biaggio

I thought Klarman was something like 50% cash right now because he is worried about the macro? This is pretty much the opposite of what Moore has been saying. I don t know for sure about that, you could be right. I don t know a whole lot about Klarman + his portfolio, macro investing etc. I assumed he focused on the securities + individual opportunities. I was just thinking that as you get older you will have a better feel and probably a different perspective regarding allocation of capital, and the psychology involved.

http://www.businessinsider.com/12-brilliant-insights-from-hedge-fund-manager-seth-klarman-2011-11 Summary of some pts from interview with some intersting pictures. Moore, check out slide 3: "Investing is the intersection of economics and psychology... The economics, the valuation of the business, is not hard. The psychology -- How much do you buy? Do you buy it at this price? Do you wait for a lower price? What do you do when it looks like the world might end? Those are the harder things." He said with time and experiences those things can be learned, but you also have to have the right psychological make up in the first place, he added." Klarman seems to be saying what you say in other posts re younger investors.

UCCMAL, you re right, owned IGM many years later (realized that they will get their 2% of AUM + 2% of whatever gains). Agree re central bankers...print baby print in my opinion with the hope of inflating asset prices.

I think its almost a lock that eventually things will be bullish again. When who knows? Probably when there are enough cheaply valued securities. Sometimes it is so long that it feels like it will never occur. Usually when you have made a mistake. I still hold my first investment (without any knowledge or research) that I ever made in 1987- $1000 in Investors growth fund...now worth ~$400 (and they have managed to increase the MER because they were not making enough money; I had paid a load as well). Valuable lessons (do your own work, dont trust salesman, and most important don t buy at 50 x earnings or whatever insane valuation) learned for only $600

Agree. Have felt that way as a customer. I think they are safe investment as long as one does not over pay. They seem fairly valued at 1.5-2 x BV for co that will earn 15-20 ROE, though I find ~ 5% dividend on BMO, RY appealing

I am certain a lot of people do not feel that way. The increased liabilities/debts of the various governments of the world are someone's asset. The value of real assets (good companies like the ones you invest in, tangible assets like metals, real estate, energy etc.) sure to continue to appreciate with the devaluation of money around the world over the long term. Is this not part of the grand plan(the most pleasurable one anyway) to grow/inflate our way out of this financial mess.

Japan's negative population growth probably a factor

I can see paying $3-4 psf for warehouse/industrial, but that has to be awfully low for office/retail mall (malls with sears in them around here are still very nice). Maybe it makes sense if it factors in that they don t own some of their real estate + that they will just be subleasing it

Nothing wrong with getting 15%. What's your favorite metric for valuing Canadian Banks? BV? would 2 x BV be max valuation? Thanks.

Have really enjoyed thread. Thanks to all. I think BAC is a blackbox but so are a lot of other companies we invest in like FFH where we trust management to reserve conservatively. I can t believe how low price has gotten. Do not own any shares but I am getting tempted by the price. I am concerned that the CEO has not doubled down at these prices. He only owns ~ 434000 shares (according to gurufocus.com). Surely he has a couple million hanging around. If I was him I would seriously do a Steve Job and forego my salary + take all my pay in shares. Berkowitz's theory (and all posters here) that they will grow out of these problem loans/bad assets makes sense. Seeing that we need a banking system I think the government powers will do all they can to make sure that these huge banks will survive somehow, someway. They have survived the last couple years-it has to be getting better from here. "Don t fight the Fed" i.e. I don t think the U.S. government wants to go thru more bailouts .

good post moore. Up until recent years I have been negative + a skeptic for ~20 years--prefering to read negative things that reaffirm my beliefs. As a result I missed out on a lot of opportunities. I learned (hopefully) the hard way. Luckily I did not have a lot of cash to invest. i.e. I was reading in 1987 that the "world was going to shit" I remember looking at BRK at $8500 in ~ 1988, just starting out and really knowing nothing + thinking I could wait for a cheaper price that never came. Its more profitable to be a buyer + optimist when everyone else is a pessimist and selling, provided you know what you are doing.

if you are holding their stock then by definition it probably is not over priced and therefore. a good buy(back) for the company. If it is way overvalued chances are you are not holding the company.

What might he buying or looking that you can buy here in North American Market? Nestle? TEF? BP? Lancashire? (damn price has not moved down at all with the rest of market)

Good points UCCMAL & MR.B. Thanks.

I spent a few minutes counting up all my purchases over the last several years...short term(less than 3 years) it is scary (less than 50%) ...for holdings >3 years doing better ~80% , I counted those holding held for 3 years or longer (those up vs those down) + those I sold...if I sold (does not matter how long I held it for) at higher price I scored it as a "success" if I sold it as a loss I subtracted a success or hit

Yah that's what the guys are saying I believe. i.e. investor should know that they are betting on high probability picks or low probability pick and adjust their allocation accordingly (also need to factor in how good you are at picking high vs low probability picks---everybody thinks that they are above average at whatever, it maybe instructive to look back to see how good one really is)

Thanks for above posts. I suppose you have to know your own "hit rate" or "success rate" in the past. I have never gone back + actually estimated that. Do you guys look back + actually calculate that? (seems obvious now that you mention it...then again just because you are down in price does not necessarily mean your wrong...in my case it probably does, but you know the usual argument here)

I think having a concentrated portfolio is the way to go but I have found it difficult to do. How do you guys determine what % to put into each holding e.g. even 10% x 10 positions or proportionate to MOS, etc? I kind of like Tim McKelvine method (paraphrasing off the top of my head)- up to 5% if cheap, with a decent balance sheet and an enduring competitive advantage,- up to 10% if cheap, good balance sheet/enduring competitive advantage and significant insider ownership

Good for them for thinking of the idea but is it possible for them to make it on $0.25 per transaction?

I know what u mean

I think they will take the least painful treatment or path of least resistance---they will try to print more money + try to grow/inflate there way out of trouble first (then the haircut). The German + french pulling out is interesting however. What were they thinking creating the euro?

I think it is imperative that we have income inequality. Otherwise most of us would just sit on our a$$.

Thanks for posting video. I always enjoy listening to professor Ferguson. I am disappointed in the lack of attention to math and science at the elementry level. There are many days when my kids get no math or science class at all on those particular days. In high school kids have the option I believe in not taking math in the last 2 grades here in Ontario. Teachers + guidance counselors make it to easy for kids to underachieve. Kids (and their parents) are allowed to make decisions in grade 9 that will effect them for the rest of their lives-example taking the "easier" non academic math in grade 9 or 10 closes all kinds of doors once they are done high school because they cannot take anything that requires a math prerequisite in university or college. It all may boil down to incentives-their parents had a well paying job ($25-30/hr), without any special skill, working in a big 3 assembly line, kids think that that will be available to them as well-but those jobs are being transplanted to lower wage countries. The incentives are changing. Kids with crappy parents + good teachers have a chance. Kids with crappy parents + crappy teachers have very little or no chance. Kids with good parents + crappy teachers have a chance.(most of us have had sub par teacher and we still found a way to succeed..kids have to learn to cope with these situations as they will recur in the future)

http://www.freakonomics.com/2011/11/04/when-is-the-99-really-the-5/ When Is the 99% Really the 5%? Here's a lesson in economics for OWS. Explain to the "99%" that they are actually in the 5% of richest people on the planet. Then take their wealth and redistribute it to the 95% of the world that is poorer than them. See how they feel about wealth redistribution then.

Thanks for posting...that looks familiar..."$80-90 per share" in real estate value not $100