alwaysinvert

No wonder Apple makes heaps of money, btw. Most of these books are almost impossible to come by in a less legal way and I have spent several hundreds of dollars in Itunes Store the last few months...

Thanks for all the input. I haven't read that many business story books and found most of them to be glorifying and not very nuanced at all (written sloppily to sell only by name association), but of course there must be some golden nuggets in that lot too. Will dig through and see if something stands out. I listened to an interview with one of the authors of the Goldman Sachs book and found it very interesting, so maybe I will start with that one. Can you pick out 5 favourites, hpmst3? Will check out the podcasts mentioned as well.

Those are all good recommendations. I've read most of it but will check out Greenblatt's new book, although his last one wasn't that great in comparison to his first. Thanks.

I've become quite an audio book junkie since I got my Iphone last summer. The problem is I'm running out of interesting audio books, and sadly many of the books I would want to listen to is not available in audio format, so I'm kind of running out of ideas. The genres of interest are pop science/social sciences/anything investing or business related. Pretty broad, in other words. Podcast recommendations are also appreciated. At the moment I regularly listen to WNYC, Freakonomics and 60 minutes, among others, but would like some more suggestions. The most recent audio books I listened to were The Greatest Trade Ever and Michael Lewis' book on the same subject (the name escapes me now lol) and I found them very well-fitted to the format with the narrative style, so I will start out by warmly recommending them. Also Guns, Germs and Steel was a great listen. Hit me!

There are quite a bit of legislative action going on throughout Europe in regards to online gambling, too, so I would not view it only as upside potential in terms of that. The Betfair model is great of course, only providing a betting market and taking a small cut from the winner in two-sided bets and not acting as the house in any market, thus allowing for odds to be higher almost invariably for the players. OTOH, a vast majority of the players just don't care that much about the odds, and different bonus schemes may be more effective in generating customers. Care to elaborate on the monopoly comment and growth prospects? In terms of player streams, online gambling as a business is verrrry hard to forecast. The leaders from some years ago are pretty much wiped out. If someone is undercutting you or in some other way outbesting you, you could se your customer base vanish extremely quickly. There are hoards of online poker/gambling companies out there just waiting to enter the slaughterhouse after enjoying a few fat years some 5 or 6 years ago.

A clear case of insider trading in my layman opinion. Sokol buys stocks very shortly before he brings up to case to Buffett (an action he well knows is positive expected value for his position in Lubrizol). That is both insider knowledge about the stock and acting upon it. The real question is rather why Buffett didn't force Sokol to sell before the deal went official.

I think emotional attachment might be a way bigger bias for me. Finding something else that I am as sure about as my present holdings is enormously hard.

I'm not going to address every single one of your statements, because it would get way too long and my purpose of reading and writing on this board is not to discuss politics. But anyhow, I don't agree on your main premise that businesses in any country owe an endless debt to their governments by the mere fact that they are operating there. I don't view the individual as a means to the government's purposes and consequently am not morally outraged by agents doing their best to further their own interests in the prevailing climate. Myself, I happen to live in Scandinavia aka the utopia of American liberals, and I actually feel pretty sad when watching loads of 'progressives' overseas arguing in favor of a move towards more power in the hands of government. Americans of all people should know better. Heck, you guys fled these countries because of oppression from the state and church. Your definition of a parasite is curious, too. A parasite, If I'm interpreting you correctly, is a producing member of society that do not want to give all their riches to the non-producing branches (i.e government)? That seems... backwards. In order to be a parasite I think you would have to detract something from the rest. Like government does :) Thus, I also think that keeping governments in check to prevent them from becoming predatory is a way, way more important cause than any number of arbitrary social causes that the government/different ideologues invent to further themselves. Lastly, I think everyone on this board would be hard-pressed to say that Google do not and will not give way more back to American society as a whole than they take away - even if they do not pay US corporate tax. Anyway, of course it's not good that companies operate under different game rules in terms of taxes, since that implies competitional imbalances. But that is a sign that the government is doing something wrong, not the companies - and even if you do not agree on that, the only way it actually will change is if the government changes its policies, so whining about the immorality of big business is pointless. Got a bit long but that's about all I've got to say on this subject for now, I'm most certainly not going to enter a flamewar on politics. Also, I have strayed from the main point that I was trying to make, upon which I got attacked, and that was my moral outrage at bigger countries bullying smaller ones into adopting policies not of their own choosing (which is happening everywhere right now), and that's something that I think is truly disgusting for a country like US, which calls itself free and democratic. And in addition, a plethora of differently tweaked societies will most certainly benefit mankind more than a grey mass of similar social and economical rules. If history can teach us anything, it's just that. Take care.

