thowed

This is the sort of thing that makes me nervous - when we're all conditioned that things can't go wrong because there's a permanenet safety net (see also: the Fed will print more money etc.). However, totally agree about sleeping well at night with the right portfolio, as long as one doesn't get over-confident about it.

Good point on questioning the source & context. I saw it on Bloomberg, but this gives a bit more context. https://www.theatlantic.com/politics/archive/2018/10/federal-reserve-chair-jerome-powell-ignoring-trump/572110/ This makes it sound better i.e. he was reacting to a pithy question. I'll never forget Gordon Brown, then Chancellor in the UK, effectively saying that he had brought about the end of Boom and Bust in the 00s. Some hubris there...

“There’s really no reason to think that this cycle can’t continue for quite some time, effectively indefinitely,” Powell said Wednesday at an event in Washington hosted by The Atlantic magazine and the Aspen Institute. Well, this sounds to me like a Chuck Prince line if ever I heard one (and so makes me think about selling things).

DYOR

Many thanks for this. I love a family run company (well, when it's a decent family), and always happy to read more about them.

Thanks all - very interesting points about EM debt, which is something I'm ashamed to say I haven't been considering. I am a fan of EM, but do a lot of fund research to find the smartest people choosing the highest quality sustainable growth (non-tech) companies (this generally works best for me in the long-term). Of course this style doesn't generally come at bargain prices. So DocSnowball, if you want to drip in, that would be my suggestion. First State are my go-to organisation for this, though I don't know where you're based - I'm not sure what they're like for US investors (their funds tend to be Irish domiciled). They have excellent Indian and China funds, and some more general Asia-Pacific ones. They won't shoot out the lights in a roaring bull market, but will protect your capital better in a down-turn. There are some good smaller funds (usually Cayman-based) but these have a relatively high minimum. For me at the moment, I think India has a lot of quality, family-run (i.e long-term focused) companies, China A-Shares has some great stock-picking opportunities (but you need someone who can really spot the rare beasts with decent corporate governance), and Vietnam is very interesting for a number of reasons, though again not many people can navigate the corporate governance issues. The rest of EM is too tricky for me.

I wonder if Howard Marks' The Most Important Thing would fit the bill. From memory it's reasonably accessible, so is perhaps more theoretical. Lynch is a good call i.e. pretty straight up if you're starting out. The Berkshire Hathaway letters from 1977 downloaded off the website did it for me in my early days, but I think I knew a bit about the legend and so had bought into it.

Thanks for this, Writser. I like the Matt Levine quote. But just because I don't have sympathy for Bush (from one article I've read), it doesn't mean I have to agree with what Elliott does. I'm attaching the 2017 Fundsmith Annual letter, which has a pretty decent, no-bullshit, opinion on Activism (pages 10-16). Extract (the rest is more detailed/subtle than this): On the whole we are not fans of activism. Too often it seems to follow a playbook that has the following steps: 1. The activist ‘buys’ a stake in a company. I have put ‘buys’ in inverted commas because often much or all of the stake is held through derivative products which means that the activist can announce a seemingly large position in the company’s stock whilst risking and committing relatively little actual cash. This methodology also gives some clue as to the activist’s time horizon which may not coincide with ours, as derivatives have an expiry date whereas stocks don’t. 2. Engage in a public row with the target company and seek board representation, a spin-off of part of the business, a merger with or sale to a competitor, raise debt to execute a share buyback (the activist can helpfully tender stock to assist with this) etc. 3. If the company responds by following the activist’s demands they then sell their stake. 4. We and other long term shareholders are left with a company that has incurred fees and diverted time from running the business to respond to the activist and execute the changes, which is now potentially more fragmented, more highly leveraged and has had to install new management. 5. Rinse and repeat with another victim/investment. The whole 'shareholders are all that matters' is a subjective issue, but personally I believe it's appropriate to consider other stakeholders (e.g. treating employees right) as a) a positive contribution to our society, but also b) it makes everyone work better, which should make for better long-term profits. annual-letter-to-shareholders-2017.pdf

Update! Summary: Margin of Safety no longer on Kindle... https://www.bloomberg.com/news/articles/2018-07-10/baupost-says-copy-of-klarman-s-book-on-amazon-was-not-authorized

https://www.bloomberg.com/news/articles/2018-07-10/seth-klarman-book-that-sells-for-2-500-is-now-9-99-on-kindle I imagine most of you either got it from your library or downloaded a bad pdf of the internets, but just in case...

Yeah, it's some good stuff to start with, but lots of pitfalls. SBRCY is interesting - seems to be a great company and dirt cheap. However institutions seem to use it almost as a quasi-tracker i.e. if they have one stock in the country, it's that one, so the price can plunge if they all go off Russia. Of course, that also provides opportunity.

