UNF2007

It's really tough to admit mistakes, but I appreciate when people share because it always provides some food for thought on how to do better. Big Ones From 2014-2015: -taking a spec risk in an small cap E+P company with significant "asset value" , about 8 months before the bottom fell out of oil, took a 30% loss. My lesson from this one is that estimating commodity prices needs to be in the too hard pile for me, anything where the asset value rests on commodity prices belongs there as well. -overestimating the moat around WTW, took a 20% loss before selling. Seemed compelling from a valuation perspective. But after thinking it through some more, and trying out some of the competing software which is quite good, realized that I made a big mistake about the viability of the business model.

"He relishes the opportunity" , a double entendre?

Agree with her brilliance, however the concept behind this company deserves some scrutiny, extraordinary claims require extraordinary proof in my view. The most important is obviously if the tests they have developed match up well with current ones. Point of care testing has existed for a while in the ICU environment, with extremely small blood volumes, specifically for ABG assessment. However the problem is that it only gives a rough approximation of the true values, and is not as accurate as a regular ABG. I actually hope it works out, but the thought that she is worth 4.5 bil based on a valuation assigned by PE is funny. There was an article a while back that talked about valuations being chosen not based on value, but based on the ability to attract more investment. Here is a good article with some of the questions that have been raised about the company. http://www.businessinsider.com/science-of-elizabeth-holmes-theranos-2015-4

Has anyone bought shares off a foreign exchange? I was watching a speech by Eric Prince talking about the Blackwater operations, at the end he mentions a public company he is CEO of now that is setting up logistics operations in Africa, for transport. Basically if you want to have the peace of mind that you can be anywhere in country and have access to transport for medivac etc. They are also going to be involved in the logistics of getting natural resources out of hostile areas, and creating the infrastructure for that. I have just started the due diligence on it, but before I even commit to that I was wondering if anyone has bought stock of the HK exchange. There aren't any ADR's available, so I'm guessing this will involve converting USD to HK dollars, with the resulting currency risk, in addition I'm guessing there are going to be some weird tax implication with owning a foreign company. Any infor will help, thx.

I have been thinking about social media a lot lately, after reading what some of the youtube channels are generating in ad revenue for the people running them. It seems to me the current model is to reimburse based on the number of people watching/time watched, but my question is does that translate into increased sales for the companies that are advertising? I wonder if anyone has studied the increase of sales per ad dollar spent on the various mediums, or if it's possible. My guess is that the sites/channels that drive the most traffic (pewpewdie) are also going to correspond to a demographic that has the least disposable income, with the most time to spend on social media and turn out to be the least profitable. I think at some point companies are going to start paying more attention to what value is created, when advertising on social media. There is a finite amount of ad dollars and shifting away from the more traditional forms of ad spending to social media may not turn out to be as profitable as everyone is thinking. If that's the case the ad dollars are going to shift back and the valuations/salaries of the social media content generators are going to reflect that. The corollary to that is some social media sites may become subscription based in the future, if the ad revenue falls off.

Did similar stuff as Scott when in undergrad, although I did have a roommate. I liked hanging out with people but it was limited mostly because I was focused on a goal, getting into med school, so basically anything that didn't have a direct impact towards that I almost completely ignored. I noticed similar behavior in other people in my med school class, one person who had an aerospace engineering degree from MIT, worked at SpaceX etc, lived in an apartment with no furniture, white walls, no A/C. Another guy, slept on cots in the med school path lab, studied constantly, rarely went home, he became an orthopedic surgeon. I think for some people, when you have a very specific goal in mind and you are determined to get it pretty much everything else becomes secondary. That said, once I got my acceptance I started dating, got married, have kids now which make me very happy. I just couldn't even entertain any of that until I had met a very important goal, I think some people are like that, my 2 cents.

