Gregmal

Hardly. It appears he willingly tripled his position during the current quarter. While he has owned some GM for a while, he's largely been in and out of it and in significantly smaller size. The is one of his biggest positions he's taken in recent memory.

This probably applies to most people in the fund management business. Especially during the decades covered in the book.

I think this largely lends itself to the notion that there are many people looking for a combination of an entrepreneurialish gig that provides the most personal freedom and the easiest path to supporting ones lifestyle ambitions. These types of businesses then become overpopulated, ground down, and then are no longer attractive on the original basis. Competition here is very fierce. A few examples personally- I grew up in a wealthy suburb of NYC. The kind of place were not many kids appreciate money because its never been an issue. It was always just a given that one of three things will occur largely revolving around the notion that you just end up where everyone else does(In the suburbs this means an 800k house, a wife and 2-3 kids with 3 vacations a year and a mid life crisis that gets resolved with the purchase of a sports car) 1) You use family/friend connections to get into a respectable job working for someone else 2) You get funded by family/friends to start your own venture (If I had a penny for every kid I grew up with who became a "hedge fund manager" with the help of mom+dad and a few relatives...) 3) You inherit money I've lived on my own since my mid teens and gotten to know the other side of the coin as well during that time period. I've found that the hustle required to really get to that next level seems far more common in lower-middle class raised individuals because it is the norm. When you see family and friends working 2 jobs to put food on the table, that becomes the standard. When you have to chose between a new pair of sneakers, a dinner date with a girl, or paying for a textbook, its far different than shopping with the credit card, then meeting your date at the Cheesecake Factory, and then showing up to class late. But these are two completely normal realities depending on where you are from. Which kind of delves into where some have already pointed. When you, your family, your neighborhood, etc become accustomed to certain ways of life, they become hard to break. If it is easier to secure an 80-100k job with great benefits, that will be your path of least resistance. In America, outside of the big cities, it's not easy finding jobs like that anymore(at least ones that don't require 80 hours a week and 5+ years of university). A lot of that went away with the financial crisis but the evolution of technology has also eliminated many jobs that used to support this. So many people must turn to an entrepreneurial path to provide themselves the life they want. However most traditional routes of entrepreneurship arent there anymore. Growing up(I was born in the 80's), you had family run businesses. The local deli, now replaced by Subway and Panera. The local sporting goods store, now replaced by Dick's. The local mechanic/auto body shop, now a Midas chain. Local clothing store, now a Kohl's. The local grocery store, now replaced by Stop-N-Shop. All of which are being threatened by Walmart and Amazon. So even those seeking to be entrepreneurs are given far fewer opportunities to than ever before. Its the ugly by-product of capitalism in which everything is suctioned to the top. As consolidation occurs the vortex becomes stronger and more and more carnage occurs, in an accelerating manner. Tons of people I know have tried starting their own business. Probably 70% of people I know at some point or another have tried starting a construction/landscaping business. 75% end up taking W2 jobs eventually. 15% struggle along under the constant pressure of never really being secure, and 10% seem to end up getting there through a combination of working harder than everyone else and doing things more efficiently. Although I'd argue that this 10% are the type that would make it regardless. Take 90% of the people I know who are self sufficient with their own businesses, and it's finance and real estate folks. Two industries under attack(automated investing/AI/ Zillow/internet plus massively over-regulated), and likely shrinking rapidly over the next decade as well. Which leaves whom safe? Doctors and lawyers? I personally believe much of this here in the states is because the education system is so screwed up. People are not educated in a way that directs them to areas that they can best be utilized. Canada definitely seems to have things better handled on that front. At least their university grads are not leaving school with a useless 5 year degree, 200k in debt, and the grim reality that you'll need to compete for a 55k a year job. Bottom line it seems, is that Canada has a better handle on "the system". The quality of life in CA is higher. Employment does not seem as challenging, and people seem to be put in position to provide for themselves better. Meanwhile in the grand old US of A, one is taught until their mid 20's that you can be anything you want to be, everyone gets a trophy, and then we wondering why things just dont work.The US may be more entrepreneurial but it is because more people have to be because there is now a greater social disparity between the people who have made it, and those whom haven't. Canada still seems to have a healthy middle class.

