Myth465

Oh I have no problem with buy and hold. I hope to keep 3- 4 of my positions for years and when I buy back FFH will have owned it or its subs for 3 years except for the last 4 month. My issue is with those who see Buffett buying giant large cap companies, and wanting to copy him thinking thats how he built his wealth. If you can find something growing, with a great ROIC, and at a decent price then by all means buy and hold. Its what I would do, and hope to do with something like LRE, FFH, Loews, and other stocks. I just think people draw the wrong message. They read a book, see Buffett speak, then go buy Coke or Walmart and think they are done for the day. I think its a great move if you want 10% - 15%, but one has to realize its hard to build wealth when starting from a small base and only getting 10% a year. If you have decades, or a decent sized base then those numbers should work out. ---- I think buy and hold vs churn and burn is a straw man. You buy at below IV, and sell when it becomes overvalued. Buffett has never regretted this and has publicly regretted buying and holding some issues. These days the IV reached from buying and holding for Buffett is that others will sell to him. So he has to buy and hold certain issues. I hope LRE trades at BV for the next 20 years, then gets revalued to 1.5 to 2 BV allowing me to sell. I also hope they dont go down due to a large cat or mismanagement. If this happens with a yearly return of 20% I will be a happy man, and will likely add each year. If they hit 2x BV before, I will sell and hope to rebuy on a rainy day (it always rains at some point). Buy cheap, sell dear. Whether its 2 days or 20 years. The skill is whats cheap and whats dear. One mans one night stand, is another mans wife. Its up to you to figure it out.

Humm, that sounds like a question designed for the audience and not so much you, and seems relatively simple. Also you asked Charlie a question, is that correct? If so how did you figure out what to ask. I dont know what I would ask Buffett, or Charlie. I feel like I have learned so much from them, and its the gift that just keeps on giving.

I think alot of people forget this. There are about 4 different Buffett's - I like to focus on the younger more broke Buffett because thats a bit closer to myself, though he was far richer then I at my age. Buying $10,000 of Coke and holding for 20 years, isnt going to make me much money.

Looks like SD is reacting to the sale (at least I hope thats the case). It also looks like ATPG is starting to play out. With regard to CHK, it looks like his vision is playing out. I reviewed the calls and presentations but, thought I had a bit longer on this one, due to gas prices. I also didnt like the forward sale transaction they did last week or so. But Canadian value makes a good point, its hard to believe that every major oil and gas company is completely out of their mind. Interesting day - http://www.gurufocus.com/news.php?id=109134

Same here especially in this case, due to the fact that its based on successful deal making. With that said, I like LUK and its becoming easier and easier to get comfy with, and I will be buying sooner or later. I kinda like the mining because its a decent inflation hedge, and really like the focus towards higher quality businesses.

Very unfortunate news. Hopefully it was sold for personal reasons. http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-EventDetails&EventId=3409054 I feel very good about SD. Each presentation gets better and better regarding the new play. They seem to be executing. Tom sounds a bit beat up though. I would be if I bought at + $15. Debt can be a scary thing, but it seems as though Ward has learned quite a bit from watching the cycle. He basically put together a great gas company, and then the bottom fell out with natural gas. He has now done the exact same thing with oil (1 big area, no people, low costs, own services) and is hedging out to protect on the downside. The business model is very simple - sell assets, drill holes, increase cash flow, hedge, and watch. Oil price or gas price increases are kickers and if gas comes back (more like when) then things really get interesting. He seems to really be watching risk these days.

