AzCactus

He mentioned his track record in a recent talk at Wharton, and I believe it was ~19% going back to inception, but I could be remembering that slightly incorrectly. Do you have a link to the video or transcript?

It is well reasoned. He has been wrong for years. He will be right eventually. Just shows how hard it is to time the market. ;) I think its Buffett who said its easy to know what will happen, its hard to know when. With that said the biggest question for Hussman and his shareholders is will he perform well enough when things go down to make up for his huge shortfall since March of 2009. Here's a chart showing 12 year returns. (attached) Hussman-SP.pdf

Given that he's a self proclaimed cloner I wound't have expected to find anything different in his portfolio...would you? Interestingly, on a year to date basis his worst performer appears to be Zinc which is the only position that appears to be completely "uncloned." Actually I don't really pay too much to what he says because I see a lot of contradictions. I know he recommends cloning, but if you say that then how did he achieve his amazing returns circa 2000? It couldn't have been through cloning. So was he in a different phase of his investing journey? If so when did he change into a cloner? And maybe we should discuss his pre-cloner results with his cloner results. I really try hard to find what every great investor has to offer, but I cannot learn from Pabrai because he just seems to be all over the place.

Here's the link for the partnership letters from 1947-1956 http://www.rbcpa.com/benjamin_graham/Graham-Newman_letters.html Thanks, David

I don't think any of us hate him or even dislike him (speaking at least on my end). I actually like him. He's a solid investor and does a lot of good around the world. With that said, I am a bit surprised that his 10 year returns are around the 10% or so mark when I hear so much about the 25%+ since inception returns so often. To this end if his goal is to compound at 26% per annum as his presentations suggest the next years will have to be pretty amazing. That leads me on of a few things: 1) the article is incorrect. His returns are better 2) As others pointed out, he has a few funds. Perhaps that 25% annualized return is based on that 3) His outperformance over the first 4-5 years was so incredible that it still generated the hefty long term numbers in spite of the solid, but not spectacular 10 year mark. I've learned some things from him and I enjoy his presentations. However, the returns seem a bit different than what we all hear.

I don't think anybody is trying to hate on Pabrai. I have learned a lot from Pabrai as well and he seems like an incredible human being. However, those things are independent of the performance cited in the article. I hope he continues to do well and outperform--but hopefully by more than 1.5% over the next ten years.

Last I heard a few months ago, he only had about 40% of his portfolio in the U.S. But I understand your point about following the herd here. Augusta, Can you please clarify the 40% of his portfolio in the US. Based on last 13F the market value was $413 MM and if he has a $700 MM dollar fund per Barron's article that equates to more like 60%? Thanks, David

Wait for things to get even cheaper.

Well done, sir.

Thanks for the article. Interestingly, BRK.A is mentioned as a top holding but based on what I could find they don't own single share of BRK.A and their BRK.B investment is 0.23%.

Thanks Global that makes sense. Sounds like BH shareholders may be in for a big decision.

I have never invested in anything resembling a merger/arbitrage opportunity and would appreciate a little clarity. The link below provides an article from the New York Times summarizing the terms: http://dealbook.nytimes.com/2014/11/17/halliburton-to-buy-baker-hughes-for-34-billion/?_r=0 Under the terms of the transaction, Halliburton will pay 1.12 of its shares and $19 in cash for each Baker Hughes share. That offer was valued at about $78.62 a share on Nov. 12, the day before news of their discussions became public. I have read that one potential issue is anti-trust. However, I am really wondering how this plays out based on the falling share price of both companies. BHI is selling at about $55/share which is about a 26% discount from the $78.62 shown above. Can this deal be consummated based on where these companies are trading now. I have a value of about $62 based on: Halliburton price per share $38.50*1.12=$43.12 $19 in Cash $62.12 $78.62-$62.12=$16.50 $16.50/$62.12=26.5% Feel free to point out anything I am missing, thanks in advance for the help. David

I agree with rranjan---some people might think that shorting is either unethical/un-patriotic. The bottom line though is that as long as the thesis is backed by facts and reasoned intelligently I do not see an issue. The only issue I see pertains to float/volume. Ackman and Einhorn have discussed their shorts very publicly on occasion and while I do not know them as people that specific action does not seem to me unethical. David

