Jurgis

This might be off topic in this thread, but compounders are also boring to tears. Especially for active investors such as people frequenting this forum. There is no action - you just buy and hold. And hold. And hold. That's why very few people ever held BRK or FFH (or for that matter MSFT, GOOGL, WMT, JNJ, IBM ) for 20+ years. And most of the people who did that are not "investors", but rather employees or in case of BRK old ladies from Omaha. ;) Even most self admitted Berkheads or Fairheads on this forum have traded in/out of BRK/FFH more times than they casually admit. Or at least kept a non-trivial amount of their portfolio in companies that were sold much more often than compounding would call for. ;) Unfortunately action is a drug. A very difficult drug to kick for active investor.

Montier is not academic. He's in investment management. Regarding his paper, I think it has some good thoughts. But parts of it are crap. I agree with him that CEOs and top management in USA are way overpaid. I vote against in most proxy advisory votes (FFH and BRK are two exceptions. There are more but not many more). I think he is partially right about short-term incentives for a lot of CEOs. This is not very good. However, without SVM, the companies may be deadweight dinosaurs that just exist to exist and do not provide good capital returns to shareholders. There's a number of Euro and Japanese companies that are run like that. I am not sure if Montier would be happy to work for any of them or invest into them. I think a bunch of people also agree that stock buybacks above intrinsic value destroy wealth for shareholders while creating rewards for management. I doubt this is SVM though. ;) It is possible that public companies are underinvesting. However, this is capitalism. If public companies are underinvesting, then private (or other public companies) can snatch their marketshare by overinvesting. I doubt that everyone in USA just made a cartel and decided not to invest and keep margins high. There is some rationality in not overinvesting and not plunging into price wars. It actually shows management rationality that they don't do it unless they see an edge. The drop of labor wealth is mostly due to globalization. SVM is likely not a big contributor. Like Munger says, people complaining about drop of labor wealth are complaining about millions of Chinese climbing out of poverty. Would USA be in a better position if it was protectionist and did not allow cheaper labor in China/India to contribute?

I'm trying to decide if I should buy another 2 shares of Fairfax or to spend money for a trip to DJCO annual. ::)

Very nice post Liberty. :)

I told you that I see binary outcome. :) And I think it's about 50-50% which way things go. So, no, I am not optimistic. I just believe that we won't muddle through. Either we get the whole cheese, or we crash and burn. Regarding your examples: asteroid - predictable, possible to handle tsunami - predictable soon, affects tiny parts of population (even if California is hit) a massive earthquake - see tsunami a new disease - possible, but unlikely to destroy civilization. Horror movies are mostly fiction. (Yes, grey goo is a risk) a major war - yes, possible. Civ destruction is possible. the deadly repercussions of global warming - possible to handle after effects of the collapse of our financial system - not sure what you exactly mean, but I'll go with "collapse of financial system due to massive automation, massive human unemployment due to robots". Yes, possible. Likely to lead to war. See war above.

How big was the meeting last year? Do they require shareholder certs to get in? (I assume it's too late to buy 1 share ;)).

I for one would welcome our new AI overlords. 8) Seriously, if it came to humans vs. self-conscious AI, I'm not sure which side I would take. Humans have a lot of unadmirable qualities. 8) The best case - and perhaps likely - IMHO is the merging of humans and machines. But, yeah, there are lot of things to work out. :)

Bill Gates on immortality research: http://www.standardmedia.co.ke/business/article/2000149742/bill-gates-it-is-selfish-for-rich-people-to-try-to-live-forever I doubt this will stop people from researching it though.

One possible way of immortality is having your brain/mind scanned and deposited into new organic or inorganic receptacles. If copy could be kept, the accidental death would not be permanent. But, yes, there will be some deaths even in best case scenario, so you are right to not say "forever". :) Yes, there are a lot of questions/issues with this, but that's why it's called "singularity" - it's very hard to predict all the repercussions including social and economic ones. And, yes, it could lead to catastrophic crises, which is why I think that the outcome is rather binary.

Awareness and pessimism are not the same. :) You can be aware of a lot of things, but not be negative about them. I could go Zen on this, but I'll go Kipling: http://www.kiplingsociety.co.uk/poems_if.htm 8)

I'll go Kurzweil on this: if you don't die before 2050 or so, it is likely that you will live forever. In fact, it is likely that humanity is facing a binary outcome: either there will be a civilization-level collapse or there will be a positive singularity type of event after which the life as we know it will change into something very different. With practical immortality as a side effect. This is likely to happen in 2040's to 2070's at latest. So if you're young, keep in mind that the world will be very different sometime this century. Personally, I might or might not make it to this. Of course, Kurzweil is older than me and he hopes to make it, but I'm not as optimistic as he is. 8)

Near-BK or BK situations can yield 100 baggers. E.g. Fannie/Freddie common/prefs could be 100 bagger from $0.3 prices (prices are higher now). There were energy/bank X0 (perhaps not 100, but 20-50) baggers coming out of 2009. Of course, options is another place where 100 bagger can happen. Biotechs - which are kind-of near-BK/option situations. But lottery is the best for 1000+ baggers ;D

I think there's a lot of confirmation bias when looking back and saying "yeah, I knew the guy was no good". I seem to remember a very positive interview with him some time ago and I don't think interviewer or any listeners having reservations. I doubt I'd have invested in his companies simply because I mostly don't invest in companies that are losing money. But I doubt I could have called his collapse.

