samwise
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Posts posted by samwise
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ok, mandate may be a bad word choice here. but question remains, what's the plan for the cash? Greg decides the next big elephant to buy?
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What happens to the cash after WB ? dividends, more buybacks, or do Todd and Ted or Greg wait for the next big market opportunity? Do they have the mandate to deploy that many billions?
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Thanks @Spooky.
agreed that mothership is much more diversified . Interesting idea that concentrating in a single vertical would require higher multiples. Could you please point me to the letter are you referring to? -
On 4/22/2023 at 9:46 PM, Spooky said:
Thanks for the feedback! I made a conscious decision to try and keep close to 50% in CSU starting a couple years ago to try and concentrate in my best ideas and it has been working well. My goal is to move to a portfolio described by Hagstrom in the Warren Buffett portfolio (focus investing) or similar to Nick Sleep (just a three stock portfolio, Amazon, Costco, BRK) and Charlie Munger (BRK, Costco, Li Lu).
I know CSU very well since I work there and generally 50% of my bonus needs to be in shares of the company. Also, given the nature of the company (basically no debt, extremely well diversified, excellent balance sheet) I’m comfortable that this can’t go to zero. Given the growth of the company my allocation was actually getting over 50% but I was able to take my bonus in cash this year to allocate to some other ideas (which is why I have more cash than normal). This portfolio is 100% of my net worth but I’m 37 and have no debt.
@Spooky I have a big position in CSU as well (nowhere close to 50% though). And am considering increasing it with some new money. But I feel like TOI , LMN could have more runway and upside with the same culture and practices. Wondering if you agree? With such a large CSU position you must have considered the baby CSUs.
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On 11/6/2021 at 2:04 PM, fareastwarriors said:
If you're able to not panic sell and continue to dollar cost average in
This is probably the main "value-add" of investment advisors, the kind that put you in balanced ETFs and don't promise to beat the market. If you can't do this on your own, then you will lose more than the 1% you are paying them. If you can do it, then the 1% is a waste.
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4 hours ago, longlake95 said:
I can buy London, Paris, Frankfurt exchange companies….but it’s a hefty commission…$200. Crazy. CIBC Investors edge.
Thanks Longlake. Crazy commissions! But it seems that's only European exchanges, not HK and Australia?
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Does BMO investorline allow foreign stocks in Hong Kong, Australia and London? Anyone has experience with these? E.g. buying the HK listing of Tencent or Alibaba.
If yes, what is the cost per trade?
Their website only mentions TSX, NYSE and NASDAQ.
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Financial Times published an article after the merger of Athene (insurance) and Apollo (Private equity), asking "Is this the new Berkshire?". Of course there were lots of protests in the comments. This was the most liked comment: " This is like saying Dracula is the same as the Red Cross , just because they both deal in blood."
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Want a 51% CAGR since the start of this thread?
This is the way :)
http://www.nonamestocks.com/p/portfolio-performance.html
But
1. Only the poor man shall pass. I doubt you can put a million in this portfolio, and you certainly cannot sell your whole position on 2 hour spikes in the price.
2. You need the force with you, i.e. lots of luck, since the performance comes from a few stocks. Miss those and your returns may not be so good. Also if you sell them too early.
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Sam,
I actually don't know much about the Japanese recruitment market. I bought Pasona in late 2018. It came to my attention through a couple of investors I respect. It has a 50% stake in a listed company (Benefit One, symbol 2412) that wasn't reflected in its stock price.
Thanks.
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Pasona Group (2168 JP) 3.0%
CGJB, are you familiar with the Japanese recruitment market? I've never understood it, as it seems hardly anyone applies to a job (don't want to get rejected?) and everything is arranged behind the scenes by recruitment companies. Some of these companies are very hands-on and growing quickly, e.g. 2124 was cheap during Covid at 10% FCF yield and 20% growth at 30% ROE. And then there are pure online companies as well, which don't really seem to fit in the culture. I don't think of Japan as a fast growing economy, but seems like the recruitment market is changing perhaps? Are people moving jobs more often maybe? Not sure where this growth for recruitment firms is coming from.
If you know anything about the Japanese recruitment market, I'd appreciate your views. Sorry to hijack the thread. We could move this to another thread if there is much to say.
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Before moving to the 'curiosity' part, on a net basis and perhaps in addition to short term opportunities that may be spotted based on short term issues, the coronavirus impact will end up being positive for markets. You also have to assess the host but that's another story.
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It would be interesting to read a diversity of opinions. i'm 90-95% retired but have some experience ranging from on-the-ground to decisional, and just finished a conference call. In my area, media will announce later on today that 50% of regular hospital activity will be curtailed across the board until further notice which means likely well into 2021..This too shall pass and all this is no big deal for investments but it is a true humanitarian crisis. At the end of the call, it was announced that the topic next Monday would be a review of end of life care decisions..
