elliott

some Americans became obsessed with Japan in the 80s, before that it was the Soviet Union, now it is China and life goes on by the way, China was already a super power many centuries ago

didnt Terry say that they would not open more funds? as opposed to those who gave the market the flavour of the day (for example, a BRIC fund, and income fund, etc) just to get more funds under management? yet now they also have a mid cap and an emerging markets funds

I am not sure I followed Dalio when he mentions that he is not surprised stocks are now rising (as is summarized in the first post, Dalio says bottoms are made when the central banks start acting), yet later (or in another interview?) he says that you really have to know which stocks you are holding, as if, buying the market is not going to work. Does he mean most stocks will go down again, contradicting his earlier point about the bottom?

exactly my thoughts. the FCF yield of the portfolio, as reported in the funds letters, was 4.0% at the end of 2018, 3.4% at the end of 2019. can the multiple expansion continue any further? and what happens if the market decided it does not require a 3.4% FCF yield, but a higher (though still modest) 4.5%? and if it required a 6.8%? this is not something that only us consider, although the managers of the fund dont seem to find reason to worry too much at the moment:

given the decline, and the recovery we have had, it is just normal that there will be people unhappy with Buffett and Munger for not having made significant purchases but what would happen if they had made purchases and the markets were to decline again? I bet there will also be people unhappy precisely because they made purchases (how could they? the economy has been hit too hard, it was obvious!) now the funny thing: many of the people in the first group will also be in the second one

oh, regarding new acquisitions, consider that now travel is very difficult in many parts of Africa. management said that acquisition work is certainly affected by the covid19 situation.

I would be cautious looking at cash. its certainly possible (they said this yesterday) that some of the businesses need more cash to survive in the next months/years, and that Fairfax will provide it. so, the question comes back again to whether you think those businesses will be profitable one day, thus the extra cash well invested, or whether they will not, and thus Fairfax is just falling into the sink hole phallacy.

during the webcast of today Wilkerson admitted that they learned some lessons from Atlas Mara and CIG specifically, he said they were up against too many challenges there, and he summarized the idea quoting Buffett at least, thats something

thank you for your answer commodities would be a small part of my portfolio. will neither make it, nor break it. even considering that I rebalance the portfolio.

maybe I should have added that I am not a trader I have a hopefully balanced portfolio, but I am sure it can be improved, and precisely as part of my research I wrote the above post in this great forum, where you can find very good answers. some times!

I am considering adding to my portfolio exposure to a broad basket of commodities through an ETF (tracks the Blooomberg commodity index) the goal is: 1) to diversify the portfolio, and I am not interested in commodity stocks as those have their own risks (debt, costs above budgets, damage to the environment, etc, etc) 2) to hold an asset class that may do well if we get inflation, currency devaluation/currency wars, etc I could go for just gold, loved to actually, but I feel the price of gold is a little bit too high for me at this stage (and, luckily, I already hold gold!) on the other hand, commodities are down and hated (returns have been negative for the last 10Y and pretty consistently so during that time - YTD -20%) Anyway, anyone has an opinion as to whether commodities may good for reason 2) mentioned above? Thanks! Bloomber commodity index target composition for 2020 https://www.bloomberg.com/company/press/bloomberg-commodity-index-2020-target-weights-announced/

what would coronavirus lead to insourcing of supply chains? I am not questioning the trend here, just wondering why do we say the trend is due to the virus. the fact that a country needs to import something from abroad makes it dependent on the exporters, with, and without, virus and in countries where the virus is causing damage, products that are made totally "in-house" also experience supply chain issues

several of the companies they hold are not making money, at least in a significant amount. I think what they need is for the businesses to become profitable, or at least for investors to believe that will happen. I exited some months ago because I simply could not see that moment coming. And I like the way they do things, the common sense they bring into the companies they invest in...

Taleb might be a little over himself, but he has nothing to do with Peter Schiff (and I listen to Schiff occasionally). I started listening to Schiff in 2015 actually. Back then, he was saying the US was probably already in a recession (january it was, I think), because inventories were going up, because people didnt have any money left to spend, credit cards were already maxxed... I am not sure there has been any period since when he has not been saying a recession (more like the end of times, actually) is right on the corner. Taleb is about risk, not making predictions, not the economy.

