Jurgis

The fact that people spend hundreds of hours evaluating financial statements of various companies (and even worse on macro or TA) and still don't outperform just blows me away. Perhaps they should just buy BRK. :P ::)

Are you guaranteeing a return over 8-9% with your picks? Edit: this discussion should be moved to BRK section though.

Biggest past mistake: not buying-and-holding BRK 20 years ago and playing golf since then instead of sitting on investment boards. 8) Biggest current mistake: not switching to index and playing golf... To be determined though. ;) Random list from memory: - Oil & gas recently. Still to be determined, but likely to be a mistake. One of the reasons: great returns on oil & gas when I bought 2008-2009. So assuming that 2014-2015 will be like 2008-2009 was "fighting the last war" mistake. - Chinese reverse mergers. I think I got out at a wash mostly but I had some big losses - and some big gains - which is one of the reasons for big losses. - I mostly did not "blindly follow super investors into various situations". Most of the recent "follow super investors " ideas on CoBF made no sense to me, so I did not buy. However, instead I bought a bunch of overvalued super investor companies: PSH, FRMO. Might still work out, but looks pretty bad so far. - General issue with a lot of my investments: not enough DD and not enough second level insight. (See comment about switching to index). Part of the excuse for these: yeah, things were way easier in 1990's/2000's. Or at least it seemed that way. ;) - BTW, mistakes of omission always seem to be great companies that I bought and sold way too early. But I guess that's also a bias of selective memory: you don't remember much so-so companies where you sold and missed maybe 20-30% of gain - even though if you miss these couple times a year, your return is 20-30% lower. But you always remember that you bought GOOG, AAPL in 200Y and missed on the X-bagger. Even though both might be equally bad to your long term returns. - To emphasize the above: unless you are very concentrated and/or hold-forever, your returns may die not from big mistakes (i.e. you expect company to do well and it BKs), but from paper cuts where you miss the 20-30% extra in so so positions. This is especially the case for Graham/net-net investors - possibly not many people on this board, but I see it elsewhere where people still do shorter term mediocre company investing. - It's tough to remember those so-so company shorter-term investment 20-30% mistakes... Even looking at past trades it's tough to evaluate if you really missed those extra returns or if you sold at the right price/moment... - OK, apart from GOOG, AAPL, BRK, the big mistake of both omission and commission: bought GILD, then GILD acquired HepC startup for X billion - I decided that this was a waste of shareholders' money and promptly sold GILD. Result: missing that 4x-5x bagger.

Two words: platform value That was very good! ROFLMAO.

If only the Democrats would nominate Biglari to run against him. That would be perfect. USA by Biglari. Could also bring a new meaning to centerfold... oh wait, that fellow Clinton already done that! 8)

If Carter can put solar panels on White House, can Trump put on a neon lights and roulette wheel?

It's not clear that's true. Would have depended on CDS pricing and he might have made losses permanent. But I see that potentially by selling let's say 1/3 at a loss, he still might have survived 1-3 years and still made something like 2/3 of the gain. I'll go with that since I don't think I want to spend time evaluating possible CDS pricing and various outcomes. :)

randomep: I think you switched the discussion topic. I was not discussing whether Burry (and anyone else who shorted housing market) was/is a great investor. You build up argument about that, which I may disagree with, but that's not what I was talking about at all. Just to clarify, what I am saying is that IMO Burry's position was quite risky because he was paying the premiums and therefore it was very timing dependent. I acknowledge the difference from Canada/Australia/China in terms of mortgage/CDO setups. But even with that the situation could have gone longer for 1-3 years (perhaps) and the result for Burry could have been disastrous. This does not mean that he's bad investor or that his investment was just luck. It was close to a binary trade (because of premiums, investor revolt, etc.) and IMHO a risky binary trade. That's all I am saying. :) Regarding the topic that you are writing about, that's a toughie in abstract (or even within the context of housing trade). I might argue that people who pile into binary idea are not great investors, but I could also argue that they are. In the end, if they are right, they can retire and ride into sunset and who cares if the result was luck or whatever. And if they continue, they may or may not blow up later. Some people change with experience, some don't. Some of them allocated a lot of capital (and risked a lot) some of them didn't. Some people ride from one success to another quite different success, some don't. But based on VRX, the fact that a lot of famous names pile into idea (while other famous names oppose it), does not make it a great/bad idea, does not make people who succeed/fail automatically great/bad or lucky/unlucky. It all depends. :)

And it is very sad if 21st century majority of America follow some kind of twisted version of a fairy tale written 2000 years ago in Middle East. You'd think humans would think and be rational.