So basically you are making an argument for changing the system, which stems from the competition between systems making glaring holes in the US tax system perfectly clear. I don't see where your problems with my statements are? Agents in economies react to incentives, there's just no point in being morally outraged at widespread behavior that's not even illegal. Surely, Google moving altogether would not at all be preferrable for the US economy as a whole and most certainly not from the perspective of the treasury department, right? If income taxes were too high in an international perspective they most probably would move completely, though.

LOL INMO you are part of the reason why this country ..... You are really for billion dollar Corporations paying nothing in tax? Seems like a weird position unless you own a big chunk in a billion dollar company. JOHANN HARI - But, you know, just to talk to something that Allison Kilkenny was saying, as well, about GE, these big companies, they justify this behavior by saying, "Oh, we do it all ourselves. We produce all this profit ourselves." I’d just like to say, try—let’s just do a thought experiment. You know, for one month, I’d like to do an experiment. Say Philip Green, the guy—hugely wealthy guy, refuses to pay taxes in Britain. Let’s take one of his stores for one month and take away all the services he refuses to pay for. So we won’t collect the garbage out of the back. When the rats come, we won’t send pest control. If there’s a shoplifter, we won’t send the police. If there’s a fire, we won’t send the fire brigade. If the staff get sick, they can’t get treated in public hospitals. And let him come back at the end of that month and say he did it all himself. He doesn’t do it all himself. These people make money using the infrastructure that all of us pay for. Now, there’s a term for that in medical literature: it’s called parasitism. If you are feeding on a body but contributing nothing to it, you’ve turned yourself into a parasite. --- I tend to call a spade a spade, or a tax dodger a tax dodger. If you dont like a countries tax rates dont do business in that country or lobby to change them. First of all, I'm not American. I live in a by your standards very socialist country, so please don't play the ignorant card on me, and take your ludacris parasite talk somewhere else. If you were aware of European history, you'd know that the foundations of the industrial revolution and our modern society were built on a VERY politically fragmented continent where lots of extremely different systems of government were battling it out against each other (you might for example have a look at how GB/Netherlands complemented each other during the early modern era, for one). There's absolutely no reason why sacrificing diversity for conformity for the mere purpose of bringing in a couple of billions extra a year to the treasuries will make our lives better off in the long run (deficits or not), when tax pressure already runs at 40-70% in the Western world. On the other hand, bigger countries and organizations shadow-governing peaceful and successful countries like Luxembourg, Switzerland etc... That is a real problem. Damn, Switzerland is not even a member of the EU and STILL are totally unable to fend off 'anti-terrorist laws' and whatnot. Countries having different systems of government is the only way we might keep the darker forces of government in check. Please keep in mind that the vast majority of all states that exist and have ever existed have been predatory in a way that would make the Sicilian mob blush. Something to think about the next time you complain about the existence of tax havens (i.e diversity and competition between states).

The day when US/EU finally have bullied all the 'tax havens' into complying with all of their demands will be a very sad day. At that point, when the competition is gone, there will be nothing whatsoever stopping them from turning predatory for real in terms of taxes.

