coc
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Posts posted by coc
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Akre is a great. I do wonder about his successors though. I'm not sure their decision making has been as sound.
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18 hours ago, UnfairFacts said:
There’s a key difference here: in the case of Enron et. al, accusations (from short sellers) flew, alarms sounded, regulators stepped in, and *fraud was confirmed*. In the case of Fairfax in 2005– the subject of your response here— accusations flew, employees were threatened (!), alarms sounded, regulators took a look, and…. nothing happened. There was no fraud.
Fairfax wasn't convicted of fraud but the substance of much of the accusation was true and solid. Fairfax has a history of being very aggressive. Had their CDS positions not worked out so well in 2008 this whole conversation could have been very different. And just because they were clear in 2005 doesn't mean they are clear now - this shouldn't have to be said. For the record, MW is only accusing Fairfax of being aggressive and that the stock is overvalued - I can't see why he's not allowed to make that accusation when bulls will make the mirror image case all day long, happy to push the stock up.
But again, I repeat, short sellers are there as an alarm system to flag issues - holding them to the standard of "There are examples where they were incomplete or wrong and therefore they shouldn't exist and/or are a corrupt institution" is unbelievably false. That's Soviet style condemnation - find a few salient examples and condemn the entire system.
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Here's a great example of an "enforcement action" - from the SEC website:
- Charges against Deloitte’s China-based affiliate for failing to comply with fundamental U.S. auditing requirements when auditing U.S. issuers and foreign companies listed on U.S. exchanges, allowing clients to select their own samples for testing, and having clients prepare their own audit documentation.
You mean the stuff that short sellers have been calling out for ten f*ckin years?!
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18 minutes ago, Parsad said:
Baloney! Hundreds of ponzis, frauds, etc are caught by regulators and whistleblowers every year...SEC alone filed 760 enforcement actions in 2022. Short sellers don't even account for a tiny fraction of such frauds that are caught.
On top of that, there is a widespread investigation of short sellers, including Muddy Waters by the SEC for improper, illegal trading practices:
Short sellers are as corrupt as many long-only hedge funds...the presumption that somehow they aren't is incredibly off mark! Cheers!
Hundreds per year?? Please show evidence. And they have caught no MAJOR public fraud I am aware of, that was not first highlighted by a market participant. Enforcement actions often (frequently) come after the house has already burned down, and most of those 760 are minor. An enforcement action is not = catching frauds as they operate. I am aware of some of the penny stock stuff and I'm glad they perform that service.
When you say "short sellers are corrupt" you reveal that you dislike the entire concept (rather than "some" short-sellers). I'm sure some of them are. Also, the DOJ probe has gone nowhere 2 years later.
I don't short at all and have no skin in that game but the anti-short thing on this board stemming from the 2005 FFH debacle needs to be pushed back on.
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Longs make up utter bullsh*t all day long on CNBC and Twitter, and Prem has made up a whole bunch of his own, so this whole idea that short sellers are some unique demon is nonsense. Even if MW is incomplete, he's allowed to go out there and say, with a great deal of backup "Here's why I'm short". If he's wrong he'll eventually go out of business. But he's called out a LOT of bad actors in his time (no, he hasn't batted 1.000 - have you?) and Fairfax is not some innocent lamb. If shorts are out there getting "100 wrong for every 1 right"
A. No one would trust them and B. They'd lose a lot of money fast.
Chanos is a good example - he made a career out of calling out bad accounting and bad actors, but in the end the totality of his analysis wasn't good enough so he went out of business. Prem has been wrong again and again, and publicly so - why is Chanos the bad guy?
Bulls don't get a monopoly on the microphone.
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Just now, Parsad said:
Not accused by the PCAOB, auditors, SEC, insurance regulators, or any regulatory body. But by hedge funds shorting the stock.
If you don't know what you are talking about, best to maybe learn, rather than throw around ham-fisted anecdotes or comments that inflame other readers.
Cheers!
Practically every fraud is first caught by short sellers. This argument holds no weight. The SEC and Deloitte are sure as hell not out there calling out the Wirecards, Enrons, Valeants, Sino-Forests of the world. -
29 minutes ago, gfp said:
Honestly I can never make any sense of your posts.
