tede02

Independence as well. In today's dollars, if I could accumulate a $10m personal portfolio, should easily be able to draw $250-500k in annual pre-tax income depending on portfolio composition. With no debt, that is a very comfortable life in the midwest.

Ditto to Stahleyp and greg. Bass is always interesting to listen to (and sounds super smart) but it seems like he was right "once in a row" on the housing downturn. I'm kind of surpised he even has outside money still considering most (maybe all) of his big calls since have not played out.

This guy's background as a professional sports bettor piqued my interest. I'm always intrigued by individuals who are playing the same "game" (both literally and metaphorically) and rise to the top as an extreme outlier. Somehow they see and or think about things differently. When he discusses his Jeopardy and sports betting strategy, I get a strong whiff of much of what I read in Nate Silver's book (The Signal & the Noise) and Ed Thorp's autobiography. In other words, Bayes theorem and Kelly forumla. I doubt this guy literally applies either but I'm always amazed how some people just naturally think and bet in this manner (and do so with great success).

It is amazing how much effort is spent trying to generate a 1-2% above the averages. Armies of reseachers are at work and yet few can do it. It's perplexing in some ways and understandable in others.

I really enjoyed both videos. Watched each multiple times. Over the last two years my mind has really opened up to investment approaches outside of value investing. It started by reading Ed Thorp's autobiography. Druckenmiller's approach is so different from bottoms-up fundamental analysis. It's incredibly intriguing to hear someone, who reportedly delivered 30% for multiple decades without a negative year, discuss their approach. The concerns regarding central bank tightening were striking. I worry that a lot of people who are piling into index strategies are doing so not realizing the surge in asset prices has largely been driven by zero interest rate policy and QE. What is going to happen as those policies reverse? Indexing may be good long term but it wouldn't surprise me in the least as the money flows peak into those strategies, the trend flips.

I'd have to agree. These guys are so rare. But they somehow have a knack for putting the puzzle together despite having the same information as everyone else. It's kind of amazing. In an ironic twist, what seems to mislead people (including myself) is some of these legends make their approach sound so simple. Buffett is the textbook example. His approach is simple, but not necessarily easily executed. It requires a lot of work, superior judgement and mastering all the psychological traps. It's really tough to put it all together. I sense he's been telling everyone to index in recent years because he's observed, despite all the wisdom he's delivered over the decades, few people really have what it takes to out-perform the market over time.

Last year's tax cuts increased corporate profits by about 21.5% (all things equal) with the stroke of a pen. It seems to me this would really distort Shiller's PE10. Stock prices in the US had looked expensive relative to history for quite some time and then over-night, things changed. Am I over-thinking this? The market obviously reprices the new earnings so perhaps it doesn't matter. I just wonder how different something like the PE10 would look if the denominator were replaced with a pre-tax figure or operating income.

This was excellent. It's always interesting hearing from guys like Druckenmiller. The way he's been successful is so different from a traditional value investing approach.

Identifying a handful of world class businesses isn't the problem. Getting them at an attractive price is.

Vinod had a great post. Here's just a few things that have resonated with me over in recent years. I like the way Howard Marks describes value investing, "Figure out what something is worth and buy it for less." Its kind of funny there has to be a debate over whether this kind of philosophy works. Someone asked Marks a question recently about value being dead. He basically said, "Look, when the economy is hot and there is confidence in the markets, that typically creates a favorable environment for stocks who's prices mostly depend on the future. These companies tend to trade for rich premiums. Naturally, this isn't where you find a lot of value investors. But all this stuff cycles through." Bill Nygren of the Oakmark Funds has also made the point that the distinction isn't value vs. growth. Its value vs. momentum. As Buffett and Munger have so effectively proven, high quality businesses are worth a lot more that crappy ones. A company can still be a bargain even if it doesn't trade at a low P/B or P/E ratio. Those are just a few things that have stuck with me.

I'm not loyal but its too big of a pain in the ass to change. I've been with a regional bank for 9 years for the simple reason that my wife convinced me to go with it when we got married. I was with US Bank before and wished I would have stayed there simply for convenience reasons (there are US Banks everywhere in the Minneapolis area). As an aside, I work with retail investors. I've witnessed quite a few that have moved their accounts out of Wells Fargo. That brand has sustained some massive damage from all the scandal.

I thought it was interesting when Buffett noted at the AGM that Ted and Todd have basically matched the S&P500 since inception. I continue to hear more and more managers talk about how much more competitive the investment game has become over recent decades. Munger has talked about it repeatedly. Bill Nygren had some interesting comments at a "Google Talks" event and another very successful fund manager I follow wrote about this in his 2017 annual letter. It really is remarkable how difficult it is to out-perform especially when you consider the virtually unlimited resources that some of these firms employ. It makes me think, what chance do I have? Then again, in a somewhat strange twist, it seems like the little guy probably does have some advantage comparied to the institutional constraints that exist with asset pools particularly above $1 billion. This subject has increasingly been on my mind.

I've been playing around with Bloomberg's free watchlist. Appears better than Google or Yahoo.

Buffett's public comments about stocks being "cheap" certainly contrast with his comments on the lack of attractive acquisition opportunities (because of high prices).

