to Coke. Great discussion... Thanks." seems more than right to me.

A car is an expense as many other expenses you have to make with your money. If you save first and spend later (paying yourself first), then it's not such a complicated decision. What can you buy with the money you have? New is usually more expensive upfront but less on maintenance. Depreciation is high on the first 2 years and low after that, but if you plan to have your car for 5 or more years then it doesn't make a big difference. If interest rates are low or if you are able to earn a better return than interest cost with your invested money, then you shouldn't pay cash even if you have the money, etc, etc, etc; but I don't think that all expenses have to be rationalized in such a complete and complicated way. If you pay yourself first and are a disciplined investor, then I think you can enjoy life and buy new if that's what makes you happy.

I've always get nervious with technology companies since the sustainability of the business model is a question I'm usually not able to answer. MSFT used to have a magnificent moat, but it has been severely damaged by disruptive technologies and I can not make a comfortable guess of what will happen with the Co in 10-20 years. An autopilot program as suggested by the questioner has a few intrinsic pre-requisites I think neither BH nor MSFT deliver: 1. Tailwind industry. 2. Honest and competent management. 3. Solid business culture. 4. Sustainable business model. 5. Low risk of obsolescence. 6. Solid history of profits and good return of equity. Among many other necessary requisites to conclude you have found another Berkshire.

Not in this lifetime. Well, not me! Daniel, meet BRK, FFH, etc. Jurgis I am sure some other folks on here would also include BH

BRK is my largest holding (which earlier in the thread I pointed is not something you should extrapolate with that ease), but not the others. I wouldn't leave my money in autopilot at Fairfax and I don't know who are the "etc."! Daniel, meet BRK, FFH, etc.

The jewish comunity in Mexico made an informal study about what was the necessary income for a family of four with kids in a jewish private school (as mine are) and concluded that the minimum amount for having a good quality of life in Mexico City was 40k per year. The same study states that having an income of about 70k grants you all the luxuries necessary for having a happy life. And finally it says that money above that 70k threshold won't improve your happiness. Still, in my house we spend a lot more than that and even though there's an explanation, that study states we don't need to travel that much to be happy!

Almost 60%.

We do live in a gated community and we do have services not usual for the US, like two maids for cleaning and cooking. Safety is an issue and I think it will always be an issue here, for example, I don't drive the car I would like because I don't want to attract attention to myself and I've been robbed a couple of times because of my watch (I no longer have a good watch in my wrist). Still, if you are discrete you can live your whole life here without any trouble! heh. i used to live near mexico city. but my annual expenses at the time were more like 10k. Those gated communities and bodyguards add up ;) . No but seriously, how safe is mexico city?

I don't agree with you and I don't think you should be looking for exceptions since I'm not sure you will be able to select them intelligently. We humans tend to find explanations for a lot of things and seem to find correlation in many fields where there are none. If I were you I would be managing my time in order to have some for involving myself in the process of analyzing stocks, but if that's not possible or you are not interested in that then just select an index fund and don't risk your money or your parents money. Good luck! Whether or not Berkshire is the only company that can be put on autopilot, I don't know, as I've heard good things about others such as Prem Watsa. If not, I'm happy to invest in mutual funds. I'm sure there are some mutual fund managers that can outperform ETFs. I'm aware that investing requires analysis of the financials, but as with everything, there can be exceptions. That's all I was looking for.

When was that and where? The school of my kids costs more than that! heh. i used to live near mexico city. but my annual expenses at the time were more like 10k.

There's only one Warren Buffett and only one! I don't think you can extrapolate that positive experience that easily. Having said that, Bogle answered your question a long time ago and the best path is not through stocks but through Etfs. I've seen that many posts tend to deviate from the substance after some exchange happens and that's happening here. Why? Because I don't know of any case where there has been market outperformance during a sustained period of time by leaving everything on autopilot, at least not with specific positions (stocks). If you are not willing to invest time to read 10-ks and quarterly fillings, as well as watching your holdings, you shouldn't be investing in the first case.

Married, two kids (6 and 3) both in private school. We live in Mexico city and we are above 130k.