Been tried in other countries. Usually doesn't work well. President has to work with Congress/etc., which does require more than just intelligence, it requires connections, understanding of the power structures, etc. For better or worse, IMO, politician is a career just like other career. There is a reason a new lawyer or manager or doctor or whatever is usually not suited to take on the most complicated jobs in their area. Same with politicians. Sure, there can be geniuses who do great, but on average a career politician will do better than someone who isn't. Expecting Mr. Smith to go and change Washington is naive and works only in movies. Possibly unfortunately.

Personally, I would rather see more parties in USA. Although multiparty systems have their own issues, but at least it solves the problem of having to vote for someone just because there's only two choices and both unattractive. E.g. in my native country I vote (when I vote) for somewhat economically liberal (i.e. free market with limits and social contracts) and somewhat US-meaning-liberal (i.e. not conservative old fashioned religious-values) party. There is no such choice in USA pretty much. There might be local politicians who lean that way, but not presidential candidates. So, yeah, if I had a vote, I'd choose Democrats just because of the Christian right Republican fringe, which is way more unacceptable to me than the issues I have with Democrats. BTW, though I don't like the political system, I don't like a lot of politicians, I don't have a better suggestion. In some sense democracy is still the least-bad system out there. Sure if we were all enlightened and could propose/select/get enlightened leaders some other way, I'd be happy, but I don't see such a way anytime soon.

LOL, as expected everyone is 20/20 Monday morning quarterback in explaining how Burry & co. could have never been wrong. Carry on, guys, keep your cognitive biases as much as you want.

Since the anti-Democrats here decided to make their voices heard, I'll state that I completely agree with Buffett: Hillary Clinton is the best candidate in this election. No, she's not perfect and not even very attractive from policy standpoints, but there's no one better. Jeb Bush would have been probably the least bad choice from Republican camp, but he's gone now. But then I am one who has "taxation without representation", so I don't even get to vote. Peace.

Move to Canada. Canada has the worst government since inception. In the poll! How do you change your vote in the thread's poll... I understood that you asked about the poll, but since this thread is ::) :o ::) anyway, I thought it was funny to point you in the right direction. I mean in the northern direction. :P Edit: no, poll votes for this poll are not changeable. Probably the author did not actually allow it.

Move to Canada.

+1 to writser. I also worry about rising nationalism. However, about Trump - I don't support him, but I think I prefer him to the Christian right ideologues of Republican party. Trump is a clown and a55hole, but he's somewhat "our" a55hole. Just look at his past opinions about hot topics: he opined with Democrats more than with Christian right. Of course, it's impossible to rely on his past opinions, since he's a loose canon and he can change his opinion tomorrow. But I'd rather have that than someone who has these opinions set in stone and will never change them. I think that people comparing Trump to Hitler are taking an easy and false strawman shortcut. This is not something to be proud of.

I watched the movie today. I thought it was great. My wife liked it a lot too. So Lewis says that after "Liar's Poker" he was inundated by letters of young people asking how to make it in Wall Street. I wonder if after "Big Short", there is a similar wave of "what can I short to make $Billions". Edit: Also reading the Canadian RE thread, I wonder how much of Burry's & co success was luck. The US housing market looking back was not horribly overvalued - or at least no more so than a bunch of other markets that have not crashed for longer. The music could have played couple years more - and most of the shorts would have gone bust, especially the ones who had to pay fees and/or put collateral.

