Jump to content


  • Posts

  • Joined

  • Last visited

Everything posted by Mungerville

  1. Thanks Jacko, much appreciated. One question: Is it your take that where I reside personally is meaningless if I set up the general partner as a corporation in any province of my choice?
  2. Yes Ericopoly, I am using deep in-the-money Russel 2000 puts again as the small caps are even more over-valued relative to the S&P. Its like deja vue all over again. The only tweak I have now relative to pre-financial crisis is I own gold and out of the money long-term calls on silver.
  3. I bought but haven't done the calculus yet. I think I am looking at a P/E of 10 buying today for the P and 18 months out for the E. If you add 1) some underwriting profit (you have to given GEICO and some others) to Buffet's normalized earnings and then 2) add look-through earnings net of dividends of the equity portfolio (KO, WFC, AXP, etc..) as the divs are in normalized earnings and then 3) add that one $15B acquisition in the next 18 months will occur increasing earnings by a 10 percent yield (net of say the 2 percent being earned on bonds presently with the cash) so 8 percent net or roughly another $1 billion... you have to get to around 20 billion in "adjusted" normalized earnings power or a P/E of 10 or damn close. Like I said I have to look at it more closely - am being very lazy. Irrespective, regardless of whether its 10, 11, or whatever times earnings, BRK is better value than the stock market which carries a higher multiple. As such a long-term BRK position and short the stock market should outperform cash in your portfolio (note: stock market is high, only times it has been higher in the last 120 years relative to GDP or long-term earnings, etc. is, in order of bubbliness 1) 1998-2007, 2) 1929 and 3) sometime in the 60s when Buffet closed his partnership. Good to stay hedged.
  4. Bronco, Are you sure you are projecting forward or do you have your directions mixed up? Do you think they are going to have 1.7 billion or whatever in cat losses every quarter on a forward basis?
  5. I'm with you broxburnboy... precious metals - mainly silver - have been my main bet ever since I was forced to sell my ORH common to Watsa for below intrinsic value.
  6. Is he in the same league as Seth Klarman? My feeling is "no". Klarman's ideas just seem so much more compelling.
  7. I'm not participating on the upside anymore. Haven't been since about a few months before Watsa hedged his portfolio. Am fully hedged and intend to profit when opportunities arise. I can't wait till the day where I feel comfortable investing without hedging, when the excesses are finally flushed out of this dysfunctional system.
  8. Ucc, The way I tend to short the stock market reasonably cheaply is to short the etf with deep in-the-money puts - say 15% in-the-money. 1. I find it relatively cheap, mainly because my opportunity cost for cash at that time is usually very low as a value investor (as most things are expensive, hence my wanting to short). So its a value investor arbitrage thing (as my opportunity cost for cash is usually much much higher in the normal course). 2. Further, if the stock market moves against me, a) I can't get totally wiped-out with my put option (as its an asymmetric short position rather than a standard symmetrical short-sale position and the downside is therefore capped) and b) I actually have a little cushion in terms of the time-value of the put option retaining value should the market move up against my trade and closer to my strike price - this value retention is greater the longer-term the put option is (but so is the cost so that is the obvious trade-off when you are deciding on the put option's term). But all in all, the cost is low for me (because I neglect the opportunity cost of the extra cash it takes to buy deep in-the-money puts) and the position is less risky. This can be applied to any etf with put options on it. I hope it is helpful in a general way to you, its been a while since I have posted I guess.
  9. The guy is an idiot. It probably means one should buy treasuries, but I would rather stick to Government of Canadas.
  10. I am not that optimistic. Overall corporate earnings are good but what percentage of the increase in corporate earnings is non-financial? Crunch those numbers and then let's talk about whether corporate earnings are good.
  11. Thanks a lot. - My portfolio is pretty pathetic in terms of value-type holdings. As per Grantham, I am long high quality US (mainly KO, JNJ, BRK; these are not even that cheap) and short the market in equal amounts. (way down on that position although BRK's recent rise helped a lot!) - I hold UTS.to as a cheap long-term call on oil prices - I hold a lot of long-term out of the money calls on precious metals, and hold 20% in gold (similar to Sprott's position) - I hold long-term way out of the money puts on the market (way down from my buy price!) Odds and ends include Walmart, long-term Government of Canadas, COP calls, cash. My portfolio is down in 2010 by 20% so far. I have been way too busy at work to find good value investments lately which would be helpful to generate returns to pay for the macro optionality costs I am incurring. Maybe the better solution for me is just go to cash but... that would be too simple! Thanks for sharing some of your picks - much appreciated.
  12. Ucc, what are your favorite longs currently? I don't personally have much going on at this point - looking for ideas.
  13. "It is painful to watch Buffett behaving like a hostage to Wall Street, damaging himself by defending investment banks and saying flattering things about Goldman in a way that contradicts any principled view of the securities business." Who here thinks that deep down, Charlie agrees with the above quote from the article.
  14. He seems to have put a 2012 marker in terms of timing for an oil prices shock which I find uncharacteristic. It seems his timing for that part of the story may be fairly short term. Sorry, I like to think worst case.
  15. I am really surprised board members here are not talking about this more - forget about the general media!
  16. Seems like Munger isn't as enthusiastic as Buffett about the state of the union.
  17. Thks. Been waiting for this one!
  18. So is buying a basket of value stocks and hedging against the S&P speculating?
  19. I've got more or less nothing in the pipeline that will make me 20% sure gains. Thus far, I am betting 1) high-quality stocks will outperform the Russell 2000 (long high-quality and short the Russel) and 2) I have out of the money longs and shorts on Silver I think I may increase #1 by a material amount (right now its around 30% of the portfolio) - I may take that up to 75% of the portfolio in the coming days.
  20. I have also learnt that I should be greatful to Buffet, Munger and Watsa as they have taught me so much.
  21. I learnt that I can make a shit pile of money but that I could have made an even bigger shit pile of money had I not had a day job restraining my time to look for further opportunities.
  22. At this point, I'll take gold and silver over those constant maturity swaps. There will be a time to move into those but that is tougher bet than gold/silver at this point. My view is in line with Paulson's - gold is the easier bet. To execute that view I bought out-of-the-money LEAP calls on silver (SLV) and shorter-term out-of-the-money puts as a hedge. Those calls are within 5-10% now of being in the money now. That is for notional of about 80% of my portfolio. Ericopoly has identified the best values out there: large cap quality stocks such as JNJ, KO, BRK. I am in those but hedged against the Russel 2000. I also have puts out-of-the-money on the Russell 2000. I am expecting another recession in 2010 or 11. With all that, I am comfortable adding bread and butter small/mid cap values if I find them but will remain hedged.
  • Create New...