Jurgis

OK. :) Both of the above are interesting examples. NFLX was not cheap in 2012. So maybe buying it was going against consensus, maybe not. I am not sure. It worked out well, but coulda worked out badly. Buying NFLX now - well that would be against "value investors" consensus although it would be with cheery Market consensus. :) IBM - valuation wise, probably it is cheap (depends on how you look at debt and various one time items though). Is the consensus that it will have secular decline? I am not sure. Like ScottHall said, it's hard to read Market's mind. Clearly Buffett who owns significant portion of shares does not think that. So is it a consensus of the rest of the market? If I buy IBM, is that a ... OK, I won't use the phrase that you don't want to defend. ;) I think we might be closer to agreement than we seem to be. ;) Unless one uses a purely mechanical approach, one always adds one's "perception" to the buys or sells. Sometimes that "perception" is very different from a lot of investors. Sometimes it's not. I think I am saying that investor might do well if they do company valuation and invest in situations where company is cheap and yet investor's opinion is not very different from majority of other investors. ScottHall might be saying that investor might do well if they do company growth extrapolation and invest in situations where they are not very different from majority of investors. (I might be misrepresenting. That's how I read his position, sorry if I'm wrong.) You are probably saying that most gains are from situations where investors do company valuation and invest in situations where company is cheap and investor's opinion is quite different from majority of investors. (Correct me if I'm wrong). Of course, ultimately it's all a spectrum: some positions are likely more "variant" than others. But some investors are probably overall more "variant" than others. It's still not clear to me that the more "variant" ones do much better than less "variant" ones. E.g. I'd classify Tom Gayner as one of the less "variant" ones I think.

That's called being lucky. Not necessarily. I was there. I could have done that. It was not a difficult choice. Instead I decided that I have "variant perception" and invested in other things... for worse results. ;)

OK. Let's take that as an example. How many positions in your portfolio are such that most people will either not understand why you hold the position or will think that you are wrong (crazy, etc.)? I'm not putting you personally on the spot, this is a question to everyone on this thread. Let me make it even easier: what percentage of your portfolio is in positions where you believe to have "variant perception"? For me personally, the number is 0%. Actually, it's probably negative: I have couple positions where I am pretty sure the market is right and I am wrong, so those would count as negative "variant perception". ;)

Read Munger on the pari-mutuel system or Howard Marks on 2nd Level thinking. Finding a great company is not enough. OK. It's not enough (actually, it is enough if you bought BRK 20 years ago and held, but I won't argue with you). I said so much above. If you are genius and can do "variant perception", great. Edit: reading Munger and Howard Marks in no way guarantees that someone will suddenly be able to do "variant perception" on their investments BTW. Should the rest of us just slit our wrists and buy index funds? Actually I'll add couple more edits: 1. Even someone who bought BRK at the top of past peaks, did really well. So not much for pari-mutuel comment from Munger, although he is definitely right short term and for some companies he's right long term. 2. Most people buy stocks all time (DCA) and not at single moment, so they can get great companies at variety of prices, some better some worse. 3. Buying great company at low(ish) price is not "variant perception". It's just valuation. WTH is "variant perception" anyway? I'm gonna partially agree with Hielko that it's mostly meaningless phrase. Can you give examples? Mike Burry and CDSs? (even he was not alone in that perception, so is it really "variant")? Berkowitz and AIG/SHLD/Fannie? Are these really "variant" either? Ackman and HLF? Or Icahn and HLF? ;) If I bought AAPL in 2013, was that "variant perception"? Valuation? Both? Neither?

And what would have been their reason for buying those stocks? Why wouldn't they just buy the S&P index? So, apparently they do think that they have a variant perception. If you call every buy decision having "variant perception" then this phrase becomes meaningless.

I partially agree with ScottHall, perhaps because I am not a great value investor. ;) IMHO having a "variant perception" is incredibly hard. If you guys can do it, you're geniuses and you deserve your outperformance. Power to you. But overall, knowing what market is really expecting from the company, having a different expectations, being one of few people having such different expectations and being right - this is very very hard. It is probably easier to find a great company and invest in it without having a "variant perception" on it. Anyone who bought MSFT or even BRK X years ago did not have to have "variant perception". They just needed to buy and hold. I also agree with ScottHall that a lot of "variant perception" theses sound like a sales pitch for the person instead of a real investment. "Look how great I am, nobody else knows this, but I do". Present company excluded perhaps. ;)

I haven't read the article yet. I believe Mars will be colonized (if ever) after we have replaced our bodies with synthetics or made them much more durable via nanotech or such. While Mars is romantic, think about how many people live in Siberia, Antarctic or in the oceans. We have oodles of Earth uninhabited because of the harsh environment, why would a lot of people go to Mars? In the past the argument was population growth. However in the best case for humanity (i.e. we don't blow ourselves up), the population will stabilize and start dropping sometime in this century. So I don't believe population growth will be stimulus for Mars colonization. I am also skeptical about resource-driven expansion. Asteroids and solar energy are likely much better resources if we need resources outside Earth at all. Resources down in gravity well (though smaller than Earth) are not attractive. So, tourism and research pretty much. Maybe terraforming, but I'd put my bet on our-bodies-will-change before we-terraform-planets. Live long and prosper.