It's a conspiratorial post about Muddy Waters supposedly manipulating FFH's stock so he can buy call options and make money on the bounce. Written by James Joyce.
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On 1/31/2024 at 9:17 AM, pricingpower said:
If you're young and doing this on the side Buffett's advise has usually been to mainly focus on your career. I like targeting only making one excellent investment per year's savings that you've deeply researched (read all SEC filings, transcripts, media coverage and know all competitors deeply) and intend to never sell. A high standard is about 500 hours on an investment, at 1-2hrs a day and not investing in everything you look at it's hard to have a know-what-you-own approach and buy more than 1 a year... but as knowledge compounds so does your bandwidth over future years. It's puzzling people look at investing in stocks (large businesses) so massively different than they would approach buying a small business.
If you look at Buffett as an example he's probably spent about a quarter million hours at the investment game (=70hr weeks sustained for 70 years?) against maybe <1000 cumulative buy decisions?
Would you share the investments made in the last few years with this approach? Thanks in advance.
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2 hours ago, ValueArb said:
I'm not sure. To be honest after being out of the work force for 7 years I just put myself 100% into getting back into work as a developer. I do know it generated a good deal of income for me over the next few years from passive positions paying out distributions and being merged away. I was shell shocked from getting myself overleveraged and stopped tracking returns or doing any real investment research because I didn't want the distraction.
I have painful memories of telling co-workers Apple was a buy at a 10 PE and so was Facebook after it fell out of favor right after its IPO but kept my account was in berkshire or index funds and didn't take my own advice
Interesting. I ask not to dredge up painful memories - just wondering that if the big drop was an indication that you'd been taking more risk than you thought in the Up Years - or simply a bump in the road. Sounds like the latter. Thanks again for the openness.
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16 minutes ago, ValueArb said:
I started off living off a small portfolio, and as it grew so did my spending (bought an expensive house, had two kids, one who required expensive therapy when young). In 2007 I knew the housing market was set to crash but didn't have any way to short it and loved my house too much to sell. So instead I levered up (with 15 year mortgages) to take my equity out and put it into the stock market, not thinking it would crash along with real estate. So when my portfolio was down 50% at one point in 2008 I was in a ton of illiquid stocks with big spreads being forced to liquidate at well below IV to cover my monthly burn. I had no idea how long it would take to turn around and afraid I'd burn through all of it in a few years so I went back to work.
My goal was always five positions, but always ended up around 10 because the best ideas are reallly illiquid, you can't always get as much as you want at good prices, and can't always get out as quickly as you like when the get close to IV. So I'd usually have 3-4 favorites that i would grow as I slowly got out of others.
Thanks so much for sharing - very interesting strategy (and history!).
Before I let you go, how did the portfolio down 50% end up recovering in the end?
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2 hours ago, dwy000 said:
Does this even work anymore? It seems the value was there because very few were willing to put in the effort to page through S&P manuals or go through the balance sheets of 1000 microchips.
But now that anyone can run a NCAV screener or sign up to a dozen services that filter and recommend this stuff a lot of the juice is gone. Especially when you have to find 25 of them at a time to make it work out on a portfolio basis over the longer term.
I hear this a lot, but primarily from people who haven't tried it and aren't doing it. Thus the thread. But cigar butts =/= NCAV stocks.
1 hour ago, ValueArb said:My returns in 2000 to 2008 were 40% annualized. Returns in 2021 to 2022 were a bit over 20% a year. Returns last year were negative, I had lost around 3% on average over all accounts.
My key to generating high returns out of net-nets was always to concentrate on a handful with strong catalysts (buyout, recapitalization, large returns of capital or liquidation). Last year I focused exclusively on bio-techs for the first time, and made the mistake of proritizing the ones with highest discount to NAV instead of focusing on shareholder base and board composition. I might have gotten unlucky since I'm so concentrated and maybe that would have worked out if I bought 30+ at a time, but thats probably an excuse. The reality is I relearned the lesson that its better to have a 15% discount and a board focused on shareholder value than a 30% discount and a board focused on keeping their jobs and finding new drugs.