Assuming cost at ~$5, possible gain to $50 and possible loss to zero, the probability of success has to be higher than XX% (I intentionally did not write a value 8)) for the investment in prefs to have a positive expected return. As it is known, humans are notoriously bad in guessing probabilities of events. However, it would be interesting to hear what probability do people assign for the successful outcome? :) Possibly someone should create a poll. :) I did not write down the value of XX to avoid anchoring. As soon as I write it down, everyone will pretty much anchor to it. ;) So to be unbiased - haha - this is simple calc and some people can probably do it in their heads - perhaps we should not disclose XX before getting some probability guesses. :)

Who are we to judge his quality of life and call it a "sacrifice"? If he decided to chop wood and carry water, that's his choice. We can only thank him for the contribution to his community. Rest in peace.

Apparently your thoughts are quite popular. The problem is that if EU falls apart, Europe is finished. EU was and is the best future Europe could have. If EU falls apart, Europe will become a patchwork of squabbling, nationalist has-beens with no global weight, overpriced workforce, and pretty much the same amount of bureaucracy as in EU if not worse. United Europe is the only way out for the old continent. But it's understandable that in bad economic times people go back to outdated insular nationalistic worldviews. I was really happy with everything EU achieved. I did not think it was possible. The last 30-so years were the greatest in the history of Europe. Too bad it might end badly. Europositive and proud of it.

Insurers exclude acts of war from policies. There are other issues with Ukrainian businesses though. Like currency devaluation and sovereign default risk. I liked the black humor netnet's observation though.

I agree with Constructive: Watsa better have plan B up his sleeve, since Greece is likely to default and leave euro. I'd say the chance of default is above 30% right now. The chance of leaving euro is a bit lower, since they could theoretically - though unlikely - default and stay. Disclosure: I do have a large position in Fairfax.

I did not read the crap article OP linked to (I glanced at first page, it was enough to vomit... a bit). Buffett does talk his own book sometimes and he's definitely not an avuncular Santa that is his public image. In some cases he's nice (or pretends to be nice), in some cases he's ruthless. He's also sometimes weird. Sometimes wrong - about inflation for 20+ years. :) In summary, he's human and that's pretty much it. :) Talking about genius: he routinely understates his IQ and overall intelligence. So his claims that investing results are not due to high IQ should be taken with a big spoon of salt.

I wouldn't invest in FAIRX because of its Fannie/Freddie positions. For me the investment manager should work on investing instead of trying to make money in lawsuits. (I also believe these lawsuits are stupid, but that's off topic here and I won't post on it more - although Fannie/Freddie bulls are likely to gank up on me :))

I for one welcome our new autonomous overlords.

If the CEO is sitting in an office waiting for the phone to ring, don't invest into his company. ;D Honestly, I'm not a CEO, but I know how busy our managers are and the VP level management too. So unless the CEO is a dunce, he's not sitting in an office waiting to talk to you. Maybe it's different in other industries. It might be cultural thing too. Maybe Americans love this. If someone asked me the questions you suggested, I'd tell them that they are wasting my time and to go bother someone else. :) (Yeah, and here I'm on the internet forum wasting my time without anyone even asking, oh, the irony :)). Anyway, I said, go ahead and do it if you are a person who likes doing it and sees a benefit in it.

In US probably, in Europe maybe, in the rest of the world probably not (but likely you can't escape them if you want to invest there).

Yeah, sure. Go talk to CEOs. Cause they really gonna chat with every value investor doing scuttlebutt. Good luck. It might be a great practice for someone who wants to build up confidence in cold calling and maybe build up their rolodex (haha). But I think that for a huge percentage of individual investors this is not realistic.

Another note is that in the past - and even currently in some countries (China, for example) - the owner operated companies have been a dirty word. The owner operators can treat the company as personal piggy bank, engage in nepotistic behavior, etc. Owner operators can be as bad or even worse as non owner operators. Even the best owner operators can have succession issues. Not owner operated companies can be as good - or as bad - as owner operated ones. KO hasn't been owner operated for ages, though it has not had 17% return for ages too now.