tede02

This is an excellent metaphor!

I definitely wouldn't call myself an expert but will offer my own experience. I believe the short answer to your question is no. With 10Qs in particular, how much really changes quarter to quarter? I'm not suggesting one disregards them but reading everything line by line is a waste of time. Let's put some context around this. Say you're completely new to the investment game. You've never read an SEC filing. At that point in one's investment career, I think it is important to look at all of the filings in detail. This is the process of gaining experience and learning what information in these reports is really relevant. Over-time your efficiency in cruising through a 10Q or 10K rises exponentially. Then there is the learning curve for each individual company you're researching. The first 10Q or 10k will probably take you double the time it takes to read the second one and so on. Again, once you determine the key factors that are worth reviewing, you probably can review a new filing in minutes for material information (or disregard select filings entirely). That has been my experience. This is an issue I struggled with particularly in my mid twenties when I was really studying guys like Buffett. I think its easy to get this false impression that you need to memorize every little detail about the companies your investing in. That was a mistake I made. I still struggle with paralysis by analysis at times but I try to remind myself that investing is really all about high probably bets. As Buffett has said, look for investments that are obvious. I always try to remind myself that I'll never have perfect information which is why that margin of safety is so critical. Now I just need to practice what I preach! ;D

Kraven and ajc are both exactly correct! ;D Sorry for not being more specific. 8)

I sent Warren a letter when I was in college in the early 2000s and received a little hand written note back. I was pumped! Still have it. At the time, I asked him for any suggestions about good money managers to work for in the Minneapolis area. His rely was very brief and written with a sharpie, "Ted, no ideas re Twin Cities, but good luck! Warren Buffett. It seems like over the past 10 years Buffett's popularity has grown exponentially. My guess is he gets more mail now than ever, so getting a response is probably also harder than ever.

I don't mean to speak for Packer, but I think he's saying that there are so many people following all the big names that it is very rare to see any significant mis-pricing. If you're looking for mis-priced opportunities the S&P500 generally isn't the best pond to be fishing in. I'm in the the financial services business and I absolutely agree that there has been a huge push towards "alternatives." This all came out of 08-09. Basically both institutional and retail investors were looking for a new mouse-trap and the financial services industry has cooked-up a number of products that they claim fit the bill. The other huge push I've personally seen, from a marketing standpoint, is to "tactical" management. It's basically another way of saying market timing which is of-course non-sense. I kind of chuckle when looking at the numbers for all of these strategies because, as you might guess, the S&P has killed them. A few other funds that I think fit the bill (regarding excellent managers who will concentrate and hold cash) include Steven Romick's FPA Crescent and Donald Yacktman's Yacktman Fund. The biggest problem with most mutual funds is they are far too diversified. I think the vast majority have over 100 holdings. At that point, the simple rules of math say you're not going to be much different from average. Fairholme is one of the most concentrated funds you'll find. Bruce seems to like holding 10-20 positions. But I think his top 5 right now comprise 60-70% of the fund.

I would highly recommend "The Signal and the Noise" by Nate Silver. This is an excellent book that I will be re-reading.

This really is a great thread. Throughout my investing career I've really struggled with the question, "When do you have enough information to make a decision." I've found myself getting "caught in the weeds" reading about things that have little value in the decision making process. I also think its a bit overwhelming for novices reading 10ks and so-forth because of all the legal jargon. You learn quickly that 10ks and other filings are all laid out in a similar fashion. With practice you'll recognize what can skimmed or skipped entirely. When Weschler and Combs were on CNBC several months ago, Becky Quick actually asked the question I submitted surrounding this topic. I've attached the transcript which you can read for yourself. To paraphrase, Weschler and Combs said they both look at basically the same things others have already mentioned (corporate filings, trade magazines, transcripts, etc.). The amount of time they spend is another story. Weschler actually said he'll spend 500-1000 hours researching. That seems crazy and perhaps is in need of greater context. I've also heard Wilbur Ross explicitly state that his firm usually will follow a business for several years before making an investment. Conversely, I believe Monish Pabrai has said a few days of solid research on an idea is adequate for him. And Buffett is famous for making investment decisions in mere minutes. This is a curious topic however. Clearly the more time you spending investing, the more efficient you get with your process and decisions can be made much faster (this is what experience is all about). This is where Buffett's "compounding knowledge" comes into play. I think you also have to be very careful reading into things like Weschler's "500-1000 hours" proclamation. What is he really talking about when he makes that statement? For most companies, does enough relevant reading material even exist to spend that kind of time on? I've learned that you just really need to do what works for you. It seems that at some point in the research process, additional information can just become a distraction from the basics of investing: What is the approximate value of this asset? Can I get it at a discount/reasonable price? CNBC_transcript_of_Weschler__Combs_investment_process_answer.docx

I found comments by Alice Schroeder to be very insightful on this subject. She is the one person who has had full access to all of Buffett's files containing years of notes and research. If I remember correctly, she said she never saw one instance where Buffett actually went through a DCF exercise. In a speech, she said basically all Buffett looks for is investments where the chance of losing money is near zero. Then he wants a 15% return on day one. Here's the speech, which is one of the best, in my view, on how Buffett thinks (start watching at about the 20 min mark): I think others have mentioned it in this thread, but I've heard Buffett explicitly state something to the effect of, "The numbers should jump out at you. If you have to do anything beyond simple arithmetic to figure it out, walk away."

My first post! I was at the Yellow Brker meeting on Friday and a nice guy from R.I. suggested this forum. I'm glad he did and am surprised I hadn't come across it in the past. Looks like a lot of great discussion. These tips are of course post-meeting, but for those who may be looking for ideas for next year, here's a few. I've attended the meeting every year since 2007. Attendance has gone up noticeably each year (especially this year). I have personally found it more comfortable and easier to hear sitting in the ballrooms that stream the annual meeting onto big-screens. I don't show up to the Century Link Center until about 7:10 or 7:15 when the line going into the building is gone. It works out really well unless you're hell-bent on seeing Warren and Charlie in person (you can always venture into the arena after lunch when a lot of people have left and don't come back). Also, I should note that I don't even go find a seat until about 8am. I go straight into the vendor area to see what's new. Plus, as someone else commented, Buffett always walks around a bit so there's a good opportunity to see him close up. In years past I've had him 4 feet from me. But, he's always being surrounded by a mob of media and shareholders trying to get pictures so have that expectation. As far as hotels go, I haven't had much luck finding a decent one for a fair price. All the hotels in the city jack their prices up 2-4 times for the shareholder weekend. Next year I plan on taking Warren's advice and look into AirB&B.