Homestead31

What is your background and experience level, and what is your ultimate goal?

i think it is important to remember that just b/c an idea went up doesn't mean that your write up was good, or that you were correct in your analysis. a lot of things have gone up over the last few years. at the same time, there are alot of good write ups, that go up for the right reasons, that are just not what the VIC founders gravitate to. focus on people's first ideas, and you will see that they are more along the lines of, "everyone thinks A, but actually B is true" or special situations. everyone's first idea is reviewed by the VIC team, but once you are in, people can post crap to just maintain and they do. i was a member for a few years, but i didn't want to post crap to just keep it live, and i had a long period w/o anything i wanted to write up. it is also not true to say it doesn't cost greenblatt anything. they give out 26 $5k checks a year, and they have an employee who i believe is full time working on maintaining the site.

it would be helpful to understand more about what you are looking for, as there a wide range of formats. the most obvious split is are you more interested in hearing management teams talk? or are you more interested in hearing investors talk?

I don't agree with this part. Why are those your only two options? Why bother paying that 1% in the first place to Merrill for S&P performance? Just buy the SP500 index. From a client's perspective, the best situation is to invest with a manager whose net worth is tied to the fund (downside protection), and who is paid on a performance basis above the risk-less alternative (incentivize upside). If I had a few million to my name and I wanted to start a fund, I would charge a 20% performance fee above the 10-year treasury rate hurdle. those are definitely not "your" only two options, and without a doubt, index funds are the best choice for most people. however, the original poster was specifically asking about actively managed funds he was considering, not index funds.

i think you are asking the wrong question. David Swenson from Yale has talked about this. Trying to judge a fund based on its fees alone doesn't make any sense. What matters is after fee returns. Over 30 years, 2% out performance results in something like 70% more in ending capital. If you don't have the skill set or confidence to out perform on your own, does it matter what it costs to out perform as long as after fees you are out performing? In other words, if on your own you think you could do 7% per year, or that an index fund could do 7% per year, does it matter if you are paying 1 and 10% or 2 and 20% if you end up with 9% after fees? in either case, you end up with 70% more money in the end! the wrinkle of course is that you need to make sure you are getting what you pay for. if you are considering large cap managers that run $5B, their chances of out performance are pretty slim. if you are considering managers that have pledged to stay small, and consistently find value in off the beaten track investments, and have a track record of success, i would argue it is worth paying up for them. this is also where the hurdle comes in. if you don't have the skill set or confidence to invest on your own, i think the proper way to think about it is, "i could go to merrill lynch etc and they will charge me 1%, and then pick stocks from the list of 3,000 names they have under coverage, 90% of which are rated as buy or hold, which means i will basically get an S&P return." Or, keeping in mind that most people think the SP500 is likely to return 4-6% over the next decade, you could say "I will pay a unique manager 1% with a 6% hurdle, meaning that he is paid the same as the guy picking from 3,000 buys and holds, unless he is able to outperform by being unique. if he is able to outperform, he will get a cut of that out performance." for what its worth, 6% is considered to be a high hurdle for these reasons.

http://valuexvail.com/presentations/?mgc_48=61/2017 some good stuff here for all to enjoy

all true about the 1.2x theoretical buybacks. it is NOT written in stone. it also wasn't written in stone a few years ago when this thread was popular and a lot of guys made a lot of money with the BRK LEAPS. fully understanding that the 1.2x "buffett put" is at best nebulous, does anyone have any views on BRK LEAPS today? on the surface it seems that BRK is not as cheap as it was in '13 when this thread was popular.. but maybe it is? and on the surface the options are cheaper, but does that matter if the stock is not as cheap?

