Uccmal

Oh, and thanks rkbabang!

I have never publicly shared this before. As a young child I started suffering from what are now called panic attacks. You can google it for more details. They would come randomly, in clusters. After a series of them I would be deeply depressed. I am unsure if I ever suffered clinical depression, although in retrospect I may have. As a teenager I discovered that alcohol would numb these effects. Other drugs made them worse. So I proceeded to drink most of the time until I hit a crisis at 28. Ironically, in a testament to my work ethic, I managed to get a University Degree during my drinking years, and work most of the time, at least until the brutal recession in 92-93. I quit drinking, with a lot of help, and subsequently addressed the underlying panic attacks/disorder. By then it was actually a known mental health issue. I am turning 50 tomorrow. Had I not addressed the co-morbid problems of panic attacks, and self medicating with alcohol, I dont believe I would be here today. I figure I would have died of misadventure, suicide (while drunk), or landed in jail (from misadventure). Life can be tough at times, even for rich celebrities. Normal adversity is compounded when you are fighting a mental health issue as well. Interestingly, like Robin Williams' incredible humour, there can be upsides to such adversity. In learning how to cope with panic attacks, there are no real life events that cause me panic. In effect, I have trained myself not to panic, which can be very handy in the investing world, and the world at large. Cheers, Al.

I freely admitted that I don't understand it. Yet, your actions have consequences which effect other people regardless of what happens to be going on inside your head. Maybe someone who has been tormented by voices in their head for years can't be blamed for killing 5 people at a park on a Sunday afternoon, but that doesn't mean it should be considered acceptable. The fact is any culture which considers suicide a socially acceptable way to deal with depression has more suicide than other cultures. If you disagree with that, you should look into the issue a little more. You don't have to like it, but its true regardless of how that makes you feel. Yes, because killing people is totally an appropriate analogue to suffering with severe depression. Nowhere did I say that suicide is, or should be, socially acceptable. My point is that people who don't suffer from it have no idea how it feels, yet continually, as you've done, make assertions that convey a superior understanding. My only response is to look at the messages from both his wife and daughter. Nowhere do you see them claiming selfishness, just profound sadness. To me that shows a deeper understanding of the subject at hand. Rkabang, I am trying to be as gentle as possible. You obviously have no experience with depression or mental health issues. Maybe you should just cease and desist at this point.

+1 : Count your blessings that you have never suffered from clinical depression. I dont think selfishness is relevant to this discussion.

I disagree about the point at which dividends are more valuable than buybacks. The apples to apples comparison would be to fix your desired % ownership and arrive at the same cash balance via dividends or selling the excess % ownership (in the case of buybacks). Aside from technical issues, the first-order difference is in the tax treatment. In order for dividends to beat buybacks in an apples to apples comparison, dividends would have to show a persistently higher valuation for the company. There are more moving parts than you mention. You cant get to an exact number. Roughly speaking you are correct. I have tried working up examples but it is not as simple as it seems. Once you add in market fluctuations in stock prices, growth rates etc., you can only get to a range where buybacks are preferred over dividends. My best guess is it is around the tax rate for dividends which of course varies per individual.

Kind of what I said. We posted at the same time. There is a large number of moving parts involved in the math here.

You folks realize that if buybacks were used instead of dividends exclusively, or even more closely to the level of dividends, that our governments would have to work out a way to tax them. So find companies that do buybacks well, and forget about the rest. And Eric, there is that point at which dividends make more sense for the shareholder than buybacks. The point where the taxes on your dividends are less than the spread between book value and buyback price. Of course it is a number with alot of inputs so without using advanced Greek Formulae you can only estimate it. This is why I think Buffett has roughly chosen 20% premium to book as his target. 30 -40% above book is likely closer to reality, but Buffett lands on the side of conservative, and profitable for Berkshire, nearly every time.

