Myth465

Attached are my updated thoughts.

Nope but I have heard his Japan story before. Interesting. He believes Graham and Dodd doesnt work there. It will be interesting to see the outcome with so many value investors looking under those rocks. I dont think the Governance issues can be tackled. Grant is a really interesting guy, and appears to be doing exactly what he loves. Another guy who tap dances to work. My guess is his partnership hasnt done all that well. He seems like a great thinker, but not the greatest stock picker.

Thanks to the University and original poster. I am halfway through Grants presentation and its most excellent. Highly recommended. Yes indeed the world will go on. http://www.gurufocus.com/news.php?id=116066

Thanks for the Insights Packer and I agree. For me it just beats accounting lol. Honestly LUK is very interesting to me and if I had my choice, I would prefer to do what they do. I just need to find a small BS company to take over, and need the right amount of capital. Hopefully 2011 is decent.

LOL I just read a sumzero GM Long which said the average car right now is 12 years old. I guess everyone has a different number, but I think we get the idea. TX I think your concerns are valid and correct. I believe BYD makes battery technology and the cars so they are in a different space. I honestly think the winner will be the one who is larger and gets the biggest buy in. I think Better place stands a good chance if they can find the right backer. They need someone like Buffett with what he did with Netjets. Given his experience with Netjets I doubt he is up for something like that again. Endless cash expenses to try to dominate an industry. What I like about Agassi is he gets it. People want to help the envirnoment as long as it helps them in the long run. Why fight consumers and nag them into buying your product when you can just offer them a better product. Everyone I know would buy an electric over a Ford Fusion or Honda Civic if the electric card had 2x the pickup, made no noise, was slightly cheaper per recharge, and was about $1000 cheaper. Whoever can deliver that will take all in this market in my opinion. The only issue is the distance, and for that to work you need some sort of charging station. I prefer the battery swap model to charging. Perhaps a battery rental model, similar to kegs could work. When you have to take a trip you rent a battery and leave your CC as a deposit. I dont think charging by mile will work. Consumers arent used to that. I would hate it. I hate filling up but like that for about a week its "free" to go where I want. I would hate to view my car as a bus and wouldnt want to pay a few per mile. Interesting stuff, I think he is going in the right direction. Honestly I would forget the US and focus on the rest of the world. It would be quite easy to dominate Europe, Isreal, and a few other smaller countries. The US is another can of worms. The infrastructure is a nightmare inmo. You would need most of the Southwest, Southeast, or the Northeast to agree on a system to make it viable. Consumers will not play the HD vs Blue Ray game, and will likely wait to see who wins. Why go through all that. Lets pick a standard or a model and move on. I would hate to live in China, but a Dictatorship has its advantages.

I agree with Ericopoly. Its an informed bet. You are either wrong or right. You can research and research and research but its going to hinge on 1 - 3 things, and may hinge on a black swan situation that no one could see coming (BP). Get to know the business, make your calculation, ensure you have a MOS, size your bet, and get on with it. When I have been wrong its typically something very obvious (KSP debt duh), hours of research wouldnt have matter. I can say the same for most Guru errors, its usually something extremely obvious. We simple made the wrong call / key assumption. I was able to dismiss most of those investments and 90% of the Guru Investments I see with relatively few filters (I dont like the business, dont like the macro, cant understand the business, its too big, dont like Management, wont give me the proper returns for the capital.....). My goal is to try to improve my big picture high level decisions. Once you get to know the business, you need to go into a cold dark room and really think about where its going over the next 10 years. If you get that right, everything else should work out as long as you dont buy at nose bleed prices.

Thanks for the tips. Perhaps I will pick it up once I am done with the CPA.

Does the CFA really help? Does an MBA really help? Also if you have a CPA and an Accounting background what would be the next most useful thing to focus on? Connections, MBA, CFA?

Speaking of Gurus, now Kyle Bass is buying Citi. I may have to dig in one of these days. He has been one of the most pessimistic guys I have come across. http://www.cnbc.com/id/40214320 In fact, based on my reading of the statement, it appears as if Citigroup is now his largest single position Let's add some context.. Citi is becoming like MSFT. Everyone wants a piece.

I think the key word was "selective". If you dont know why you own something regardless of what you do (coattail, research, throw darts, prey) you may get killed because when / if it falls you will have no idea what to do or when to get out.

