Packer16

Sold some ACME and bought some BAC Packer

I would say none because each of these guys are dealing with larger amounts of cash and in some cases compensation whose focus is on them and not the investor. The closest to early Buffett in my mind are folks who have started partnerships (a few on this board) who have a value philosophy can provide concentration and have a similar incentive structure as the early Buffett partnership. Packer

I guess the real question is how useful is the PE10 in projecting a low for a value oriented portfolio? If you are investing in index funds it probably is useful but I know the composition and weighting of value portfolios can be signifcantly different than the index. However, if you are investing in individual stocks (many of which are not in the index) then wouldn't finding cheap stocks be a better indicator of when / what to buy? I know I own maybe 1 or 2 S&P 500 stocks out of a 20 stock value portfolio. A more useful benchmark may be some Joel Greenblatt's funds as they are screened and value weighted indexes. It would be great if there was some historical info on such indicies. Packer

Anothor benchmark is the S&P 500 is down 43% in real terms (and this may be understated as I used CPI) from 2000. Packer

Is there a way you can consult or work part time in your prevous field and then spend time on learning investment stuff? Since most of this stuff is cumulative, over time you can accumulate the knowledge you need but you probably want some income coming in the interim. You may also want to (maybe you already have) informationally interview folks in the asset managment field and/or hook up with the local CFA group in your area. There are probably folks on this board you can also interview if you ask. You may also want to look into if thier are any jobs in areas that can combine finance with the area you have experience in to get your feet in the door. I started out wanting to do asset management but I am now doing valuation services consulting and have been able to combine generating a nice income, savings and the opportunity to invest money unconstainted (in niches that others may not be able to). The last item is important because that is where I have been able to find the most inefficiencies. Just some ideas. Packer

An aspect of macro I have found useful is studying LT inflation and deflation cycles. I haven't tried to make specific projections but have tried to examine what happened in the past during these cycles. As human behavior has not changed and the aspects of many industries changes slowly, this information can be used to inform investment decisions as to the durability of firms when stressed by economic cycles. The approach of buying cheap has not changed but the understanding of how firms/securities react to stress is helpful. Packer

Congrats and as others have said if you focus in a few places and don't try to cover everything you can work with VL and other US free sources like Edgar and co web sites. Bloomberg and the other sources (Capital IQ) are good if you want fixed income or foreign stock info or are cruching alot of numbers for general valuation/analysis purposes. You do have to check the data from some of these sources with the source docs because in using them there are occasional errors. Packer

You have to be careful about the current level EBITDA because it is dependent upon spending an addtional $3 billion on a new constellation so there is a significant difference between FCF and EBITDA in this case. If you like satellites, look at APT or Asia Satellite. Cheaper and the have busienss that does not require alot of investment with questionable returns. Packer

Why would you want to buy warrants in a chapter 22 going to a chapter 33 company? The economics of Iridium do not make sense and the last time I checked Tilson's valuation was based upon what I would call aggresive projections. I used to work in the industry and have seen this show before. Packer

4 years is good because the only things folks want over a long period of time will get done. This is the way the system is designed. Packer

Lets tax them per transaction and reduce the deficit. Packer

I believe he holds the debt so he has a larger MoS versus the common Packer

Here it is: www.mcmadvisors.com

Is there any other yealry event that a good number of members attend outside the FFH or BRK annual meeting? It would be nice if there was a mid-year type of event we could also meet at. Packer

Frank Martin is a contrarian investment manager who is a great writer. His annual commentaries are available on his web site for free and he has written "Decade of Delusions" and "Speculative Contagion". I have read Decade of Delusions and it is a great stock market history of the 00s from a value investors point of view. Packer

Great article. Any candidate that would make these types of proposals would go a long way to dealing with the deficit and the wall street free lunch issue. Packer

I think Fairfax can more easily deploy cash versus Berkshire due to smaller size and emerging market opportunities. In addition, Fairfax seems to be able to take advantage of the ups (going all in when assets are cheap) and downs (hedging and cashing out in a down draft). This is a strategy used by Frank Martin also and I think will have some success in this market. I think the hedges are more than hedges but a way to capitalize on sideways markets. Packer

I will give you a current example. Take Lodgenet. It is trading at $2.00 or 1.4x FCF. The leverage is 3.2x EBITDA (leveraged but not crazy) for a hotel cable-type system. Lets say a normal EBITDA multiple is about 6.0x (below the current multiples of cable operators but at a premium to telcos). In that case, the upside would be 290% and the downside lets say is 100% loss. How do you determine the upside downside %s. I have been using 50/50 but was wondering if you had other ways of quantifying this. Thx. Packer

How have you been able to quantify the upside/downside probability? I have tried to use this but have had a hard time handicaping highly leveraged (inlcuding LEAPs) investments. Packer

Sold some SURW & purchased more TVL, MGAM and LNET. So many cheap companies. Packer

Sold some ACME bought some TVL Packer

I agree with Sanjeev. The fundamentals of US firms are great and I am able to find low single digit FCF multiple firms continuing to decline in what appears to be indescriminate selling. So I am pondering selling 10ish FCF multiple stocks to buy 3 to 5 multiple stocks. Packer

One aspect about the safety net not mentioned is the private aspect of it in the US. The larger the private amount, the less gov't provided safety net is required. An interesting idea for tax reform is to provide a tax deduction for private safety net programs (Salvation Army, etc.) but limit other chartable deductions. Packer

I think the Debt/GDP chart provides some good insights. We have lowered the debt/GDP in the past and we did not fall off a cliff. Its hard for me to believe that most programs cannot be modestly cut without a major impact. This will force us to decide what is a want versus a need. This will also have the impact of reducing the health care subsidy which should bring down healtt-care costs. I hope we also look at education and lowers subsidies (gov't grants and loans) for degrees that cannot pay back loans after folks graduate. I think loan/grant level should be tied to subsequent average earnings. If we can change the tax system also it can be a win-win for everybody. Packer

This may finally wake up our folks in Washington and force them to make hard decisions (on both entitlements, wars and taxes). As Churchill has said "The US will do the right thing once every other alternative has been exhausted" Packer