Mark Jr.
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Posts posted by Mark Jr.
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Good read. I think I lot of the people demonstrating as "we are the 99%" think that everybody in the 1% owns a couple of private jets and is a 33rd degree freemason.
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This guy is a friend of mine. He's a "futurist", keynote speaker and an optimist. Me, not so much. But he's seen the inside of a lot of industries and gets inside the heads of the people running them, so he has a very good vantage point on direction things are headed.
http://www.jimcarroll.com/2011/10/the-paradox-of-optimism-manufacturing-the-build-america-mindset/
The premise: everybody is pessimistic about the US manufacturing sector with one notable exception: people inside the sector.
I’ve never encountered a sector with such a degree of optimism about the future. And believe me, I deal with virtually every type of industry out thereAnd the upshot:
There’s a variety of attitudes at work, some of which I spoke at IMX in Las Vegas:- the industry has seen tremendous opportunities for innovation through advanced technology and changes within the manufacturing process
- manufacturers are learning quickly how to streamline the process, such that they can focus more on agility and such capabilities as mass customization
- the rapid emergence of new methodologies such as 3D printing is providing new opportunities for transformation in process
- the arrival of the ‘digital natives’ is accelerating the rate of adoption of new ways of doing things
What it is really leading to is a fascinating new trend that I think is just bubbling below the surface, but that I suspect will be mainstream within the year — “Build America.”
We'll see if this "Build America" meme emerges and gathers steam. In an election year it makes sense. But looking out past a year one wonders if the US manufacturing sector is indeed fertile ground for value oriented contrarians.
- the industry has seen tremendous opportunities for innovation through advanced technology and changes within the manufacturing process
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I've never been comfortable with the term "entrepreneur" as it's been applied to myself: a guy who started a business that got off the ground and is still going today.
I graduated college (for the second time) with a diploma in computer programming into the nadir of the 90's recession and it was impossible to find a job. I threw my resumes in the garbage, printed up some business cards and *presto* I was no longer an unemployed recent grad looking for work. I was a consultant. I remember seeing a TV commercial from some bank with kittens rolling around in toilet paper and a smug voiceover cooing "so...you've decided to become an entrepreneur" and it enraged me. I wasn't choosing anything, it seemed, it was necessity.
Then a few years later in the mid-90's all I knew was that the internet was getting interesting and that I wanted to be involved. That was it. No ideas around starting a business and selling it for big bucks, no desire to cash in on the explosion, I was just immersed in the technology and suddenly people were paying me to "do stuff" for them, and before long we were creating "things" that people were paying us to use. Systems, programs, etc. Suddenly I look around and lo and behold, it's a business.
It didn't feel like there was an entrepreneurial impetus in there anywhere. Sure, we realized we were in "start up" mode and that was both exciting and scary. It beat working for a living (because the common theme throughout all this was that it never felt like "work"...still doesn't).
So now I have a few businesses and investments in the space that give me a good living. Enough to take some off the table incrementally and invest it elsewhere. Over the years I came to identify with "investor" more than "entrepreneur", and as I refine my investment style I realize I'm some kind of pseudo-activist. Not that I go in, take a position and start a proxy war. But rather I get involved with companies with more than just my capital. Now, I'm not Warren Buffet, so it's not like I go in and take a 5% stake in Coke and get on the board. I'm talking tiny, even local companies. Put in some capital, help them with business development and usually their technical issues, since I have a background there.
So for me it's more about investing than entrepreneurship. The latter seems about starting something and then cashing out. The former is about buying in and helping to develop it and take it to the next level (and then just keeping it). IMHO.
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Feel free to email me any time markjr [at] easydns [dot] com
I enjoy discussing business climate and strategy, I even try to think about "web assets" and the web industry from a value investing perspective.
Just make sure you tell me you're the guy from this board so I can make the connection.
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Eggcellent.
