AzCactus

If I have seen further it is by standing on the shoulders of giants---Isaac Newton. I like this one because pretty much anyone in this forum owes some of their successes to the experiences/lessons of others.

Yeah Baupost, maybe Brave Warrior and Arlington too.

Is there any concise way to find letters from different hedge fund managers either on this website or another? I think it would be cool to read letters from different value guys going back as far as possible.

+1 I was thinking this too...However that would be more of a long term goal. It would be tough to put a 1 year old on a budget lol

I don't have any kids but in addition to what Innerscorecard mentions---I think it should be something that will eventually grow into a learning experience. I.e. after a few years he begins to understand why the money is being put into stocks and not spent on new clothes.

Do you guys have rough formulas you use? One example, off hand would be a 10% gross yield. So in the mortgage was $100,000--than rent would be $833/month. $833*$12=~$10,000.00/$100,000=10% I know that between taxes, repairs and vacancies the net would be lower. However, I am looking to get an estimate of a realistic yield.

FrugalChief-Your opinion is worth a lot especially considering your profession. Thanks for taking the time to shed some light.

http://money.cnn.com/2015/04/02/investing/warren-buffett-stock-market-bubble/index.html?

Joel thanks for posting. I look forward to reading. Interesting to note that this was shortly before Buffett closed down his partnership and also before bear market that occurred in the early 70's.

Yeah your coworker had it coming. So there are 30 teams (t) in the NBA and most teams have played about 74 games (g) So, g*t= 2220 Based on Jawns post there have been 38 triple doubles which is basically one every 58.4 games or 1.7%. Obviously Westbrook's numbers are much higher but your coworker still should have been given much better odds lol.

Your basketball bet was a virtual slam dunk. Not because Westbrook isn't great (he is), but because of the odds of any player in the league getting a triple double on any given night is not too high. I would bet if you look on ESPN there are fewer than 10 players who have more than 1 triple double this year. Your colleague basically made a bet the way somebody buys a stock only because its going up.

Any meetings with great food or Q&A sessions? I don't know about the meeting but I have heard the food is good at Chef's Warehouse annual meeting.

BAM might be another

Great memo---thanks for posting.

Buy a car used and spend no more than 4 months net pay.

Thanks Crocodon.

Ben, I appreciate the response. In my case I am holding cash--but not necessarily because I think a recession will be in 6 or 12 months. I am ultimately holding cash because there aren't investments I really love too much right now. Additionally, the cash I have may not necessarily get invested in stocks some maybe used for property of some kind. The one issue I would hope to avoid that you allude to is selling when things are at bottom to buy something that you think maybe an even better bargain. In my case I am more comfortable holding some cash now (maybe 15-20%) not selling towards the bottom but go on offense and wait things out. Given your reputation--your 2 cents are worth much more than that. David

Schwab---you are talking about two guys who manage large sums of money. Your line of reasoning (its a small percentage of all their holdings or they have a more compelling reason to invest probably wouldn't apply if you were cloning someone like Arlington or Brave Warrior would it?

It's hard for me to reply without having a better grasp of your reasoning. For me specifically, the 7.5% is a filter to dial down the number of ideas I look at. I don't say to myself this idea is larger than a 7.5% therefore its great or its lower than 7.5% therefore it's bad. The 7.5% limits the ideas I look at and also gives me some (but not too much) confidence that this is a meaningful position. I would not say "immediately justifying," I would say it makes the idea more intriguing but this has nothing to do with whether or not the position would be cloned. If I like an idea at $10, I should like it more at $8 if my reasoning/analysis is correct. The other thing I do (taken from Pabrai/Buffett) is I write between 5-7 bullet points regarding the reasoning behind purchasing a position. This allows me to step away from the fact that I got an idea from Buffett, Einhorn or Klarman and simply judge the company on its own merits.

The fact that an idea is good for Buffett does not mean it is a good idea for you. Most likely you, Buffett, Combs and Weschler have different circles of competences. So the first thing is understanding what makes an idea good---Buffett buying it isn't a reason, you understanding it is. I also have two other defense mechanisms in place: 1. The position must be at least 7.5%. This obviously gives me confidence that the idea is high conviction. Of course, it doesn't mean that the idea will work but it gives me some piece of mind. 2. Most important look at the price. 13f's are at least 45 days old. And prices can change substantially over a short period of time. If the average price for the quarter was $30 and now the stock is at $42 your upside has gone way done and your downside has gone way up. Hope this helps.

I read Baupost's letter on Valuewalk and was intrigued that Klarman spends much of his time talking through recessions and presumably preparing his clientele for the next one. The links to the letters are below: Part 1: http://www.valuewalk.com/2015/03/baupost-group-2014-letter/ Part 2: http://www.valuewalk.com/2015/03/baupost-group-2014-letters/ But I want to know your thoughts on recessions generally, how you kept your head in 2008 and how you are positioning your portfolio for 2015 and the next recession.

I'm sure there's already a thread for Valeant. At this point its probably pretty long. Let's not get derailed. lol

I agree that the author may have had a bone or two to pick. And therefore, the article is not objective. But what is factually inaccurate?

I know that some of you are shareholders and fans of Biglari Holdings. This piece by Forbes (link below) is pretty tough as it highlights some of the whiplash from his $34 MM pay package in 2014 amongst other issues. http://www.forbes.com/sites/antoinegara/2015/03/20/the-implosion-of-a-warren-buffett-wannabe/

Great article. It really helps reinforce the importance of patience---reinvesting, compounding and minimizing taxes/transaction costs.