Macro is an important and unknowable thing. Which is why one shouldn't overdue it. Thats one of those Buffett quotes you so selectively choose to ignore. I would prefer to listen to him vs. a person who thinks he knows what he means. Buffett speaks in simple words, I dont think he needs an interpreter. Lol Grant is on your side, he feels the Fed has gone mad. But he is useful in terms of his explanation for whats going on and more importantly why, which mirrors mine. Fair enough. I think its a market. Fear and Greed, 2 extremes. The market going up 10% after going down 20% hardly seems like a mania. Maybe it will turn into one, but my guess is it turns on the first piece of bad news. We have had a good week or two after 5 - 6 bad ones. With a 24 hour news cycle everything feels like a mania. Europe issues were made to feel like the world was coming to an end. Funny how its only a mania when things go against your theory. I think they call that confirmation bias. I can honestly say I dont know what the hell will happen. I think / hope its going to be range bound while things sort themselves out. Either way I buy cheap and sell ... Sounds like a market to me. People got in because they thought they missed the boat. I got in because my stocks were cheap. I will get out when it gets less cheap and they will probably take the hit and ride it down. Then I will get back in. Buy cheap, sell dear. Jim Rogers has the best rationale. The market rallies when it needs to and sales off when it needs to. It will find a reason to do what it needs to do. Why they get in doesnt matter to me. I buy cheap, sell less cheap in this market, dear in a normal one. The man has made more money then this board aggregated. Stop being such a purist. He obviously knows something and it all spends the same, and you dont get extra points for doing it the Munger way. His thesis was 100% correct during the financial crisis. Calling him an idiot is like calling Soros an idiot because he doesnt invest how you do. Lets save that word for the real idiots - Jim Cramer. First of all your hero's business partner is convinced of the certainty of Dollar debasement. History has shown that the dollar has been debased on just about a yearly basis. Second, who here is trading on QE2? Third, Lol you totally missed my point. Your options are as follows - Stocks, Bonds, Gold, Commodities, Housing / Realty, or Cash. All are bad options. Pick one and move on. I pick Stocks. You pick Cash. I hold some cash to hedge my bets, sleep a little better, and reload on the downside. Your rhetoric and refusal to name 1 investment idea implies that you hold significant amounts of cash, waiting on that magical day where the best companies in the world trade for pennies on the dollar. I am not thrilled about my prospects but yours look pretty bad as well. For a guy like Tepper who manages billions to hold more then 20 or 30 percent cash would be almost criminal. He would simply lose his assets under management. The market is full of uncertainty. Get used to it. Make your bed, lie in it, and sleep tight. I am indifferent to QE2 from an investment perspective. I think its ingenious from a monetary academic perspective (global coordinated inflation). Bernanke's job sucks. Inept fiscal policy, stupid electorate, useless Congress, 20% real unemployment, deflation on the horizon, everyone trying to debase there currency to inflate the dollar stealing our manufacturing and pushing up our unemployment, and 70% of the US Engine / 14% of the WW Engine (the US consumer) loaded with debt. I think sitting on his hands hoping it all works out looks just as bad from where im sitting, and doesnt work well economically or politically. Buffett is man enough to realize that and avoids throwing stones. You seem to be bitching and thats about it. All options look bad. I have consistently said its a high stacks game of chicken. That sort of implies its not guaranteed to work. What do you propose. Probably something regurgitated from Rand, Keynes, Hayek, Friedman, Rothbard, Paul, or some other guy / girl. Guys like you would still have Brazil mared in semi hyperinflation. At least when I tone into Schiff, Rogers, Faber, and company I get some sort of advice vs. sit on your hands. I have assets and they need to be allocated. My stocks which are backed by oil, tankers, planes, buildings, and businesses and are cheap in my opinion look better to me then your cash which is likely to shrink in value. Keep waiting on coke for 5 times current year earnings. I think it will be a long wait. If you are right hopefully I have a bit of cash to be buying as well. I admire your energy but would prefer to read about the ideas you like vs. hearing the market is overvalued. I tend to agree with you giving the crummy outlook, but I dont own the market. What I do own, I think is cheap, but would welcome any and all feedback. I would also like to trade out for cheaper higher quality ideas and look forward to those posts.

Grant is much more eloquent then you are I and he echos my assumptions. http://www.gurufocus.com/news.php?id=109037 I think you guys dont give the fed enough credit, and perhaps at times give them too much credit. There concern isnt only the market, we also have a race to the bottom with regard to currencies and a faltering economy with a useless Congress. If they stand still and the dollar rises then most feel the US economy will fail to recover. Asia is intent on keeping a weak currency and inmo we have the beginnings of a currency war. I think the fed believes they can weaken the dollar and others will follow - if they do then assets rise bailing out everyone, if they dont then we have a weak dollar with rising exports. The risk is everyone losing confidence at once and bailing on the system. One has to ask oneself where will they go? If every country around the world increases the price of everything by an equal factor then what happens. Personally I think its the plan. Brazil, Russia, India, China, the UK, EU, and most of South Asia all want a weak currency. Who will not inflate, and loose all exporting ability? Its a huge game of chicken. I dont know how it all will turn out. Its far too complex for me. I just know my stocks are cheap and the only thing stupider then holding stocks which are backed by a variety of different assets - is holding FI and Cash. --- Cardboard, I dont think its a huge Mania, I believe its a good old fashion rally. We went down and now people want a reason to go up, and they are latching on to QE. All of my stocks have been in on this rally and many are small. Even FBK is up a bit. One piece of bad news and we stop and a series of bad news starts taking us back down. I think it will continue for a while, even years between 8500 and 12500. I say get on when its cheap and off when its dear. Bonds are a bubble but who here owns bonds, who here owns treasury? I think that talk should be saved for another audience. People feel like they are missing out. They should have got in at 9900 when Parsad said things were cheap, now they are late to the party but still want to dance. Those are the same guys who will leave late when the cops knock on the door and get busted. Its a cycle. Rinse repeat. I think Tepper is doing the right thing. The man manages billions, he has to do something with it. Should he tell his people he is going to hold cash while the Fed is promising it will be worth much less tomorrow. Its a world full of risks and bad decisions. One has to pick one and move on. ---- Munger I would still like an answer to my question, and would also like to know what you are doing with your money. If you are holding cash then I think we should wait and see how that works out.

