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V interesting, UK. I think it's true that many of us (myself included) try to be too clever, to our detriment. If you are concerned about the market, often the easiest thing is to just increase your cash weighting (esp. if IB are paying you decent interest). It's so easy to get Puts etc. wrong, so just KISS. (of course, I can't help myself and have a few protective Puts at the moment...).

Yes, many thanks. I knew a little bit about Fairfax before, but it has been this Board, and especially your posts that have been the foundation for my understanding of the company that has led to my investments. Also thanks to Sanjeev. And we shouldn't forget Prem and the Fairfax team, too! Cheers!

Nice one. S&P 600 is an underrated index - I've never understood why the Russell 2000 is so much better known - by my understanding the 600 has stricter criteria on profitability. Incidentally one of the best US small-cap fund houses I know moved into large-caps in about 2010, and is just moving back more into small & mid-caps on valuation grounds.

@thepupil Personally, while I think US index investing makes total sense for large-caps (how many funds beat them?), I think EM indices are pretty rubbish & there are some decent active managers to choose from. Separately I also think that over 10 years, Vietnam should be one of the best-performing EMs (well, technically Frontier, but it's all marketing...). Europe... I thought this was the way back in 2010, 'because the US market is expensive', so I'm a bit scarred there. But undeniably some great companies on much lower ratings than their US equivalent (there's been some good material from Lindsell Train in their UK strategy on this e.g. Experian vs. Equifax).

Absolutely, but how long did the Nifty Fifty work for? You can still overpay for great companies. But timing, I have no idea.

Shanghai Airport was viewed favourably by some quality Asia funds I follow (& I believe Charlie Munger was also a fan). I've seen Beijing pop up too. Vietnam has some airport stocks, though arguably the most interesting are the ones doing freight, or duty free.

How I feel. Don't have loads of cash, as most stuff I own seems OK, but I'm not a Bond expert so this cash interest is better than I can find elsewhere.

Thanks for this - really interesting & useful stuff to think about, and completely confirms my experience when I've tried to be smart going OTM & getting caught out. Looks like nice timing on yours.

If you don't mind me asking, why IWM? My guess would be either: a) It's got more low quality companies in it (never understand why S&P600 isn't standard for small-cap). b) Too many hype stocks on other indices that could go up for longer than is rational. c) you think domestic might struggle more than international. Whatever reason, seems entirely reasonable after the first half. Cheers. Incidentally, I'm amused, despite myself, at the troll on the other thread. Though this reflects the novelty of it, due to the overall high quality of people on this board. If it was another forum/twitter etc., half of the people would probably be like that.....

Just to say I'm enjoying this Gregmal/Changegonnacome exchange - I can't say which of you is right, but I know that good stuff comes from a healthy & respectful exchange of different views.

I have been doing Twitter for a bit, and have to stop, because it is so full of idiots. Of course some honourable exceptions like Pupil, BG2008, Bill Wabuffo etc. Particularly excruciating is the 'Macro Trader gang' who have become mini-personalities, and a load of yes-people following their every word. The self-satisfaction is extraordinary. I have found some good stuff on small cos - it's great to expand the field beyond here on e.g. small Oil Royalty cos etc. But like all social media you end up spending too much time on it, being wound up by the idiots, but unable to stop seeing more.

Thanks, Viking, very interesting. Quite extraordinary the changing fortunes of Greece and e.g. the UK since 2011. In particular when one remembers that Greece has had an extreme Far-Left prime minister in the meantime. Perhaps that was necessary to shock people into voting for somebody fairly Centrist and sensible (which I think many other countries could benefit from doing...) though of course it could have had the opposite outcome, which doesn't bear thinking about. Anyway, it was impossible to predict, but a reminder that buying things very cheap when everyone is panicking can work nicely!

@Viking Have you considered Prairie Sky? An HK darling. Doubled their divi this year & still relatively low pay-out so could increase further. Management seem decent (esp. with comparative low bar for Oil Royalty cos......). Not ostensibly cheap, though if oil went up, this might matter less. Of the Oil Royalty cos, personally I like DMLP best in the US (quality management), though for us non-US people, the tax can be a pain, though at double digit yield, it can potentially still work. Thanks for all the FFH stuff, been a huge help in the research.

It depends on your time horizon. If you bought the Nifty Fifty near the top, sure you'd outperform the index over 50 years, but what if you needed to release some cash to buy a house after 10 years? I don't think it would be so pretty. I am all for long-term compounders, but I also think one has to distinguish between theory & reality. Most of us don't live long enough to have the luxury for something to recover from an overvaluation over 20+ years (& there's a whole separate discussion about what human would have the patience to leave it either & believe it would recover).

Did you get inspiration from Chris Mayer - I think it's one of his serial acquirers. It's on my list to look at at some point.

I think where the activism is succeeding is generally where the activists respect the Japanese culture and engage constructively & respectfully. Ideally buy some of the company, turn up to meetings, speak Japanese (or bring a Japanese speaker) and show interest. Then you can suggest changes. And if that doesn't work, then you can get a bit tougher. Anyway, there has certainly been more success recently. Separately, there do seem to be a load of super-cheap, decent quality cos in the Micro, Deep Value space, though no guarantee that they'll re-rate.

Nice on $FRPH. Did I miss anything? Couldn't understand what happened today. I suppose the illiquidity means it doesn't take much.

Thanks! I much prefer a transcript but can't always find them. I still always find him interesting for inspiration - he's rare in having the humility to acknowledge that he doesn't know the answer, but provides interesting ideas to consider.

Of course, Revlon, that's why it's not easy. Though with EL, I think what we're discussing per @Spooky and @dealrakeris stuff that you can hold for decades, things will drift, but the longer-term performance has been pretty decent. The difficulty is having the confidence that management won't screw up like Revlon, & if there is a family input like the Bettancourt's, that generational hand-over works, or they successfully delegate to a Pro. Another method could be - decide on the Sectors you thing have long-term durability & buy Sector ETFs - e.g. Consumer Staples, Healthcare, Tech. (this is not dissimilar to Fundsmith).

Thanks for this.

Yes, thanks for this, & also especially to Viking who has helped me understand Fairfax so much better recently. To ask a stupid question: The average long-term return of their Investment Portfolio is 7.7%. If Book Value has compounded at c.18%, doesn't this indicate they should get out of this & do more of the other stuff? I appreciate their investment style has been 'out of fashion' somewhat since 2009 but this is over 38 years. Thanks.

It's the million dollar question! If I knew the answer, I wouldn't be on this board. If you haven't already, I'd recommend reading the Fundsmith Owner's Manual, which is very good on long-term compounders & the concept of 'don't try to be too clever, stick with the ones that you know have endured. Also the think-pieces on Lindsell Train's website. They both have concentrated buy&hold portfolios of 'boring' compounders, esp. stuff like Pepsi, & McCormick's, Diageo, Brown-Forman. It feels like certain industries are less likely to be disrupted - will women stop using cosmetics? (L'Oreal & Estee Lauder). People will spend money on their health. People will want insurance. Anyway, just some thoughts. And I'm very jealous of your large exposure to Constellation - congrats for that, & I am presuming it's a good place to work too!

I read it a while ago, & don't remember it that well, but I know I enjoyed it. Of course some stuff it's dated, but ultimately I suppose I see it as the roots of the Chuck Akre etc. quality growth philosophy. I suspect it's better than the Chris Mayer book that was inspired by it.

Personally, I have hugely enjoyed some of his blog entries, but found the book disappointing - I didn't find the narrative structure worked for the duration. I appreciate I am in a tiny minority!

Amazing! Thank you.