6: an ISP, a home-service provider, two banks (one full-service, one internet-based broker), a tobacco company (85% market share in Sweden) and an investment company (of which their biggest holding is the broker, 20% of the portfolio). I am considering just dumping the investment company altogether and investing in one of their other core holdings directly, which is a monopolistic company that owns ski resorts, decently priced at about p/e 15, IMO. They also have a stake in an investment bank, which is a business that I am probably not alone in being weary of here. My biggest holdings are Bahnhof, the ISP, (mkt cap at about 320m SEK) at ~40% of the portfolio and Avanza, the broker, (mkt cap at 6.6b SEK) at ~25%, including the indirect ownership. Both are extremely high-growth. Bahnhof has gained some international notoriety for hosting the Wikileaks servers :) http://www.youtube.com/watch?v=V2hG_BxSVVs I'd say my holdings indicate that I'm more like Fischer/Munger, although not as fond of tech as Fischer.

I take the polar opposite view, and with all respect for the suffering in Japan, say that much of our perception of this nuclear situation comes from fear-mongering. Still, the cost of nuclear power seems to be far less than that for the alternatives, like coal and oil, even when counting risks in running old plant types with much lower safety than new breeder reactors. After all, the direct deaths from the absolute and utter catastrophe (7 of 7 on the scale) in the corrupt and malfunctioning Soviet Union, where the meltdown went on for months, was a 'mere' 57 people and at the very most 4000 cases of cancer. Here in Sweden, we stopped building, upgrading and researching on nuclear power after a referendum following the Harrisburg incident. The public paranoia was massive and the debate climate a joke. Decisions on this matter should absolutely not be taken in connection to this incident or to satisfy public opinion in any way. An old type of reactor, which are being phased out, gets hit by first an earthquake, then a tsunami and even then the situation probably won't measure up to that of Tchernobyl. I honestly don't think that's a very bad grade for nuclear power. Meanwhile, fossil fuels kill multiples every year of what Tchernobyl did in a, up to this point at least, incomparable event. So what are we going to do, hope for fusion power and solar energy while we keep our oil and coal dependency? Cliffs: The word meltdown sells.

Could you elaborate on why you think so? Just curious. A giant investment company managed by virtual unknowns (even if they're handpicked by Buffett) with incentive based fees doesn't seem like a very good d€eal for shareholders compared to just going with a smaller (but still big) fund or an investment company with better maneuverability. Whereas, these days at least BRK can be said to be run by the best capital allocator in the world. I just don't see a decent argument for investing in a BRK that's 3x the size of now 20 years down the road in comparsion to the alternatives. On the other hand, if they turn it into a dividend spitting machine... As for the other question, I just expressed myself sloppily. I didn't mean the money they keep in treasuries for reserves or the 'just in case' cash. Just the public stocks.

Not that I was asked to give my opinion, but this seems like ill-conceived jealousy or intolerance to non-conformity to me. When your kids are old enough to know the difference, I think they will be old enough to know that you are an exception (and that you, most likely put in loads of work earlier to get in this position). Until then, they will benefit from your increased ability to attend to their needs. Provided you are able to hammer in that message, obviously. Which might be easier said than done, for all I know. I don't have kids but I have kind of overlapping experience since I have been making my living in an unconventional way (no, obviously not anything illegal; online-poker, which has been highly lucrative the last few years) for a couple of years and have had to smooth it over quite a bit both for my immediate family and more distant relatives. To the extent that my relatives know the details of what I do, they have been pretty dismissal and/or judgmental. I just don't think you should listen very much to anyone else's judgment in relation to your own life. And, most importantly, beware of feeling guilty/ashamed of the fact that you fail to conform to the norm. Obviously, take the life-advice from a 22-year old for what it is worth :)

This annual report just strenghtens my conviction that BRK, when Buffett/Munger steps down, should spin off their publicly traded securities to the shareholders and start paying out the bulk of the earnings of their subsidiaries in dividends.

