DooDiligence

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.

I've taken another tack, and that is to limit myself to a modest update on the news for the first 7 days of each month. Ditto for Twitter & I found myself not even wanting to visit there this month because it's so full of inflammatory nonsense. Spending nearly a month with your head in the sand is liberating. I highly recommend watching re-runs of Rowan & Martin's Laugh In to see how nothing has changed since the 70's. The absurdities are pretty funny when framed by great social satirists. The Obamas thread was about divorce... and only highlighted the Obamas as a great example of a couple who makes it work. Nothing political about it. I'm not criticizing it as such, however, my post in it regarding Michelle Obama could have turned it into a political thread. Either way, it got moved to the politics section.

I've never posted in the politics section & was glad to see it broken off into its own little corner. I posted a thread in the General section re: ACA because I thought it would benefit those who are interested in healthcare, and as it turns out, the discussion was civil & even included some good natured & humorous banter. The recent Obama's thread (appropriately moved to the politics section) was initially posted in the Generals section (if memory serves) otherwise I'd never have seen it & subsequently made my post regarding Michelle Obama's appearance on 20/20. A well respected COBF member suggests the following to help deal with stress. I've taken another tack, and that is to limit myself to a modest update on the news for the first 7 days of each month. Ditto for Twitter & I found myself not even wanting to visit there this month because it's so full of inflammatory nonsense. Spending nearly a month with your head in the sand is liberating. I highly recommend watching re-runs of Rowan & Martin's Laugh In to see how nothing has changed since the 70's. The absurdities are pretty funny when framed by great social satirists.

Nice, thanks. "We're not out there competing to by RedHat for $35 billion, but we've always been an opportunistic company." ;D Do Malone & Rometty have a history? --- This old interview of Malone by David Faber on CNBC has already been linked here by Liberty but, IMO, it merits revisiting, (starting at minute 06:00 they talk about the Time Warner deal (this discussion is pre-approval.) Malone says this is one of the few diversification deals that ATT has done which makes sense, and then he explains why. I'm not pumping ATT, just saying that I trust this guy to know what he's doing. (I might, however, be pumping Charter and Disney ;) and Comcast to a smaller extent.) It's a fascinating discussion & gets quite deep & wide regarding the entire space. At minute 21:00 he talks about MVNO agreements. He says that a deeper / closer relationship with Verizon is important, but that doesn't mean owning or being owned by Verizon. He doesn't really explain what that "closer" relationship would entail?

You are definitely worth more alive. Thanks, she knows it but I like hearing her say it ;) Simplification of relational polynomials: ( :-X + :-* ) = :) :D

Yep

You are definitely worth more alive. ACA is the Affordable Care Act BCBS is Blue Cross Blue Shield COBRA is the Consolidated Omnibus Budget Reconciliation Act which requires an employer to continue coverage under the same plan, albeit with higher premiums. (the ex-employee is not required to continue paying for the coverage.) --- Bring it on. PM me for the address. Is this "zip" as in not eligible for ACA exchanges because you would qualify for Medicaid and get all your healthcare for free? Not sure about this one, but I think an individual of my age (56) would not qualify for Medicaid unless there was some kind of disability? I know that if you do take Medicaid, it will affect your eligibility for ACA assistance but am not sure exactly how. A really important aspect of the program is to make sure you notify HealthCare.gov of changes in income as this can have a significant impact when you file your next tax return. ACA premium assistance is paid in advance, to the insurer, based on what you CLAIM will be your next years income, so if you make more than you claimed, your assistance will decrease and you will have to pay back the difference. Also, as your income rises, although the premiums for the same plan will not change, your assistance will decrease and your deductible will increase. (Not sure but there's prob some clawbacks here as well.) I'm overestimating my capital gains income but may actually reach the projected amount and will be very forthright with any known or projected changes. --- I have no idea how all of this ACA assistance will affect future generations. --- Apologies for being so defensive at the end of my initial post :-X