I would say listen to the Interview or the Ted. His logic makes perfect sense. Green cars are worse cars, but greener. People want better cars, he was saying to move it from a Fad lefty trend (most would call me a lefty), to a revolution - It has to be better in most respects and cheaper than the average vehicle at the competing price point.I would say the sweet spot for car sales is $15k - $25k. Not that people dont buy cars more expensive. Just that the critical mass isnt at $40k. I also feel as though he is looking at it from a world perspective, and if that's the case then his numbers really begin to make sense. Keep in my this is backed up by absolutely no data :), and is just one mans assumptions. Thanks for the TED.

I didnt follow that as well. It seems like they will own the battery and you the car. My guess is the rates for battery power will be only slightly cheaper then oil / petrol power. The guy is a genius. I have never seen such a clear understanding of the consumer before. I would short GM, I dont think the Volt will work because he is right. The average car is 8 years old and very few people buy $40k cars. You need an electric car thats faster and cheaper then a gas one. He gets it. What idiot thought it was a good idea to sell something for 1.5x its competition and then you make it up in savings overtime. When has that worked with the American consumer? If I had to guess the cars costs $24,000. He takes the costs for the battery on, bringing the costs down to $16,000. He then charges you for the fuel and collects the spread. The fuel is much cheaper then gas, but you only pay slightly cheaper and he gets the difference overtime. He also captures all improvements in the battery overtime increasing his ROIC. Thats what I picked up.

I really like the CEO, and would love to buy stock in this company. I think the Israel move will be a success. http://www.charlierose.com/view/content/11323

Lol you guys are really getting good at the one liners. You just summed up my 4 paragraphs of my BS, with one sentence. Talk about 80/20 and Pithy. Greenblatt said that Investments typically hinge on 1 or 2 important variables. The key inmo is correctly position oneself to be correct with record to those variables. Hopefully MOS bails you out when you are materially wrong.

Thanks again for the link. Its mind boggling the amount of work they put in. I think these guys have a secret weapon that few of us will get without those years behind us. Experience. I can look at a company similar to one I have invested in and pick things up rather quickly. I could buy anyone of the drillers after Deep Water Horizon because I held Ensco for about 3-4 years and also lost some money on some of the crappier commodity drillers. Buffetts competitive advantage inmo, is that he is a genius, and is he has literally seen just about everything over 30 years. I remember one of the guys who runs a pretty famous value fund, said they dont even have to write up stocks. After doing it for so long, chances are they have already written it up or owned it at some point. They just have to update their write up and get up to speed.

Ackman's a beast, and comes off as wicked smart. Steve Eisman seems very similar. I would never do much of anything if I did that for every company I had the slightest interest in. Hell I dont do 10% of that and I still dont do much lol. One must tailor things to fit oneself, and not tailor oneself to fit things. A guy with a kid, and a 9-5 trying to copy these guys makes as much sense as someone weighing a buck fifty trying to do that workout he found in Pumping Iron. Oh ya though it was written by Arnold, it must be good for me.

This is tough. I agree with everything you wrote, but feel that people recommend reading reports without telling people why or what to look for. People act as if the key to value investing is sitting huddled in a semi lit room with reports all over the place. I disagree with that concept. I think the key is understanding a business, understanding its Management, understanding its advantages and moat, and finally buying when its cheap. Annuals, proxies, qs, and 8ks go along way towards all of that understanding, but again inmo you need to know what you are looking for. People have several different thoughts on Management. I dont bother talking to them, but I do listen to calls and investor presentations. I think knowing where there motives lie is quite key to investing and I also think its fairly transparent most of the times. You take 3 years worth of shareholder letters, and 10ks, and you cross check things. Are the metrics the same, do they keep changing, do they always blame others (the cycle, economy, commodities, consumer, blah blah blah). Do they do what they say they were going to do, do they generally just have no idea whats going on and appear to be reactionary. You can cross check all of that with 3 years of letters, and reports. Presentations are cliff notes to me. I love them. I know the basics of an oil company or manufacturing company. I know whatever I am looking at seems cheap on some metric. What I need to know is whats there plan and why this is different. I can scan a presentation in 20 minutes (with my BS detector set to max) or can read for 3 hours after a long day of pretending to work. For me I have to find ways to cut corners. The pros have a bit more time and can afford the time, but until I get there I cant. I read the presentation. If I like what I see, then its off to the 10ks and proxies. Then some thinking, some thumb twiddling, check a few sites, then maybe later in the week or 4 months later I buy depending on my capital and how I feel that week. Sometime she gets away and gets stuck on a watch list. Sometimes I buy and it moves up 20%, and my favorite is when it collapses right after I have done my homework. For me I have a circle of confidence and know enough about 5-10 industries to grasp whats going on. What I need to know is a bit about Management, their general strategy, the price, why its cheap, what they will do about it being cheap, and what are the potential company specific risks / catalysts. I can pick a good bit of that up from Qs, press releases, presentations, and other reports. I brake out the Ks when I feel decent about the idea and prospects. On a new industry all this goes out the window. I dont generally have time, so I cheap. I find a guru, and watch them for a year or so. I learned about Insurance, Realty, Conglomerates, Leasing companies, and Drilling companies this way. I learn the industry overtime with a small bet in a guru centered stock or just by watching some guys many think are smart. Overtime you get the key metrics, and drivers for the business. At some point you know what to focus on and can review some of the key competitors and make an informed investment. I think one must find a model that fits them and their situation. If you come across 5 decent ideas a week, work 40 - 45 hours a week in a non related field, have kids or a personal life then...... Those are my thoughts, and remember they are worth exactly what you paid for them.

