rranjan
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Posts posted by rranjan
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One of the best books I have read.
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I picked up a used 2013 Mazda 5 with 20K miles in a very good condition. Car was checked by dealer and one independent shop before I purchased but I had to play at only one place for inspection. Car was previously in rental fleet. Got it around 30% cheaper than a new car. Hopefully, it should work fine and last for many years.
Earlier, I had a used Geo prizm 97 and that lasted me for a long time. We don't drive too much.
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Some on this board might consider it sacrilegious to watch videos on trading and speculation (gasp!), but I've found the YouTube channel of Tastytrade to be very informative for me in trying to learn about options (which I can then apply to investing in LEAPs, etc.).
Anyway, they posted a video today that I found interesting and actually relevant to some discussion that has been going on on the board recently. As the market has been pushing new highs, members have been discussing trimming various long positions. It occurred to me that this wasn't in true Buffett style to not buy-and-hold-until-you're-dead.
The following Tastytrade video compares buying near market lows and selling near market tops to simply buying near market lows and holding forever:
I haven't checked their math, but I'm curious if what they claim in the video only works for the specific time period they chose, or can be generalized across the history of the stock market.
In any case, I thought it would be interesting to watch and discuss, even though we're value investors and the guys in the video are not.
I am not really buy and hold forever but I think it's difficult for anyone to consistently know the market lows/highs in advance.
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Congratulations for doing what you love for the last 7 years and doing it so well. I am 100% sure that you won't trade your experience with anything else. For business, the next 7 years will be lot easier than your first 7 years but you are likely to remember first 7 years bit differently.
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Thanks!
And with regards to the second comment, can he show me a stock that has gone up to infinity?
Don't be a jerk, you know very well what he means.
Scott, it's actually an interesting point worth considering. Outside of a few hotels that have been operating in Japan for close to 1000 years most businesses don't last more than 40 years. They eventually go out of business or are merged away into something else.
Granted 40 years is a long holding period, but still worth consideration.
Infinity and 40 years? That's nitpicking. Upside and downside possibilities are asymmetrical in big way for any reasonable duration for an investor. That's the takeaway.
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Looks like Prem might have been right all along. We are in yr 5 after the crisis. He could make up for all the lost time pretty quickly if this scenario plays out.
People are getting excited about mkts.
Reaching for yield and income.
Reality:
US is slow
Europe has issues
BRICs are not growing as fast
corporate profits are high and could contract
Central banks and govts are maxed out. Cant juice markets much more.
Time to be defensive.
Many of those realities have existed for a while. All these realities are fine but unless you know how they are going to impact your individual chosen businesses they are irrelevant. Not able to find cheap stuff is different issue. You are focusing on unknowns and also trying to guess how those unknowns are going to effect your holdings.
I don't have any expertise to predict time line for those above listed factors like Europe having issue or US growing slow. More importantly, if few selected businesses are likely to do well despite all those problems then I am focusing on irrelevant stuff. Amount of cash I hold is directly proportional to the amount of undervalued businesses I can find. It has absolutely nothing to do with above listed factors. Yaah, it's good to be aware of extreme situations to see if you are going to have tailwind or head wind but US is not in extreme situation right now.
I am building more cash but it has nothing to do with any of the above listed factors. I will welcome volatility any time even if I am invested 100%. That's how I see it.
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Well, we can console ourselves that it was not Joe Kernen talking about brick. Almost in every interview he talks about that.
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That's not a claim you can make for all IRAs. Some people might have been invested in foreign stocks that were not at risk of collapse.
If the financial system collapsed, everyone was at risk. The US dollar and the economy plays a foundational role in the world.Don't remember the days when we were waking up wondering if the number shown in our portfolios meant anything?
That's stretching the argument. One can even argue that government was responsible for whole mess. Anyway, that is useless point to discuss.
Simply said, Government should differentiate between post tax and pretax retirement vehicle. If you start taxing twice then it becomes ad hoc.
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Yea have read about half off Titan but was over a year ago but will start again but long books are hard to stick to.
The Vanderbilt book is very long to but very informative but after like one month of this audio book I am ready for maybe something in the line of Freakonomics.
I personally found Titan a fascinating read. Finished it in two days.
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Yeah I've got to say I really liked it too. Sorry to add to the confirmation bias :)
Here's some questions I pose to the board:
If an investment is not simple, is it a bad investment? - Complex doesn't necessarily mean bad but simple has higher chances of you not missing something critical.
