DooDiligence

What did you like about Kingkiller Chronicles? I hope I don't put anyone off with my harsh comment if it's any good... some peopel seem to love it. Funny you mention Dresden, that's how I got to the current list of WWII books as I was looking for some info on Youtube about the rebuilding of Germany after WWII and the impact on Dresden. There's plenty of footage in color, showing the aftermath; rows and rows of ruined buildings, people pushing carts as no gas is available, the wounded laying on the sides of the road. And it's all in silence; no booming guns, no thunders planes. Horrorifying. I recently saw a documentary on Vonnegut & found out that he was a POW in Dresden during the bombings. I was going to read Slaughterhouse 5 next but decided that I just want to be entertained instead of being taught hard life lessons. Hence, the Heinlein juvenile novels are on deck.

Nice! Growing the housing segment. I'll bet everything they build gets Benjamin Moore paint jobs as well as other related pieces & parts. More listings for all those realtors that are getting added to the fold on a regular basis too.

Thanks, I'd never seen his blog. I'm thankful to not have any emotional connection to that poem. But I may have one to Scalzi, that I never knew existed. He likes cats, I like cats, But am not presently owned by one. I like the "Whatever Holiday Shopping Guide" and it's coming tomorrow! Virtue Signaling & other Heresies seals my affection for the guy.

I'm with you on Gaiman. A little bit is great, but goes a long ways. I'm thinking about re-reading some Heinlein over the semester break. Red Planet Starman Jones Space Cadet They, among other stories, were dubbed the juvenile novels, but I think they crossover well to adults (either that or I'm just a kid at heart.) Not hardcore sci-fi, but I enjoyed them a lot.

Proud to say that I have never made a post there and hopefully this factoid counterbalances some of the stupid crap I've said elsewhere. (gotta hit the "post" button quick, before your suggestion gets implemented ;D )

I miss Thai street food. Nothing like a big hot bowl of Tom Yum on a nice steamy night. (The best vendors are near the police stations.)

I'm all in with a purchase of CLB today. edit: also added some MO Jan 2021 $50 calls using the supposedly sacrosanct skool funds. The cash I have left is sacrosanct (no, really) and will be used for a bachelors degree unless BRK takes a big dive, in which case I'd probably add to the position & start busking to cover the missing cash ??? --- [[[ This should be a sufficient signal for ALL intelligent investors to marshal their cash for a huge downturn in the markets. ]]] --- I only need about $5K or $6K in income for next year to maintain eligibility for ACA & will hopefully be able to sell off the MO Jan 2020 calls in 2019 in order to make this happen & to add a bit of cash back to the educational fund. Other than that, I believe that the other businesses are good for the next 5 to 10 years & more in some cases.

Thank you for confirming my opinion that more fat people justifies my fuzzily logical long term view of success for NVO. I'd also like to give a huuuge shout out to the Republican party for delivering on their promise of a gigantic orange turkey with a freakishly shrunken penis ;) Oh, and "gobble gobble" everyone!!!

A year of working between Abidjan & Takoradi showed me this. I'd seen it before but these areas really hammered it home. It disgusts me to see students whining & making excuses for barely putting out any effort. It reassures me to know that they will be no competition in the work place. Unless, of course, they're great political operators. Fortunately you can't fake music. I keep the disgust to myself & like to believe that 1 or 2 see an old guy shining & are motivated to get their asses in gear. (The competition doesn't really scare me...) Here's to mediocrity & the social programs that stand between it & dog eat dog chaos. BTW, I'm doing a literature essay about Harrison Bergeron & will post it later for anyone who's interested in my take, on Vonneguts take, on forced equality legislation.

Let me signal my virtue by saying that I signal on a daily basis. Right now I'm trying to signal "yield" to a woman at the bar who undoubtedly lost her virtue decades ago. Actually, I'm signaling "hey, I'm a really busy guy, look at me on my phone." Crap, this can get really confusing. How do you signal, I'm not a poser?

This not a luxury brand. Luxury is quiet & understated. Here's a vidi that prob exemplifies their base. If you Google "Dolce & Gabbana Asshole" you'll find out what a clueless pair of douches the founders are.

This thread has proven to be even more enjoyable than I thought it would be! --- Delayed gratification & paying attention to the beauty around the path. These things can make communion easier if we don't get all smug & righteous. People are attracted to competent people who don't make them feel small. An added bonus is that women love delayed gratification!

I find you're able to concentrate selection bias, simplification bias, clustering illusion and the fallacy of anecdotal evidence to underline what seems to be an investment approach (bottom-up or top-down) issue. Apologies since I may be missing the courtesy bias. :) Please explain how it is easy to avoid a disaster, before it happens, if possible. The only thing I can come up with is, "use a condom". ;)

Coincidentally, we just had a poetry exam in Comp 2 & it covered: Dramatic, situational & cosmic irony...

Sorry for throwing a wet towel on the thread & you're right, he could be wearing a Folex, which would probably be appropriate for him. Hey, at the risk of sounding like an idiot (like I've never done that before, right?) What's an SMA? I Googled it & came up with "spinal muscular atrophy".

