alwaysinvert

Not to pick on Uccmal, but do these studies include portfolio changes when dividend grower slashes dividend? It seems self evident that "dividend grower" will perform acceptably while it grows dividends. But what happens when it has a problem and slashes dividend. Won't you lose a lot of previous outperformance by switching to something else at the worst time? Alwaysinvert, Jurgis: I cant do Dremans book justice here. You just have to read it. Anything I write will be taken out of context. Its an awesome book, amd he has corrected for most of your concerns. Alwaysinvert: I am staying out of the buyback argument on this thread. Been there done that. I did read it ages ago and from my foggy memory it indeed is a good book, but what you said is not something you even need historical research to prove. It is logically self-evident from the properties of the compared groups (one is self-purging and the other is not). Of course, if it's all corrected for the finding is a completely different thing, I'll have to check the book for that. As for some buyback vs dividend argument, I'm not that interested either. Both tends to be imperfect for different reasons. I was just speaking of cases that I anecdotally have found to be the most ripe for mispricings. I don't hate dividend investing by any means, it's better than many alternatives and may very well even be better than indexing. But my opinion is just that the theme is way overused for value investing (and that's not saying it's of no value whatsoever in value searching).

That's a trivial conclusion. Of course that has to be true because dividends ultimately have to be grounded in profits, so as a group of course dividend payers/growers are going to be more healthy than non-payers. The issue is if you can find other markers of good performance besides dividends that may be even better. For example share shrinkage. I think dividend champions and the like are generally way overrated. Huge portions of the market are addressed towards investing in those stocks at the exclusion of every other kind of stock. I absolutely love to identify companies that could be huge dividend payers but for some reason or another aren't. That's a very hated subset of the market and if price offsets it or if there are good reasons, I will bet on them.

Thanks, Parsad. Does anyone remember a presentation in which Pabrai was talking about an investment he made during the IT bubble where a tech company was attached to a regular boring company and was later spun off or something and achieved a giant valuation? Can you link me the youtube video? Would be very grateful, thanks.

They have a profit share program called Oktogonen which is the biggest shareholder in the company. It gives out shares to all employees equally and has made numerous low-level employes millionaires. Basically, if the company outperforms its peers in profitability and doesn't cut the dividend it is obligated to deposit into it. Employees can withdraw their money only after they turn 60. I'll check out the book, thanks.

Well, you could say . . . The thing about Buffett is that no one would have ever heard of him had he not had the lucky break to get turned down by Harvard and wind up going to Columbia to study under Ben Graham. Remember, before Buffett was exposed to value investing he was trying all sorts of harebrained investing schemes, such as charting and technical analysis and so forth. Now Buffett would have probably figured out value investing eventually on his own, but his story would have been quite a bit different, and his years of great compounding would likely have been delayed by at least a good number of years. He had been familiar with Graham and his writings for quite some time before going to Columbia, so your timeline is incorrect. What you are talking about was something he dabbled in for a very short time in his adolescence. Basically, Buffett was always a value/fundamental investor. Graham just expounded those ideas the best.

http://www.borsdata.se/en For Scandinavian stocks. They are still adding stocks in Norway and Denmark, I think, but Sweden and Finland is completely covered as far as listed companies go.

That's generally not true, because the hands that you lose a lot of money with are also the ones that you are supposed to make a lot more money with. Hands that you never lose a lot with rarely earn a lot because the second best hands are most often distant seconds.

He has a bunch of non-US holdings that are unreported to SEC, I believe. BTW Horsehead was the only original idea in his current portfolio and it didn't do well so far. Mining is tough! A couple of Indian stocks of which he mentioned a few in an interview when he was in India and Hyundai Preferred. And maybe some other stuff.

Here bigger shareholders don't pay taxes on dividends. There are also very good account options, with almost no limitations on funds, for private investors that take away dividend taxes. Also, yes my impression is that stock options are a bit more common in the US, but I think we are inching closer in that area. And buybacks haven't been allowed for as long as they have been in the US so we may still have some catch-up to do there. There are other possible factors too. In Denmark for example the number of shares outstanding is generally very low compared to here in Sweden. That will of course have an effect on the ability and willingness to repurchase shares and it seems to me that Danish buyback programmes are much more uncommon and if they have treasury shares they are more likely to sell them or use them as currency.

Share structure changes lend themselves to loss engineering where I live. I have no idea if that's the case in other jurisdictions. It's because of a provision in the tax code which allows you to choose between paying 30% on your profit OR use 20% of the selling price as your GAV and pay 30% on the remaining 80%. So if you for example get new B shares "for free" you could use this method to generate tax losses on paper, because you can declare all of the loss in the A shares but only have to declare 80% of the profit in the B shares. This is only applicable to different types of shares in the same company (A, B, preferred and whatnot). Spinoffs do not fall under these rules and neither of course do regular new issues of shares. If anyone knows of any companies which are changing their share structure in the near future, I'd love to hear it. Of course, the more new shares issued, and therefore the larger the loss in value in the original shares, the better the arbitrage is.

Mathematically it is not possible for them to buy 20% of the share float in quick time. About 500 shares trade daily, it would take 660 trading days. For this reason, they need "single large transactions". Buffett's letter talks about that one day, 10 to 20 years from now when they may be unable to deploy capital intelligently. I believe that this frames the context. Could they not buy stock from the Gates foundation? It would be a win-win. The foundation gets rid of stock in an easier/cheaper/faster way and BRK gets a big chunk bought back at a cheap price, also while not disturbing the market price during. It also has the upside of not taking advantage of a badly informed owner.