1) I don't have any strict rules in regards to this. Can't see any situation ever in which i would feel comfortable having mopre than 50% of the portfolio in any one stock. At the moment I have 30% allocated to one single stock. 2) None, have never even thought about it and don't see the point. 3) Yes, I have done a couple of different arbitrages, 2-3 a year this far and I wouldn't call them investments necessarily. Some of them have been blends, though. 4) Yes, although it's hard for me to pinpoint one or two factors that would stand out as more likely in most cases. Since I haven't done many workouts or netnets, the catalysts aren't as clear. "Value as its own catalyst", as some would say. In some of the more arbitrage like situations there have been more clear cut catalysts. For example a position in an investment company, which habitually have made buybacks and stock tenders whenever the stock has been trading at a discount to NAV for some time, and indeed did end up doing so. 5) Nothing of the sorts, at least not knowingly

I find it very hard to view his investors as unknowing victims.

But owning a VIX ETF would make you profit on big market moves in both ways, which of course, ceteris paribus, is more attractive than only on the downside. I'm not looking to short the market per se, I just thought that this maybe could offer a good risk/reward alternative to cash. Regarding the contengo, I had suspicions of that being a great factor. It's too bad.

VIX is at more 'normalized' levels now. Has anyone bought hedges via a VIX ETF? Probably nothing for the fully invested, but how do you view this in comparison to holding cash? A basket of puts in presumably overvalued companies would be less cost-effective, I guess.

If they could make $5 per user and year, they would make $2.5b a year. Now, making $5 a year on each user doesn't seem wholly unreasonable in my view, albeit those figures won't be made in the very near future. Also, I don't see any near-time cap in user base. 1b in 5-10 years is not a bold guess, and to me, although I'm a highly modest user, the model seems too sticky to go away. Of course, this doesn't fit any value parameters whatsoever. I'm just saying that this is quite different to Yahoo at 100x earnings some 10 years ago.

What is your benchmark? BeerBaron OMXSPI

ROIC I probably did 40%, at least. Quite liquid at times, though. And my benchmark index returned 27% 2010, so in that respect I probably had a much easier ride than most here.

What about Buffett, Watsa and Klarman and for that matter, Soros and Blackstone? I think they would be worth paying 2+20 for. 15% and 20% gross returns translate into net returns after 2+20 fees of roughly 11% and 15% - pretty respectable, imo. So, the question boils down to whether there are sound managers out there who can achieve greater than 15% gross returns. I think there are. You do make a valid point about the difficulty of differentiating between the real superinvestors and the others who are just "lucky monkeys." However, if you accept that we can pick winners like Watsa and Klarman (who are not pre-identified superinvestors), then you can't rule out the possibility of finding other superinvestors. I agree it is risky just to look at past performance because you can fooled by randomness. You can reduce the risk of being fooled by looking closely at the investment style and philosophy of the manager and whether he sticks to his claimed knitting. I do accept that we could pick risk-adjusted winners "after the fact", for example Klarman, by looking at their past performance both quantitatively and qualitatively (but certainly not just quantitatively), although I still wouldn't pay 2/20 for them. You could call that my margin of safety.

If I am being fooled ..it is by the same (remarkably consistent, long term) randomness that is fooling every other investor here. These don't look like the historical records of random after fee returns, they look remarkably like the major index funds on steroids: http://www.vertexone.com/wp-content/uploads/pdfs/Alternative%20Funds/Performance-Sheet-ALTFUNDS.pdf http://www.sprott.com/docs/Performance/opp_hedge.pdf I am not questioning their ability to beat the index before fees (I'm not familiar with those funds at all), it's just that I hardly think there would be anyone in the world worth those fees. Of course. after any given period, if it's not too long, there is still going to be someone who actually did beat their indexes, but that's just basic survivorship bias at work. This is just the opposite of the tale of the superinvestors, where the overachievers were pre-identified.