Apparently, the guy is an idiot & that video is a piss poor apology. All he needed to do to cap off the video was to say "but hey, at least I'm not Jacob Wohl." --- From the linked article: Moreover, he said, FCStone borrowed on margin against the accounts to cover money-losing positions. In the end, the clients didn’t just lose all their all their money, they also now owe FCStone for the loans, he said. https://www.bloomberg.com/news/articles/2018-11-19/hedge-fund-s-accounts-liquidated-amid-energy-market-volatility

1 word, Berkshire.

Morningstar has been a decent place to start prospecting but is virtual garbage when it comes to ratings & valuations. --- Over the past year, I started noticing wide, short term, gyrations in the quantity of 5 star stocks reported from the "Stock Favorites" link: Date - # of 5 star stocks on Morningstar 12 Nov - x43 13 Nov - x25 15 Nov - x709 19 Nov - x1066 The vast majority of 5 star rated businesses have no analyses at all. A week from now they'll be back down to presenting 20 five star stocks with no apparent reason for the cull. --- ATM, Bagger Daves is listed as a 5 star stock, BAGGER DAVES, really? --- You get what you pay for and I'm paying nothing with library access so I should stop bitching, right?

I rarely have to salt your cooking.

In this interview, Daniel Kahneman (one of the pioneers of the discovery of cognitive biases, nobel price winner etc) says that he still experiences (or is not "immune to") cognitive biases: https://soundcloud.com/bloombergview/interview-with-daniel-kahneman-masters-in-business-audio (37:00 into the interview, but the whole thing is great). "I am not smarter than I was when I started in this line of research more than 50 years ago. Because my system 1 is just the same way that it was". But then he says that he recognizes "This person is trying to anchor me. It still works by the way. But I can recognize it". If Daniel Kahneman is still "fooled by" cognitive biases, I think it would be arrogant of most of us to think we can avoid it. My favorite quote of his was the one about "familiarity becoming confused with truth." It applies not only to authoritarian regimes, but to investment theses as well.