I think gold is like value investing (buying $1 for 50 cents). It either takes to you or doesnt. This issue for me is what is it worth, when is it cheap, and when do you sell (when is it expensive)? I cant answer any of those questions. There are about 50 other commodities including oil and natural gas which have relatively easy answers. For that reason I am indifferent to gold and focus on other things. If you could answer those questions then let me know.

This is a broken record. I would prefer if you responded within threads of individual ideas. Your thesis seems to be the market is expensive wait till its cheaper. We arent market buyers. What dont you like about the individuals ideas discussed?

Thats my issue with your assessment Munger - you appear to be saying hold cash during a period of rising inflation which seems a bit nutty. The world is full of crappy choices sometimes we have to pick the least crappiest one. Please lay out your investment advice. We all know the world economy sucks and will suck for a while. Honestly I think Bernanke might be doing the right thing, given the hand he was dealt.

Its been a good few weeks.

Thanks, I read this before but its much more relevant today, will print and reread.

So canned food & ammo?

I honestly think the plan is joint world wide inflation. Leaves exchange rates in the same place and everyone reduces there debts. China will follow to keep their peg with the dollar. The middle class dont really notice, the rich dont really care because the assets are moving up, and debtors are bailed out. I can understand where you are coming from but how does holding dollars help?

twacowfca you are correct. The Bronco's of the world are getting screwed. Those in the bottom to middle pay no / little in the way of taxes. Those at the top like Buffett pay little on a percentage bases and none on accumulated wealth, and the working rich at $250k to $2 million pretty much carry the load.

;D I've been following LUK for several years and still don't see what people like about this company. I cant find it either but havent looked too too hard. With regard to page one what about going forward? End of 2007 LUK would have been a good short / horrible investment.

The things they were comfortable with scares me a bit more ;D. I was kinda 3/5s of a person back then, and considered chattel in large parts of the country. Constitutional arguments always slightly annoy me. I dont care what someone from the 1800 thinks / thought. --- With that said, I doubt it most of the Framers were from the monied classes. I hope to join you guys in the "rich" class, but I fear you guys are going to ruin it for us younger guys. You guys will cause a revolt. Luckily I can blend in should things go South. ---- TX where you been, your thoughts mirror mine, and you are more eloquent. I thought the same about Laffer, remembered the same Schiff video, and didnt want to bring it all up because I think Schiff is crazy as well. As Buffett said a teacher gets an apple and he gets billions. He doesnt think its fair but doesnt want to change much, except for throwing that dog a bone. You want to take away the bone, what do dogs do when you take away the bone? http://www.youtube.com/watch?v=tpog1_NFd2Q&feature=related

