LR1400

That is true in the definition sense. However, a person like Jesse Livermore or Driehaus, who most would call a speculators was still attempting to compound his, which is investing. I personally view the terms as interchangeable as they both have the some end result goal.

Scott, I agree value investing does work and the core concepts make sense. It's been proven. It requires too much waiting to see and also too much riding the price up and down, often 30% or more. I would prefer to be in cash while the stock prices are down. Buying and holding for years makes a lot of sense when brokerage commissions were so much higher, like say in the 80's. Simply, there are other ways as well and it wouldn't surprise me if Munger followed that path were he younger.

I know I will get annihilated here, but I have had more success buying and selling growth companies in a manner similar to momentum investors. When going value I got virtually no return. Are there any others who have transitioned to more of a momentum approach? I still believe in the Buffett idea of owning a business forever, though often this is unrealistic. Market forces change and can do so rapidly or slowly to the point you notice too late. And if this is in a privately held business, you can often be stuck. I like the idea of selling if the price goes down a certain percentage as opposed to averaging down. Then redeploy the capital somewhere else.

You must be a broker. If he's not, he's gonna be soon. ::) You nerds need to live a little. It's ok to have some drinks, even if Warren doesn't. :) Not a broker. Business owner. Original post was a joke, but since you care... :) I live just fine TYVM. :) Couple drinks per day is a way to alcoholism and other medical problems. It's your life though. We care and we wish you well, but it's your choice after all. ;) And yeah maybe you gonna be just fine. Have fun and good luck. Update. I quit drinking. Was using it as a crutch. I'm not opposed to it in the future in moderation, but done for now.

I don’t agree with no middle at all. That’s bs. That may be the case for development but not investing. Middle area and middle income allows value add and most consistent and largest renter base.

By far the hardest thing for me to do as well. Value investors are typically so he’ll bent on buying cheap that many will stay in a bad deal or average down. Many also want to stay invested for the “long term”. Both have hurt me. I don’t think I’ll average down much again unless it is an extreme no brainer. Won’t do it on a commodity or potentially disrupted industry.

I just don’t see convoying being allowed. The public will revolt at dealing with 20+ trucks convoying together on already congested highways. If you are going to convoy, why not just rail. Much less disruption to public traffic flow.

My biggest mistakes revolve around selling. The desire to follow the “hold forever” mantra has thrown me off. I now realize the hold forever idea is only good for a few companies. I have instituted some definitive sell criteria for myself now, that I hope will allow me to be more disciplined than thinking hold forever/until something fundamental changes. When I look at say, a cheaper company like GE and look at a more expensive one like FB, I understand how FB makes money better than I do GE. I also think FB has higher probability for price appreciation in the next 5 years, despite FB being a “tech” stock and not meeting classic value criteria per se. Same with AAPL.

Scrap metal can be similar.

Someone is beating the market. The growth guys are/have been beating the market. Value not so much. But there’s still a link between the two. Pick your poison based on personality. Plenty have been successful both ways. Another aspect is, we rarely know what individuals do unless they write a book or an article. From reading about some of the growth/momentum guys they are as conservative if not more conservative than many on this board. Value makes intuitive sense, by so does a company that rapidly grows earnings over and over.

I’m also going to do some short to moderate term trading as John discussed, and note what he and Spek have said. All of the successful people I’ve studied that use this strategy use a trailing stop loss % of the high. They don’t put it in they just mentally have that target and sell if the price reaches that.

Any book about PE summed up: 1. Buy company. 2. Load with debt and/or massive labor cuts. 3. Acquire "synergistic" businesses. 4. Pump EBITDA. 5. Sell for higher "multiple". Lol

I just can’t see the value a DCF with terminal value for many, if any situations. Stock as a bond concept where you are looking for returns far exceeding the risk free rate and the returns from other opportunities. Simple calculation and how many greats do It apparently.

