Parsad

Was the Reuter's quote out of context then? Is there some place where Buffett said that he's only talking about relative to the risk-free rate? Additionally, I know I've asked this elsewhere before, but I'm immensely curious as to why everyone has seemingly jumped on the bandwagon of an "imminent crash" happening. Is this just because we've had a "summer selldown" in the each of the last three years? (April-June '10, July-September '11, April-June '12) Is this because people are still burned from the '08-'09 years? Also, why does this matter when we can buy GM @ $31.42? No one said imminent crash...just that prices are getting more and more speculative. And yes, the Reuters quote was out of context, but do you really need to know that, or can people figure that out rationally and what is quoted becomes irrelevant. Overall asset prices are always influenced by interest rates and the assumption becomes that rates will stay low forever...it never happens. Here is an article with Buffett discussing equities...how he sees no imminent crash...that stocks are reasonably priced based on interest rates. Cheers! http://www.moneynews.com/StreetTalk/Warren-Buffett-Fed-Stock-Market-Bernanke/2013/05/06/id/502897 "When interest rates are low, and people expect them to stay low for a while, it pushes up the value of all other assets," he said. "Interest rates act like gravity for all other asset prices."

Or is it profitable so you can put it in BAC? Just kidding :) It is profitable, and I will be upgrading the site over the next year. Cheers!

Buffett is saying that stocks are not overvalued relative to the risk free rate. That doesn't mean that stocks on a historical basis, especially when considering the risk premium investors are willing to accept at the moment, aren't high. Risk premiums on both equities and corporate bonds are now at the same levels they were at in late 2007. Margin debt is as high as then. I don't think investors need to bail on stocks, but they should be careful in what they buy, and holding significant cash shouldn't feel like an anchor. Cheers!

The other statistic I pay attention to is margin debt. It is at the highest level since October 2007. The two previous times it was this high was in 2007 and early 2000. That being said, another statistic I pay attention to, railcar loads is flat or improving in many areas. So it may be a bit of time before we see any correction, but the spring is compressing. Cheers! http://www.yardeni.com/pub/ECOINDRAILCAR.pdf

Thanks for the donations guys! I don't have a tablet, so I had no idea that the new ad was creating problems. I think I will just stick to Google Adsense and Amazon...they seem to work the best without much interference. Cheers!

Ok guys, that ad is gone and the usual Amazon ad is back. Let me know if that is back to normal on the tablets. Cheers!

Which ad in particular is causing the grief? I switched over to that text ad at the end of the posts to try something new...is that the one? If so, I can get rid of it and go back to the smaller Amazon one. As for the last ad on the bottom of the page...that one stays. Cheers!

PS - I'd be happy to contribute to an "ad free" forum! People always say that, but few, if any, do. Cheers!

Whether they are logged in while you are logged in is not private. But, when they last logged in is indeed private - as far as I remember. Yes WarrenWatsa, you are correct. Which answers the question asked by Valueorama. It was a privacy breach...the reporters should have known that...unless it was sanctioned by Bloomberg. Cheers!

I think some of these reporters should be fired as well! Cheers! http://www.cnbc.com/id/100728847

Funny interview of Icahn, and he takes a shot at Chanos. I love it when these guys fight amongst each other. Cheers! http://www.cnbc.com/id/100727811

KeyCorp has acquired BAC's commercial servicing portfolio and will be sub-servicer to Berkadia as well. No numbers given other than the assets. Cheers! http://www.fool.com/investing/general/2013/05/10/keycorp-to-acquire-commercial-mortgage-assets-from.aspx

Yeah, that one caught my attention too. That would be the perfect life if you could top off the bacon with a can of Coke! ;D Cheers!

I think if you make independent decisions, then this is irrelevant. I've attended every Fairfax AGM since 2005, and I was fully invested in 2009 and 70-90% invested in 2010, 2011, 2012...we're still about 65-70% invested in 2013. If an investor is swayed by other investors or what they hear on the news, then they've got a problem, because they are going to partake in things that will not have the full confidence of their own analysis. Cheers!

...Patrick Wolff Uses Buffett as His Guide. Cheers! http://finance.yahoo.com/blogs/breakout/chess-master-fund-manager-patrick-wolf-uses-buffett-174642576.html;_ylt=AoKRveonqNGoSlTrCylp372iuYdG;_ylu=X3oDMTRwMTFjbnEyBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yaWVzIG1peGVkIGxpc3QEcGtnA2RjY2U3YmY5LTJmYmItM2ZiNy1hYTRlLTY3MWFiMTg0NDY0MwRwb3MDMQRzZWMDTWVkaWFCTGlzdE1peGVkTFBDQVRlbXAEdmVyAzhhNTk4OGYzLWI4ZDMtMTFlMi1iNWY5LTEwYzBmMTI0MzE5NA--;_ylg=X3oDMTFkcW51ZGliBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3BtaA--;_ylv=3?vp=1

Article on the 5K and Brooks. I bought myself a pair of those commemorative Berkshire Hathaway Brooks running shoes. Very, very light like the Nike flex shoes. Cheers! http://finance.fortune.cnn.com/2013/05/09/warren-buffett-5k/?source=yahoo_quote