Thanks CB for the detailed reply. Very interesting perspective for those of us not involved in running hospitals.
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The market seems to be seeing through the coming months of viral pain, just as it looks through any natural disaster which has high human costs but lower long term economic costs. So the following questions are more out of curiosity than investment impact. Many doctors have posted here, so maybe someone knows more about whats happening.
1. NM hit 102% ICU capacity. What does this mean? Are staff working 1.02 shifts? Could they work 2 shifts? 100% doesn't seem to be a real hard limit. https://news.yahoo.com/intensive-care-units-hospitals-coronavirus-pandemic-health-human-services-report-202137966.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAMIvCKGM_DZzdARm4PBZQPw9v5c7skbhTqwAHGTo0B3B0dN_VoKnBoa82VuexpuEVdS_KAgn6jc7SIiDRt0WLkiEb9mNqlc0TiO9Em4bhpMNUYLq0jxqYAsbQXlfPtzuzESS8d54JBy17r2WUKoQOPF7Gc5Weg00nILQDJPoFbzw
2. Assuming there is a real limit somewhere, and demand and supply of ICU beds needs to be cleared, what approach do US hospitals take? Who gets the limited supply of ICU beds
a) The one who has the money , aka free market solution?
b) The one who knows the governor, aka corruption, nepotism...
c) Some triage, aka the one most likely to survive and live many years? Who makes this judgement and sentences people to death?
3. IF the capacity/supply constraint is not physical beds but staff, can't that be imported from areas in the world where the pandemic is more controlled? e.g. Aus, NZ, S Korea, China. Staff can be flown in from there. You'd need to ask nicely and give the right incentives, but not sure if there are any other constraints. Hospitals can't take the medical malpractice legal risk perhaps? Still seems better to me than letting people die in the corridors.
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Passing on from a health expert.
“95% efficacy is the stuff of dreams, where you dream about eradication of the disease rather than just containment. E.g. MMR vaccines are 97% efficacy against measles, and the disease hardly exists anymore. And that’s when measles has R0 of over 15. “
So depending on how long immunity lasts and how fast the virus mutates, it might not become endemic.
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I wrote a bigger post on theories layered on ideologies. Munger's friend was anchored to asset value discounts which was a theory. Nothing prevented him from investing in discounted intangible assets before his "change". I'm sure Coke, P&G and Wrigley traded at discount before the 1980s as well. Similarly I am sure there are better ways to do value today than cigar butts and GARP. The ideology is intact but you must always evolve and be flexible about theory/implementation.
Yes I think that’s a good way to frame it: the idea itself may be valid, but there may be limits to how far you can take it. Reminds me of the quote by Ben Graham. You can get in more trouble with a good idea because you forget that the good idea has limits.
Russian communism could be thought of as an example of this. If you see a system with one Tsar and everyone else a serf, it’s easy to get a good idea that more equity would be better. One can take that idea too far. There is probably a balance and an optimal level of inequality and opportunity.
Change is required always.
I disagree if you are talking about value investing theories and practices. Change is required periodically maybe, but not always. If it were always required the framework would be useless since you would be reevaluating it everyday, instead of using it for evaluating companies.
And i wonder if having a punchcard (few decisions over a relatively long period for truly good ideas) "ideology" helps to adjust to blind spots. i'm not sure. At least it may help to resist the temptation to go after what's been recently popular?
The punchcard approach works when searching for competitively advantaged growth companies. There aren’t as many as reading VIC would lead you to believe. Graham and Schloss didn’t use that approach. It doesn’t work for cigarbutt investing ( yes, pun intended)
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Do you consider value investing to be an ideology?
That's interesting and tricky to answer so here's Li Lu's answer:
"I’m not ideologically opposed to anything. I am against any ideology." :)
It seems Mr. Munger meant to stay away from 'extreme' or 'intense' ideology.
True and a reasonable answer. I meant it more as an exploration of my/our own blind spots as value investors. That is usually unnerving and unwelcome but more productive in realtime than mocking scandanavian rowers with hindsight.
There have been many articles and postings about how value investors have suffered because they stayed to close to their "ideology". I wonder if there is any truth in that?
rb, agreed. E.g. one of Munger's better known friends used to buy only asset value discounts, but he changed. Is there a change required now?
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Do you consider value investing to be an ideology?
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If there are 18 million official cases, how many true cases will the US have had? Is it 10-to-1? How about 8-to-1? Something else? At a certain point, a considerable portion of the US will have already had covid and the R0 will drop by virtue of running out of potential carriers. If you believe that R0 will be pushed below 1 once ~60% of the population has already been infected, you would probably be pretty close to the finish line when you see 18 million official cases reported in the US.