Go for it! What do you have to lose? I’ve raised some money for real estate purchases. The money is tied up for multiple years. The main driving factor for success was some credibility (from me and experienced partners), preferred returns, and a prospectus tied to my “customer”. I probably hit 20%-30% success rate and I wasn’t raising millions.

https://historyofptsd.wordpress.com/world-war-ii/

https://www.telegraph.co.uk/history/world-war-two/11983763/There-was-no-help-for-PTSD-when-I-left-the-Army-in-1945-but-we-still-dont-do-enough-for-our-veterans-today.html

They had ptsd, they just called it shell shocked and there was more negative stigma attached to talking about feelings. WW 2 was beyond brutal. Know former tier one special mission unit guys, screened for “emotional” stability who know they have it but really really just say it’s frowned upon to have it. When people are blown up, maimed, etc. and you do the same to others...well what do you expect. I would say it’s normal. I would agree that past societies that are used to some death, even hunting makes it easier to tolerate. Even the soviets who slaughtered Poles in the great purge killed themselves later.

I believe most of these pros are simple with valuation but broad and “complicated” with analysis and research. Which to me means looking at industries, the future picture, etc. And some like Tepper throw in a large macro view to make a determination. All of this being based on fundamentals of some sort. I listen to Tepper who seems really complicated at times because he’s so well rounded, but when he talks about past decisions he talks about how much of s BJ brained and how simple the decision really was. He probably uses some kind of model but it’s probably similar to the analyses he did when he was in credit at Goldman. I read an interview with Gabelki and another semi-famous investor. They were discussing a natural gas shipper and the other guy went on and on about how the company didn’t hit this number or that number. Gabelli keeps saying, it’s cheap, buy it. It’s cheap, just buy it. He was right, thankfully I listened to him. I believe Buffett is similar. He’s going to look at the earnings yield versus other investments and the future prospects of that yield and its growth. Pickens even thought similarly, lots of fundamental research and analysis, thinking, but he’s making his decision based on what he thinks will happen in the future based on that fundamental research.

I wonder as well. I assume more overseas. Maybe he would’ve closed his partnership. I don’t see him making the transition to value in relation to long term growth like Buffet did. Cigarbutt, where do you think he would go?

It’s a tough call. Marijuana, alcohol should totally be legal, no question. I honestly could see a decrease in drug use over time were most of the legal, or at the very least not so severely punishing to the user.

I don’t know, I had multiple medical issues when I was younger and was prescribed all kinds of narcotics, very strong ones unavailable now. I recall kind of wanting them, but being able to not take them and just making myself make sure I didn’t become addicted to them beause I knew I could become addicted. Really the bottom line is: people like to get a buzz and this is one method. I believe in little regulation and personal choice. People are going to do whatever they want to get a buzz. The drugs will vary over time. Opiates work better than most things like Tylenol and ibuprofen and they will be restricted to the masses beause of some idiots.

Cigarbutt, I like Greenwald’s approach overall, especiallly his discussions of scale and growth and how growth often erodes value when there are no economies of scale. It helped me understand the difficulty in assisting my family in the growth or its business. The problem I see which it surrounds the premise of valuing reproduction value and taking it above book value. In my experience: 1. In high PPE businesses book value of the assets is often much higher than the OLV of the assets. 2. Which leads to a reproduction much higher potentially. As you noted, the reproduction value worked for you on frontier. I did use reproduction value -> EPV when buying CHL. It worked out well, hopefully it does over the longish term. It also makes sense to consider reproduction value when considering high quality companies.

My kids hear me talk s our business constantly and how to make a buck etc. My son brought up supply and demand and its impact on pricing/profit at 7-8 years old. He’d heard the concept somewhere and discussed it with us. Hopefully all of my kids will get it. To me the most important thing is teaching them basic financial skills as others have described. That will benefit them regardless of their ultimate interests. All of them won’t gave the desire to be rich.

If we distill this down to business in general I think IQ is of even less importance. A certain salesmanship and savvy communication/charismatic skill is much more important. That is also a skill and can be learned but I think it’s as easy to learn than calculating intrinsic value of a business. It takes tough skin and lots of rejection. Pure hard work, drive, desire to achieve a certain goal is also of equal importance in my observation. Taking action. Is the final key. Obviously taking action irrespective of potential outcome is stupid but if you are 80% there go with it. Taking that final step and committing to action is where the successful versus unsuccessful often diverge.

So smart to spend three pages arguing which geezer is smarter and why. They were good for their day but they are both hopelessly outclassed by modern investors. Now that's funny. Can you list these modern investors?