Despite Munger and Buffet's advice re: auctions ("Don't go"), I am going to win this one. :)
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Great read from Cringely today on MSFT, Ballmer and the tablet strategy
http://www.cringely.com/2011/09/ballmers-last-stand/
I opened a position in MSFT during the nadir of the August mini-meltdown, and I'm a linux, open source guy who purged all vestiges of windows from my house years ago (and barely tolerate it at my company....and that's just to be able to test our website through it)
Parsad said it pretty succinctly (to paraphrase him) -> they're making more money per share and returning more of it to shareholders now, when nobody wants them than they ever did when everybody wanted them.
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Today I was interviewed by Postmedia (canada.com) for my opinion on the value of the teaparty.com domain, held by the Canadian rockers from Windsor by that same name.
http://www.canada.com/entertainment/Will+Canadian+band+cash+Party+domain+name/5426110/story.html
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Central Bankers in the US are elitist, it is a culture that was instilled from the GreenSpan era. Their speak is ambiguous and they genuinely think they are smarter than everyone else. They sit their in the mahogany room on the top floor of the federal reserve and get to act out g-d.
In reality most of them are huge narcissists with napoleon complexes that have no clue about the real world.
On a related quote, since central bankers are quite cozy with their career politician cousins, I have always been a big fan of the following, possibly most underrated quote in history:
“Too little attention has been paid to the fact that electoral politics lures disorded, messianic personalities into positions of power.”
– Davidson & Rees-Mogg in The Sovereign Individual
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Did this auction ever happen yet?
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Was just about to post this. Of course AAPL will tank tomorrow. Sort of brings to mind Warren Buffet's one and only stock picking "tip" "On the day my death is announced, buy Berkshire"
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Great thread. Moore, I salute you.
I know I'm a guppy among gurus of investment practitioners here, but if I may chip in with a few observations, I hope none of them are flogging a dead horse.
"This time is different", let's look at that one.
In all previous bubbles that people compare gold to, what we'll euphemistically call "The Powers that Be", namely government and central banks, had a vested interest in the perpetuation of the bubble itself. Asset bubbles are equated with healthy economies and it enables governments, and populaces to live beyond their means on mostly borrowed money and leverage.
From the South Sea Bubble, when the Bank of England jettisoned it's wartime debt to the South Sea Co. right on up to Greenspan's gratuitous use of "fedspeak" to allay any suspicions that housing was in a bubble (hint: it was, and it was ignited to deflect the after-effects of the Internet Bubble crash - itself actively cheerleaded by the established authority as the heralding of a new era)
Looked at this way, it's the government or central bankers "jawboning" the bubble (or a dutifully complicit mainstream media) where one often hears the rationalizations of "this time it's different".
Not so much with gold.
Gold is reviled by what we'll call "the powers that be" and it's lapdog media pundits. In fact there is a lot evidence which is still not prevalent in mainstream circles of active price suppression of gold, as GATA has been documenting for years. (Of course, you can't even talk about that without one's tin-foil hat on, you get the "conspiracy theorist" label just bringing it up).
So when housing looks frothy, or the stock market looks frothy, the Fed or somebody will put on a dog-and-pony show and using lots of opaque jargon talk up the bubble and talk down the voices of reason.
In gold's case, we have the precise opposite. When gold goes up, the sombre authorities rationalize it away as temporary or meaningless.
If anything, that's at least ....different.
When gold makes new highs, the mainstream media and the established experts trip over themselves to call it a "bubble top". That's different.
When gold flips over, finally, and instead of new highs being called "tops", pullbacks start to be heralded as "opportunities", then I'm looking to sell. Until then, I hold.
If there is a bubble in all this, perhaps it is not in the price of gold, but in willful aggregate credulity in an inherently flawed monetary system within the framework of unworkable welfare states running out of railway track, and this "credulity bubble" can be inversely measured by the price of gold.
Every single paper currency in history has gone to zero. Gold has never not been a store of value. Never. I think anybody trying to argue that somehow, the paper currencies around today will NOT go to zero, or that they will NOT keep losing value, NOT be further debased as long as possible and that gold shouldn't or won't have any value are the ones truly saying "this time is different". Because what is happening now has played out before in history in one way or another, numerous times.