Thanks, these comparisons are always interesting to see. There's a closed-end fund in the UK, which has no management fee, and a 15% performance fee over a 10% cumulative hurdle rate per annum. It launched a little over 3 years ago, and the NAV is 20% down from launch, so you've got a good lot of free performance if it turns itself around. Thanks also JRM for the Snowball explanation (I've forgotten most of it...). 6% seems not unreasonable to me though, as I believe it's the long-term expected real return rate from equities (from Siegel, or Dimson perhaps, I think). And obviously we've got some inflation. Ultimately though, the definition of reasonable charges is a very subjective thing.

https://sumzero.com/headlines/business_services/FCAU/411-pabrai-advice-for-value-investors In case you haven't seen this. Some interesting stuff, though anyone familiar with him won't find any surprises. The one thing that did make me raise my eyebrows a little is him saying that he takes a 33% performance fee above the 6% hurdle - I'd thought it was 20. I appreciate the zero management fee, but 33%, gosh. Anyway, this is not intended as another bout of Pabrai-bashing, I think he has a number of talents, but I'm just not sure I'd pay anybody that.

Writser - me too, then I went. It really is in the middle of nowhere! I'd love to say it was the best experience of my life... to be honest, the food WAS great, but when I was there, I found the place pretty vibe-less (an occasional danger at high-end places), though not because it was overly-formal, it was just a bit quiet, and the room's pretty plain. It was a few years ago, so there's probably stuff I've forgotten. I'm thrilled I've been, so I don't have to wonder, and for bragging rights (!) but as an overall experience it was not the best, you need more than just great food. Incidentally, presumably because it's such a compelling story, I'm coming across a few more restaurants that are doing the cooking over wood thing. Overall my feeling about favourite restaurants is what a body-art guy said when asked what their favourite tattoo was. The next one.

Yes, thank you, this is fascinating - you don't have to agree with all of it, but Druckenmiller usually has something interesting to say.

Spekulatius - completely agree. I think Munger's comments generally refer to companies he knows of through his investment with Li Lu (at Himalaya Capital). Most of these are unlikely to be the big foreign-listed names we know, but lesser-known A-shares (where there also isn't a 'shell holding company' issue). I've heard others say that the A-Shares market is one of the great stock-picking opportunities i.e. a ton of relatively under-analysed companies in a fast-growing country. Of course you have to be super cautious about corporate governance, but hey, it's not supposed to be easy!

For a stock, you could try this: https://en.wikipedia.org/wiki/Coca-Cola_Hellenic_Bottling_Company A respectable Greek family have been in charge for a while, so it offers Eastern European exposure with quality corporate governance. Main listing is in the UK. For a similar, smaller company, take a look at Sarantis, which is listed in Greece, but sells its products around Eastern Europe. Most Funds are pretty rubbish and offer a bulk of Russian blue-chips and a handful of other oddities. I know a couple of boutique funds that might be of interest - drop me a PM or something.

Maybe this is going back to basics, but I think you need to consider what a fund does, in the first place, i.e. is it a pure Long Equity fund, does it do index/individual shorting, is it multi-asset, does it invest in blue-chips or micro-caps etc. etc. Then you can figure out what performance/outperformance you are looking for/expecting. So for instance with Akre, I'd probably be looking for him to outperform the S&P500 or Russell 3000. Whereas with Alluvial maybe I'd want DW to outperform the S&P600, though maybe it should be a more global small-cap index. I take the point made that a lot of people don't read the materials or listen much - I've heard this a fair bit from managers. Long/Short funds are interesting, as you have to work out if they're trying to reduce volatility with their shorts, or just create extra alpha. That said, 99% of people who short don't do it successfully over the long-term in my experience, so maybe it's not that relevant. To go back to the Original Post - I suppose that if your fund has a different approach, then that's a way of marketing it (as long as you find the minority of people who read enough to discover this). Without more info, I wouldn't know where to start with you, as I don't know how you've beaten the S&P500 since Jan 15, though generally speaking I'd guess it hasn't been easy for a Value investor. I always think it's good to state whether you are likely to outperform in a bull market and underperform in a bear market, or vice versa, as that gives people a sense of what to expect. For people doing US large-caps, I think any long-term outperformance of the S&P500 is damn good - I know a number of people on this forum have done it, but if you look at the institutions, it's a pretty rare thing. Unlike some others, it's a pretty efficient index. Anyway, I hope this makes sense , I'm chucking this off the top of my head...

Agreed on Morningstar slowness. But it's basically my only choice, as I need international stuff, and Rocket seems to be North America only. On the other hand, I'm trying to be glass-half-full, and think that I am spending less time looking at prices, which on balance is probably a good thing.