thanks twocities to be clear, i still think the stock is cheap, but not AS cheap. When it was at 1.2x there was theoretically no downside to the buyback level (which obviously isn't guaranteed). Now, at 1.4x there is ~17% downside to the buyback level. however, it may worth considering that while the stock is now technically at ~1.4x book, the market value of KHC is not captured by book value. adjusting for this gets you closer to ~1.3x book. This just one of those crazy GAAP things, and we know how Buffett feels about that... so maybe 1.2x isn't the buyback level. maybe now it is 1.3x. impossible to know. also worth noting that book value could also be adjusted based on the potential for a change in tax rates, as deferred tax liabilities would be reduced if trump is able to lower corporate tax rates. that combined with book value growing every day as cash pours into Omaha, and we're probably not all that far off from the 1.2x BV level that BRK was at a few years ago when this thread was popular. anyway, i haven't historically invested in LEAPs, but i remembered this thread was interesting so i wanted to revive it. it seems like in the money LEAPs would have good risk/reward here

curious what people's opinions are here on the LEAPs. P/B is ~1.4x, so not as cheap as it was when this thread was really humming a few years back (P/B was ~1.2x at the time), but at the same time, volatility is at record lows, making the options cheaper. any and all thoughts appreciated.

hi all - i know buffett, munger, pabrai and others have commented on the benefits of an investment committee of one and the problems with group decision making. i am looking to learn more in this area - can you post any relevant quotes, links, reading material etc that you can remember coming across that speaks to this philosophy? thanks in advance

i found BofA Merrill... does anyone have an equity research report from UBS or Wells Fargo? if yes, please check the back where it shows what % of names are Buy/Hold/Sell, and if it says how many names they have total, please share as well. thanks

hi - i'm trying to gather some info on sell side research - specifically how many stocks are under coverage, and what % are buy, hold, or sell. every equity research report from the sell side banks has this info in the disclosures section. if anyone has access to any piece of research from BofA/Merrill, UBS, and Wells Fargo, could you take a look at the disclosures and let me know how many stocks are under coverage, and what % are buy and hold? thanks for your help!!!

can anyone comment on the on-going costs and procedures for an RIA? I am in NY, but other input welcome as well. on the new york website (http://www.ag.ny.gov/investment-advisers-faqs) i was just reading about needing to provide a balance sheet and income statement and update documents annually. are you guys doing that all yourself? is there a template you use etc? any thoughts appreciated

JoelS - thats the one!!! thanks!

i realize this is kind of random, but the collective knowledge here never fails to amaze me so here we go... I am looking for an article that i read a few years ago. 2013 if i had to guess. i am 95% sure it was a bloomberg article. the article was about a company whose name i can't remember. the company was a retailer - i think some sort of like fast food or sandwich shop chain. at one point they were close to bankruptcy, but then a new owner came in and overhauled the way individual locations operated. the big change was that the manager of each location was given a piece of the equity. all of a sudden, stores were super clean all the time and running at peak efficiency. it was a huge success. i think this chain was based in boston, but i'm not sure. if this rings a bell for anyone, please post a link to the article if you have it, or the name of the company and i will try to find the article. apologies for the random post, but thanks in advance for the help!

TTT anyone?

i have no idea what burry's performance has been over the last few years, but he has made comments in interviews indicating that he has remained bearish since the crisis. its been a tough couple of years to make money if you're bearish.

meacham references the information about the best performing funds over long periods lagging pretty regularly over shorter periods of time... i know i have seen a few articles that reference that fact, but i can't remember where.... does anyone have a link or some data etc? thanks

quick question - if i have a loss in a taxable account, can i sell the shares and immediately buy them in an IRA account and still get the tax loss? i know you have to wait 30 days to re-buy in a taxable account, but given the tax free nature of the IRA account i'm not sure if this is a way around the 30 day waiting period? thanks

in my view, this guy has 2 problems, neither of which is concentration. the first problem is his client base. every great investor talks about how important your client base is. to successfully run a concentrated portfolio, your clients have to understand that there is a good chance you will under-perform the markets for long periods of time. even munger had back to back -34% years. if your clients are thinking month to month, you should fire them b/c they clearly don't understand how concentrated portfolios work. the second problem is his inability to deal with volatility. pabrai's wife has commented that she did not see a single change in mohnish's behavior in his personal life when the world was blowing up around him. this guys wife was clearly not happy. concentration can be extremely emotionally taxing. every great investor has written about this at length. you need to be able to just ignore the world. this guy clearly couldn't. these comments are not meant as criticisms. very few people are built in such a way as to deal with the volatility that can come from a concentrated portfolio. many of those who are built that way have become very very wealth. many of those who thought they were, but learned they were not when the sht hit the fan have become poor and resorted to index funds. there is no shame in that, but it is a shame they didn't just index from day 1.

