biaggio

"Most of my best ideas have been dug up the same way as you (although, not with your success) and I look for steep drops after key value investors have purchased." FFHwatcher, have you ever used this site for previous value investor purchases at a discount from what they bought them at: http://www.gurufocus.com/Guru_bargins.php?&p=1 These stocks are down more than 20% since our gurus either bought or recommended to buy. They may be candidates for bargains, as you have the opportunity to buy these stocks at a greater than 20% discount from the prices our gurus bought.

"It's so important for people to track their thoughts and beliefs because our minds have a way of rewriting history to make us seem smarter or more insightful... we forget the dumb stuff we say and remember only the good stuff." So true. I wish I could have started 20 years ago---it would have been interesting to look back to see how my mind was thinking (or not thinking)

I think I read it in one of Peter Drucker's book that if you want to get better at making decisions, then it is a good idea to write down your ideas and what you think might happen + then see what happens over time-see if your right or figure out where you went wrong. With a board like this it is good that others can post their opinion. Having the price(or pt on a graph) at the time of the post maybe helpful if we're looking back later to help judge if you re right or wrong or just early (if the price is important to you in the case of buying stock; eventually the price of the stock will be the ultimate judge of the original thesis), Often members of this board will help you avoid a mistake by making you think a little differently. I like what someone posted elsewhere from Ben Franklin- Only a fool learns from experience. I have been keeping a rolling log of various ideas for the last 3 years, with a price at the time whenever I "post" to it, for instance when earnings are announced/conference calls etc. I find it helpful

"there are a lot of companies producing ammo out there for the retail market, yet they can't keep up with the flow of business." Are you sure they are not purposely decreasing production,to drive up price? This would be what I would hope. It is frightening to think that they can t keep up with demand. Are there any publically traded ammo companies?

For what it is worth: Jim Rogers: Bank Stocks Not Attractive http://www.gurufocus.com/news.php?id=109935

good point Myth

"One of my favorite investment strategies is to look for the unrecognized / unrewarded assets (excess capital)" I very much like that as well. I find that excess cash is the best unrecognized asset to look at. I have not had much luck so far looking at unrecognized real estate value for instance.

Thanks salab makes it so obvious: "Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

I am not an expert by any means. My understanding is that once you hit the statutory cap rate (capitalization divided by total assets I believe) then you re not allowed to expand the denominator, the total assets/loan portfolio without raising more statutory capital. In one of Peter Lynch's book he described looking for banks with high cap rates because these would be the ones that could grow. e.g. if you had a cap rate of 20% then you could double your assets i.e make loans etc + hence double your profit (in other words you should prefer a bank selling at X earning with a larger cap rate than a bank selling for the same earning multiple but a smaller cap rate). does that make sens. Its been >10 years since I read that.

Thanks for the article. A lot of truth but awfully cynical with some exagerations. (I quickly skimmed the bottom 3rd of the article) Medicine is not easy. The human body, having survived millions of years of evolution has a lot of built in natural defense mechanisms (a lot of times we are better off doing nothing...but people today will not except that), and it is so complex that it is difficult to come up with absolute recommendations that work on everyone. The biggest problem is the one related to conflicts of interest. It is often subconscious in my opinion. Scientist/researchers want their theories to be right. They want their cures to work. Incentives just push you over the edge.

Agree with all re importance of learning from investment mistake. It s a good thing he did not make his biggest mistake at the end of his career. Learning from your mistakes, and having the courage to make mistakes when you re younger, helps to minimize the chances of a bad decision and outcome. Definitely applies to other parts of our lives. How many people do we know that do not take responsibility for their mistakes (blaming other s etc), or never take a chance. These are probably the same who go on to underachieve.

http://www.scribd.com/doc/33669035/Buy-When-There-s-Oil-in-the-Water-Jun-10 Broyhill management presentation last summer

RRJ, re WFC "They're undervalued at $25 or so today." Have not researched much, somewhat outside my circle of competence. How do you value banks? Have read you can base valuation on return on asset, or multiple of book value. I know this is some what simplistic but I try to get a guestimate to see if something I should learn more about. (I would love to invest in banks as it burns me the low interest they pay and all the fees the charge) IV (present value) Based on return on asset: 1.8% (peak ROA over last 10 years) x $1.3 T in assets (assuming no growth) divided by 5.2 billion shares outstanding x 10 multiple=$45/per share.

http://www.gurufocus.com/news.php?id=109539 Muhlenkamp talked to CNBC to talk about his favorite sectors.