i'll have a go at this, and others can follow. i view the resolution process through the lens of an investor. i believe the market will react very strongly if perry is reversed, and somewhat less strongly if it is vacated and sent back to district court for fact finding. even if reversed, perry would be sent back down for the district court to fashion a remedy. so even if appeals court reverses say by fall, you may not have the district court order a remedy until early 2017. even if govt loses the appeal, the govt will ask for an en banc hearing of the court of appeals (unless it is 3-0 against, if i recollect correctly), and will ask for cert to SCOTUS, which may be denied. but my point is that you should have an actionable exit point at the time the cir ct reverses or vacates, and i would be surprised if the market would not react strongly until all appeals have been exhausted. so your maturity analysis is subject to "prepayment" if you will. Fair enough, but IMHO "prepayment" will be possibly 0.5 (0.5 par for prefs, for example) of the full win. So, yeah, you get shorter timeframe (possibly), but you also likely get smaller gain. BTW, I'm using a very simple arbitrage model on this: Current price: 4.5 Probabilities Target price 50 45.5 0.15 6.825 Loss price 0 4.5 0.85 3.825 3 Time period in years 4 18 Gain in annualized percents: 0.166666667 Note that this assumes 15% probability of success, which is IMO quite low, 4 years of workout, par at workout. It still gives ~16% annualized return. But see what happens if I cut the time to 1.5 years, $20 at workout (and cut loss to $2 instead of $0), keeping the same probability: Current price: 4.5 Probabilities Target price 20 15.5 0.15 2.325 Loss price 2 2.5 0.85 2.125 0.2 Time period in years 1.5 6.75 Gain in annualized percents: 0.02962963 The estimated return goes down to 3% annualized. This just shows that partial "prepayment" is not that great scenario for investors. BTW, if we change 4 years to 8 years in the original calculation, the expected return drops to 8%. So time matters. Though, of course, probabilities matter way more (if probability of success is 20%, estimated return is 16% even if we have to wait 8 years). For everyone: I am not claiming that 15% probability is right, you can plug in your own probabilities, timelines, prices, etc. ;)

Part what you said is correct. Buffett tries to get the good stuff. However, it is incorrect that he "just ignores the bad stuff". He did quite a few reorgs in his captive businesses. Buffalo news, National Indemnity (and/or other his early insurance companies), GenRe, NetJets, and a whole slew of recent Tracy Britt Cool helicopter restructurings. He even forced KO CEO out through boardroom politics. So don't get fooled with "he does nothing" image.

I think I asked this before, but just in case you legal types want to think about it: what is the "maturity" distribution of court decisions including appeals? The same way you look at debt maturities, I'd say you should look at court decision maturities and possible appeals all the way (to Supreme Court?). Then you can build up the best-cases (without settlements which can't be guessed), average cases and worst cases. Very roughly, if your worst case maturity is ~3 years, this is possibly great investment. If it's 5 years, it's becoming so so. If it's 8-10 years, then it's not that good (and also adding risk of any financial complications during that timeframe - although I am not a lawyer and I can't evaluate how these would affect judgement of actions preceding the complications).

I have to admit that I am holding some from higher cost. I am not adding. I want to see how Ackman deals with the current situation. I am not a staunch believer in him. I think he has some good ideas and the "platform" companies though ridiculed may be sensible concept. He overpaid though (and I overpaid for PSH :) ) and VRX was/is a double mess. It is likely that individual companies - PAH? - might be better investments than PSH. However, I think we should ask Sanjeev to merge this with PSH thread in investment ideas: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/pshne-pershing-square-holdings/msg253137/#msg253137

Not a rant. Good observations.

+1 on what Uccmal said. Also, if Prem wants 100% guarantee of survival in GD, he should not be investing in Sandridge, Blackberry, Greek banks, etc.

McLean writes rather well argued and level-headed articles, especially when she gets big-enough word count. Although parts of this are probably recap from her book.

annual report 2017: "...these losses are significant but we consider them unrealized and expect both of them to reverse when the grand disconnect disappears-perhaps sooner than you think..." or not? We'll see in a year! Grab popcorn!!