I watched this last night. It's absolutely priceless. A few thoughts come to mind. I just have to believe the investing environment is much tougher today because of competition. John Templeton talks of buying companies at 2, 3, or 4 times earnings. Those opportunities seem much, much more rare today. I presume it's because not only are there many more people looking for these opportunities, but all the damn algorithms. That being said, there is so much more noise in today's world with 24-7 news and the internet. Part of me thinks all the noise is to the advantage of those who can basically ignore it. The noise leads 99% of people astray. If you can focus on what actually matters and try to limit your mistakes, you have an advantage. Buffett has this magical way of cutting straight through the fog. The clarity in which he disccusses investing and what actually matters is simply second to none.

My two speculative oil/gas plays BXE and CHK got crushed 63% & 43% respectively. Expensive learning lesson.

Here's a personal antidote. A few years when I was 30 or 31, I severely injured by low back from intense exercise. I was a healthy guy, worked out regularly, etc. I stopped exercising for a few months trying to heal up. Meanwhile I was starting to develop sciatica in my left leg. I tried a few chiropropracters which helped a little. I also saw a physical therapist perhaps half a dozen times. She gave me some strechting and exercises to try. Finally I started feeling the pain and tension in my back subside. This was after about 6-8 months of nagging low back pain. I've always liked the P90X workouts (and the follow-up programs). For a few months I only did the light workouts that emphasized stretchcing such as Yoga and Dynamics in P90X3. Several months of this basically cured my low back injury. It was all about stretching the muscles and getting rid of the tenision. However, the most important thing I learned is what caused the injury to begin with was me jumping right into an intense workout as I had throughout my twenties. I've learned that it is absolutely a necessity that I warm up at this stage in my life to prevent injury. It has made a world of difference. I'll finish by noting that I've read more and more research suggesting what people natuarally want to do when they have a back injury, rest, is wrong. The best thing is to maintain movement. https://www.wsj.com/articles/new-help-for-back-pain-1448311243

Do the world a favor get rid of them responsibly. My brother died of an opioid overdose on Dec 23, 2015. I lay the greatest blame with the pharmaceutical companies who committed fraud by first persuading health care providers that no one should ever have to endure pain in this day and age because of the “miraculous drugs we've created.” Then (this is the fraud) the companies falsely claimed that the drugs they were manufacturing were not addictive. Now these assholes, like Purdue Pharma, are rightfully being sued by dozens of states. I would love to see executives go to jail but I doubt it will happen. I recently read that from 1999 to 2015, 183,000 Americans died from prescription opioids. That is over three times the number of people the US lost during the entire Vietnam War. The rate of opioid deaths is now over 30,000 per year. Imagine the outrage if the US were involved in a foreign conflict resulting in these kind of casualties? There is plenty of blame to go around. 60 Minutes most recently profiled how the drug distributors, led by one of the biggest publicly traded companies in the US, McKesson Corp, completely neglected their responsibility to monitor and crackdown on pharmacies and other buyers who clearly were trafficking opioids. There were stories of small-town pharmacies buying enough opioids to supply every man, woman and child in the town for a year or some crazy thing. The distributors knew the sales were illicit and not only did they do nothing about it, they fought the DEA when they (McKesson) were questioned about not reporting suspicious orders. https://www.cbsnews.com/news/whistleblowers-dea-attorneys-went-easy-on-mckesson-the-countrys-largest-drug-distributor/ It just pisses me off so much because this entire crisis is all about money. None of these executives or board members gives a damn about the thousands and thousands of people who have died and families that have been destroyed. The best thing that could happen to most of these executives and board members is to have a son, daughter or grandchild die from an overdose. No one deserves it more.

As I read more about blockchain I'm starting to see a possible outcome as the technology having a big impact on many things while the currency aspect becomes worthless. I don't have any strong conviction either way as my knowledge is extremely limited but it just reminds me of the late 90s when the internet was going to change everything. It did change everything but most of the companies from that era never panned out.

Is it possible that you're explaining two independent and largely unrelated situations with one framework? Is a bubble (severe price rise without similar increases in value) fundamentally different for a brand new commodity versus a business with cash flow stream? Is it possible that future events are easily predictable and obvious at first glance? Is it possible that you're correct and this is the most obvious bubble of all bubbles? Absolutely. Is it appropriate to simply dismiss as a bubble because of recency bias related to asset classes which are valued in fundamentally different ways from the asset we are currently discussing? I'm not so sure. I think you're over analyzing. It's basically exactly what Peter Lynch talks about in his books. When you start to hear regular people talking about a new hot investment concept often, it is a red flag for excesses. It's just crazy right now. I know of at least two people, who probably couldn't explain what a mutual fund is, that are buying bitcoin. When easy money is being made, that is also a huge warning for speculation. Howard Marks always mentions, "What the wise man does in the beginning, the fool does in the end."

Many people also seem to mistakenly believe that indexing is somehow "less risky." I don't think it's a bad strategy over a long time frame but a lot of retail investors are probably in for a nasty surprise.

For those of you operating or working with an RIA of any type, what software do you use for performance reporting and billing? We're looking at a couple different options right now including Black Diamond and Morningstar Office. I know there are some cheaper offerings out there. I like the research and tools that is included with the Morningstar offering. The guy I work with seems to like the look and feel of Black Diamond. Suggestions welcomed. Thanks!

I started a small position in Mattel.

I was thinking about this a bit more. Would be nice if the US could perfect missile defense and surround N. Korea with these systems. That would really be amazing. It would be the ultimate slap in the face against the regime. They've spent all this time, money and bluster on missiles and then they're neutralized. Kim has bet basically everything on missiles. That's his only bargaining chip. He'd have to go completely back tot he drawing board. Of-course, the technical problem here seems very significant. I haven't read much about missile defense but it appears to be pretty tough to master.