jawn619

Thanks for the clarification. Can someone else explain to me the national deficit? preferably with some concrete numbers? The answer to your question is another question: What do you want to include in your calculation? Federal debt? Federal entities deb Federal pension plan liability Federal Mecidaid and Medicare liability States debts States entities debts States entities pension plans deficit Cities debt Cities pension plans deficit Other liabilities (promised guarantees, etc...) Federal. I just want a rough idea of what the Fed's balance sheet looks like.

Thanks for the clarification. Can someone else explain to me the national deficit? preferably with some concrete numbers?

I was discussing this with a couple of friends and i was thinking about something that almost everyone believes but might not necessarily be true. One was the concept that the U.S. treasury bonds/bills are RISK FREE I have a questions about the nations balance sheet. So basically with all of this quantitative easing, The US balance sheet is loaded with huge liabilities. So the US is basically like someone who is living way above their means and has a huge amount of debt compared to it's assets? Does anyone have any links or data showing what the governments balance sheet looks like? Or any ways of thinking that can enlighten me?

i've been doing it for a little less than half a year now. http://www.amazon.com/10-Happier-Self-Help-Actually-Works-A/dp/0062265423 check this book out. I think it's a good way to describe how effective meditation is. 10% happier is a good ROI, and i think it compounds every year.

soon.

I bought it just under 30 and that i also followed David Einhorn into it.

I saw an opportunity to buy a stock that warren buffet has 12% of his portfolio in at a price lower than his. What was your reason for buying it?

My thoughts on why all of my previous stated investments were "value traps" Conn's was trading at fairly cheap multiples considering they were growing at 20% a year. I knew they did a lot of businesses by lending to subprime customers but I was willing to overlook how bad that business model is because i was so enamored with the numbers. PBR was a value trap because when i got in the P/B was low, P/E low, and great dividend yield My mistake was that I didn't look at the cash flows. PBR has negative free cash flows and has a HUGE amount of debt that they used to pay the dividends. IBM is probably the hardest for me to understand if i'm making a mistake well. It might not be a value trap at all but if i had a spectrum of Value Trap--------------------Overpaying i think IBM would be closer to the value trap side of it. I don't know what the market view on it except that it's seen declining revenues for a while now. I guess i've learned from my mistakes, I just wish I hadn't learned them firsthand through my wallet. =/

I give up, How? I'm curious to know Jawn, here is a riddle for you: IBM's mainframe business grew 72% YoY in Q4 2010. How did a nearly 50 year old technology grow 72% YoY?

Thanks everyone for the tips. I've already read all the books suggested (intelligent investor, security analysis, margin of safety, poor charlies almanac etc) but i am only now understanding that a wonderful business at a fair price is better than a fair business at a wonderful price. As for buying BRK, i can't get myself to pull the trigger on buying BRK at 1.5x book value. Even though it's a great business at a slightly expensive price.

As a beginner investor, It seems like i am gravitating towards these value traps. Does anyone have any tips to avoid making these mistakes? Or a mental model for thinking to avoid these bad situations? Examples I followed Einhorn into CONN, Bought PBR on the basis of a low P/E ratio-but sold out before the big bloodshed. And am currently in IBM

PWE is one. A lot of other oil/gas. XCO as well.

Me too. have followed him into a couple things too.

agreed. 10 years is an insane amount of uncertainty to put any type of precision into. But i don't think you have to be precise, just right. Better to be roughly right than to be precisely wrong.

I read this and i didn't think he told me anything i didn't know. Index funds are good, fees are bad. One thing i did get from it was that Ray Dalio thinks portfolios should be risk weighted. meaning most people should have a lot more in bonds.

I also got value trapped in some smaller oil names. =( This is definitely an interesting way to think about it. I have no idea what's going on macro but i feel like we've been up from 2009 from easing and everyone's talking about how the market is overvalued and how a correction is due. The drop in oil prices might be the catalyst that starts the global recession.

PROFOUND

Thought id share something that i thought funny. I recently received this email and decided to reply back Hello, My name is Jordan Ring and I am with JDR Capital, a healthcare advisory firm. We are working with an emerging biotech company, Vycor Medical (OTC: VYCO), that I thought may be of interest to you. Vycor is a commercial-stage medical device Company addressing large unmet needs in brain surgery and neurological disease, with minimally-invasive, FDA-cleared products. Vycor has grown sales at a 5-year compounded rate of 52%, with margins averaging 85%. We believe the Company may reach profitability in 2015 and consequently see a sharp uptick in valuation. Large device companies are increasingly interested in acquiring high margin, high growth products that can help offset the effect of Obama's medical excise tax on their low margin businesses. Vycor operates in segments with few to no competitors and continues to see unabated growth and adoption. Vycor's growth has been driven by organic adoption, new domestic and global distributor networks and may be further buoyed by product expansion and new product launches anticipated before year-end 2014. I would like to schedule a short phone call with you to go over the VYCO investment proposition in a bit more detail, and Company management is also available upon request. Which date and time works best for you? Best, Jordan Hey Jordan, VYCO gross margins indeed seem very impressive and their products revolutionary! I had a couple questions that I thought you might help clear up. 1. On the 10qs it seems like there are huge general and administrative expenses. More than 10x the cost of goods sold and r&d combined! I understand though since medical devices companies usually have huge general administrative expenses. Paper and pencils don't come cheap anymore. Maybe the recent decline in oil will decrease costs? 2. It doesn't seem like VYCO generates any cash. But seems OK since VYCO is able to obtain 5 million of capital from issuing common stock. I relish an opportunity to be a shareholder in a company that does not hesitate to dilute its stock. The more the better I always say. 3. Is this the pump or the dump portion of the scheme? It looks like VYCO Just recently doubled in price! While I do like strong stocks and people have told me that the trend is my friend, I don't want to chase a stock up 100%! So let me know which phase we're in because I have lots of other investment opportunities I have to weigh this against (a Nigerian prince needs help moving his wealth and I just won a foreign lottery!) All joking aside, I've spent a lot of my time looking at 10-Qs and most of them look pretty pedestrian or not enough Margin of Safeties for me to make an investment. It's refreshing to see some that have some obvious big red flags. 10-Q http://www.sec.gov/Archives/edgar/data/1424768/000114544314001322/d31746.htm

Most "wealth management" opportunities/jobs are actually sales jobs. I would say that the duties of a financial adviser the first 2-5 years of his career is 90% finding new clients and 10% of the other duties you described. Also a lot of firms(even the prestigious ones like Merrill Lynch will take anyone with a pulse and 15% of new recruits will be there after 2 years). Be careful you know what you're getting yourself into.