I've looked at various models and everyone always seems to use the 4% rule but realistically if your primary residence is paid off, how much really do you need. Taxes on my home are 16k. Healthcare probably another 15k. 60-75k should be enough for any prudent and fiscally responsible adult. I also question what most consider retirement. Retirement to me is doing what you want on your terms and enjoying life. Running around stressed and under a constant gun is what we strive to free ourselves from. But retirement? Many imply that this is where one officially does nothing and sits on the front porch reading all day. To do this the parameters are far different from a situation I'd more closely associate with retirement where maybe you work by choice doing something you enjoy for a supplemental income. I've also occasionally screwed around with various models that branch off the 4% withdrawal plan. I'm no where near needing to tap into my investment funds but I've always been intrigued with the idea of refining the 4% strategy to something variable. Say, you live off of 50% of the previous years returns, with a cap at 7% and anything after getting thrown into a side account that rests mainly in short terms interest bearing vehicle. This side account then acts as a draw account to live on in years of negative returns. It can also be used to add fresh funds after market corrections. It essentially forces you to cash out a small piece after outperformance. It would look something like this. Say you have $3m and return 20%. You "gain" $600k. Your primary account increases to $3.3m after you withdraw $300k. You live on $210k(I'd still probably spend nowhere near this), and $90k goes to the sub account. Next year you gain 16%. $528k gain, $210k to live on, $54k to sub account. $3.564m in main account. I like something like this because in lean years it forces you to be nimble, and in solid years you are rewarded for great investment returns while still growing your money. Also, provided you can generate a positive return, your safety net account grows and will cushion your down years while also allowing you to have dry powder most who are "fully invested" don't have. As long as your returns are positive, you're never really in bad shape, and honestly, while everyone debates the practicallity of "beating the index", simply generating a return greater than zero is easier than easy.

IDK, I'll preface this by saying I am long these as well, however something I've struggled with is the basis for these claims. It all seems outrageously rife with hind site thinking and Monday morning quarterback mentality. Essentially investors hearing the winning lottery numbers and then claiming they had the tickets before it was announced. On the one hand, I agree with pretty much everything the bulls here are saying(fundamentally in terms of what's legally right and wrong), hence I own the securities. However the other side of things, one that isn't so compelling, is the simple fact that these companies, along with many others were in dire situations. Maybe they weren't insolvent, but they were shut out of the capital markets and the lender of last resorts did so on rather onerous terms. This lender, essentially held the fate of these companies in their hands. Just because they acted differently with AIG or C, doesn't mean they had to do so with Fannie and Freddie. That lender, then down the line changed the rules, but if you think about it, any majority owner would seemingly have similar ability to do so if they owned equivalent amounts of a given company, and the rest of the shareholders would just kind of be screwed without any recourse. More troubling if I am playing devil's advocate, is that it seems like every long here, got long well after the doomsday events that shaped the reconfiguration of these entities. IMO the argument that "yea these companies were stolen and obviously they were healthy" doesnt really hold as much water if you werent previously invested in them during the time period in question. Your argument essentially is what? That it was so obvious they were healthy but I didn't make an investment until 2012? If it was such a no brainer that these entities were healthy at the time, why weren't they able to access the capital markets? Specifically in relation to the preferreds, look at a lot of the O&G companies that have recently been thru chapter 11. This IMO was just a messier(not surprising bc the government was involved) re-org. I hope it all works out. But a lot of the arguments, while fundamentally pretty damn sound and legally compelling, are all hind site based and IMO wishful hoping.

I think a trend we are already starting to see, but one that will become more prevalent is focusing on higher education in earlier years rather than blowing a load on colleges and universities. My parents always stressed the importance of a good education and my siblings and I all had the opportunity to go to private schools. The logic was that the mind and the individual develops far more during the early-mid teenage years and thus those years and the education received is more crucial towards development as a person than going to a "brand" school for $50,000 a year. So for $10,000-$20,000 a year for 4 high school years, you supposedly get much more than you would for 4 years at $40,000-$50,000/year. Maybe I'm an outlier, but the first two years of college are gen-ed which is the same everywhere, and personally I found being adventurous far more enlightening than mundane tasks that largely revolved around things like being able to do what you are told and memorization(tasks I knew I could do if I wanted and thus felt no need to do if the content did not compel me). Additionally, having gotten a real education in high school, I was already at a huge advantage having taken calc+stats classes and advanced sciences and then showing up to college and seeing people spend 2+ years and tens of thousands of dollars learning Earth Sciences and Algebra. This was over a decade ago. My youngest brother went the same high school route however went into college knowing he wanted to be a biomedical engineer. I had a vague idea that either law or finance interested me, but otherwise not a clue. My brother seems to be in the same boat as a lot of kids these days, whereas I was in the same boat as many in my day. So I think there is becoming a naturally tendency for kids to develop their interests earlier, and then pursue them more efficiently. I think universities will soon be forced to evolve and as a result of both the lack of demand and well as the insane costs, I think we are not too far off from seeing the typical 4 year degree cut down to 2-3.

