Adam
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Posts posted by Adam
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Thanks everyone.
As I mentioned I am learning how to invest on my own, but I assume that will take a decent while.
For the meantime, part of my strategy is having part of the portfolio "managed" by smart investors who know what they are doing, that is why I want to hold the companies I mentioned.
rishig - I want to hold the companies without trying to guess if it's a good time to get in or out, since that completely beats the purpose of delegating the investing decisions to these managers, but I do plan to balance the holdings based on price and/or P/B - haven't decided yet exactly how.
I would love to hear more comments on the holdings and best alternatives.
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This is not a bad idea and not a bad selection. Whether you will outperform market (which market? US? ;) ) and index (which index? SP500? ;) ), is a 64K$ question.
Indeed, the benchmark is SP500.
I'm a non-US (and non-Canada) citizen. I trade with Interactive Brokers and exempt from withholding tax (except for US dividends), and am taxed by my country's laws, which basically say that all foreign stocks are taxed at 25%, except for REITs. Are any of the companies I mentioned considered REITs ?
"Not sure if US investors can hold TPOU.L" - why should US investors have a problem with TPOU?
"Don't want to deal with K1 reporting" - not sure if my tax laws have a similar issue with foreign public L.P.'s, but that is a good point and I'll check with an accountant.
"RE cos" - pardon my ignorance, but what does the "cos" stand for?
"too hard pile for me" - what do you mean by that?
Thanks
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A little ridiculous to expect this to drive growth in your portfolio.
"Growth engine" was probably not the proper phrasing. I do mean for it to substantially beat the market over time (more than 1-2% annual).
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Everyone wants to beat the market. But unfortunately it isn't easy.
If you want to be a "defensive investor" like one described by Ben Graham in Intelligent Investor, you are better off focusing on two things:
(1) Live below your means and save
(2) Dollar cost average into a low cost index fund.
If you want to do better than the market over a long period of time, there is no easy way. You got to be "enterprising" investor and that requires work.
I'm already doing (1) and (2).
And I'm learning how to be an investors by my own means, but that will be long process (given that I'm also working full time).
Of course I'm not assuming that beating the market is easy, although I am assuming it is possible, that is why I want to delegate that job to those who:
a) have a proven record
b) seem to know what they are doing
c) are accessible via publicly traded companies
This is the classic problem with diversification. Every additional holding is likely to only bring your returns closer to the average (Howard Marks talks about this a lot). You're obviously hoping the "average" of the basket is higher than the market as a whole, but that is not a bet I would make with any substantial sum based on my own experience.
I am concerned that adding too many holdings will bring me closer to the market mean (even though that won't be a disaster since I'm mostly an index guy), but that is why I focus on a small basket of only the best of the best, and I am assuming/hoping for the "average" to beat the market over a 10+ year period.
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I think you should take a look at the fees being paid to hold PSH and Third Point. Are you okay with the fees that the holdings pay to the funds? I think you would be better off with an index than paying those kind of fees.
I am aware of the fees and believe that in the long run these investors are able to outperform the market (S&P500) even with the fees.
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I would love to hear your thoughts on a portfolio I'm building.
My goal for this portfolio, which is about 20% of my total invested assets, is to invest in the absolute best capital allocators/investors, and hold on to them for at least the next decade or two.
This will be my main growth engine for the total portfolio, while the rest is mostly index stock/bonds based.
My current picks are:
BRK.B - Berkshire Hathaway
MKL - Markel Corporation
FFH.TO - Fairfax Financial
PSH.AS - Pershing Square Holdings
TPOU.L - Third Point Offshore
IEP - Icahn Enterprises
BAM - Brookfield Asset Management
HHC - Howard Hughes
I plan to have them equally weighted (except maybe HHC, since it's related to PSH) and re-balance as the prices of each become more attractive.
I've also considered many others, which for now I think I'll leave out:
Y, WTM, WRB, LRE - all probably good insurers, but don't have great investors running the show.
GLRE, TPRE - I don't like the added uncertainty of the reinsurance business (at least with MKL, FFH the business is solid). I would much prefer to invest directly with the investors (it's possible with Loeb, but not with Einhorn).
L, LUK - both were great in the past but have severe management issues today. P/B is very attractive but I'm not looking for value/speculation in this segment of my portfolio, but to invest with the best of the best, so I'm leaving these two out.
Others I'm still considering
SIGB.L
CRS.L
RCP.L
BH
POW.TO
SPLP
HRG
LMCA
BVT
SHLD
OAK
FRMO
and whole bunch of others, but I'll cut off here.
I think my main questions are:
- Are my top picks solid? Do you think something is critically missing and should be removed?
- Which companies can serve my goal besides the ones in my top picks (I'm considering adding a bunch of 2nd tier companies which might fit this criteria with a smaller stake for each).
- Do you think these companies are worthy of holding for a decade or two? I don't want to switch/monitor them all the time.
My portfolio of top capital allocators
in General Discussion
Posted
I (really) don't know much about the decisions they made, but from 2008-2014 (including both) they annualized 10.5%, while S&P500 annualized 7.2%. It's not amazing and not as good as other on the list, but it's not horrendous for sure.