Ballinvarosig Investors

Thanks for the write-up on Clarus, valuegeek. I know Kanders has had a great record with Armor Holdings; however, he has most recently blotted his copybook with his disastrous investment in the now bankrupt Stamford Industrial Group. I'm still not too convinced on the notion of investing in what is essentially an IPO. When Clarus do make an acquisition, they will probably end up overpaying. Not only that, but history shows us that IPO and these type of acquisitions will initially tend to disappoint. I just can't help but feel that you could get a better price after the acquisition is made.

If you've been through one real estate crash; you've been through them all! I still remember the crash in London in the late 1980's and heard exactly the same reasons as you've listed as to why London property prices were justified. "Sophisticated" Japanese were on a spending rampage and would pay any amount of money for a property in London. Property in high-end areas like Mayfair was so rare that supply restriction would always ensure rising prices. London was the financial/media/fastion/etc capital of the world; the rich and famous will always want to move here. Historically low interest rates will remain low - it's a new paradigm. Despite all the old usual gobbledegook, "real" real estate prices ended up halving a decade after the peak. If property does begin to wobble, then watch the Canadian banks. Here in Ireland, we're a few years into our slump and we've watched the Irish banks going from having a total market cap of something like €150 billion to about €5 billion today (they would be zero's but only for the Irish government guaranteeing them). I doubt that things will get as bad in Canada as they did here, but any bank with a high degree of commercial real estate and rapid growth in the 2000's is a candidate for disaster.

I often see many value investors parking part of their portfolio in these sort of companies. On paper, they look like cigar butts, with stock prices often below the cash on the balance sheet and NOL's being ignored. However, in reality these companies seem to go nowhere for even decades on end, by which time the cash on the balance sheet has been flittered away. One stock I have followed is Clarus Corp. This is one example of a company that has seemed to have been around for years now, without actually using the cash on the balance sheet to make an acquistion. Each quarter Warren Kanders (the CEO) delays, the cash on balance just gets smaller and smaller and smaller. An even worse example is Ambase Corp. These guys have been a shell company for ten years now and seem happily content to pay themselves nice salaries, employ PA's and maintain a corporate HQ. It's madness that management ignore their fiduciary duty, but even crazier that shareholders don't vote them out! There are quite a few similar stocks that have done similar things over the years, and from what I can see, with disappointing results. Bexil Cadus Has anyone any thoughts on these kind of set-up's? Am I missing something?

[flash=200,200] Here's a guy who is taking the opposite side of this debate (economy to deflate - government bonds the only game in town).

A few stocks that I bought earlier this year and intend on holding Fortress International Group - FIGI Itex - ITEX Chromcraft Revington - CRC Fortunet - FNET (this stock was a great pick, it just kept giving and giving) A few stocks that I may buy at some point, the price obviously being athe determinant factor Defense Industry Intl - DFNS Southpeak Interactive - SOPK Ash Grove Cement - ASHG US One Industries - USOO AutoInfo - AUTO Signature Eyewear - SEYE Chanticleer Holdings - CCLR

Who called Buffett an "idiot" and said this was a "terrible decision"?

Considering he's now working with a multi-billion dollar hedge fund (First Eagle), he has to start taking a position and view on unGraham-like stocks.

In fairness to Greenwald, he is looking at this deal from a Grahamite perspective and from there, BNI doesn't look particularly cheap. What Greenwald needs to understand is the expectation that Buffett himself has set on Berkshire (return of 10% going forward). Like many have pointed out, at the size Berkshire is now, it's very difficult for him to find a pitch that he can knock out of the park. I think BNI will give him the return he's looking for, but anyone expecting a home run from this deal will be disappointed.

For my suggestion, the most obvious Blue Chip comparison is one that's closely tracked on this board, ITEX! Although it's a bit opposite to what you're looking for though (higher P/E but growing revenue), it looks reasonably cheap.

I've looked at SYTE before, but the issue over buying customer lists and then retaining customers bothered me. Also, I was quite concerned with the viability of this business model going forward. What also annoys me about SYTE is that it's annoyingly difficult to trade when you're dealing with tenth's of a cent! If Mr. Dash is reading this, he should start pushing the board to institute a 100-to-1 split!

http://compoundinglife.com/ This might be useful for some of you.

There was no mention of a BYD investment. It does however examine the stocks that Wesco has and concludes that DJCO may have exposure to similar stocks (primarily KO, PG, WFC).