Article on longevity...I thought I would post it, as Irving Kahn is on the list. Also, read the comments section, as there are a couple of very funny jokes! Cheers! http://shine.yahoo.com/healthy-living/odd-tricks-people-who-lived-past-100-swear-by-184109562.html

Sorry, but I don't see much consistency in your arguments so not clear how to reply to that. You have started this thread due to worrying and concern about a general market/economic situation. Not sure what I've been inconsistent about...I was pointing out the fact that markets have risen dramatically and the risk premium that investors are paying aren't adequate for most stocks and definitely the broad market...that I'm concerned about this. You do agree that timing the market in the long run is impossible, so why worry about it. Just don't time. And if it drops again 25% as you say, you can rinse and repeat again. Even the dip last year was used for that. Timing the market "perfectly" is impossible. But when broad market valuations increase to the point where risk premiums are lower and lower, you are indirectly timing the market when your investments have reached intrinsic value, and you do not have replacement ideas so you have more and more cash...it's just prudent behavior. Cheers!

The 80% figure was written before I found that site...taken from the Ned Davis slide presented in Fairfax's 2009 AGM. Outside of the tech bubble and related years (1996 to 2010), markets had stayed below 80% and the median was 60.6% in the previous 70 years. I posted the link to the site, because it was one of the sites that showed up when you asked me a question and I did a search, and had a pretty decent explanation that I thought you could understand. I cannot tell you for certain what the rate of return will be over the next few years...except to say I cannot see it being anywhere near what we have enjoyed for the last four and a half years. Cheers!

80% or less of total market cap to GDP. Ask yourself what the total US Market Cap to GDP is presently. It does not change my behavior, but my ability to find undervalued opportunities, as they are fewer and harder to find. Cheers! I hope this doesn't sound pedantic, but why 80%? I would love as many details as possible. http://www.gurufocus.com/stock-market-valuations.php Cheers!

Sorry, I believe I paraphrased what he was saying. ;D Cheers! http://finance.yahoo.com/news/einhorns-advice-investors-dont-advice-021913019.html;_ylt=AlQLT0NfMOlewi0XY_nOf_2iuYdG;_ylu=X3oDMTNyNGlobHU3BG1pdANGUCBUb3AgU3RvcnkgTGVmdARwa2cDNTQ4NmZmZmEtMTVlOC0zMDBiLTljZWMtNWY2ODg3NGE2ZDlhBHBvcwMxBHNlYwN0b3Bfc3RvcnkEdmVyAzM2NzRhZjAwLWI4NGYtMTFlMi1iYTRlLTYxYmU4ZmViMDZiNw--;_ylg=X3oDMTFkcW51ZGliBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3BtaA--;_ylv=3

80% or less of total market cap to GDP. Ask yourself what the total US Market Cap to GDP is presently. It does not change my behavior, but my ability to find undervalued opportunities, as they are fewer and harder to find. Cheers! Why? Listed stocks on NYSE only have revenue from the US? You are saying that Apple's marketcap or Goldman Sachs' or what have you should only be connected to a local GDP even though a part of their revenue is related to other markets' GDP? Should we also ignore those trillions in investments coming in from non US countries? There is only ONE market and it is the global market with lots of small markets inside. This is why messing with big macro economic calls is so hard, there are always much more variables in the equation than it seems. Even if you are right timing can kill. That's why Value Investing works. If the market really crashes, sell at a tax loss and buy those 5 cents on the dollar. Rinse and repeat. This is the same argument we heard in 1999 and 2007. What we all found out is that doing the above provides far less return on investment than simply being patient and waiting for a fat pitch. Incidentally, if you are including the global market, you should be even more concerned, as I feel that the U.S. economy is actually in far better shape than the global economy...I've said that for the last two years. Every time investors have bought assets with a low risk premium, based on the low interest rate environment, they've been burned considerably. Just because Buffett is buying stocks, doesn't mean that a significant correction isn't around the corner. Remember, he was bullish on stocks back in October 2008, yet the bottom did not hit until early 2009 after a 25%+ drop. Just like Prem being bearish since early 2010 hasn't been right either. No one ever gets the timing right...but the risk premium should always be adequate...otherwise you could end up breaking "Rule #1"! Cheers!

80% or less of total market cap to GDP. Ask yourself what the total US Market Cap to GDP is presently. It does not change my behavior, but my ability to find undervalued opportunities, as they are fewer and harder to find. Cheers!

But that was an extremely overvalued high to begin with. Cheers!

This is what worries me. You had a ton of cash in Q1 and then you changed your mind and invested...not based on fundamentals, but market psychology. While some of our investments remain undervalued, there are several we have sold and are getting out of. I'm looking at the companies on my watch list, and virtually all that I watch are far above prices I would pay...that's about 200 stocks. I don't expect 2008/2009, but the faster capital flows into stocks, and the faster that risk premium shrinks, the larger the eventual correction will be...and it will be quick with all of these HFT's kicking in. I'm happy to wait for a fat pitch with alot of cash on the side. Cheers!