JayGatsby

Annoying how everything now has to be described as an arbitrage. I guess the merger arb guys started that trend, making speculative bets on uncertain outcomes.

I've really been enjoying Dalio's book. He reads the audio version (except for one chapter in the middle, oddly). I think there's a lot of merit in the principles he espouses. I guess a lot of it is common sense type stuff, but you could say that about most of what Buffett/Munger say as well. It just turns out common sense isn't so common. Some of what he talks about I learned previously the same way he did: mistakes and lost money. I've recently started trying to document my ideas a bit better and seek criticism (something this site is great for if I could ever make it past step 1). His life goal was always the same as Buffett/Munger: be independent and work with people he found interesting. Like them he overshot. Although a lot of people say that without it necessarily being true. I'd suggest the Farnam Street podcast interview before buying the book. The book is basically a longer, more detailed version of that interview

I use Google's Project Fi. It works in these countries: https://fi.google.com/about/rates/ Data is a flat $10/gb in most countries. Voice charges vary and can be high, but you can always go into airplane mode and call over a wifi connection. Im using the Moto X4, which cost $300. I've been very happy with it. I think the only noticeable difference for the normal consumer between a high priced phone and a medium priced phone is maybe the camera. X4 camera is good for what I do. Fi rates in the US are $20 for the service, plus $10 a gigabyte for data. Phone is on top of that and financed at 0% interest for 24 months. The app Datally (made by Google) is really helpful for reducing background data use. It claims to have reduced my data charges by 28%. The phone service in the US is as good as the T-Mobile network (not particularly good). If you sign up use this link and we both get $20: https://g.co/fi/r/XE066W

I've been thinking about shorting the canadian stocks, although I've heard (haven't tried) it's tough to borrow shares.

How's your accounting? I took finance and accounting in college and find the accounting much more practical. In school they try to make valuation very scientific, but there's a lot of practical flaws with the way it's taught (beta as risk for example... it's very precise but not very accurate). At the end of the day it mostly comes down to a good understanding of the accounting, which is why I asked that first. There's a lot of much better investors here, but I end up just looking at equities similar to bonds... if the company generates $1 of cash flow per share, and the shares are $10, is a 10% yield right for the risk/reward? When I've been wrong it's usually because I misjudged something on the risk/reward side so a discounted cash flow model wouldn't have helped me because my inputs would have been wrong. For what it's worth, this was the valuation textbook we used in school: https://smile.amazon.com/Valuation-Measuring-Managing-Companies-Finance/dp/111887370X/ This book I bought for interviewing.. kind of the cliff's notes but a pretty big book: https://smile.amazon.com/Practitioners-Investment-Acquisitions-Corporate-Scoopbooks/dp/0976154803?pldnSite=1&ref_=nav_signin& Hope that's helpful.

Interesting. Thanks. I was curious if the argument was that a) the total amount of back pain is actually the same but we're overtreating it, or b) actual back pain is up for whatever reason (obesity, weightlifting, etc). Sound more like a.

Does it give a why?

Thanks for this. Really liked the "I never meant to be rich, I just wanted to be independent. I just overshot" (or something along those lines. Think a lot of people get that backwards.

I think if people understand compounding and deferred gratification they'll be in pretty good shape... small sacrifices today can have a huge payoff for your financial future. It's hard to teach people to be good investors in 15 minutes, but if they follow the basic principles they can't end up too far off. Buffett has some anecdotes in some of his old partnership letters that may be interesting: http://www.valuewalk.com/2016/10/compounding-short-stories-a-king-columbus-and-indians/

Happy new year! LC, congrats on the house.

Nice results and thanks for the discussion of the results. ~15% for me in USD. Biggest winners were HNZ (announced a sale), RICK (shares repriced after good capital allocation), and PNTR (microcap spinoff which has repriced following strong execution). Losers were OCN (I underestimated the regulatory death by 1000 cuts), and CMG (customers haven't returned like I expected them to). Also have a fairly significant short basket that was a pretty significant detractor on performance. One benefit of the short basket is it lets me mentally swing a bit harder at long positions. Some of these I expect to come around eventually, but I'm not sure of the right balance. Few things I'm focusing on in 2018: 1. Documenting my research and seeking criticism (Based on reading Ray Dalio's book). Have some write-ups I'll share for feedback once I get through the holidays. 2. Continue focusing long portfolio in strong companies with increasing intrinsic values. As they summarized in University of Berkshire Hathaway, look for businesses with decreasing market value and increasing intrinsic value. 3. Special situations / corporate actions: My swings here have all been small, but 2017 was the first year I had these in my portfolio. Would like to incorporate a larger percentage of these for uncorrelated returns. Thanks to Writser and others for sharing these... hopefully I can contribute rather than just take ideas in 2018. 4. Short positions - These have been a fairly significant detractor like I said, but they have helped me to be fully invested. Thanks all for your ideas, thoughts and feedback. I forget when I found this site, but the community here has been a great find. In 2017 I went to my first annual meeting (Fairfax). That was a great experience and I'm looking forward to going to more meetings and putting some faces to screen names.

I'll take KMI.