The way I look at it is this. A police officer is a human being just like you or me. Therefore a police officer has no right to kill other than the rights that you or I have to kill, which is in self defense or immediate defense of an innocent 3rd party. Therefore in every instance of police officer involved violence the question I ask myself is "What would happen to me if I did that?" If the answer is "It would be ruled a justified use of force in self defense" then the police officer acted appropriately. If the answer is "I'd be in deep shit", then the officer did not act appropriately and should also be in deep legal shit. I know this isn't the way it works (the police practically have a license to kill), but it is the way it should work. RK, I could not agree with you more. The fact as you alluded to above is that police officers (at least in the US) may have a greater degree of leniency than other parts of the world. The issue with the Garner case (which I have not really researched) is that everything is on video and the officer should be on leave and almost definitely should go prison or at least be tried be tried for a crime. In that case the officer's life never appeared to be threatened at all. I know if I did that to someone there is no doubt in my mind I would be on trial and probably in prison for a while.

I don't mean to single you out, but it's kind of sad to me that many people think it's "just" for a police officer to kill you if he feels scared. Ham, Don't worry about it. I have my big boy pants on. If you read my post--which it appears you did, it is not really a definitive statement. The key to something being justified however is based on the circumstances. When you say "feels scared" that really means his life is in imminent danger. Based on the testimony (some from African Americans)---Brown attacked the officer in his patrol car and reached for his gun, then after walking away from the officer he turned back towards him in something resembling an aggressive posture. In my opinion this classifies as imminent danger. I would be curious to hear in your judgment how close the officer would have to be to dying for his actions to be justified.

In an attempt to be objective, there appears to be a lot of grey area in the Ferguson situation because it boils down to eye witness testimony and the forensic evidence. In that case, I truthfully believe the police officer thought his life was threatened and acted accordingly. Remember that shortly before the incident occurred Brown violently attacked someone (caught on camera). However, in the Garner case which I do not know a lot about (other than the video)--it seems evident that the officer went WAY over the line and abused his power. In my judgment he should be prosecuted for at least (voluntary manslaughter), and maybe something harsher. It is honestly hard for me to think that a lot of injustice existed in the Ferguson case. The fact that more publicity exists regarding it does not alter the facts. However, the Garner case is really a sad example of police misconduct and someone at least being tried for what appears to be a crime caught on video.

Generally speaking, I'm of the view that less skilled managers are more likely to be benchmark huggers. If you aren't good, its easy to just stick with the herd, be average at best and keep collecting a paycheck. If you truly are skilled, you don't want a portfolio that is spread out it diversifies away all of your winners. You want to make bets that will have a material impact. Diversification is the enemy of out-performance. tede02--you are absolutely right. Any manager can randomly place 7-10% of net assets in a position and by definition they would be concentrated. Whether they are skilled because they made that bet for the right reasons is really what the research looked at. Ultimately, the research found those managers who took concentrated positions typically outperformed their counterparts who owned more positions or who were benchmark huggers.

I can not speak for anyone else here but a 4%-5% real return is pretty much a 6%-7% return (assuming inflation is 2%). I think the issue is that you are proposing this question when stocks are basically at an all time high. So if the S&P returned say 6.5% for the next decade it would be at 3848 (or nearly double where it sits today). I am unaware of a ETF that will achieve the suggested returns above without being active at all. If you have a significant AUM (as is suggested by your post) than you might want to consider having your money handled by a value investor who did well in 2008. Best of luck to you. David

I saw this on Valuewalk and thought it would probably interest a few folks on the board. If anyone reads it and has opinions either way I would love to hear them. In any case I will probably give this a read over the weekend. Here's the link (gives brief overview): http://www.valuewalk.com/2014/12/mutual-fund-managers-who-take-big-bets-skilled-or-overconfident/ Here's the PDF: http://cdn1.valuewalk.com/wp-content/uploads/2014/12/SSRN-id891727.pdf David

UCC--this is what I am wondering too. Both in terms of previous times people were positive about stocks maybe 06/07--I was still in high school than. To your point though I think that the "ignorant" are drawn to certain reads expensive stocks is because they have either recently been high flyers or are cool/trendy names. This description certainly fits for the above names--although Starbucks is certainly different than the other two.

