Saluki

I used to own shares of a land based oil rig driller called Patterson UTI, and the former CEO/founder was a thousand years old and very sharp. Reminded me of Munger. He said that the problem with the oil industry (the E&P guys) is that they like to drill holes more than they like making money, and that if you give them a dollar, they will drill you a hole, you give them another dollar and they drill you another hole, and that you run out dollars before they every tell you that it's a bad idea to drill another hole.

Well, I like to give credit where credit is due, but I can't remember who told me this pithy analysis. He said if you want to destroy a city, the only thing more effective than rent control is carpet bombing. In the poor areas of the city, where it's meant to help, it does the most harm. I grew up in NYC and the South Bronx had many blocks with buildings that looked like something from The Last of Us. When you aren't allowed to raise rents, you don't have money for repairs, and many landlords just borrowed as much as a bank was foolish enough to lend them, then collected the rent for as long as possible, and eventually just stopped paying the mortgage and the taxes and eventually just walked away from the property and let it be the bank or the city's problem. The problem is made worse by laws that make it incredibly expensive and time consuming to evict a "professional tenant" who knows how to work the system and probably has a free lawyer. In NYC if you own a property through an LLC or Corporation you have to hire an attorney to appear for you. How many mom and pop landlords can afford to do that for a year without rent coming in? Why don't they own it in their own name? Because they don't want someone to slip on a banana peel in front of the house and sue them into oblivion. I think the risk is less in high end buildings. New construction isn't subject to rent control in NYC if I'm not mistaken, and even in the older buildings, if you are charging market rent and verifying income, it's unlikely that someone put his nose to the grindstone to graduate at the top of his class, get a job at a top law firm or bank and then use that lifetime of work as part of some grift to rent a place and not pay. But at a lower income level, 9 months or a year of free rent might look like a great risk reward situation. You stop paying rent, after a year when they finally evict you, you rent a new place under your wife's name, then a year later under your elderly mother's name, then your kids, and eventually yourself again when enough time passes.

Just watched this. Great find, thanks for sharing.

After the Berkshire AGM (where Uncle Warren explained how AAPL is not a 35% position, b/c their investments include their operating businesses) I decided not to trim the big ones anymore, because as a percentage of my total assets, which include my work provided 401k and future pension, and my home in my city and condo in Florida, it's really not that big a position at all. And yes, some of the big ones that slowed down in the past (like Fairfax) and I didn't sell eventually came back strong and if I sold, knowing I still liked the future prospects, just to keep a certain allocation like 5% each for 20 companies, then the returns would be less lumpy, but they would be less overall too. As to the small positions, I do see your point and I didn't have a good answer. But in reading the Joel Tillinghast book, who outperformed the market for two decades and had 800+ positions in his fund, he explained it better than I could. Something can look really cheap, or have huge potential for growth, but it's not a sure thing, so putting a huge part of your net worth is not optimal. But a smaller position is a way to start to participate and you can add to it as the picture becomes clearer or your faith in management improves. Maybe researching the smaller positions keeps me busy and therefore I don't do something foolish like trim the big positions? Maybe the big positions aren't attractive except for brief periods every few years and I feel uncomfortable sitting on cash or buying my biggest conviction ideas at prices that are unattractive currently but will still do okay over time? Thinking of those small positions as a percentage of my total net worth/assets makes the allocation even more questionable in some ways though. Viewed through that lens, they are so small that they are basically just going to Vegas and playing the nickel slots. Just thinking out loud, but I appreciate the feedback.

I trade in and out of the SRG cumulative preferreds, currently have a tiny position. They pay 7.5% at par ($25) and periodically dip below $22. It's not a bad place to park your money since the CEO is trying to sell the company and if the common holders get anything at all, the preferreds will be called at $25 and you get the dividend while you wait. It won't make you rich, but it's not scary either. No telling when the company will sell though, since the real estate environment has gotten tougher with the rise in interest rates. I have the SEC filing for another preferred in my reading pile that pays a little more, but it's trading at close to par and the business has been having some problems, so I'll probably won't stick my neck out for a few more basis points.

it was a pain, but I did it with excel. I copy/pasted the positions from my brokerage account, which needed reformatting (ugh), then I added a column that figures out percentages. Then click on the "Insert" tab, and on the top of the tool bar there will be a bunch of options for bar or pie charts.