I don't know a great deal about Mr Chou, but this thread throws up a really interesting point for me about investing: The importance of diversification. So Fund managers have a 'style' or 'strategy', be it value, growth, special situations etc. The fervour especially of value people makes me think of it a bit like a religion. For me, as an investor, I try to be as agnostic as possible. I don't believe in 'right' and 'wrong' strategies in the markets. I believe in outperforming the index sustainably for the long-term. Markets may be a weighing machine in the long-term, but they can also stay irrational for longer than you can stay solvent. So as an agnostic, I try to build a portfolio of the best managers with different styles, on the basis that they should all do well over the very long-term, and their blend of styles should mean that there should always be a few pulling their weight. I guess it's like a sports team, or a tool box - there isn't one player/tool that will do everything for you at all times. The follow-on question would therefore have to be: is Chou one of the best Value managers out there for an agnostic? I have some sympathy for Value managers, as the past 10-year environment has not been particularly favourable to the style, but I also know that a number of investors and fund managers on this board have been able to outperform. Anyway I don't know enough about Mr Chou to have an answer for this.

I could probably write an over-long essay on Terry Smith, but I'll do my best to be concise (spoiler: I failed). Read all the annual letters - there may not be much new that you'll learn, but he writes very well and entertainingly, and is one of the most no-bullshit people around (he's not really like Munger, but they're both refreshingly honest and scathing about the problems of their industry). Some people don't love his pugilistic tone - he has that boxer-style 'I am the greatest' thing, but he's mostly backed it up. I haven't yet watched the AGM videos. He's been around forever - his initial notoriety came from a book he wrote called 'Accounting for Growth' which basically showed how companies can manipulate things in their Annual Reports. One of the examples was a client of his then employers, and he got fired. Which, as he said, was the best possible publicity for the book. For a long time he was CEO or chairman of UK inter-deal brokers, so at this point he'd been a successful analyst, and run a business, which seems like pretty good experience. His fund has been incredibly successful for a retail fund since launch in late 2010. Until recently I worried that his strategy hadn't been tested in different environments, but I've since found that he ran a very similar strategy for his former company's pension fund, and it did very well from late 2003-10, doubling MSCI world performance in gross terms. I don't know what the 08 drawdown was. The strategy is simple - 25-30 blue-chips, with about one purchase and one sale (if that) a year. The geography is about 60% US / 40% Europe. At the start there were more Consumer Staples/Bond Proxies (e.g. Nestle, Unilever, Colgate), but has picked up a bit some tech and industrials along the way. He also really likes healthcare, and I was very impressed how he swooped in on Novo Nordisk when it bottomed in late '16. I guess Akre would be roughly the sort of US equivalent in terms of a concentrated, low-turnover approach. He does quite a lot of press, as he's so quotable compared to most UK fund managers. There are some longer interviews which I've really enjoyed - I'll try and remember a few of the best. He is up to about US$20bn AUM now, which is peanuts in the US, I know, but it does mean that with a max of 30 holdings means that he can no longer realistically invest in some of the mid-caps that he did in earlier days. So there may potentially be a time when performance dips because of size constraints. He's hinted that he might one day close the fund, but my instinct is he won't. One key point to note is that his right-hand man is a guy called Julian Robins, and there is a suspicion that he is almost more important than Smith. This is unproven, as is how well Robins would operate without Smith. Smith is in his mid-60s so could retire if he chose, so succession is something to consider. Smith also has a London-listed closed-end fund invested in EM and Frontier markets. This launched in mid-2014 and to date has NOT been a success. FEET has about 50 holdings, and the Portfolio Turnover has been a lot higher than the main fund. It has a lot of Consumer Staple subsidiaries, and also healthcare as he sees that as a big EM growth area. I can't say exactly why it hasn't worked - my hunch is: a) he and his team don't have the on-the-ground expertise and focus they should have, compared with, say, Arisaig, whose portfolio is very similar, but they have so many years of on-site engagement and insight with their companies. b) the EM consumer stocks have been eye-wateringly expensive for a number of years. He professes to be unbothered by this, and appears to have a Nifty-Fifty view i.e. they have phenomenal metrics and so will grow into their valuations. But it hasn't worked so far. I am a big fan of him as someone to read and get inspiration from, but I don't invest in the fund. I wish I had! However I favour another firm with a similar strategy called Lindsell Train. I would very much recommend you look at their website - their 'Insight' papers which are wonderful - they are more Buffett-esque, and very wise. Their USP is that they manage a closed-end fund which has an unusual 40% holding - their own asset management company. It has been phenomenally successful. The fund trades at an absurd premium, but if you've been a long-term holder, you've made a killing. I hope this is the sort of thing you were after. It's off-the-cuff, so I apologise if there are any inaccuracies, but it's approximately right.

Thanks for the tip, SleepyDragon - that's now the only thing that works for me.

Just came back, thank god. The new page really is hideous...

I lost the finance.google site today, damnit.

Ah yes, this is the sort of intelligent commentary that brings me to CoBF.