I am by no means an expert, but several people I know have spoken very positively about some of the Mutual Series Funds as a buy and hold forever. *Edit, noticed you mentioned ETF's, not mutual funds.

PepsiCo is a name I'd be comfortable owning into a melt down. I think the junk food/soda crackdown is exaggerated. There's been nothing known to man to be worse for you than cigarettes for decades and those companies are still cash machines. Soda and potato chips will survive.

Site was down/scrambled/no content at various points between 5-9:30 EST.

Tepper is different animal (much more diversified) compared to those other folks. He is, but from time to time he really loads up when he sees something and doesn't often miss. The financials were his big one, but even now, AGN is a pretty concentrated position. GM a couple years ago was about 20% if I remember correctly. Cooperman on the other hand is the definition of diversified and had one of the worst runs of "blow ups" I've seen from 2014-2016. SD, MONIF, S, where all fairly big and well promoted positions that all had spectacular declines. Another name I'd mention in the not blowing up camp is Nelson Peltz.

After reading through a few threads, particularly the SHLD and VRX ones, it got me thinking. Obviously we all take major beatings from time to time, the trick is to managing the impact of such events. This is something that wasn't really done with Ackman's VRX investment, or Berkowitz's SHLD position. The effects for both guys have been pretty devastating by any measure, but especially in terms of publicity. I can think of major positions blowing up for many guys. Watsa, Cooperman w/ SD, Pabrai ZINC, Baker Street, etc. But what about guys who haven't really had this problem? What sort of investing style have they used to avoid these pitfalls. How do they manage their positions. Obviously a major market downturn is going to have a predictable effect on performance, but the big killer is having prominent positions go bust for reasons specific to the investment rather than the broader market. First name that kind of pops out for me is Tepper. He does seem like more of a trader, but he isn't afraid to be concentrated in a big idea. What managers do people follow whom don't seem to get beat big? Lastly, more so out of curiosity in regards to others here, how do you personally look to avoid this. Diversification seems to help, but one look at Cooperman the last few years will show it doesn't spare you entirely. As a trader, it seems obviously a bit easier as you typically have a set of rules. But as a value investor, what rules do people use to avoid major blow ups? Do you just size it and let it ride? Do you only add under "x" scenario? Personally I've found avoiding companies with high debt loads/complicated capital structures and unpredictable earnings/consistent history of losses helps. I tend to concentrate in companies with hard assets. The downside is I miss out on a lot of tech, biotech, and even energy names. Apologize in advance if this thread has already been covered somewhere. Still somewhat new here but thought it was an interesting subject given the popularity of threads relating to SHLD, VRX, and FNMA which could be another big blow up for many managers(not surprisingly both Ackman and Berkowitz as well).

To me at least, this seems like a clever way to cut costs.

Zacks is trash. No value to it. Their analyst work is an automated script.

Pretty cool stuff and great reddit discussion. Always find this kind of stuff fascinating. How one attains their freedom. The pursuit of money is often falsely associated with people who are driven. Personally I think the freedom from hard work is the primary driver and accumulating wealth is generally just the bi-product. David Siegel from time to time has had somewhat interesting commentary on the ease with which hard work alone can propel one to great heights simply because this type of work ethic itself has become a scarce commodity. Especially when you are young. Wouldn't necessarily call him a role model but I always find it neat how you hear the same type of things. "In my mid twenties I was at my office working on Friday at 10 pm while my friends were out getting drunk and chasing tail at the bars" was one of his better lines. It is quite true. The earlier you can stand compounding the better. Not only can you compound wealth but experience too. Both become immensely valuable over time.

Personally Ive found concentrating in a few solid ideas within sectors you like and understand is the best approach. If you like to read and research it helps too, although at times this also makes it difficult to stay disciplined because you are constantly presenting yourself new ideas. On the other hand I know people who just diversify the heck out of everything and never plan on selling. One person I know will buy 100 shares of anything fundamentally solid, up to about 10k. He's got a portfolio of like 200 companies purchased over the past 30 years plus. Some have gone to zero or been losers; some have turned into 50-100x the initial investment. This is a very long term process and approach but if you hit on a few investments with returns like that, your retirement is taken care of. I guess starting early is big too.

