watsa_is_a_randian_hero

yeah...deck is a different animal. I dont know what motivates girls like my fiance to by uggs...I think they are hideous. Either way, DECK does earn about twice the ROIC that SKX does, but it is also priced at twice the EV/EBIT.

About half my net worth is in 2 stocks right now - FFH & FCBN. I've fared just fine over the last few years, thank you for your concern though... :) BTW, SKX is @ about the same price it was when I originally posted. And while DECK has continued to hit new highs, I'd still invest in SKX today over DECK. I thought you sold your DECK anyways?

Ok??? Your above statement is a true fact. Listen, I'm not going to sit here and debate with you a point I agree with you on. However, that still has nothing to do with the 2 simple points I was making. I made 2 points above, and you are trying to make statements like this quote, and statements about my supposed ideology as if they are counterargument for the 2 points I have made above. Don't take this the wrong way, but if you don't hear back from me on this or any other topic its because (a) I have a full time job to tend to (b) time outside that job is scarce and I'd rather be researching stocks, and © while philosophical/ethical/legal debate interests me, a "debate" presupposes both parties are debating the same topic.

I never said that. You said Greenspan said that. I was explaining his thought process and how that did not equate to negating contract enforcement. You debate like a politician; you describe me as if you know me and put words in my mouth and my "ideology." I had 2 points I was making; (1) that a free marketer would NOT believe insider trading is ethical, and (2) that insider trading represents breaches of an ethical duty (theft of information), breaches of contract in many cases (NDAs/CAs), and breaches of law in many jurisdictions. Now for the last time, if you want to debate something with me, stick to the only points I've made on this thread (1 & 2), and please limit your tangents.

You are wrong because your original quote said "he didnt even believe in the enforcement of contracts." You have not provided a citation to that effect. Fraud and contract enforcement are two different things. Greenspan was saying fraud enforcement would not be necessary as the market itself would enforce; institutions have safeguards to prevent, conduct due diligence on counterparties to discover, and the minute a fraud is discovered he/she would be blacklisted from industry. And, rand and greenspan are two different things. Greenspan may have been a follower at one time, but I don't think many Rand followers today would characterize the way he ran the fed (ie, bailouts for LTCM and the Greenspan put) was characteristic of a libertarian. And, my argument above related to insider trading; libertarianism was brought up only in the context of refuting a statement about how free-marketers would prefer insider trading. Argue against the points I have made if you care to; rather than arguing against "some crazy lady from the 50's." I have cited the CFA Institute as well - is that crazy?

The CFA Institute has a great approach: http://www.cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2010.n14.1.aspx# Their approach boils down to: 1. All inside information is the property of a company. 2. Trading on material inside information constitutes a theft against the company and its shareholders (bullish information gives you the opportunity to buy cheaper than those uninformed, bearish information gives you the right to sell more dear than those uninformed). 3. Companies should make an effort to disclose as much information as possible in as timely manner as possible to prevent abuse. 4. If you are spreading material inside information it is an ethical breach; if you were bound by a CA or NDA it is a contract breach; if you are regulated in an area such as the US it is also a legal breach.

Lol, interesting part. Whats funny is Greenspan who knew Ayn and was part of her inner circle said he didnt even believe in the enforcement of contracts, he said the market would sort it out. Sounds like you Watsa my friend are a free market pretender. The market you wish for doesnt seem so free. Umm...wrong. Cite your source. Heres mine: http://aynrandlexicon.com/lexicon/patents_and_copyrights.html Google ayn rand intellectual property rights and you'll see she was clearly supportive. The concept of any property ownership (physical or artificial) is a construct of man. I don't know where you get the statement "intellectual property in a free market system," but I would appreciate you citing a source of a reputable free market supporter.

Feel like I need to comment - I doubt most free-market ayn rand types (such as myself) would prefer a system where insider trading was promoted (I would not). I think the standard party line would be: inside information is the intellectual property of a company, and therefore spreading this information in the marketplace (breach of NDA's/CA's) would be illegal and the company should be entitled to civil damages. In addition, in a "free marketplace," companies would deal with only with lawyers/bankers/exchanges/consultants that have internal controls preventing employees from spreading inside information (this already happens to an extant).

Im from chi - stateside they are SIPC insured

This sums it all up: So QE at this point represents little but an effort to drive risk premiums to levels that are inadequate to compensate investors for risk. This is unlikely to go well.

I use IB as well. They are the best option for a retail or semi-professional investor/trader. Best mix of service quality, product breadth, and price.