What I do is try to get to a reasonable earnings power value, based off adjusted operating earnings and then capitalize those earnings with a discount rate of anywhere between 10-12% depending on how strong I think the franchise is (if there is one), which is purely a qualitative judgement. I then want at least a 33% discount to that fair earnings value to invest. I don't build growth in as a MoS at all as I am not really that great at identifying those companies where growth is dependable and profitable (I wish I was). As it moves up in price and the MoS shrinks I start asking myself the question, how sure are you this is worth x?, and is it worth it to wait for it to get to x given what has happened since it was purchased, is it better to sell and capture what ever percent of the mispricing has corrected? Obviously the closer it gets, the smaller the MoS gets, and the more anxious I get about selling. I'm usually selling around 90% of intrinsic value and up. Although I have almost always sold to soon, it is a problem with my process, I'm working to get more comfortable holding up to and past 100% of IV on high conviction ideas.

The federal reserve of St. Louis publishes a monthly economic trends report you can get online. Learned about this from listening to the Value Guys podcast, back when they did them...

Took the test... INTJ. How accurate are these things? Kind of reminds me of the Michael Burry interview where he talks about being diagnosed with Asperger's and would have felt better not knowing, maybe not that extreme but similar, lol.

Very interesting, thanks for posting. One thing I found in here was his description of how he viewed the levels of the S+P 500 and DJIA. He came up with a formula which is something quite similar to the Shiller PE. Just briefly calculating the data for today I get an avg S+P 500 earnings of 79.12 over the last 10 yrs capitalized with twice the current AAA bond yield of 3.6%. That gives a normalized level for the S+P 500 of about 1100, with a P/E of 14. Case 2, If you use current S+P earnings of 104 and twice the 30yr T-bond yield @ 2.5% it comes out to 2080 with a multiple of 20. I'm far from an expert on this stuff, but to get to the current valuation one has to assume current earnings which are record high will continue on, and interest rates which are near record lows will continue on, it seems unlikely this can persist. It seems the more reasonable case would be somewhere between the conservative Graham valuation and the current one. With that said Buffett says we are in a zone of reasonableness so I don't know, any thoughts?

Thanks for posting this, lots of interesting information, I found this article buried in there, makes me understand better what all the recent concern about non-sentient AI is due to. http://www.tandfonline.com/doi/pdf/10.1080/0952813X.2014.895111

I'm not really old yet @30, but old enough to have some regrets. #1 not holding onto visa @70 /amex @10 longer, bought both during 2008, and sold out at a goodly profit, but short of the ultimate bonanza as Graham would put it. #2 not leveraging myself, I had the option of a cheap 50k loan at 1.5% from commissioning around 2008. #3 I was blindly passionate about getting into medschool in college, despite the doctors I talked with telling me to avoid it. After going through the process and now almost done with surgical residency, I wish I had explored other options, investing as a career never entered my mind even though I was passionate about it back then. On the plus side I'm debt free, now I just focus on building up a strong capital base and hopefully early retirement.

Really like the "how to get rich book" started it today. For me there is some mental hurdle where I get myself comfortable to the point I feel something is a good bargain and I can see myself holding it for 3-5yrs and averaging down if it falls. Once I own something I continue to read about the company/industry until I sell it, trying to accumulate knowledge for the future. Kind of like reading about your patients in residency. I would guess probably 200-300hr per company, over the life that I own it.

Where did you guys find the first edition? I have searched and only seem to be able to find pricey original copies for sale.

I read through it, it is quite lengthy, mostly because he spends so much time alluding to things, rather then just getting to the point. I mostly read it to see what the pro's he interviewed would say. As far as the interview with WEB goes, Buffett basically told him to index his money, that was it. Tudor Jones told him to look at 200 moving day averages, and sell anything that crosses it. Dalio gave him the model portfolio, and told him to not bother to try and beat the pros at their own game. I don't remember anything else memorable as far as investing advice goes. He did spend some time talking about building wealth, savings, creating a mindset that you can be happy with achievable financial results. Overall I would say good motivational book for the person who is living beyond their means, with basic investment advice. But lacking of any useful information to anyone who has spent meaningful time reading the investment literature.