But you would certainly agree that paying taxes – which is what I'm talking about – is not on the list of these goals you mentioned? Call me naive but it bothers me to no end that paying a dividend is still the standard capital allocation policy in nearly every large company. This is simply a waste of money. Warren Buffett got me really thinking about this in his 2012 shareholder letter (page 19-21). It just doesn't make any sense, neither short nor long term. I don't think it has anything to do with CEOs being greedy. They just don't think about it. Buffett thinks about, Malone thinks about it – every single CEO in Thornton's Outsiders book thinks about it – but most of the CEOs don't. And what amazes me is that even most of the investors don't. Dividends push a company to be responsible with their capital. A growing dividend and the expectation of a growing dividend are especially key. I wish I could recall where I saw the data; the gist of it is that having a growing dividend equates to a growing stock price almost perfectly, over the long term. Buybacks are open to too much abuse: Screw up an acquisition, cancel the buyback, have a single bad trade (London Whale), cancel the buyback; buyback shares at an all time market top (Potash). Excepting 2008/09 you rarely see companies slash a dividend. Very few CEOs and companies do buybacks well. The Outsiders is a subset who are good operators and good investors, which is a very rare combination. Its that simple. The major institutional investors and most individual investors want dividends. The reasons are entirely rational. If you have to pay the dividend it is proof that money is coming in the door. Its that simple.

Smoke some ganja.... Seriously, As KClarkin said, this strategy only works with good companies with something of a long term moat. The Buffett, pre Sees Candy, bought and sold as things came to value. These days I really only trade my Leap positions. The common stocks I have are generally extreme long term holds, barring bizarre events. There are only a few that qualify for sloth status, in the public markets.

I'll believe it when I see it. My experience is that most people dont spend alot of time thinking about this. It occurred to me 20 years ago that it was better to own the fund owner than any of their funds. I have held IGM and Power Financial in some accounts for over 10 years. My parents have a financial advisor (i.e. fund salesperson) who manages their investments for them. He is trustworthy, and generally upfront, but his goals are in direct conflict to theirs. He gets a piece of the fund fee, every year. Their returns are the market averages minus 2.5%. My returns are well.. a little higher. To most people, saving money, on a new computer, is much more tangible. We here on this board are certainly not most people.

I have done it off and on for ~10 years. I did an MBSR course. Also, have spent a small amount of time at thich naht hahn's centers in France and New York. Lapsed right now. But I am running again.

Advice above is good. The board has been my mentor, and a source of stability. i.e. Sometimes, I get overly enthused about an idea and the board brings me back to earth; other times I get disgruntled with a company's performance and board members point out my irrationalities. The board serves a my Munger and my Buffett. Other than that I couldn't coach someone due to style differences. I work off of two distinct styles. One is finding high dividend payers (SSW, PWT) and loading up for income. The other is using extensive leverage primarily via leaps. I dont do Ben Graham very well. I have a vast repertoire of non-investing industrial experience to draw from so I can visualize how companies make money, and why many dont and never will. I also dont blindly follow "gurus". I dont know them or their motivations. In the early days I used to read Annuals before getting to know a company. Now I do it toward the end of the process. Once there, I am mostly looking to make sure my "value" investment wont go bust, quickly, or worse, slowly. I will add that my only advantage is temperamental. I cannot beat the majority of fund managers on information, nor do I need to.

Me selling Rim puts when it was above $40.00 despite all evidence against it. FFH buying TIG. Ffh buying Canwest Global common stock right to the days before the bankruptcy. sorry couldn't resist.... Thousands of Canadians buying Brex at a price higher than all the gold allegedly in the ground. Millions buying Nortel when it had a market cap of 200 b US with no profits in recent memory.

I loved the detail on how he worked the cocao beans, came to invest with the pritzkers rather than taking the opposite side. Alice did an enormous amount of research into his deals and relationships that is lacking in all the buffett "how to books".

All mentioned at some point David Dreman - Contrarian Investment.... - very data driven. Great study on market psychology as well. Helped me form the cornerstone of my philosophy. Lynch - One up on wall street - great starter book Lowemstein - Making of.... Smowball - deep insight into what Buffett does and how he does it in between the fluff. Intelligent Investor/ security Analysis I took a hack at Marty Whitman and found him incomprehensible.

A bit of a background. Harry was a board member who spent alot of time insulting other board members strategies and insisting he had the secret sauce. His secret sauce was a black box of quant BS. He made the mistake of publicizing his short investment record which was pretty pathetic, after all his blustering and insults. Finally, he quit the board in a fit of pique and deleted his posts. After that Sanjeev, locked the board so that posts of exiting members couldn't be deleted.

What the heck is NTTAWWT? Not that there's anything wrong with that - Seinfeld. Lol, :P; that's great.

What the heck is NTTAWWT?