Mh, You mention below that you weren't actively looking for a change. I think this is vital to the extent it implies that you were satisfied with your career and life in NYC. I think if I was in your shoes I would try to be as objective as possible by doing the following: 1. Write pros and cons of moving to Philadelphia and staying in NYC. 2. Assign a weight to each of these. While I have no idea how exactly you quantify being near family or your wife being happy with her job you could probably estimate. 3. Pick the city that nets the higher number. I am fully aware this may sound overly simplistic, but after reading many of these great posts---I think the above approach would help create a sense of clarity. Again good luck and I am sure you guys will make the right choice :)

Over the holiday weekend I was in Los Angeles visiting family and my aunt wanted to speak to me about investing. She mentioned that she had spoken to an acquaintance (who is not in the financial industry) at a local coffee shop and this individual mentioned to her the three stocks that she needs to own are: TSLA, FB and SBUX. I bring this up because the ongoing bull market is the first one I have actually been an adult throughout. This maybe purely anecdotal but is this the sort of talk that people have heard leading into previous market peaks. While, I am aware that this situation does not necessarily represent the larger population I thought that it was interesting that these three stocks were picked given their prices. Anyone who wants to chime in about talk they have heard or general opinion about the market would be good to hear.

Mh, You mention that pay and benefits are the same between the two jobs. From what you are saying it sounds like the cost of living is lower where you currently live and you feel your job is really rewarding on the one hand but challenging on the other. To me it sounds like you have an opportunity to improve the hospital you are currently at. The main reason for leaving sounds like it would be the chance to work for a prestigious institution. Obviously, you and your wife need to make the final call but to me it sounds like you would be leaving quite a bit behind. Good luck in your decision :)

This link shows the best performers for the S&P 500. WMT and FD along with a couple of healthcare related stocks did well. http://www.reuters.com/article/2008/12/31/usa-stocks-sp-stocks-idUSN3135725620081231

That's exactly what we've been talking about here and in Racemize's thread. It's easy to posit a single event where one approach of the other would be bad. The reverse is equally true, but not as visible because sins of omission always less noticed. What if the market goes up rapidly for years while you hold a large amount of cash (this has just happened to many people over the past 5 years)? Many people never stopped being bearish after 2009 and missed multi-baggers. When they buy in the next downturn, it might not make up for their missed opportunities, but most of that will be pushed under the rug. Or maybe there's a drop, and they expect the apocalypse, but it's just a mild one and they never actually buy because they're so sure it'll go much lower... What truly matters IMO is over long periods of time. I might not be able to buy as much during dips, but I will participate more when things go well. If the businesses that I pick have more attractive characteristics than the market overall, and are more attractively priced, and they can live through almost any crisis and deploy capital opportunistically (buybacks, M&A), then holding them seems quite safe to me and I feel like they can create more value for me than I could with cash. If I could predict general market moves, I would. But I've been hearing people call for huge drops for years, and if I had listened to them I'd be poorer, and there would be the very real risk that I would stay bearish through the bounce off the bottom anyway and miss the following recovery (this seems to happen frequently even to very good investors). Timing is hard. Liberty, I think you and I are saying something similar but not the same. You mention sins of omission and people who held lots of cash and missed multi-baggers. While I agree that this is true I would suggest to you that if someone held cash and could not find a way to deploy it in late 2008 or 2009 than they are not suited to be invested at all. In terms of being invested in good businesses versus having cash all time---you are absolutely right. It is much better to be in a good business for an indefinite period of time than try to time things and hold very large % of cash for extended periods of time. However, one does not need to be able to time the market perfectly to realize that cash has value during a downturn for what it does do (allow an investor to go on offense) and what it does not do (drag down returns). To give an example: If you look at Mohnish Pabrai's 13F between 6/30 and 9/30 of 2014 the value went from $481 MM to $414 MM. This is roughly a 16% increase. I would not say that Pabrai is timing the market. I would say that he is currently not able to find investments that meet his criteria at the present time.