Rod

Personally, I’m seeing far, far bigger discounts today in smaller stocks than I’ve ever seen before. I suspect that Einhorn is right. People have predicted for a long time that the rise of passive would damage price discovery. That probably hasn’t happened yet in the large stocks, but seems to have in the small ones.

That's a good point. Isn't that pretty much what he did by accident in the 1990s? Took a couple yolo bets on dotcoms as a raw beginner and got lucky then used that to form the base of a "market beating" long term record. I guess after 20+ years those initial yolo gains are wearing off.

But remember if you are very concentrated you have far fewer stocks to research.

If you find that flexing a position over time works, wouldn't it be better to just go all in or all out? Why maintain any core at all? Trading around a position either works or it doesn't. Personally I don't do it. I have a pretty similar long term record to you and I've always owned 6 or 7 stocks, currently only 4. So I agree totally with the concentration idea.

One problem is that they are a fully taxable corporation. I would much prefer if they were a mutual fund corporation and could distribute their tax liability. Then you add management fees on top of that. It's definitely a drag on performance.

Imagine your wife didn't have the job in Toronto and you didn't own the house in Toronto. Would you buy that house now to give her somewhere to live so she could start the new job there instead of staying in Calgary? I doubt it.

I would just enter the dividend myself without the T5. I don't think CRA will complain if you are paying your taxes correctly.

Her process was obviously terrible, but she got very lucky and it worked. There's a high risk she learned the wrong lesson and will gamble again on a hot tip and lose most of it.

I'm convinced he's not.

I don’t disagree, but why do you think Munger has chosen to be friends with him?

Same for me. I can only get 8(!) posts on my laptop screen even in condensed mode. Why can't there be one line for a post anymore? I much prefer the old site even though it was more primitive. Being able to see what's new at a glance on one screen beats all the slick improvements unfortunately.

We should also consider that position sizing isn’t just about how much you put in at the start but how you adjust the position size over time. Many people like to trim winners because they feel it’s too risky to allow their portfolio to become more concentrated. I think this is the wrong way to look at it. I’d be interested to know what others think.

yep. One is Brookfield (actually Partners Value Fund), the others are Dream Unlimited (DRM.TO) and Brookfield Office Properties Preferred (BPO.PR.N). I could be accused of being Real Estate heavy.

Concentrated bets are not for beginners because you need to ensure your bets are all low risk and learning to do that takes experience. I like to own 3 to 5 stocks which puts me at the extreme concentration end of the spectrum. But I’ve been at this a long time and experience has shown me that I have good enough judgement of risk to do it. You have to be able to judge the durability of the business. Factors that increase risk are leverage, financial and operational and a short history. Factors that reduce risk are being in a business that is more at the core of the economy and serve basic unchanging needs. Some companies are low risk because they are more like holding companies and are highly diversified (think Berkshire). I currently own three stocks, two are highly diversified and involved in real estate and infrastructure. The third is a preferred stock in a similarly stable business.

I like the Brookfield Office Properties prefs, BPO.PR.N and BPO.PR.P specifically. They are priced about $14 up from $10 but still very cheap.