I think looking at this in pie format is helpful because it keeps me from stressing about the smaller positions, which won't really hurt me even if they go to zero. The concentration on some of the bigger ones though, is concerning me lately. I'm not Bill Miller who can hold 90% of his personal portfolio in Amazon and just let it ride for 20 years. BRK is a great company that I've owned for more than a decade, and so is Google, but I've been thinking of trimming them if they get past 25% of my portfolio. 30% would definitely be too much for my tastes. Maybe trimming BRK and adding to FFH, or trimming GOOG and adding to something else techy?

Sold a bit of junk and bought some Seritage preferred (SRG-PA), STNG, VTS, OXY

Added some NETI and CPNG.

I'm almost finished with this book now and I'd highly recommend it for anyone to add to their collection. Just enough anecdotes and charts and post mortems on investments to get the point across, but no fluff whatsoever. No one is as pithy as Peter Lynch, but this guy has a very readable style. Whereas One Up on Wall Street got many people interested in investing that otherwise had no clue, this is a definitely not a beginner's book because it assumes you already know terms like enterprise value and EBITDA, so I think this forum is the target audience. I had several bookshelves full of investment books and have made a deal with my better half that I only buy a new one if I get rid of five old ones. I usually put them in the little free library near my house. There are some that I can't imagine ever getting rid of because I re-read them occasionally (Greenblatt, Peter Lynch, Charlie Munger, Ben Graham's Security Analysis), I think this one will make the permanent collection.

I was an M&A lawyer in the beginning of my career, and the best advice I would give is don't skimp on the due diligence and make sure the lawyers/advisors that you use are experienced in the type of business that you are buying. My firm did a lot a cable transactions and once we had a white shoe manhattan firm on the other side, who did a lot of M&A stuff, but not in our industry, and they probably cost their client 2-3x as much because everything took them longer since they didn't know it and had to "get up to speed" on things while billing for the learning curve. I'm sure it would be prohibitively expensive if someone hired us to do a software or pharmaceutical deal, for the same reasons. It's okay to have different people for different things. Our clients had a boutique tax law firm that represented a lot of cable companies, and they had a different firm for litigation. Just because you use a firm for, say, the real estate portion of the deal, doesn't mean that the tax or IP people in the firm are just as good.

I'll echo what others have said that having read both this and 100 baggers, both are worth a read and this is the better of the two books. Along this line of buying compounders and holding for a very long time, a couple of books with similar strategy that are good reads are The Davis Dynasty (the patriarch was a bureaucrat at the state insurance commission and later got rich investing in insurance companies and holding for decades), and the Phil Fisher books (I believe that he held Motorola for decades and it was a huge part of his portfolio).

Added a little JOE and CPNG. I think there are cheaper things in my portfolio, but none that I'm willing to increase position size right now.

I don't go on Substack, I avoid Twitter like the plague, and I try to avoid articles that give their take on what Buffett said. Like everything in life, it's usually better to go to the primary source. I've got Buffett's chairman's letters in the hardbound book and it's a great learning tool. It seems all media is moving towards shorter, click baity content. Twitter is the worst for the written word, and Tik Tok for video. Maybe you should make a conscious effort to move in the other direction towards long-form content. There are legendary investors who have written books (Peter Lynch, Ben Graham, Phil Fisher, Phil Caret, Joel Greenblatt, Einhorn, Tillinghast, Howard Marks) and I think those are great sources. I read a lot of biographies. Currently I'm reading one on Marvin Bower (responsible for taking McKinsey from two offices to an international powerhouse). In the past I've read books on a particular industry (shipping) and I have one in my queue about graphene now. I don't know if I'll ever use the knowledge, but it's easier to just keep accumulating knowledge and then having it ready if something comes up then to pass up an opportunity because by the time you get up to speed on something the opportunity passed.