What does "simple" really mean? The COBAF thread on BAC is 200+ pages long, and yet the thesis is seven words long ("earnings power hidden by legacy costs"). -- Hidden earning power is very simple conclusion but reaching this conclusion is not easy without doing some due diligence. Simple doesn't necessarily mean easy. Even after 200+ pages not everyone will agree to final conclusion.
Few thoughts above in bold.
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Fantastic read. Thanks for posting it.
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We average down relentlessly. Two things seem pretty clear to me:
first, no one can consistently buy at the low or sell at the high
(except liars, as Bernard Baruch said), and second, lowest average
cost wins. We constantly strive to lower the average cost of our
positions by buying more if and when the price drops. Throwing good
money after bad, others call it. Many investors think a drop in the
price of stocks they own is evidence they were wrong. We think of it
as an opportunity to increase our implied rate of return by lowering
our average cost. Someone once asked me how I knew when we were
wrong to do that. When we can no longer get a quote, was my answer.
That's really funny as long as your money is not managed with same philosophy.
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Bill miller talks about value investment but his actions were far from it even when he made money.
How so?
Some of his tech investments didn't have enough intrinsic value for the price he paid or at specific price he was holding them. Now about making money in them, yaah almost every dart thrower was making money in tech stocks. Not saying that he was a dart thrower but putting his performance in perspective when it comes to tech stocks. Also as some one else pointed out, the absence of downside analysis. After analyzing his past investments, I won't spend even 5 seconds thinking about his buys/sells.
He used to talk a lot about applying Buffett's logic in tech stocks and he did make some money but his logic was far from how WB thinks. Talking Buffett's logic was easy part but he was hardly following it.
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Bill miller talks about value investment but his actions were far from it even when he made money.
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Nothing all that new, but still a rather chilling video.
+1
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Thanks a bunch!!
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Fantastic job. I didn't realize that board was 11 years old. I thought it was 7-8 years old.
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What I learned is that this dividend is a priority for Fairfax and we have to learn to live with it.
S
My understanding -- Dividend is meant to supplement modest salary of management. It helps them to avoid selling their stake in FFH.
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Corner Market Capital. Anyone know these guys? I hear they're pretty good.
http://www.cornermarketcapital.com
I looked them up and it seems they follow Buffett/Graham way.
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The bigger question for the 3-5 position people is why do you have so many positions? If you have consistently outperformed like that why do you need so many positions? Why not pick the one...
If you happen to be wrong or some unforeseen event takes place, which impacts your specific pick, then you can be wiped out unless you are hedged. Game over! With 3-5 positions you get chance to fight for another day. No need to hedge or do anything fancy. Plain vanilla stock piking will do with 3-5 positions
I generally have 5-15 positions but rarely with equal size. It depends on situation. At times, I can be concentrated( 50 -70%) in 3 positions even if I happen to have some other positions.
Having said that, I think every one should do what they feel comfortable with. I can never hold 50 positions but there is nothing wrong in having 50 positions if it works for some one.
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I could use a couple myself. I'd have to do 200% 7 years in a row to be a Billionaire. Difficult, but they say the first $Billion is the hardest.
It will be incredible if we ever get 1-2 billionaires in based on portfolio returns who are posting here. Well, 7 years in a row - 200% is kinda tough :). But how about making it over few decades?
I will feel very happy if we have billionaires among us in future who started with very little. Now, no one should come after me for this billionaire talk. All in good jest and also I didn't start it.
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The 10-yr returns are about 27% with mistakes which I find incredible.
Packer
Fantastic returns.
On topic, I had taken huge position in BAC warrants in lower 2's so returns should be satisfactory. I had picked up decent size AIG warrants around 5-6 as well. Need to calculate returns for whole portfolio but one year returns are not very meaningful( unless it is Ericopolly :) )
It's really incredible. With number of unforced errors I make, I would have been dead in any any other field. I am going to try to minimize my unforced errors in future( Number one goal for me). Any thoughts to do it well is appreciated.
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+200% in 2012
mostly leveraged BAC, some leveraged AIG.
This should give you reason to not feel bad when you get those inevitable 40-50% drops :)
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+26%
Dozens of positions. No position started at larger than ~1% of portfolio. I invest like my investing idols, Graham and Schloss. I buy when things are very cheap and sell when they reach IV. Cash never less than ~30%. No leverage.
Fantastic results.
Your best long-term idea today?
in General Discussion
Posted
Most wide moat companies fluctuate in price by 40-50% in 1-2 years. Do you think that their business value keep changing by 40-50%?