I was absolutely not trying to imply that I'm an expert on the subject. It's much easier to spot faulty reasoning when others are doing it .. Anyway, some random thoughts on this: First I think you have to know a little bit about how people tend to fool themselves. For that, you can read Kahneman, Wikipedia, whatever. Or visit the casino or Yahoo Message Boards :) . Be aware of the traps many investors fall for (confirmation bias, loss aversion, hindsight bias, etc.). Unfortunately it's far more difficult to spot this behavior when you are doing it yourself. Some random things that I think are helpful (obviously not all will apply to everyone) - Most important: avoid hasty decisions. Much easier to make mistakes if you are in a hurry. Don't buy shares 5 minutes before you have to go to a birthday. Don't trade on your phone. Don't trade at work. Don't buy shares 'before they go up'. If you want buy/sell something, let ideas percolate in your head for a while. Don't trade if you are angry, scared or jealous, only trade if you are totally calm. - Write down your thoughts (i.e. an investing diary or something). It's very easy to delude yourself afterwards: "I always thought this was a no-brainer", "this thesis worked out perfectly" but if you write down your thoughts you can't fool yourself afterwards as easily. It's humbling to read all your own crap a few years later and to find out you were spectacularly wrong. Also, writing slows you down. See point above. - The above especially holds if you share your thoughts with others: i.e. discuss what you are doing in person, on this board, on your blog or per e-mail. Again, it's much easier for others to spot your faulty reasoning. - In similar fashion, it's also interesting to write down the confidence you have in your ideas. Do you think an idea is 10/10? Absolutely top notch and risk-free? Write that down and marvel about your own stupidity two years down the line. - Watch out for thesis drift. I think a lot of people fall for this. First you buy a stock because they have a great new product. Then you suddenly own it because, even though the new product was a failure, their other products are great. Then sales drop but surely the company has a great balance sheet and will never go bankrupt. And finally you will own it because it is heading to bankruptcy, but surely the assets will fetch a nice price in a liquidation. Again, write down your thesis. - It's easy to make mistakes when your thesis is vague, say: "this is a great business, I will buy it until it stops growing" or "until it is fully valued". Try to make your thesis measurable in some ways. I.e. write down: I expect sales to grow by 20% the next five years. I expect this to trade at 65% of book value. My price target is 15x earnings. Peg a 'fair value' price label to all your holdings. - People have a tremendous tendency, for example on this message board, to _defend_ their ideas when somebody is critical of them. Of course this is good, up to a point. However, you don't have to refute every criticism. Appreciate the fact that something might be wrong with your ideas. If you valiantly defend a stock for years (for example on this message board) it is very hard to change your mind. Some posters here have silently left this forum after being spectacularly wrong about a few stocks rather than admitting they were wrong. Make it easy for yourself to stay flexible. - In line with the above: try to keep a neutral attitude towards your investments. Don't think: this stock is perfect and will make me rich no matter what, think: I like this stock but there are some risks here, like so and so and so. Share your ideas with the intention that others can poke holes in them, not to convince others that you have found the best opportunity of the decade. Don't participate in giant circle jerks where everybody congratulates everybody for being a super good investors - Don't focus too much on what management is saying. It's hard to stay neutral about Berkshire if you are the biggest fanboy of Warren Buffett on the planet. Hard to form a rational opinion on Victoria's Secret if you let the shows distract you :) . In general it's hard to stay impartial if you focus too much on people. - Don't focus too much on results either, neither your own nor others'. Is your portfolio underperforming the S&P? Underperforming Bill Ackman? Is holding X up or down 5%? Who cares. Focus on your own analysis and decisions. Do your own work and if you do it well results will follow. - Ignore most financial news. Watch CNBC all day and you will eventually become just as crazy as Jim Cramer. As I said before, don't hurry things. Ignore most day-to-day financial news that makes you want to act, act, act on everything. - I think that sometimes it is severely underrated to sit (or even lie down) and think. Slow down, don't research anything, don't make any spreadsheets or forum posts but take a step back, relax and think about all the facts you have gathered, about what the key issues are of your thesis and how likely it is that you are wrong. It's very easy to get lost in the heat of the moment or to focus on the wrong things, i.e. the Valeant thread is like thousands of pages of mostly irrelevant discussion (about how effective their foot creme is or whatever) while the whole company was burning down. Make sure you see the big picture. - Maintain a skeptical attitude. If something sounds to good to be true it probably is. Most things regress to the mean. - I usually keep small positions in a diversified portfolio. Makes it far easier not to get emotionally attached to a single idea. Also means you don't get bored as easily and start doing stupid stuff. In short, slow down and write down. I agree with others that 'doubling down' is difficult and people tend to do it too early and too large (at least I do!). Usually whenever you feel the urge to add to a position it is perfectly fine to wait for a week or so. I.e. Berkshire drops 10%? Don't feel compelled to immediately start buying again. All of the above. Thanks for taking the time as I really respect your ideas. I don't invest in the equities you write about because they're way over my head, but I do learn from your discussions of them. --- A year ago, I imposed a 7 day rule on myself which prohibits me from buying when an idea 1st grabs my attention. After the cooling off period, and at least a shallow dive, my jets are usually cooled & I sit on my hands again. Case in point, my recent re-attraction to Louis Vuitton (I'm still waiting on a recession to drive this one down into an abyss.) I keep notes on everything I own but they're not of the calibre of a VIC writeup or the majority of the analyses which are done on here on COBF. I agree that a journal helps avoid thesis drift & when prices start dropping (like with DVA & MO recently) I re-read my entries & the panic goes away. I also agree with regards to averaging down, and I have been good about assigning a dollar value that I'd like to own of an issue and sticking to it. For better or worse, I like to buy 1/3 & then average down until I get to my allotment. I did this with NVO but only got 2/3 of what I wanted. I've gotten pretty much all I wanted in DVA & MO and added some long dated calls (Jan 2020) to the MO equity. I plan on doing re-dives on everything I own over the semester break / Christmas holidays. I'm doing a little bit of work on DVA & MO now, and trying to find disaster scenarios. This is a big departure from looking mainly at rosy, crystal ball nonsense. We'll see how it turns out. Thanks.

This discussion has come up before in a number of different threads, a few of which are listed below in a semi-random order: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-12-cognitive-biases-that-prevent-you-from-being-rational/msg99293/#msg99293 http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/two-infographics-on-cognitive-biases/msg262662/#msg262662 http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/cognitive-biases-the-anchoring-bias/msg301328/#msg301328 http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/cognitive-bias-in-military-intel-analysis-(and-investing)/msg93675/#msg93675 http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/cognitive-biases-the-hindsight-bias/msg302184/#msg302184 --- It may not be particularly interesting to those of you guys who have a firm grasp on their cognition and behavior but to me, this is a very helpful discussion. --- Sunk cost fallacy = BTFD, when you've been unpleasantly surprised by a big/small downward price move? How do you figure out if you're deluding yourself when averaging down, as in the case of BRK or MO or DVA, if you believe that the businesses have a long runway & management is doing what's good for owners? What are the warning signs that you're screwing up? Confirmation bias & refusing to account for negative narratives? I'm trying hard to imagine the worst scenarios for everything I own & may actually end up selling off a few positions, next year, as a result. I'm pretty sure that neither of those sales will be BRK, MO or DVA.

That was a man to listen to ;)

What a great guy!

Hey man, don't bet on humorous banter. You teased Florida, I challenged, you accepted. The only reason I didn't already ask for your address is that I'm from Toronto (the warm part of Canada where winter didn't fully set in yet) and in a couple of days I'm going to Scottsdale where I'm gonna defrost for a bit. Give it a few more weeks after that and you may find me in your driveway asking to borrow your Tahoe to go get some beer. It's a Colorado & I like Meister Brau.