The left made a case out of Russia for their own self-protection. Assured that the spying on Trump & Co. would eventually come to light after HRC lost, it looks to me that Obama's minions created this entire "Russian's hacked the election" narrative to distract from the real target of their spying. Public enemy #1 -- their political opponents. The most amusing aspect of all of this from the libs/MSM is that they had been presented with the idea that Russia is something to be concerned about and completely blew it off. I remember Mitt Romney questioning the fact that Russia could be a major problem during one of the 2012 presidential debates and sly ole Barry made some crack about "the 1980's called and wants the Cold War back". The arrogance was unprecedented. Then the Ukraine stuff started going down, and still, no one wanted to touch it and outside of some half assed sanctions, it was ignored again. Now, after losing the election, and ignoring the issues for an eternity, they get all riled up because "someone"(whom they're claiming is from Russia) leaked emails exposing how corrupt key members of the party were. And it's Trump's fault.

What I think is funny, and probably worth an SNL skit or two, is the paradox between a man's pursuit of a woman(or I guess in today's day and age another man as well(although you never hear about sexual harassment on that front from MSM)) and the application of the same principle(once called resilience) in regards to other areas. Pretty much anything sales related for that matter. Imagine a cars salesman if forced to behave with such little drive? Salesman: hey, this is a wonderful car, perfect for your family, inexpensive yet well rated Customer: No thanks Salesman: OK have a nice day How about T-Mobile which is very aggressive about recruiting customers? "How much are you paying at Verizon?" "I'm not interested" "Ok, bye!" Things were fine up until probably the last decade, when previously there were just natural pursuits and a girl saying No was sometimes just part of the game. A respectable and proper gentleman would not really have a problem deciphering whether he was getting the "NO" that meant get the F away or the "no" that meant keep trying, I like the attention. But now today, a girl is given the message that as long as she says no once, she essentially has a free call option on whatever the heck she wants from a guy provided he didn't make her sign a legal contract. This IMO is a symptom of the larger problem; things that were previously just common sense and common courtesy now need to be governed and regulated/legislated because society has gotten so petty and PC and there are no shortage of lawyers or politicians trying to capitalize on it.

I don't really view spending time on evaluating investments to be a burden or lost cost. I enjoy reading, consider investing a partial hobby as well as a job; it's something I like. Because you derive independent enjoyment from investing, it makes sense that forming a belief about whether you can beat the market is less relevant to you. For people who do not believe they can be the market, this would be either irrelevant or a good thing. By hypothesis, their security selection and portfolio weighting decisions (i.e., deviations from the index) destroy value rather than create it, so gaining knowledge likely won't help them. But if your point is that you cannot avoid some active decision-making because you must pick an index, I would suggest the broadest, most vanilla equity or bond index fund you can find, rather than any exotic index. Funny but I actually hadn't thought of it like that. Essentially, telling somebody you are deficient, and they for better off not trying. The more you try the more you'll just screw up. Knowledge is not power for you. Which again, for the average person probably is somewhat if not entirely true. I've met some very well educated and highly accomplished people who have blown me away with their ignorance when it comes to investing. In my own case, I own one ETF(index/etf to me are basically the same). CIBR. My reasoning is the I am highly confident in my ability to forecast the runway for cyber security. However I am fine acknowledging that I have next to no ability to analyze companies trading at 100x sales with any degree of confidence. Nor do I have any confidence in my ability to learn how to get comfortable with companies that carry such staggering valuations. But I do want exposure so I found two ETF's, CIBR and HACK and did some work running through the various differences in terms of portfolio holdings and weighting of the components. It's probably the only investment I have where I literally have no deeper knowledge or understanding of the vehicle or instrument, and as such despite it doing well, will never be a major component of my portfolio. How some could get comfortable having a major allocation to an index, even say SPY, is crazy to me(someone just dumping money into XZY Global Index fund after a while will have a very high concentration). After all, especially with broader market index funds, you are entirely at the mercy or macro trends. Which is definitely something one can analyze and make efforts to be aware of. And if you're doing that work, then you might as well do it for individual companies.