There's a rather whithering article on Gurufocus about how overpriced Amazon is. EBay + Costco + $4bn = Amazon? As my mammy used to say, people know the price of everything; but the value of nothing ;D

I'm not disputing that he's not a great investor, of course he is. What I am disputing is the "Cult of Warren" that is being built up by the likes of Schroeder. While working all the hours under the sun and having a photographic memory are rare attributes to have, I refuse to believe that they're unique. Also, from what I can see, Seth Klarman is working with the same magnitude of money as Buffett and has achieved similar returns, if not better in the last two decades. If he decides to stick at investing, he's easily on course to beat Buffett.

??? Relax man, I only visit this site a few minutes each day, so you can expect me to reply instantaneously to anything that's directed at me.

My mentor is a family friend from Ireland (where I live). He started off smaller than 100k, withdrew profits as he went along, so he hasn't got anywhere near the figures you're all quoting. There's no point me mentioning his name because he's never done anything in the media and only ran money for family. He was probably lucky to have been investing during the historic 90's bull market, but then again, Buffett was also investing in a similar bull market at the start of his career. I'm sure there are plenty of people out there who no one has ever heard of who have even better records.

First of all, I have no intention of shorting any stock, let alone Amazon. You could be waiting several years for the market to correct itself and even then, the most you can ever make is 100%. Secondly, I think you guys are all basing your investing decision over criteria that's really irrelevant. I mean seriously, the available colours of the Kindle, the battery life, whether the unit is touch screen or not, etc; generally, anyone who wants an e-book reader will be buying regardless of these factors. Maybe I can put my argument more simply. Does anyone here think that Amazon can sell 6 times as many books/e-books that they're currently selling to justify the enormous price that the stock is asking? I'd like to remind you, that since 2001, it has taken 9 years for Amazon to merely double their sales. Also, considering Amazon already have 70% market share, they're going to need Americans to start reading 6 times the number of books that they currently read. Is this really going to happen?

I agree, but I'm afraid your example actually further backs my point up! The likes of Google and Apple would have far more intangible assets than Amazon, but yet they have price/book multiples of around 6. For a company to have a ratio of 16, I would be looking for the most incredible business ever. I simply don't see that here.

This veneration of Buffett as some kind of once in a lifetime, God-like Superman is really starting to grate on me. My mentor has compounded returns of 80% over a 12-year period. He didn't do anything different than Buffett either, he lived, breathed and drank investing for 12 years. Now I'm not saying that just anyone can do what Buffet can do, but it's nonsense to suggest only Buffett can do it.

When the market tanks 8% in one day, back the truck up, close your eyes and buy anything.

Some food for thought on Amazon and the book market. Insiders have been flogging shares at an incredible rate - http://www.gurufocus.com/InsiderBuy.php?symbol=AMZN. The price is trading at 17 times book value. If there is even a sniff of trouble, you're going to get wiped out. Amazon already have a 70% market share in the book market. For Amazon to trade at a fairprice, my back of the envelope calculations estimate that they need to sell 6 times the amount of books that they sell now. The digital book market was worth $80 million in 2008. I don't short stocks, but if I ever started; I would pick Amazon.

My first port of call is to check my RSS reader which I've set up to recieve SEC filing updates on various companies that I'm interested in. Not really too bothered with reading up on the macro situation. Usually look at microcap stocks and prefer blogs that get down the meaty analysis of stocks. These are blogs I particularily recommend. www.shadowstock.blogspot.com - This guy just knocks great idea after great idea out of the park. Doesn't seem to get hardly any attention, maybe because he focuses on microcap/nanocap companies. www.greenbackd.com - Not sure if there is a better site out there for liquidations/spin-off's/mergers. www.stocksbelowncav.blogspot.com - Very solid stock analysis in the true Graham style. These are also good blogs. www.unchartedstocks.com - Mostly general microcap news, but there have been a few very decent picks. www.microcapspeculator.net - Not a fan of the technical analysis/gold stuff, but there's definitely material worth reading here. www.oldschoolvalue.com - Fairly popular blog, loads of great ideas. www.manualofideas.com/blog - Same again. www.streetcapitalist.com - Mostly general news stuff, but often a few good ideas. www.stockpursuit.com - Against some gold/technical analysis stuff I'm not keen on.

12 replies and 6 people think gold is the bubble. Hmm.