I pretty much know if I am going to invest in a company before reading an Annual. In my opinion their are more than half a dozen better ways to get to know a company. The investment presentations in my opinion are far more useful. Those plus sitting in a empty room or car and thinking can do wonders for your insight. I do read the reports on every company I invest in. I look for read flags, trends, and other things. The most important thing to me is the shareholder letter. The bites and pieces I find interesting are some of the risks, lawsuits and other details, and a few of the accounting choices / estimate rationales. I am an Accountant / Auditor, numbers can realistically be whatever Management wants and inmo Auditor independence is a farce so the financials are always reviewed with some skepticism. The key is not to read millions of pieces of paper. Its to get to know the businesses and to think as owners or I guess longer term renters. INMO you should have some sort of purpose prior to reading a 10k, it shouldnt be light Saturday night reading. Uccmal appears to have a good plan, and if I ever wanted to understand banking thats what I would do. My other methods for getting to know those businesses have utterly failed.

Same question. Things seem pretty hunky dory. We even have some prior year releases still popping up.

I have been twiddling my thumbs (waiting for the 2013s) but I think its now time to buy LUK shares. I was waiting for the leaps but may do the shares due to there being no catalyst. Im hoping it doesnt spike tomorrow. They are really clearing out the complication and raising capital. I really like this transaction. http://www.marketwatch.com/story/leucadia-national-corporation-announces-agreement-to-sell-its-remaining-interest-in-cobre-las-cruces-to-inmet-mining-corporation-2010-11-30?reflink=MW_news_stmp

I think they made the discussion on day 1. The question is how long will it take for them to find another buyer.

I agree, it will be interesting to see the fallout from this one. I dont think WikiLeaks can be ignored for much longer. I would be very careful if I was Mr. Assange. This is getting much more press play, and now I am sure he has several governments pissed off at him. Many of who dont exactly respect the rule of law. Reminds me of the Buffett 9/10 and certainty quote. I feel alot less certain knowing even the small amount of details leaked out about the future. Interesting times.

I think these things only look difficult if you are thinking about things quantitatively. Once you start to see things from a qualitative perspective the picture becomes clearer. Depreciation is a quite simple concept, and fairly easy to get your hands around if you A - know the business, B - know what part of the cycle you are in, C - know the capex spend over the last cycle and the plan for this one. Some invest throughout the cycle, some counter cyclically (similar to SSW), and some with the cycle. I tend to think about the business then subtract out what I think is maintenance capex. If the Manager is allocating capital properly then growth capex should take care of itself and raise IV, if not then why are you even looking at the company? With that said I have still been burned a few times this year so what do I know. I pretty much only use FCF, and EV. I dont really use EBITDA, because I dont tend to use relative value much. Either its cheap and the capital structure makes sense or not. EBITDA is a nice short hand though, its typically always quoted and one can easily reverse engineer it to get what they want.

Not me unless they are in Houston. One day maybe. Right now it doesnt make sense considering my capital. Also I have been to 2 for the companies I work for and they suck. Very procedural and not too shareholder friendly. Whats the point?

Thanks for the link. I think CHK will succeed.... In crushing the NGL markets lol. I feel like Ward is talking directly about CHK when he says alot of producers talk about liquids, but they are mostly NGL - We mean oil when we say liquids. I am excited that the majors are getting into nat gas. With Exxon lobbying for nat gas we should see something happen at some point. I also think the majors can continue pushing on exports to make nat gas more of a world wide commodity. The big breakthrough for the US would be running cars on compressed gas, but I dont know how we get there. I want to play the drillers, but cant figure out the land guys. Rig counts will fall and I dont have enough expertise to know which rigs do what (oil, gas, unconventional gas, shale, blah blah blah). Offshore to me is a bit easier to understand. I still watch PDS and HP and hopefully one day will see a good spot to get in.