Any views on this? https://www.reuters.com/article/us-usa-tax-privateequity/u-s-tax-curbs-on-debt-deduction-to-sting-buyout-barons-idUSKBN1EF1G5 I haven't heard much of any discussion on that but googled it after someone made a comment about it on a seeking alpha article. It seems that that could really be disastrous for some highly levered companies. Could present some interesting short scenarios? Edit: Another article: https://www.wsj.com/articles/downside-of-tax-bill-hits-dell-other-heavily-indebted-companies-1513852200

In a way you don’t really own your Bitcoin in the same way that you own your house or your car. You own bitcoin in the same way you own the cash in your wallet. It is a bearer instrument. With a $100 bill the piece of paper is the instrument, if someone takes it from you they can spend it. With Bitcoin the instrument is your private key. If someone knows your private key they can send your Bitcoin to another address (their own presumably). So if you store your private key on a piece of paper and someone takes it (or even takes a picture of it) then they can access your Bitcoins. If you store your private key on a computer and someone hacks into it they can take your Bitcoins. This is why I think it is dangerous to hold Bitcoins in a 3rd party account Like an exchange or online wallet like Coinbase. You are trusting a company to keep the key safe. I suggest controlling your own keys and keeping them safe yourself. Interesting. Thanks. So the ledger records all the private keys that are out there? So if I transfer my bitcoin to you, my private key becomes invalidated and you get a new one? What is being recorded on the blockchain?

This has probably been answered in one of the prior pages, so apologies for the redundancy, but can someone explain this to me? http://www.bbc.com/news/technology-42409815 Mechanically how does someone "steal" crypto, or similarly, how does someone "lose" crypto? This will show how awful my understanding of this stuff is, but if there is a distributed ledger doesn't that track ownership of the asset? If I own a share of BRK through Interactive Brokers, somewhere they have a ledger that has a share of BRK in my name and BRK (or NYSE) has a ledger with a share in IB's name. I assume there's backups made of those ledgers so if someone hacked into IB it would be difficult for them to change IB's ledger from my name to their name. I was thinking the benefit of crypto was that there's another layer of protection because that ledger is now distributed to millions of computers... making it impossible for someone to hack in and change the ledger?

Right now it shows "253 Guests, 31 Users (4 Hidden)" so getting 100 views in a few minutes doesn't sound impossible. I'm always open to a good conspiracy though... BUY CMG, BUY CMG.... now we wait and see. 8)

The flipside argument is that when billions of $ are on the line, nothing is off limits when it comes to personal lives. Sounds like a faustian bargain, if there ever was one. I said should as I'd hope people have some personal ethics in these sorts of things.

Agree with the critics that people's personal lives and especially the personal lives of their family should be off limits. Kleinfeld did a decent job for Alcoa, but his downfall to me was overpaying for a few deals that didn't materialize. Maybe at the end of the day they do. Regardless, I think that's the lens that should be used for a CEO, not creeping into their personal affairs.

Here's the WSJ article he refers to: https://www.wsj.com/articles/u-s-shoppers-wield-smartphones-to-keep-a-lid-on-consumer-prices-1513036486 Glad he called it out. The dogma of the article really makes no logical sense (that I can think of), yet the article never questions whether the underlying criteria is actually what's flawed.

Looks like the pulled the plug on whatever is updating the prices.. Seems like one of these other sites would provide a similar view, but they all just seem so cluttered. Maybe I'm just stubborn.

All audiobooks on Audible are half off for the next week. Two I'd recommend that are read by the author are: Principles by Ray Dalio: https://www.audible.com/pd/Business/Principles-Audiobook/B074B29GQJ/ref=a_search_c4_1_1_srTtl?qid=1512638732&sr=1-1 Am I Being Too Subtle? by Sam Zell: https://www.audible.com/pd/Business/Am-I-Being-Too-Subtle-Audiobook/B072P5VYK8/ref=a_search_c4_1_1_srTtl?qid=1512638830&sr=1-1 Any others? I'm also listening to How Asia Works currently, which is really interesting but it's too dense for audio. I'm usually listening while walking/driving so narratives do better than dense nonfiction.

Very general comment, but it's refreshing to see performance that has underperformed the market for 7 out of 11 years, while outperforming the market by over 50% during that period.

Thanks might buy this. Like others, I have some catching up to do. Sometimes it's hard to capture history with a book. Hindsight can make it look all too sequential ("there was a crazy run of internet stocks with no revenue and then BOOM") when in actually there was irrational exuberance about a technology that did in fact lead to basically everything people predicted. One thing I've found enlightening from Ray Dalio's book is how much they studied history. His quote is something along the lines of "everything is a modern version of something that happened in the past".

Good Profit was a great book. Less so for somebody who is purely investing, but for anyone who has any ability to manage incentive structures it's definitely worth reading. The Kochs inherited a good business and then have compounded it at a ~15% growth rate. Charles was quite young (in his late 20s, maybe 30 if I remember right) when he took over. The two lessons I really remember from that book are: 1. You have to keep putting yourself out of business through innovation or somebody else will 2. Create a meritocracy and people will drive results

Brad Stulberg's podcast on Invest Like the Best was quite good if you haven't listened to it: http://investorfieldguide.com/brad/ He wrote Peak Performance, which looks to discuss some similar topics.