to be clear, i have a concentrated portfolio of ~15 names and i am happy holding these names and in several cases have been adding. for most of them, i can look at them and make an honest, conservative case for why i think they will be up 100% in the next 3-5 years, although i am re-examining my thesis on one or two of them as well. i'm sure that i won't be right on all of them, but i think the returns will be more than acceptable. my question is more regarding the different styles of investing, and which is doing better/worse in this market or any other observations anyone might have. For example, Vinod, your point about owning higher quality companies at less of a discount is well taken. traditionally i have viewed that approach as having an element of market timing to it and have always more focused on the best values i could find. of course in hind sight i am thinking that several months ago a few of the names in my portfolio were just a couple of bps away from my sell level, but i didn't really sell much... and now of course i am wishing i had b/c they have retreated significantly - not due to a deterioration in business, but due to multiple compression. however, i am happy reminding myself that for these companies IV is continuing to grow and multiples will expand once again in the future. another market observation is that there seems to be a clear bias against smaller names - i saw a piece the other day that showed that the bottom market cap decile of the R2000 was on average down 50% from its 52 week high, and each decile up the market cap ladder had incrementally better performance. similarly, the R2000 "value" index is down something like 10% YTD while the growth index is close to flat. clearly the market is favoring "growthy" stocks at the moment, and by definition stocks with temporary problems are not growthy.

i'd appreciate some thoughts from the group... a very common approach among value investors is investing in stocks that are suffering from "temporary problems." In fact, while my portfolio has some special sits and some compounders, most of my positions are what i would consider good businesses with temporary problems. there is a ton of evidence to suggest that this approach works real well over ~3+ year periods... but in this current market, the stocks with "temporary problems" are getting smashed much harder than the compounders and special sits. this makes sense to me - after all - there is a tremendous amount of uncertainty out in the world right now, and this macro uncertainty just compounds the uncertainty associated with a business that is dealing with temporary problems... compared to a special sit that should be some what agnostic toward the market or a compounder that is easy to say, "it'll be fine in the long run" it is no wonder that mr. market is more concerned that the temporary problems will become permanent problems. the other possibility is that i am just plain wrong about these problems being temporary, although I take research very seriously and work hard to understand competitive advantages and moats and i don't think that this is the case. so my question for the group is has anyone else noticed investments that fall into the "temporary problem" box getting hammered more than other investments? is anyone else struggling here? when you think about portfolio construction, do you think about limiting the amount of "temporary problem" stocks because you realize they can be more volatile in the short run? when you look at "temporary problem" investments do you just value them off of current problem earnings and look for a low multiple on problem earnings? or do you look out a year or 3 and value them off "normalized" earnings? (this is what i tend to do) Any other thoughts on the "temporary problem" method of investing appreciated as well... and please refrain from using this as a platform to pat yourself on the back for your great results if you have them... thanks

thanks - i see that both of these have "recent" sections, which looks like its just today and the day before... has anyone come across something that has more advance functionality? like for example you can do the last week, you can limit it to CFO & CEO... you can limit it to open market purchase only... you can limit it to a certain minimum dollar amount etc? these 2 are a great start, but curious if anyone has better options?

Does anyone have a good system for tracking these? In the US i use openinsider.com... there are a few different ways you can manipulate the information to get what you need... i haven't found anything equivalent for canada. i'd love to have a site where you could get a list of all canadian insider buys over the last week... any ideas?

Tim Ferriss did a podcast centered around mediation... sort of http://fourhourworkweek.com/2015/07/31/tara-brach/ anyway, the woman on the podcast, tara brach, has a website that supposedly has a bunch of different guided meditations. I haven't checked it out yet myself, but i have seen her mentioned several times recently, and seen a lot of positive reviews of the material on her site.