More likely. The optimal outcome for the economy is to get everyone sick over the next 2-3 months, let all the old people die (they don't contribute much to the economy anyway), and then have life revert to normal when everyone has herd immunity. Richard, what do you make of the points Taleb (and others) make against the case for herd immunity? some body posted an article Taleb co-authored for the guardian a couple of pages back. anyway, one of the several points is, herd immunity relies on, well, immunity, but at this point that has not been proven, ie, you get sick once, you may still get sick again (and transmit the virus).

Look at it with a wider perspective maybe you are right. Maybe I just listened too much doomsaying :-) I am in Spain. 13 million people working in the private sector vs 14 million people comprising retirees receiving a rent from the government + unemployed receiving some type of subsidy + public administration employees (data as of december 2018, but its been like that for a few years). For how long can that situation be sustained? https://www.libremercado.com/2018-12-19/insostenible-13-millones-de-trabajadores-del-sector-privado-mantienen-a-otros-14-que-dependen-del-publico-1276630056/ (in spanish)

will/can any of those strategies work? I mentioned this in another thread, but everybody wants to buy quality names now, saying buy them now that they are on sale. but if enough of us are doing that, will we get the cheap prices we are looking for? (sure, prices have dropped a lot vs just a couple of months ago, but are business fundamentals and prospects the same?) the same goes for, for example, airlines and hospitality stocks. just here, how many of us are following those stocks guns ready? maybe pessimism is weighing on on me these days (I fear my country is going to have to face a very bleak future, after CV is gone), but I see all kinds of people, from friends who bro-invest to people who know what they are doing (such as all of you guys!), thinking they are going to make good money out of this. but who does even know when markets will recover?

Exactly my feeling. But then I wonder... Did someone in the 90s?

Something I am not sure markets are pricing in is the possible long lasting effects of this crisis. Much of Europe, for example, was in pretty bad (economic) shape before the virus. This may just precipitate whatever was going to happen eventually. Several of the points Dalio has been mentioning in the last few years come to mind: income inequality and unemployment, the need to live off subsidies and what that does to peoples morale, resulting populisms and nationalist movements vs globalisation trends, social welfare systems arguably broken, the conflict between the US and China (far from just an economic issue), etc, etc ps Now that I mention Dalio... If you read his books, you will remember that some crisis where markets went down a lot saw periods in between where they also raised a lot. 30%, 40%, and sometimes even with accompanying good macro economic data that supported the rallies fundamentally. So we may think that all is good at some point, and actually be just in the middle of the way down.

Enrico, are you sure holding a lot of cash is the right thing to do? I do hold cash, to be clear, but I also fear it might lose value - a lot of value. And I dont think we will see it coming. This ties with a question Castanza made early in the thread. "Are you buying gold?" I have a small % of the portfolio allocated to gold, so no, I am not buying because I already had the gold. It might be a good idea to buy if you do not have, although its considerably more expensive than say a year ago, and gold price rised, but also dropped, during the GFC.

I agree with you that the "cold numbers" might not reflect the apocalypse reported in social media. I am also in a European country right now, however, and I dont know about the "cold numbers" but I can tell you I have been to a couple of hospitals and the image is ugly. Very ugly. Not to mention that a lot of people who had health issues they needed dealt with are asked to remain at home, and manage however they can. And the health system is not the only one not working properly. Police/security is deficient too. I have been in the need to report some trouble to the police (I apologize for not being more specific), and I didnt even manage to get to file a report at the police station because there were so many people, and due to the risk of infection only one person at a time (one and only one) could enter the police stattion. Even if I had been able to file the report, I am not sure they would be able to do anything to help me. This may be anecdotal, as you say, and for those healthy, or withou any troubles, virtually invisible, but for the rest... ps I am going to have a look at the jokes thread. I need my mind to forget about it all even if for a short time.

funny. just yesterday, my DD process determined that I should not research Bank of America - one of the reasons being that its equity ratio is lower than what I ask of banks. by the way, I may now be mixing banks so reader beware, but I think that in the 2019Q4 conference call, Bank of America indicated it felt it was more than adequately capitalized.

...and the 10Y Greek bond yielding 1.3%

you can find banks in Europe earning a nice ROE and not being particularly levered well, at least in nordic countries in sweden, for example, rates stand at 0%, today - had been negative for several years - and you can definately find some good banks here

I think this virus will certainly have a noticeable economic impact, although I tend to think it will only be temporal. That said, buy the dip? Me, I am not into that game - for the last 2 years, I have only bought 1 stock per year - but, even if I were, I would think twice in the case of indices and the like. The economic impact may be short lived and minor, but who says hyped stocks will reflate to the same craze multiples?