Porn! Kraven, I don't think any of us here have any desire to see Ericopoly, Twcowfca, Indirectinvestor or Packer naked! You might want to know how BIG their net worth is, but the rest of us just aren't interested. What you do on your computer in the privacy of your own home is your business. Cheers! ;D I would like to see Packer and Sanj. naked, while singing a duet..... Guess, I'll have to wait until april 2015, patience young grasshopper, patience.

I think your onto something with the US and Canadian Banks. Under sufficient regulation, after the fall, a basket of these should compound for couple of decades, now at least. Of course the one caveat,is that you have to know when to get out of the way. But, that applies to anything, of course.

Randomep, You knew this was coming. lol. Your wrong about the options , or the thinking behind them, at least. I can only speak for myself. I only buy Leaps on stocks I perceive as being significantly undervalued. I have analyzed, and in some cases (Ffh, Bac, Wfc, Jpm) held the stocks for some time already when a dislocation appears. Options are simply leverage. However, when you take them on, you have to think short term in the context of that undervaluation - if short term is considered less than 2 years. You also, have to be prepared to take gains when they arrive, and re date the options as necessary, should they lose value. Probably it can best be described as a short term strategy within a longer term goal. I can absolutely guarantee that if Buffett were starting out now he would use Leaps. And FFh trades frequently. The only time Prem likes " the guys in charge" is when they are left holding the bag for a few years. That said, when I come across a company I really like for the long term, that pays a dividend I will keep it. i.e seaspan for 5.5 years. I am very interested in learning how you gauge timeframe. Do you think in terms of upcoming events? Business at an inflection and early signs of improvement are present? Abnormal stock behaviors - e.g. breaking from a long term downward trend? Thank you for the input. Check out the BAC warrants thread. Very simply I keep the time frame as far out as possible. When the new Leaps cycle comes out in the fall I will sell down my 2016s opportunistically, for 2017s unless BAC has come to value 22-25 (to be adjusted as events unfold). I am willing to take a loss on the Leaps, to push out the expiry. I.e. I only hold a handful of Jan. 2015 leaps (JPM, AIG) at this time. These are well in the money. The rest are 2016s. This protects me from events. I have also, catastrophically protected my BAC leaps with shorter term puts, Jan. 12 which I will sell at a loss or expire worthless, unless BAC, drops precipitously, then I will take profits. The worst case is a down year and I get cash back from prior gains, in prior years.

Randomep, You knew this was coming. lol. Your wrong about the options , or the thinking behind them, at least. I can only speak for myself. I only buy Leaps on stocks I perceive as being significantly undervalued. I have analyzed, and in some cases (Ffh, Bac, Wfc, Jpm) held the stocks for some time already when a dislocation appears. Options are simply leverage. However, when you take them on, you have to think short term in the context of that undervaluation - if short term is considered less than 2 years. You also, have to be prepared to take gains when they arrive, and re date the options as necessary, should they lose value. Probably it can best be described as a short term strategy within a longer term goal. I can absolutely guarantee that if Buffett were starting out now he would use Leaps. And FFh trades frequently. The only time Prem likes " the guys in charge" is when they are left holding the bag for a few years. That said, when I come across a company I really like for the long term, that pays a dividend I will keep it. i.e seaspan for 5.5 years.

If/when it goes public - spacex; or solar city Anyway, this is a mugs game. In 2001, after the dot.com crash which company would you have picked for long term growth and success: HP, dell, Rim, Apple, yahoo, Time warner/aol, sony, google, facebook (didn't exist), twitter (same), linked in, netflix, ABc, NBC, CBS, Fox, CNN, Microsoft, intel, ibm - I think I made my point. In 1996 it looked as though Netscape had the internet wrapped up. In 1997 it looked as though FFH would grow at greater than 20% a year. Remember all the early search engines. Who could have predicted Googles dominance in 1996. This is why value investing works consistently better than other investment styles. My major wish is that I held on to my spring 2009 picks: AXP, Sbux, HD, GE, and WFC. Hindsight is 20/20. I would have been further ahead with these than fussing around with options on BAC. I still hold Seaspan, fortunately.

Gio, I agree whole heartedly. When I found this board 10 or so years ago my investing results took off. It helped me develop a philosophy of investing that works for me. Al

Take a look at Nigeria. I think it is very possible and likely pretty damn easy. This has to be figuring into the plans of each side.