Great post Cardboard.

We have had a Facebook "Like" button for a few months now. ;D oh ya.... how does that work? From what I've seen, it doesn't. I sometimes see numbers near it, but it seems to have the same number for the whole thread and not for the post, so I'm not sure it's actually doing anything useful.

I wants a Burger... maybe nots... http://www.cornerofberkshireandfairfax.ca/forum/books/%27branded%27-movie/ 8)

http://www.imdb.com/title/tt1368440/?ref_=nv_sr_1 It's not a book, but it seemed to fit better here than into General category. :) Funny Russian-style surrealist satire of marketing and brands. Movie is quite uneven with some cringe-worthy moments, but I think I'll never be able to look at some familiar brands the same way again. 7/10

Voted "yes". Can I have your shares? For free preferably?

Watching this: Not drinking though... great ad, crappy beer.

I'm looking at crack spreads too... it's a gas! 8) Or maybe oil. ::) Peace, love and kerosene, bro.

Love and Peace bro, yeah.

All the macro discussion is making me want to ... say what I really think, but then I'll get stoned... So what is everyone smoking? ;D

2007 was not like 2000. Today/tomorrow is not going to be like 2007 or 2000.

Sorry, but I think you are just cherry picking the data looking backwards. Edit: it is easy to say now "A simple rule based formula of buying it around 20x and selling it around 30x". But actually if someone waited for 20x, they would have waited until 2011. So you would say "no, I meant around 20x and that includes 22x". But why 22x? why not 30x? ;) It's easy to do this now. Same with "sell at 30x". It fits the data nicely. But if you looked at something like NFLX, you'd have to make a different story. So, sorry, but I don't believe this works going forward as nicely as it works looking back. Edit2: There's another issue with the Google story above. You assume someone would have held cash (or what?) through 2006 to 2008 and then pounced. That looks great looking back, but there are at least couple issues with this. First, holding cash is huge opportunity risk (and if you held something else, you would have to account for selling whatever you held in 2008 at the bottom). Second, the only reason there was opportunity to buy Google at 22x PE in 2008 was the once-in-generation market crash. What if there was no crash? Would the someone held cash to 2011? Third, if we are looking for great returns starting to buy in 2008, then Google is possibly one of the mediocre ones... Anyway, I think I should shut up, since I might persuade someone that buying great companies at any price is the way to go. ;)

Second! 8)

We will need to provide means of living for 80%+ non working population. I don't think we are prepared for that at all (intelectually, spiritually, morally, economically, politically).

http://aswathdamodaran.blogspot.ca/2015/08/narrative-resets-revisiting-tech-trio.html Although I am against buying great companies at any price, I think Damodaran is being naive that you can make great money by darting in and out of a stock in a great company. He may make money on Apple now, but that approach missed most of the gains in Apple or Google or Microsoft for 10-20 years when huge returns were made. To get that you really had to buy and hold.

He locked them. Which pissed them off. ;) Blame might be wrong word. It's just funny. So you give money to someone to manage. They go off and get you 10x+ return during the worst financial crisis ever. And you fire him because "he did not do what you signed him up to do". He should have stuck to value stocks and returned 20-30% losses like the rest of the managers. That would have been outstanding. No, I understand their thinking. It's just that the lesson is: don't dare to do something that's not in the charter. Even if it's brilliant and you succeed, your ass is gone. Anyway, I think I flogged this donkey enough. Peace. 8)

Can you remind me, is Twitter fast growing in any metric nowadays? ::)

Like Mike Burry did, yes? :P Every now and then life is subject to random error. :P To be fair, while Burry is brilliant, his early investors didn't know at the time that they were signing up for a big macro bet when they invested with him, they thought they were getting something else, so without the hindsight of knowing that the bet worked out in the end, it's pretty easy to understand that they were nervous and some wanted to get their money out. If I had put my money with him for his value-based stock picking abilities and learned that he was buying vast quantities of credit default swaps and side-pocketing the money, I might have gotten nervous too. I don't know. Liberty, the issue was not that they were nervous while the bet was working out. The issue is that they dumped him after he made multimillions for them. "So long and thanks for all the fish" and all that.

RR is totally not obvious to me. ;) well you do have to squint a bit It might work well out for you, but for me it's too much of a turnaround plus complex accounting. A pass. :)