So yes, the price of gold may someday "crash", if you want call going from say, $5000/oz to $2000/oz or even $1000/oz a bubble "pop" but I don't think it will play out that way. Gold may somebody be back to $35/oz, of course, that'll be "new dollars" or "world dollars" or whatever the new, next currency gets called after the ones we use today are wrecked beyond usability.
But let's keep in mind what's really happening when that day comes: it isn't that gold has "suddenly become worth less", it'll be that a global currency "do over" has occurred.
Parsad: yes, I'm in Toronto and there's none of that common interest here. Every once in awhile I get a question from a friend about gold, but it's nothing like what you're describing out there in Vancouver. Maybe it's more prevalent there because that's where all the juniors are based? Just a thought.
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Probably another good thread to bump up. So what has everyone been buying today?
I was ready to pull the trigger on a few things, but I'm all out of ammunition, as usual. :-\
I took advantage of today, because when I looked back I figured I didn't take full advantage of last week's meltdown. These crash days seem to always happen when I'm on vacation (greets from Barbados) and I get caught unprepared.
So last week, I picked up some individual stocks I had been researching and after that I thought I missed out on some wider opportunities. So today I did a bit of rebalancing and now, I'm somewhat satisfied. Going into this I had one of my RRSP accounts with all cash, so between last week and today:
- opened a position in Brk B and doubled it today now at 15%
- 6% into Leucadia
- 10% into Markel
- 7% into Onex Corp
- 7% into MSFT
Leaving me with 35% cash, but I have equivalent of another 35% cash in another RRSP I need to move over, I'm designating the one half of this as dry powder to keep ready if things continue to unravel and then still have that other 35% equiv. chunk in reserve just in case.
Then there's also cash in my wife's RRSP, around 50% so there's that too.
(Parsad, I wish Corner Market had an RRSP eligible fund.)
- opened a position in Brk B and doubled it today now at 15%
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Has anybody else read "What Would Graham Do Now?" ?
It's about how one would apply or update the Graham approach / value investing for today's global market. He brings in "Mr. Government" to accompany "Mr. Market". Also gets into more active investing (active like getting involved with the company, sometimes private companies)
I'm still fairly early on in it.
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Mark the figure is 0.6% of Total Financial Assets where historically it was as high as 2-3% for Mining Shares, and gold bullion backed the monetary base.
Right then. I have terrible recall for numbers like that.
P.S great earlier post by you in this thread.
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I think at the end of the day, the most obvious harbinger of a gold bubble top is still notably absent: a buyers panic to get into it. I think it was Eric Sprott (or maybe Marc Faber) who recently observed that even at today's prices (this was a few months ago), global exposure to gold and gold investments (including mining stocks and ETFs) was something like 0.05%, where in previous gold tops it had risen as high as 20%. (Those numbers are from memory and prone to being off, but those were the ballparks)
Until my cab driver starts chatting up gold or I walk into the bookstore and it's all "Get rich now investing in gold", I don't think we're there yet. (Yes, there are gold ATMs, etc but they are still curiosities, not ubiquitous)
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I had an RRSP that was nearly all cash (85%), so on monday I opened positions in BRK-B, Tata Motors, Shoppers Drug Mart, and an obscure waste-to-energy company I've been researching called Covanta Holding (CVA) - Sam Zell is the Chairman, bought them out of bankruptcy a few years back and they are currently held together with an insurance subsidiary. I liked them at $17, like them more at $14.
Picked up some Mitsubishi Financial to round out my Japan holdings (call me crazy).
Also put in some low bids on Onex Corp (not yet filled) and trying to add to my Tucows at .68 but nobody is selling that low yet.
I've still got lots of bullets left in this RRSP, with another one in my wife's name at around 50% cash, so bring it on.
Oh, I almost forgot: doubled down on ALS near $10.
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I know it's been a crazy week, but I'm just replying here so I can subscribe to the thread and know when the auction is open.
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Sanjeev, I would be happy to donate domain services, DNS and a place to host the website.
Just shoot me a pm anytime.
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What Microsoft should do
http://www.cringely.com/2011/05/what-microsoft-should-do/
"Buffett used his cash flow to buy a share in the futures of many other companies. Like Peter, he became a fisher of men. Following such a strategy is a very real option for Microsoft.