SJ, Slovakia’s results don’t show a 10-to-1 ratio of true cases to reported cases.
They tested the whole population and found about 2-to-1.
Previous PCR based results: 79k, with 23k recovered, I.e 56k active cases https://www.worldometers.info/coronavirus/country/slovakia/
Then they tested everyone else with rapid tests, and found 57k.
Herd immunity may be further if you change that assumption down to 2-to-1.
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Mattee and Spek,
Yes I agree that people’s tolerance for other peoples deaths is much higher now. A lot of people want that nothing be done, either because nothing can be done, or because the cost is too high.
Looking at statewide data, I had some thoughts, shared below.
https://healthdata.gov/sites/default/files/reported_hospital_utilization_20201107_2134.csv
It seems ICU utilization is higher than hospital bed utilization. E.g SD has 20% bed utilization and 50% ICU utilization by COVID patients. So the limit will probably be hit by ICU capacity first. The 50% utilization in SD has had no effect on news flow there, on the political scene etc. So perhaps the next level to watch is when ICU capacity hits 100% and death panels are set up to decide who lives. If people accept that as inevitable then there probably isn’t any new lockdown happening ever. That was the redline that got crossed in Italy, which caused every western country to suddenly take this seriously.
Besides the dakotas, most places have 20% ICU utilization by COVID. So we need 5x the cases from 3-4 weeks ago to hit that. If that level was roughly 50k cases, then we need to hit 250k cases. But of course people stay in the ICU for a while, so perhaps the number will be lower.
When do we hit 250k? We are at about 100k and doubling in a month. So this could happen in less than 2 months. But previous waves have turned and never followed the exponential path, so perhaps the same will happen again.
So overall it seems the risk of a new lockdown exists, but needs to cross a few hurdles. Cases would need to keep increasing, whereas previous waves have all crested. The next requirement is for the population to actually reject the inevitability of other people’s deaths. Then if there is a lockdown it will probably be more targeted. And market reaction will also separate the companies most affected.
The biggest market risk might be the length of the recession caused by previous lockdowns and people avoiding socializing, rather than any new lockdowns.
Then the tolerance thresholds might change on Jan 20th. But I am not sure if anything changes, as I have been told that the power for healthcare is with states and nothing is changing there.
P.S. I am only trying to figure out what will happen, not what should happen. That is a conversation to be had in your local political scene.
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I am trying to figure out the levels at which the rising case count starts to threaten the economy again.
So the USA had about 1200 deaths per day in early November (just eyeballing the charts). Assuming a month lag, this came from about 60k cases in early October. That’s about 2%. Cases are now doubled, so we should expect 2400 deaths per day in a month. Is that a valid expectation?
Since this caseload is very widespread and skewed to younger people, it is not overwhelming any health systems yet. What number of cases would threaten the health system? At what caseload do elective procedures get cancelled, and where do further policies to control the spread become necessary ?
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Slovakia is trying to avoid lockdown by testing everyone in the country. If you pass, no need to quarantine. So you end up just locking down the people who carry the virus, in theory. However, with error rates in rapid antigen tests, it remains to be seen how successful they are. Might require multiple rounds of tests.
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What will happen between November and Jan? If Trump gets out, but is still serving the people who don’t like him, while Biden is in, but waiting for the power transfer and effectively powerless.
Will Trump lockdown, or preserve his legacy by staying open no matter what. The market seems to fear a shutdown, but perhaps that doesn’t happen till January?
Predictions anyone?
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Agree with CB on multiple effects apart from just mandates. E.g. Ontario had a spike in cases and the premier today claimed improvement. How? A combined effect I think.
Government action: closing bars, indoor dining and gyms.
People action: the school board was offering choice between virtual and in person attendance. 10% of people switched to virtual in one of our kid’s. schools. There were probably other changes in behaviour whose net effect was reduced social mingling.
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1. Meanwhile, back in the muddled middle (away from extremes of Sweden or New Zealand models) this is what the effort to control COVID looks like. https://www.cbc.ca/player/play/1793499715656
One the one hand I feel that it’s ridiculous that our public health officials are writing memos on runny noses, on the other hand this is very real for me as my son gets his nose checked whenever I drop him off for childcare.
2. Are we going to witness a natural experiment comparing flu and COVID this flu season? It’s so many controls we should see a milder flu season. Can we compare flu deaths versus COVID deaths over the next 6 months? Or is this not possible because flu gets seeded in the population in a different way?
What are you buying today?
in General Discussion
Posted
All the passive indexers pay for index data . That’s why vanguard switched to ftse 10 years ago, to save on the fees. MSCI crashed then and I should have bought, but didn’t because I thought others might follow.