I think you misread Buffett, why does everyone think its a personal issue. Why cant he just have a progressive ideological base? I agree with Chomsky that consent is largely manufactured. The middle class has been kept fat, dump, and happy for most of the last 30 - 40 years, and that is breaking down. I think Buffett wants to keep it that way. I would say he would prefer to give a bit, vs having alot taken via Democracy. This is my theory but its all speculation. I also think he is pragmatic and wants a balanced budget, and you wont get there by taxing that broke fella behind the tree. Its politically very smart but no one says its works but Laffer. Not the CBO or anyone who isnt dogmatic about it. I dont think you are going to change your thoughts on it so its a pointless debate, because I am not going to take Authurs word on it. Tax cuts dont pay for themselves. They do what they do, reduce revenue, and increase the amount of money people can hold on to. Its a simple premise. http://blogs.ft.com/martin-wolf-exchange/2010/07/25/the-political-genius-of-supply-side-economics/ I kind of think Laffer is an idiot, which may be a bit unwarranted and kind of mean. I also think supply side economics is idiotic. I think this is a straw man argument and one I wont engage in. I am not advocating a 90% - 99% tax rate, and don't really care to argue the merits of one. Also taken to its illogical conclusion you would like a zero tax rate, because it would really maximize production. I am advocating a progressive tax system, and a balanced budget which will require higher tax rates for all but those with no money and spending cuts. Or similar tax rates and dramatic draconian spending cuts.

Very interesting guy. Sad to hear. I heard he married up.

Buffett is a Genius because he is advocating doing whats right, and also advocating whats in his best interest. I think ideology is very interesting. Its blinding almost. Sane people become insane when they become wedded to ideology. Eventually things break down and there will be a revolt, if the top class refuses to drop down a few crumbs. The last thing economic Darwinism types want is real Darwinism, and I think thats where things will go, should they push there policy mantra to its illogical conclusions. I probably sound a bit like Value Carl now. Anyway I thought the bit below was interesting. ----- The Problem with Inequality from Econo View by Mark Thoma Steven Pearlstein on inequality: The biggest problem with runaway inequality, however, is that it undermines the unity of purpose necessary for any firm, or any nation, to thrive. People don't work hard, take risks and make sacrifices if they think the rewards will all flow to others. Conservative Republicans use this argument all the time in trying to justify lower tax rates for wealthy earners and investors, but they chose to ignore it when it comes to the incomes of everyone else. It's no coincidence that polarization of income distribution in the United States coincides with a polarization of the political process. Just as income inequality has eroded any sense that we are all in this together, it has also eroded the political consensus necessary for effective government. http://www.washingtonpost.com/wp-dyn/content/article/2010/10/05/AR2010100505535.html If you asked Americans how much of the nation's pretax income goes to the top 10 percent of households, it is unlikely they would come and here close to 50 percent, which is where it was just before the bubble burst in 2007. That's according to groundbreaking research by economists Thomas Piketty, of the Paris School of Economics, and Emmanuel Saez, of the University of California at Berkeley, who last week won one of this year's MacArthur Foundation "genius" grants. ---- But you are right, the rich / productive will take there ball and go home should we mention taxing them 1 cent more.

Damn, I never thought they would put them on the same platform, but it makes sense. I figured you would have a 5 gig os hdd with a separate 1 tb hdd. This makes more sense and is the best of both worlds. Its also better for the HDD manufacturers. My thesis is that overtime the storage companies can buy / R&D there way into the market and retain the desktop and corporate markets. They however will never have access to flash, mobile, phone, and cameras due to not having first mover / tech advantage. It could be wrong though.

Lol, it has begun, actually it continues is more appropriate --- ;D

Interesting idea. I own WDC due to it being cheap and growth in storage. I think things will move to SSDs but it will be overtime, and people will still need huge HDDs for excess storage. I see some sort of Hybrid where SSD is used for the OS / programs, and HDD is used to store massive amounts of pirated material I mean emm content. I was looking for a SSD producer to hedge my bets / pair my trade with and looked at Sandisk but moved on. How does this compare to them? It appears to be cheap on a cash flow basis, and has no net debt. They have had some huge capex though over the years. I am guessing its related to that factory.

I actually agree with this and I am a progressive. As I said in another thread I would support Paul Ryans plan or something like it. A simple tax skim, no deductions with 2 or 3 different tiers. I would also add an appropriate exemption to protect the poor / partially protect the middle class. I would be ok with testing a negative income tax on a state by state basis. I would make entitlements state driven.The states would have to spend the money on the mandate but could do so anyway they want. Of course your liberal states would have armys of social workers and bleeding hearts and the red states would have a negative income tax or some other right wing solution. We would see what worked better in time, but the budget would be balanced. I am convinced that its one of the worst jobs for a wealthy person to have. I can now see why Buffett laughs when asked about him running and says he has the job he wants. I thought his take on Obama and expectations was insightful and I really admire the fact that he stays so optimistic regardless of how bad things look. When I discuss the future and look at Washington, its tough to stay on the up and up. I think you mean TWA.