enoch01

Thank you Ragnar for the series, and thank you Rabbit for posting. Good stuff!

Interesting read: http://www.mass.gov/ig/publications/reports-and-recommendations/2012/lottery-cash-winfall-letter-july-2012.pdf

I highly recommend it. Very good to read if you are preparing for any kind of strategic planning within your organization.

Interesting to see these articles after the financial crisis, and after banks have seriously scrubbed and improved their balance sheets: http://www.reuters.com/article/2012/07/25/us-banks-earnings-roundup-idUSBRE86O06R20120725

A and B warrants plus options - I have lots of exposure. Capital ratios are high, Merrill Lynch is making money, favorable rulings in the courts, housing market is recovering, nasty loans are further through the system, NIM won't stay like this forever. Edit: oh yeah, and Brian Moynihan is CEO.

I think this is basically correct, and much of the confusion regarding the IQ requirement could be cleared up if it was discussed this way. Sort of OT: For more on the nature of the "necessary-sufficient" relationship: http://plato.stanford.edu/entries/necessary-sufficient/

...and just continue to use up that virtue Charlie Munger was talking about. Then one day, there isn't enough virtue left. Maybe I'm just dense but what the heck does that even mean? Inflating away debt is theft by another name, and theft is not virtuous. The trust that a society commands in the market is a function of its overall virtue. Creditors will tolerate an erosion of that virtue for only so long.

...and just continue to use up that virtue Charlie Munger was talking about. Then one day, there isn't enough virtue left.

Various financials (via warrants), and natural gas.

+1 I expect BRK and BNSF to issue debt any day now... I mean good grief, Buffett could issue $10 Billion at hardly any cost, and turn around buy a huge slug of AIG at 1/2 IV. Long leap pos AIG

Hilarious. So today he's again the hot hand at the table, and will no doubt take in more money as a result. And he's sharp as a tack, I'm sure. But what's the over/under on the amount of time it takes for him to blow up again? Would you trust him with your money? You know, Boaz Weinstein didnt really blow up. He lost lesss than 2 billion which was only an 18% drawdown in 2008 - that really is not bad. No, that isn't too bad. But I was quoting the story, which I guess was the problem.

Hilarious. So today he's again the hot hand at the table, and will no doubt take in more money as a result. And he's sharp as a tack, I'm sure. But what's the over/under on the amount of time it takes for him to blow up again? Would you trust him with your money?

Sometimes (most times?) mispricings are a function of the security's obscurity. Sometimes they are due to complexity. And sometimes mispricings are due to irrational fears of market participants. I'm sure there are other reasons. I don't care - I just want to be on the lookout for mispricings. About 18 months ago I owned a lot of off-the-beaten path small caps. Now I don't. Don't want to make it sound like I'm bashing the thread - I enjoy your contributions.

Thanks for posting!

Hester, I'm sorry to see you go. :( You've made helpful contributions and I hope you reconsider.

What is "superstition"? An example would be a spirit impregnating a virgin. Tough to sell me on that. I'm not sure I understand. What do you think is sufficient to label something a "superstition"? It has to be more than just something that is "tough to sell you on", right? There's lots of things that are at first tough to sell people on, but later we might think are true (e.g. a round earth, the incompleteness theorems, theory of general relativity). Are you saying it's only a matter of perspective, or an objective quality? No worries if you don't want to answer (this is an investment board after all). I've had similar conversations before with people who use the term, and am just curious. Thanks. This is how I view it. A father has a daughter. He promises her to another man in marriage -- he represents her to this man as a virgin. She gets pregnant before the wedding. A spirit did it! She is still a virgin. The story protects the good family name. It's tough to sell me on this kind of a story. I am more prone to believe that she had sex out of wedlock, and that's how she got pregnant. Others will fall (due to supernatural beliefs) for the line that a spirit did it. I'm not sure what you mean by "supernatural beliefs", or what you assume they could cause, but suppose the story is true (we are a curious, impartial, and tolerant bunch on this board). I at least wonder what the daughter would believe, and what you would call her belief? But of course ultimately it really doesn't matter where anybody stands, right? It only matters whether something is true or not. Well we both agree that it would be strange to believe something if it isn't rational (ie, have "rational substance"). But just in the example you gave, there's probably at least one party who would have some pretty damn good rational substance for believing what they believe, even if some hacks on a message board debate about it 2,000 years later. So "superstition" I think just depends on what evidence people have explored, and really isn't anything innate to a belief. I'll heed Parsad's advice and drop it now...

What is "superstition"? An example would be a spirit impregnating a virgin. Tough to sell me on that. I'm not sure I understand. What do you think is sufficient to label something a "superstition"? It has to be more than just something that is "tough to sell you on", right? There's lots of things that are at first tough to sell people on, but later we might think are true (e.g. a round earth, the incompleteness theorems, theory of general relativity). Are you saying it's only a matter of perspective, or an objective quality? No worries if you don't want to answer (this is an investment board after all). I've had similar conversations before with people who use the term, and am just curious. Thanks.

What is "superstition"?

I'm actually getting excited about AIG as well. More CDO sales coming, fast and furious: http://bloom.bg/IMrO1L

It is difficult to keep a republic, as Ben Franklin observed. Today in the U.S. we have increasing concentrations of political power, a cultural melting pot, and a distracted populace that is losing it's ability to think critically. It is a situation ripe for demagogues on both sides. Really I think wisdom and virtue are the keys to such things: "In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you." Warren Buffett

"Doing business differently from others invites criticism, to which we are supremely insensitive." - Sardar Biglari, 2011 shareholder's letter True in so many ways.

Here's a good article about pension funds shunning stocks in favor of...bonds! http://blogs.reuters.com/unstructuredfinance/2012/04/04/whither-the-yale-model/ ...mm-hmm... :o

Opportunities arise when lots of holders sell en masse, which is an act of capitulation. Owners feel it after giving up on all reasons to hold. I try to invert this process, and think about purchases in terms of capitulation: what am I compelled to buy, after giving up on all reasons for not holding? This dramatically shrinks the universe of worthwhile purchase opportunities, which it seems to me, is the way it ought to be.

From New England, currently in Florida.

(Channeling Jack Nicholson from A Few Good Men): "You want capital?! You can't handle the capital!!"