Final number for me: +17.72%

I use a not so rigorous but much simpler aproach. I always measure my performance two ways, the first one only using the money I had at the beginning of the year to measure my performance of that year (which is the one I consider of meaning since my additions are small), and the second one using the whole value, incluiding every additional deposit. For doing that I simply register my return up to the moment I added money and start measuring the return on the value of the total portfolio (at starting of the year value + added money) from that moment forward annualizing the results. I aIso check the value of the S&P, BRK and a few other benchmarks I use (closing or openning, depending when the funds are available to trade) and register it in my excel. At the end of the year I apply the return of the S&P and the other benchmarks from that day to the end of the year and apply that return to that deposit and compare it to what I achieve with that money. If I decided to keep it in cash 'cause I didn't find anything attractive and my benchmarks were up during that period then I underperform on that percentage of the portfolio, and that way I can compare my returns to my benchmarks incluiding the opportunity cost of not being invested with my whole portfolio. Actually I meant adding money into account. Say I have an monthly salary of 10K, and I need 7K for my monthly expenses, effectively I'm supposed to be adding 3K cash for investment every month. I might not have bought any stocks in the first 6 months since I could not find any opportunity. How do you include this 3K/month in the equation? Your brokerage account might do the calculation based on the cash available on the brokerage account. But I might not have moved my cash from my saving account to my brokerage account until the opportunity arrived. When you calculate the yearly return, are the folks here adding the investable cash (3K/month in the example here) in the saving account as well? I think the most rigorous solution to your problem is to consider each deposit as a separate virtual account. All of your virtual accounts must have the same IRR (let us denote as R) over its lifetime, which is from when you deposited it to NOW. And the R is the rate such that all your virtual accounts add up to your actual account balance NOW. In your example you deposit 3k per month so say after 3 months you have 10k, then your R is expressed as 3*(1+R)^3 + 3*(1+R)^2 + 3*(1+R)^1 = 10 and the solution is R=6% per month or about 100% per year. My solution R is a rough estimate using spreadsheet although there is a closed form solution for this geometric sequence. I just plugged in the following into a cell in libreoffice (which should be compatible with excel) =FV(1+R,3,-3,0,0) and I tried various values for R until the result is closest to 10. The second last term of the FV() formula is the initital condition, so you can also plug that in. This is the method I use to calculate my return over various periods of my investment career. Let me know if you have comments or if I am confusing you....

It doesn't matter if you buy or sell during the year, just check what was your portfolio's value at beginning of year and compare that with your end of year value and that's that. The thing that does matter is if you add or subtract money one or more times during the year, but that's also easy to calculate.

Itt Educational Services, Enviromental Clean Technologies, Esi Group? Which ESI? What's the thesis, can you share?

On point number 1, someone like Buffett will tell you to load the truck on the 80% upside potential idea and forget about the 20% one, and a quantitive analyst qill tell you to invest 80% of funds available on the 80% idea and 20% on the 20% idea. Under Buffett's premise you are running an opportunity cost and on the other one you are not, but If your analysis is correct you shouldn't invest time nor money on a 20% idea if you have an 80% option available!

Use your common sense! 4x return in 5-10 years in real estate doesn't sound very probable, though it's not impossible. There's a comment down the thread that says that if it's so good why the pitcher is not taking advantage of the opportunity for himself and that's usually a good question to ask to those selling "opportunities".

Unspectacular year? Just to put your "unspectacular year" in perspective. If you start with 100k with those results you'll be a billionaire in a little over 37 years and if you have 1M then in just 28 years. I already have 37 years, so what do you think about that!

I actually like that one a lot! I posted a thread about it a few months ago but it didn't get traction. The company pays a nice dividend which I think is sustainable, it has doubled the book value per share during the last 12 years, reduced the number of shares in circulation repurchasing almost 100M shares during this period (27% of shares outstanding) and earned 4.5B before taxes during the last 5 years. Actually, during those 12 years the company earned more than 9B before taxes and paid 3.2B in dividends (Current Market Cap 12B+). Goodwill (including intangibles not clearly itemized in the balance sheet) is a little over 1.7B but I think this should be way higher in order to clearly identify the moat of this company. Why? Because the company is earning a return of 50%+ on tangible assets (average net income [taxes are in the 18%-20% range and I've not adjusted the return to a higher tax rate] last 3 years), which is an amazing return and suggests a clear and present intangible moat.

Yep, you are correct, omit that piece of information.