Pretty much anything about this will be loaded with politics or at the very least coloured by what school of economics you subscribe to (and yes monetary policy, too). I like Friedman, though. Throw in some Keynes and Hayek for good measure, maybe? That's very specific but some authors who are at least tangential: Marx, Weber, Malthus, David Landes, Jared Diamond, Deirde McCloskey, Gregory Clark. Maybe there are some good history books on this specifically but I don't know of one. Bruce Bueno de Mesquita. Bryan Caplan (The Myth of the Rational Voter etc). Public choice theory. Lee-Kuan Yew. The Sachs-Easterly debate on foreign aid (featured in a couple of Econtalk episodes if you don't want to read whole books on it) . Don't know.

I listen to loads of audiobooks. Some recent ones that I enjoyed are Red Notice and The Emperor Far Away. Almost all new titles of a certain size gets narrated these days, so that's good. I like to come back to some titles that I have read the regular way and listen to them too. A nice way to freshen up on the material without having to focus as intently on it as if reading. Free my hands for dishwashing, driving or whatever.

Went back and checked. The first stock I bought was on October 6, 2008. I then gradually switched all my funds over to actively managed in the next half a year or so.

For a Swede there can only be one answer.

It's starting to get insane when people ask questions that are literally answered two posts above. Or repeating links/news which have been linked AND discussed on the same page. That's not only weak and lazy, that's pretty fucking dumb. Does people not know how old style forums work in the Twitter and Reddit age? It's not rocket science.

If your ideas actually were stupid, you would be more likely to get responses, because then they would probably irk someone. I'd bet most of the good investments here actually have comparatively fewer responses. There are of course dumb reasons for this or else value investing would not work. But there are also good reasons such as circle of competence, trading barriers etc.

I used to read that way when I was in college and in graduate school. But I wasn't a very good student, and I think my lack of engagement due to this laziness hurt me. Obviously smarter people can do it. That's why I don't like to think about literally copying Buffett or Munger, although I love to learn from them. They're a lot smarter than me. They might say to avoid spreadsheets, but I might need a spreadsheet just to calculate what they can figure out in 15 seconds in their head. Maybe I didn't convey my main point well enough. I wasn't advocating copying Munger and mentioning him may have been detrimental to my message What I was trying to say is that it is way, way more important to search out stuff that interests you and expose yourself to it than the details of how you do it. I personally would hate my life if I spent six months taking notes on Security Analysis and probably quit this line of work altogether and become a garbage man instead. But other people may have a higher threshold for boredom than me. Or an entirely different idea of fun. I'd also like to add the issue of marginal utility. I think reading Security Analysis once at normal pace, moving on to other stuff and then coming back and rereading the whole thing or some sections is actually a better use of time than picking the same thing apart for half a year.

Maybe this will sound unhelpful and I'm not an authority or anything, but learning is a lot more easy if it is fun and interesting. So I go where my interests take me. My take is that if you approach it as a job it will become a chore. And chores that you don't actually have to do will seldom be done. Munger was asked about how he absorbed his reading recently. His answer was that he just read. No underlining. No note taking. Nothing of that kind. Incidentally, that's how I have always done it too. I didn't take notes back in school either and was always chided for it by teachers. Admittedly, this was not part of some master plan, I was just too lazy. But recent stuff I've read about it actually seems to bear out my strategy; it's harder to focus on listening to the content if you are preoccupied with writing it down. I'm not saying this translates to note taking when reading in the least, but maybe rigor is not always the correct solution. Now, Munger is a genius and I am mostly just sloppy, so I grant the possibility that I could be wrong and a more pedantic approach is best for most people. However, I would also add that things you have read can still be benificial even if you can't recall all that much about them some time later. They still build your mental framework . Thinking about some behavioral econ factoid, I'm not so sure I could say if it was from Kahneman, Ariely, Thaler or Cialdini, but what does it actually matter? I am pretty sure I have learned more by reading all of them instead of studying Influence for a year.

It's nitpicking, but I would say that the problem isn't that Buffett is too nuanced, it's that the people who follow him aren't nuanced enough. Buffett says "it's bad when hedge funds do this and that" and all people remember is "wow, Buffett really dislike hedge funds". It's like they dumb down what he says, and then attack that dumbed down version. That's no Buffett's fault. People just can't deal with nuance, period. And they tend to hear way more or way less than what was actually said. Following the Berkshire meeting via Twitter was seriously freaky. The amount of misquotes and misinterpretations was astounding.

I was always the smartest kid back in school, but as I've grown I've had to accept that there are many much smarter people and more diligent than me in every field out there in the big world. That's why I try to be a generalist. I'll never be the smartest, but luckily enough investing is a field in which you can do pretty well over a long time and end up at or near the top in the end. I don't think there is any one sector in which even Buffett is the most knowledgeable in the world. Maybe, maybe insurance, but then again there is Ajit Jain. Investing is like decathlon, not the 100 meters. That said, I'd be lying if I said that I didn't want to be recognized as very good. However, I think there is so much in investing that is about delaying gratification. Constantly comparing yourself to others in this field is mind poison.

And that's why I think consciously not aiming for maximum dividends has a high likelihood of being a market-beating strategy. Not that you necessarily need to beat the market with $10 million. Much of my portfolio is allocated to companies that are "underyielders" compared to both their market price and their available funds.

I second Guns, Germs and Steel. I liked 1491 too which was also recommended by Munger a couple of years ago. Haven't read the sequel 1493 yet, though. Anthony Kenny's History of Western Philosophy is good too. I can also recommend Destiny Disrupted by Tamim Ansary which is world history told through Muslim eyes. If we are talking only financial history, there are few books that beat The Match King in my opinion.

I'm not going to do it again but I have scored both INTJ and INTP in the past. The results here do not surprise me in the slightest.

"The problem with quotes on the internet is that you can't always depend on their accuracy" Abraham Lincoln