Wonderful job. Can I ask why you stopped for well over a decade if things were working so well? And how concentrated have you typically liked to be?
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13 minutes ago, ValueArb said:
Because Buffett's highest returns by far were when he focused on cigar butts.
Fair enough. Have you been happy with your own returns pursuing it? (Not compared to WB - compared to your expectations.)
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2 hours ago, ValueArb said:
Every single position I own is a cigar butt.
Did you land in this territory by design or by accident?
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Yes good discussion. I think of a cigar butt as a business you don't love but the stock is an interesting trade based solely on valuation. One puff and gone. Truly the mirror image of the "Find quality and then pay a fair price" type attitude.
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Kuppy blew up on junior gold miners in Canada. It wasn't like Munger where his Blue Chip (now BRK) got marked down in a massive bear market for small caps (-80%) and then became a legendarily good investment for the next 50 years. The money was gone at Praetorian.
Then the MGG blowup.
He's doing better now clearly.
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One thing to remember about Abel is that he's *currently* in charge of all the operations he'll be in charge of when he's promoted at WB's death. Any changes you think he's gonna make, he'd presumably be making now.
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Just curious. This is not a pissing contest on what's the "best" way to do this. Just wondering if anyone buckets themselves in that way any longer.
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On 1/12/2024 at 3:24 PM, Longnose said:
I've already built my position. so sure. Ticker is TBTC.
Company is essentially Casino Software. Highly regulated industry. There is an old seeking alpha article that gives a pretty good summary of the company. They stole some nice business from their competitors during covid.
to me the biggest risk is CEO retiring and not wanting to hustle anymore.
Thanks!
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22 hours ago, Longnose said:
I found a 16M marketcap OTC stock this past year that has a 10 year CAGR of 15-20% depending on when you start your timeline and not just one big moonshot where they went up like 500%. Steady growth, both in rev and profit. They are also in a pretty small niche with massive barriers to entry. There are only 3 major players above them that dominate a multibilion dollar market and these guys have been steadily stealing little bits of marketshare YoY from these mega companies. Im hoping that they continue to keep eating at the share and then become an acquisition target.
Care to share?
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Slow Horses S3 is ace. Love it.
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17 hours ago, backtothebeach said:
Regarding book keeping: I calculate monthly returns looking at the month end-values of my portfolio. The annual return is the monthly return compounded.
If I take out money I try to do it at the beginning or end of the month and subtract it from the starting value or add it back to the ending value of that month. It would be the opposite for inflows. Example: Let's say I start with 110k, and take out 10k on one of the first days of the month, I just pretend I started the month with 100k.
Or, with a lot of inflows or outflows you can net them out and adjust the starting and ending balance by half the value.
Nothing too fancy, everything else would be too much work for negligible extra precision.
This is exactly what I do as well. Compounded monthly returns with inflows/outflows intra-month left out of the calculation.
The only more precise method would be to do it daily, but as you said, doesn't really gain enough useful precision unless you're a professional fund manager.
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I have the Catherine book and been meaning to read it, Massie is great. Empire podcast recently did a series on Russia that re-piqued my interest in the development of Russia.
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1 hour ago, KCLarkin said:
50% of their U.S. stock portfolio is Mag7. You want them to add more?
Munger's been pretty clear on this. They wanted one tech stock and they chose Apple. No need to speculate.
In fact he was arguing at the time they should have been buying more AAPL.
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So let me get this straight. After 25 years in business for himself, Pabrai is starting a new fund by pitching...Berkshire? And after comparing his approach to Warren Buffett and "circling the wagons" around very long term compounders, his initial allocation is to put a third of the fund in coal companies?
How deep is the well of suckers?
Interview with David Einhorn
in General Discussion
Posted
Have to double this take. Einhorn is saying all that fresh powder lying around doesn't want to make money because they don't seem to be interested in some of his stocks. Seems a lot more likely that he made some bad investments. (And some amazing ones)
That said, he's picked it up a lot lately so his switch in approach, theory aside, has been a good one.