biaggio

if I could only have 1-3 picks (to be my whole portfolio) would choose FFH, BRK-B, and cash (if I could add a couple other just off the top of my head, with pick from Monish, would say FFH, BRK-B, BAC, AIG, IBM, PSX, CASH---added IBM, PSX to decrease risk of having all holdings in financials)

if you have a belief in JOE, instead of owning the stock and trying to lend it out, how about selling the put when they are expensive (collect the premium)? Collect the premium + if it is put to you then you'll own the stock. -I have no experience with options (so this might be a dumb idea) but am looking at using them in a low risk way

Leftcoast that is funny Plan, that sounds obvious but its never as easy as it looks (at least that never works out for me). Its real tempting though. How much of your net worth do you have in that 100 year old company. 40% IRR I would love to be all in but am too much of a chicken and am not that greedy. I'm probably carrying too much cash (40% overall) but it sure makes for a good sleep. My plan is to average in, i.e continued dollar cost averaging into good/great business/capial allocators like FFH, BRK, LUK, L, ALS when they "go on sale" as well as some of the favorites here like AIG, BAC...if market decreases will be happy to buy more, if it goes up will be happy that my holding have gone up. At the same time trying to get out some of the value traps that I have fallen into. I have sold some of these lately. Its these occasional value traps that are inevitable that make you overly conservative (carrying too much cash and not being real concentrated) but as someone once said if you re not making mistakes then you re not trying hard enough. I will never be accused of not trying.

the CNBC interviews are entertaining

EMH works or the market is efficient because we have value investors. EMH says that if there is a $20 bill on the ground its a mirage because the market is efficient and so there can t be a $20 bill on the ground because some one would have picked it up by now, that would be the value investor who pick up the values when available. The small caps or certain large caps are roads that value investors have not cleaned up yet so there are $20 bills on the ground i.e values to be had

http://www.gurufocus.com/news/186722/latest-picks-from-hedge-fund-manager-mohnish-pabrai-buys-gm-chesapeake-energy-sells-tex-pot-cse top 5 holdings of Mohnish Pabrai Bank Of America Corp (BAC) - 7,502,000 shares, 25.5% of the total portfolio. Citigroup Inc. © - 1,807,510 shares, 20.6% of the total portfolio. Goldman Sachs Group, Inc. (GS) - 506,130 shares, 20.2% of the total portfolio. General Motors Company (GM) - 2,237,000 shares, 18.3% of the total portfolio. New Position Chesapeake Energy Corporation (CHK) - 1,005,000 shares, 7.8% of the total portfolio. New Position Concentration and focus not in question thats for sure.

these proposed new systems where we can pay with our phone, sometimes without even pulling it out of our pocket is scary to me. At the moment I am not worried as I figure the credit cards and banks are on the hook for fraud I believe, but who needs the hassle.

To me FWIW, it looks like: i a good (possibly great) company based on -consistently profitable, with steady growth, excellent ROE (15-20%) -Looks like they have been borrowing money to buy back shares + expand # of stores -looks like a Peter Lynch "Stalwart" i.e a 10-15% grower -paying a dividend ii concern: -balance sheet - decreasing cash, increasing debt. Inventory increased by 35% from 2010 while Sales increased by half that by ~ 18% (equal on a sales per share basis-both up ~ 34-35%) I think without cheating that it is selling for between ~ 15 x this year or next years earning or ~ $45-60 Would want to pay less than this. Would want to look at qualitative factors-nature and quality of business,competition, what kind of moat they have (looks like they have decent competitive feature as they are able to earn decent 18+ % ROE without much use of debt) re analyst estimates- they are projecting higher + above average performance for the next 5 years as compared to past 10 years- I would cut that estimate in half if you use it at all i.e assume earnings growth of 6-7% vs 13% as an example + base your estimation on that,

Thanks for posting idea, racemize. I think it may be useful and educational for some of us. Would be interested in how different folks look at + use the numbers. I think just doing these by yourself may not be as useful and educational as actually seeing what others would do .

http://greatinvestors.tv/all-videos/ I found this web site thru Greg Spiers's web site--thought some here may appreciate these. Many interviews from Manual of ideas Just watched http://greatinvestors.tv/video/brian-bares-on-how-he-became-a-great-investor-in-small-cap-e.html Never heard of Brian Bares. Has same philosophy as many here, that is focusing on qualitative features of a company as opposed to looking at strictly the numbers(the same thing everyone else is looking at).

http://www.fairholmefunds.com/pdf/071012-FairholmeStaysTheCourse.pdf

http://www.bloomberg.com/video/oaktree-s-marks-on-strategy-europe-real-estate-COoIXqQQR1C6oCCzcqEnLw.html/ Good interview on Bloomberg.

Sorry did not look at the date of article. I forget how I got to it-thru some blog or news site. I assumed it was written recently-dumb.

Testing, Testing The health-care bill has no master plan for curbing costs. Is that a bad thing? by Atul Gawande Read more http://www.newyorker.com/reporting/2009/12/14/091214fa_fact_gawande#ixzz1zhkb3xcD

was it http://www.vrbo.com/ ? (vacation rentals by owners)- I have used this several times- very good

good point...

Was it Einstein who said that genius was equal to 1% inspiration plus 99% perspiration (or something like that). In my experience a very high IQ can be a hinderance like the size of an engine has on the performance of a car once it gets over a certain size (at first you get the benefit of more power, as engine gets larger + heavier the weight of the engine becomes a negative on performance). Passion and work ethic can go a long way.

Interesting web site. Thanks for posting.

I could be wrong but your assumptions seem reasonable. Annual 16% return- I will take it - makes me think I should increase my allocation to BRK I was thinking or hoping I would get a couple % more than market- say ~ 10%

http://www.youtube.com/watch?v=Kq_JApaNam0&feature=related "Warren Buffett - Investing in Real Estate" Younger WEB talking about buying real estate outright as opposed to buying REIT with 8% yield.

Good succinct post Martian. I have been guilty of using DCF too much. Very helpful thread. Thanks everyone for sharing some very important information.

Oddball, I am thinking that he is talking about the aftertax return in a taxable account if there is significant turnover in the portfolio, which there can be when you re managing own money. But at least here in Canada, have had to pay capital gains tax on mutual fund gains held outside my registered accounts as well. I think the biggest issue is if you enjoy the process.

Where do you buy that? I work in Richmond BC so the nearest to me is Steveston Farm. You get on a list. If you bike or walk the dike you can see the Galveston cows feed along the seashore. Aside from the grass they get about 7% of their feed from the mash from the local brew pub. A happy cow is a tasty cow. Thanks. I will have to check out local farmers

Imagine you have $100m that you want to save. What are your alternatives? You don't have FDIC protection (and there is no reasons why bank accounts can't have negative rates), and you can't put that in a safe under your bed. Sure, regular Joe's with $5,000 don't have to accept negative rates, but they aren't the majority of deposits. Not arguing that we will see those rates, but I'm just saying that there is some reason for why T-Bill yields sometimes go negative. It could happen for longer dated issues too. Ben To protect $100m you only need to purchase 400 certificates of deposit -- each one from a different bank. The $250,000 in FDIC protection is only the limit of protection that you have from each individual bank. Thanks for your response- I should have known you guys would have a logical explanation. Quite a statement from the market as to the fear that is out there. What are CDARS?

I don t get how anything could have negative interest rate...why would anyone buy those? What, you re going to pay someone to hold your cash? Only thing I can think of is that you think that some greater fool will come and buy at a higher price (and lower interest rate).