There’s no lack of money for Redmond to diversify. For more than a decade the company has reliably thrown-off at least $1 billion each month in cold cash that could be used for diversification without impacting in any way the day-to-day operations of Microsoft. But what I propose is something more than that — deliberately shaping Microsoft operations to maximize cash flow for external investments. If Microsoft eliminated its many products that don’t make money that would free at least another $1 billion per month and maybe a lot more."
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I've followed Liquidation World for nearly as long as I've followed Fairfax. Owned it briefly in 2002-2003 when I thought they may get their act together. Nope!
This bungled mess of mis-management has finally been put out of its misery by Big Lots at 6 cents a share. Cheers and good riddance!
http://www.theglobeandmail.com/globe-investor/big-lots-snaps-up-liquidation-world/article2036075/
I just posted to the Investment Ideas thread about this:
Is this completely kosher?
Didn't Seth Marks used to run Big Lots? And then his own Talon Capital lent money to LQW, they did those highly dilutive financings which seemed to run the stock price up, then seemingly on cue, as soon as the lockup on those private placements expires: the price tanks. Now Marks' former company buys his present one, and assumes the debt owed to his financial company?
Am I the only one who finds this disingenuous?
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The James Grant thread reminded me that I have belatedly posted the transcript of an interview I did with John Mauldin (I think because in his "Endgame" book he said that "Hyperinflation is always a political decision, not an economic outcome")
It's here
http://wealth.net/on-wealth/wealth-net-exclusive-interview-with-john-mauldin
The interview was conducted on April 19th, just after the S&P negative outlook on US debt.
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Its a tie between:
Buying Real Estate in 2005
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Buying Apple at 12.50 then SELLING OUT AT 21 (Thought I was a genius with that one!)
I think this is my pattern: my worst investments have been from basically second guessing myself out of my best ones.
Case in point: I actually nailed the top in 2007, sold a domain name for around 25K and put it all into 2 year LEAPS, at-the-money PUTS on the DIA, SP, QQQQ and GOOG - sold them in Jan 2008 thinking "this market will defy gravity forever". Had I just held them to expiry (Jan 2009) it would have been the trade of the century for me.
In terms an outright bad investment, I put a largish position into Instorage a few years back and (this is embarrassing), realized I had actually misread the financials. I thought they were profitable and paying a dividend when in fact they were losing money and making their distributions out of paid-in-capital. As soon as I realized the error I sold out at about 33% loss. They were eventually taken over but I don't know at what price.
Back in the day (1999/2000) I bought a stock called Georgian Trust, pretty well blind (I hadn't even heard of value investing then). Not a huge position but it went to zero almost immediately afterward. It's still sitting in one of my accounts, festering.....
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What is the title of the "Excellent Article" (I assume it is something much more recent).
The cover page is a mock zombie movie poster: "Night of the Living Fed"
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A value investor I met via a shared interest in new media assets, his name is Aram Fuchs and he runs a fund called Fertilemind Capital. He talks about gold in his latest letter to shareholders which he's given me permission to post on wealth.net here:
http://wealth.net/on-wealth/a-value-investor-buys-into-gold-oh-my
and the direct link to the PDF "Lucrative Paradox Of 2011“ here (5 pages)
http://wealth.net/wp-content/uploads/2011/01/Lucrative-Paradox-Of-2011.pdf
Patient Capital newsletter for November 4, 2011: Vito's been buying...
in General Discussion
Posted
I just received Patient Capital's newsletter this morning (no, I don't have the minimum 500K required to invest with them, but Vito and Domenic were very polite with me when I inquired and added me to their mailing list at my request).
The overall tone reminded me of something Parsad said back during the August mini-panic: that there were a lot of businesses out there now who were in much better shape than prior to the GFC, who were now selling at even better prices, compared to their fundamental strength.
The main takeaways:
and
The entire newsletter available here (4 pages, quick read)
http://www.patientcapital.com/newsletters/newsletter-2011-11.pdf