"He has had this holding for the better part of a decade meaning his return is very low on an annualized basis." How patient should one be? If you own something that is trading at 50% discount to IV-how long do folks here hold it? Especially if IV is not growing or paying out a dividend. I like Pabri's rule of holding for at least 3 years.

interesting topic. Allocation to each category-Would it not depend on ones risk tolerence + his confidence in estimating in estimating upside, downside etc ? I would think that you would want to invest in more than one stock...the less confidence + competence you have the more securities you would need.(i.e. the extreme of the average person who does no work should stick to indexes vs the business man/owner/jockey investor can have one stock e.g. young bill gates owning early microsoft stock or sam walton + WMT) If I had 5-10 stocks that fit category A -that would be appealing...90% chance of earning 100% assumimg over 3 years (I am making up the time frame, assuming that the average company takes ~ 3 years to reach IV as per Pabri). Again depending on your age, financial situation (college tuitions coming do) adding some from the other categories (added risk + return depending on your risk tolerence)would be fine. How much would depend on your appetite for risk. It would appear that you re being compensated for taking the risk. I may be out to lunch, but am putting the thoughts out for my own education.

http://can-turtles-fly.blogspot.com/2010/10/business-insider-interviews-jim-grant.html Though you folks would like this interview.

Thanks for the presentation vish_ram. I can understand why a lot of investors don t want to talk about there short positions. It just seems in bad taste. He strikes me as cocky + obnoxious in the presentation. I used to like Einhorn. It seems that land is dirt cheap in Florida. It seems that rural land at $1800 per acre seems awfully cheap. Developed lots for $30,000 does not seem right either. Everybody should be moving to Florida, as land cost an awful lot more here in Canada + the weather is not as nice (mosquitos or not).

Well, it's funny how everybody lets Buffet get away with S&P Puts and think he made a great deal but they shoot MFC for not buying those puts. Obviously if it's good deal for Buffett then it's a bad deal for the others. So by not taking buying any overprices hedges MFC might be doing the right thing. Whos cares if their earnings will be lumpy, what counts is the total return. MFC is a great franchise and it should not trade a Graham prices. As for the debt, they can aford it at the current rates. Again, nobody complained about FFH preferred offering so why would we complain about MFC. BeerBaron Sorry Beerbaron, I was thinking of the possible right downs for their U.S. Long-Term Care Insurance (LTCI) market (I thought it was an announcement by the Co, but apparently an analysts opinion, I found it here just now -Manulife facing headwinds- at http://www.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/manulife-facing-headwinds/article1741464/ I thought I had read something similar elsewhere as well but can t remember where I saw it) In a previous thread MFC discussed, and I was asking if MFC could have a embedded/intrinsic value of $25/share...I would love to buy ~ current price but am worried about other right downs. At the same time I know that we won t get such a great price if there was nothing to worry about. May be a great buy if you're convinced that it is a good/great business. I like your philosophy of buying great prices at good price.

"I'm currently keeping a close eye on MFC, this is getting close to my spot price. It would be nice to buy this one under TBV" I had a look a few weeks ago. Though have not read in detail latest right downs, are you concerned with recurrent right downs recently + coming to market for more debt (though at low rates it might have been a bargain)? I thought if market had a melt up this would be a good holding.

I found it surprising that the majority of BRK's wealth was from a few investments. I think CM mentioned that in his recent presentation at the U of Michigan law school. I have no such fat pitches that come to my mind at the moment but would love to hear from others, especially very long term investments that can return >1000%. Good thread Bronco. By the way Bronco, is L the only stock you currently own?

It amazes me that 70% of volume is due to HFT. What would Charlie Munger say about HFT? I think value investors will be fine. I would put my money with members on this board. Buy when price makes sense. Don t buy if its not a good price. In the long run I think everyone here will be fine. I believe (maybe I am naive) that if they are stealing or manipulating, that the vast majority of the time we are probably talking about a fraction of a penny. I have a little trouble knowing that they know the order flow, but I am trying not to get emotional about it as I can t change it.

"Really an irrational panic is the best time to buy but you have to determine if a) it's an irrational panic or b) something has changed about the company." -ideally if you have done your homework ahead of time (which I wish I had done), then you re prepared ahead of time + can take advantage of the price when indiscriminate selling occurs. -I picked up a small position today, hoping that I get a chance to buy more later

Thanks Scorpiancapital. Agree that if BV grows at 19%, a good buy paying current asking price...normally, I just like to have that 19% growth as a bonus.

My novice valuation of LUK is ~$8 billion less ~$1.6 billion in debt divided by ~243 million shares or approximately $26 per share . (no value given for net operating loss carry forward, I was not sure how to value this). What are others opinions on current valuation? There does not seem to be a great MOS. Would this be classified as a great company (certainly has been a great capital allocator) at a fair price and still a good buy at current price?