I understand the point of his analysis. I stated I agree that any gain will be temporary and will not permanently effect long-run gdp. However, he should maybe take a breather before getting so bent out of shape at the FED, and take some time to check his math.

Its ok, treasurehunt. Hussman made an honest mistake. On the other hand, I think munger needs to follow his own advice of "Next time don't be so eager to criticize." While he is wrong, I would probably expect him to insult you now as well. He has a history on this board of using insults as a defense mechanism.

Munger: do the math. Hussman "said a 1% increase in the S&P 500 has been associated with a corresponding change in GDP of 0.042% in the same year, 0.035% the next year." That means a 1% change in S&P500 = a 0.077% change in GDP over 2 years. That means a 10% change in S&P500 equals 10x this amount, or a 0.77% change in GDP. 0.77% of 14 trillion is not 11 billion, it is 110 billion.

I agree with his underlying thesis - that any gdp gain is likely to be temporary in nature, and borrowing from future growth. However, I don't like when people like this are so single-minded that they are stretching to find data to support their theses, and make up new math techniques along the way.

yeah...too bad his math was wrong!!! "Let's do the math. Historically, a 1% increase in the S&P 500 has been associated with a corresponding change in GDP of 0.042% in the same year, 0.035% the next year, and has negative correlations with GDP growth thereafter (sufficient to eliminate any effect on the long-run level of GDP). Now, even if one assumes - counter to reasonable analysis - that the GDP changes are caused by the stock market changes (rather than stocks responding to the economy), the potential benefit to the economy of even a 10% market advance would be to increment GDP growth by less than half of one percent for a two year period. Now, as of last week, the total capitalization of the U.S. stock market was at about the same as the level as nominal GDP ($14.7 trillion). So a market advance of say, 10% - again, even assuming that stock prices cause GDP - would result in $1.47 trillion of market value, and a cumulative but temporary increment to GDP that works out to $11.3 billion dollars divided over two years. Moreover, even if profits as a share of GDP were to hold at a record high of 8%, and these profits were entirely deliverable to shareholders, the resulting one-time benefit to corporate shareholders would amount to a lump sum of $904 million dollars. In effect, Ben Bernanke is arguing that investors should value a one-time payout of $904 million dollars at $1.47 trillion. Virtuous circle indeed. " He did: (0.042%+0.035%)*10%*10*14700 = 11.3 Should be: (0.042%+0.035%)*10*14700 = 113

Wrong! You are Wrong -niels12think! The market is efficient! Fairfax must be priced at the book, as rational market participants have determined based upon FFH systematic risk level, an appropriate risk-adjusted required rate of return. Barclays figured it out - thats why FFH is included in their index fund - MSCI Canada Index Fund! When will you guys learn?

Harry - a few points First, congratulations - you won over a 3 month period. It looks like you exited your position as well, so you have a realized gain. However, we will see what netflix does over the next 5 years. My position is more based upon the competitive environment Netflix will encounter over the next few years, not subs they are adding today. Prem was wrong on his CDS bets and down 75%+ over 4+ years before making 10x on his money. Finally, position sizing is a valid form of risk control. I started with a position that was a fraction of 1% of capital and averaged in as the price rose. I have allowed the short to grow, and now have converted it to solely 2012 put spreads so that losses are limited. You cannot argue position sizing is not a valid form of risk control.

I've been short the VXX since about 29, after the flash crash. Its at 15 now.

But hurricanes in the Gulf of Mexico don't blow then. And corn isn't harvested in the spring, but weather in the spring can affect its harvest prices. Hurricanes typically threaten supply right before peak heating season (fall). This can cause the march-april spread to widen.

The spread between 2012 March-April natgas could be a creative hedge for those of us who have large insurance exposures. The spread is highly sensitive to supply availability, because of the high drop off in demand from for heating gas over that month. This spread is trading very low right now relative to historical levels. Supply disruptions due to events such as hurricanes would likely lead to gains here.

I think this would be most useful if the age buckets were modified (given the bulk are in two buckets). I think the best buckets would be under 30, 31-40, 40-50, and 50+, and then we do a net worth poll for each of those buckets.

eh, we'll see what happens. my point is with sizing is that nflx doubling from here may be a drag on my performance, but its not going to put me out on the streets. And as long as my cost to borrow doesnt rise (in which case i would buy deep in the money puts), then I can afford to be patient on this one.

i think stops are a bad risk control tactic. I think a better risk control tactic is position sizing.

and its not even as if its a business in a highly competitive industry with a average P/E multiple that I'm saying should be lower...its trading at a much higher valuation than the market in general