This is very much true as well. Beating the index is a very popular topic on CoBF. In real life not so much. People don't really care if their investments beat the index. Mostly they just want their money to be safe and earn a decent/good return. You really find out how much people don't care about beating indexes the moment when you see a client and you tell him that he's down 15% but he should be happy because he's beat the index by 500 basis points. If people's overarching goal in investing is to beat the S&P500 or whatever then no one would buy any bonds. It's also true that investors obsessed with beating indexes will probably fail to do so. Just go out there, do your best, do good work and stop worrying about the index so much. Unless you have no opportunity cost to your time or derive independent enjoyment from the act of investment research, it makes sense to care about whether you are likely to beat an index. If you can't, why bother to do "good work" on investments? Wouldn't it be better to do no work, put your money in an index fund, and spend you're time on something else? I don't really view spending time on evaluating investments to be a burden or lost cost. I enjoy reading, consider investing a partial hobby as well as a job; it's something I like. But regardless, I sift through things all the time. Often trying to find reasons not to make the investment. I will occasionally drive around nearby areas looking at potential properties. May a year goes by where I don't do a deal, I couldn't imagine thinking of that as a waste of time or sunken cost. Last year I did one deal and the current yield is about 13.5%. At the time I couldn't predict what the index would do. I didn't care what it did. Instead I viewed this along with several other factors as a risk adjusted return I would be content with. Whether the S&P does 25%, I just don't care. Which brings me to the next point. I really don't think anybody is capable of fully knowing what they own with an index fund. They are told what it is supposed to be, but it's impossible to really understand every component of it. I remember TVIX was supposed to be a 2-3x correlation to the VIX. And one day(I want to say in 2012), when the VIX was up modestly, this index proxy lost something like 60% in a day for no reason at all. It's definitely possible to beat the index over time, however right now we seem to be at the apex of index mania because we have deviated so far from historical norms in so many different areas of the market/investing and many of the experts have been chasing their tails. Owning an index has been and will continue to be en vogue as long as the bull rages on in a straight line up and monetary policy allows most asset classes to have high correlations. But this IMO is not something that is sustainable in the long run, and the second these conditions should cease to continue, being in an index may not seem like such a no brainer.

Also, perhaps getting a little too much into a philosophical angle here, but who's to say that the entire "its impossible to beat the market" campaign thats been growing the past few years isnt some wonderfully orchestrated marketing campaign promoted by companies like Vangard? Meant to discourage investors from even trying and just toss the money into an index fund? Honestly I don't even know why "beating the market" is even that important to people. To me, I couldn't care less. It is utterly irrelevant how my investments perform compared to the market. As long as I am intimately familiar with what I am invested in and comfortable enough with what I own, I don't care about all the other noise. Its kind of even comparable to the market timing approach. You think Buffett really said "I'm banking on a turnaround at BofA" in 2011? Or do you think he simply found himself a great deal and was comfortable making the investment? I'd compare it to trying to hit a home run in baseball. Typically when you try to hit it out of the park, you grip the bat too tight and swing at bad pitches. Whereas when you just relax and pick your spots, life is a lot easier. I consider trying to beat the market just another unnecessary distraction that complicates one's decision making and adds unneeded stress.

He was definitely right about KO and has also been right about quite a bit during his current spat with Consolidated Tomoka. His problem is that he comes off as all or nothing and sometimes over the top/too extreme in his negativity. This turns a lot of people off. Probably more so than the performance issues. Frankly if you are investing in a fund like Wintergreen, you shouldn't expect to be beating the S&P. But neither should someone whom buys a CD. One look at his portfolio will tell you he's not chasing the indexes.

This is something I'd want to like. As long as it is not filled with stuff about "the next marijuana millionaire" etc. If anyone here recommends it I'll probably grab a copy.

This is probably the most overlooked yet relevant thing. Further if you look at guys whom supposedly beat the indexes regularly, ie a Klarman, they definitely have a "dgaf" approach as to what others think and their portfolios are rather unconventional. Second, they already have their financial future's taken care of.

Politically correct, ignorant, whatever, all are the labelled cost of having an opinion these days. Opinions are not fact, they can be right or wrong, nonetheless its just an outside observation the I have found to have some merit, IMO. There's an attitude prevalent amongst many Americans in today's day(not just relating to investments btw) and age which I best describe as "do it for me". I have found, again solely from my own experience, the Canadian mentality is different. I guess if we call it "Canadian conservatism" its more acceptable. Hedge fund I guess can be defined differently, although I suppose my reference was more in relation to broader investment management. From my little perch here in America, I have no problem saying that I've found Canadians to be savvier and more financially cognizant than my fellow Americans. If I offend anyone north of the boarder with this sweeping generalization, I apologize.

I remember hearing him say something along the lines of "if I could snap up 500,000 single family homes in one order I would; it just doesn't work like that though". Granted when you have money its not as much of a challenge, but between the time and the fees necessary to make a large enough investment he probably would have just been better off buying stocks. Which is what he did.