My better half works at McKinsey, and she is way more tech literate than I am. She mentioned that she just finished a course on ChatGPT on Udemy which was helpful. It helps to learn how to give better prompts and use prior answers to shape future queries apparently. For instance, she had it generate lists of best cities to live with these 5 criteria and rank them in an excel sheet (I didn't know it could do things besides write bad poetry and give passable, generic history essays for high school students).

I've been to the AGM 2x before the lockdown (It makes more sense, in some ways than the BRK meeting b/c you can meet Prem and upper management, which isn't really possible in Omaha). I would go again if it wasn't so close in time to the BRK AGM. I hate to fly and don't like to do trips too close together. There's definitely more fun things to do in Toronto, and the side events are much smaller and there is much more signal to noise than in some of the retail oriented side events in Omaha which are like a sales pitch for some firms hawking newsletters (not naming names). I got a picture with Prem and one with Mason Hawkins one year. And I got to meet Arnold Van Dem Berg the first year I went. When people say what a nice guy he is, it's not an exaggeration. I'm not a billionaire so his time would've been better spent talking to the deep pockets, but we had a great conversation and he gave me a copy of a book of quotations that he compiled, and wrote a nice inscription in it, then when I was about to leave he told his son to take a picture of us. Class act! I enjoyed watching it online, but it's not the same. I think I'll be back next year

watching it now, thanks for the reminder.

This seems like a strange recommendation, by I'm getting a lot of value out of this book. In addition to being a performance psychologist to most of the top PGA golfers, he's also a coach for Point72, and the parallels between top performers in any discipline are really interesting. This book is about Golf, not investing, but you can easily apply the mindset and habit adjustments to investing (or tennis, or bike racing, or surgery, or battle). Really interesting read, and above is a video where he talks about applying the principles to investing, which is NOT discussed in the book.

Bought some VTS on the dip yesterday, and I added some NETI, taking it to 2% of my portfolio. I think NETI is a full position now, but I would buy some more VTS on a dip in my retirement account, (I didn't want to sell anything in there, so I bought most of it in my taxable account, and recently realized I should've sold some positions in my retirement account and bought them back in my regular account, and bought VTS in the tax free account since the 10% tax free dividend is like a 15% taxable dividend). [edited to add that I sold some BRK this morning in my retirement account to add to VTS on the dip. I plan on replacing the BRK shares in my taxable account as funds come in so I can maintain my original allocation]

VTS, SWBI on the dip. Bought some NETI over the past few days to hold for 30 days and tax loss harvest my older, higher basis, shares and got lucky on the timing.

So my back of the envelope math says that even with today's pop in price, FFH is back to .9 price vs book value

Yes, some of the pictures you take will look photoshopped. Just beautiful. If you like outdoor adventure stuff, Pucon Chile is like Interlaken Switzerland. We went on a day long hike to the top of an active volcano there. Highly recommend Chiloe Island too. It's the farthest north you can go and still see every type of penguin. There are several companies that take you people out on zodiac boats every 20 minutes or so to the see their nests. Lot's of wooden Unesco churches and houses on stilts too.

https://www.cnbc.com/2023/04/12/full-transcript-berkshire-hathaway-chairman-ceo-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box-today-.html Transcript of the interview now online.

If you are going to rip on some ridiculous tax breaks, this is a silly one to pick on, it's a university. It's well funded already, but it's going towards education. That writer is an idiot. If this guy really wanted to rail against something he should look at the art "museum" of the Walton heiress or one the Rales' brothers. It's ostensibly a museum, even though it's not really open to the public. So you have taxpayers subisidizing the costs of acquiring and maintaining your art collection on you property. Your grandma doesn't a tax break for her collection of tea spoons from every place she visited, but billionaires get the taxpayers to subsidize their art collecting hobby?

managed to add a little more VTS at the open following yesterday's dip. It was negative at the open for a few minutes before going up and I got lucky I sold some appreciated BRK in my retirement account and bought the same amount back in my taxable account so I could buy VTS in the retirement account without having to hold it for a year if it shoots up to unreasonable levels. Someone I met from the board told me he has bought low and sold around $20 twice and bought back again. I tend to hoard stocks like an old lady collecting commemorative plates, but I think if it was in my retirement account where I don't have to pay short term capital gain taxes, I might be open to the idea of trading in and out of something like this.