opihiman2

Reading threads like this on here is really enlightening. I was pretty surprised that 4 hours ago, it looked like the remain vote would remain. Shocking to see that change so rapidly. But, I don't understand why people were positioning themselves strongly on one side or another on this. It was such a close vote in the polls, and I could see it go either way. It's like betting on a coin toss. Anyways, will the votes even matter? Will the politicians actually follow through? Thoughts?

SHLD. They are going to be the next big retailer to go under. I will short them on strength soon.

LoL! I just read this entire thread. I really wonder about this board lately. They say hindsight is 20/20, but I thought the few detractors and skeptics were right on. The thing number one thing I've learned in life is that if it sounds too good to be true, it probably is!

Taxes are huge and can take a significant chunk away from alpha. There was a post on here from some user, I forget his username but he completed a CFA, that did some backtest on EV/EBITDA -- I think, can't quite remember the strategy criterion. I remember that the portfolio was rebalanced all the time whenever a new stock was added or subtracted from the portfolio, and I thought, the returns he found were just too unrealistic. So, I re-did his calculations and adjusted it for all of the short term capital gains taxes that had to be paid out every year. It took a sizeable chunk away from returns (over 25%). Holding even one day longer, for most people, will reduce that down by nearly a half. For my strategies, I don't sell until 366 days unless certain things happen for my sell criteria to kick in.

Ah, ok. Memory might be iffy right now. I actually had their 2015 shareholder letter opened for awhile and remember this part: "As the table shows, there have been two five-year periods when our annual book value growth was below 5%: 2001 – 2005, which was part of our seven lean years, and recently, 2011 – 2015, due to the defensive measures we adopted because of our concern about financial markets. You can see that our average combined ratios for the last two five-year periods have been excellent (i.e., float at no cost) but the average total return on our investment portfolio in the last five years has been the lowest in 30 years. This has been by design as we worried about the speculation in financial markets and the potential for a 50-100 year financial storm. And we wanted to be sure to survive that! We expect to make up (in a hurry!) for the low average total return on our investment portfolio over the past five years and, combined with disciplined underwriting results, return to average annual growth in book value per share of 15%. In spite of poor book value growth over the past five years, the intrinsic value of our company has increased verycsignificantly even though it is not shown in the book value numbers" I took that to mean they were going to take the hedges off and chase performance. Seems like they are, at the very least, going to chase performance! I hope they don't plan on doing that in the US equity markets.

^^ Yeah, I remember reading that in the FFH sub cat. Fairfax is now saying that after years of dismal float performance, they are now taking hedges off and looking to chase performance now. I have a feeling they are going to blow themselves up soon with a mean reversion type event. Seems to happen to the best of em (Sequioa, Baker Street, etc...)

Sorry folks, if you're confused by the "sub-category" in the topic. I initially posted this over in the Investment Ideas. I think ratiman is right. A lot of the blow ups have had some jockey (well, SD and SHLD mostly) bent; but, mostly there was a famous investor like Watsa, Pabrai, Einhorn, Ackman, etc..., investing in the common. I wonder, though, what their real win/loss percentages are like nowadays. Pabrai seems mostly like a coin flipper to me nowadays. Watsa and crew have kinda gone nowhere these past several years by hedging and betting on another major blow up. Now they're taking hedges off (at the worst time, IMO) and going back into the markets after one of the longest bull market runs and peak market valuations. I wonder about those guys. Einhorn is buying things that just makes no sense to me. Yelp? What? Much thanks for the responses. I'll take a look at the other threads. But that SD thread is super long and I'm barely 1/3 of the way through it. If I find some common themes, I'll post some lessons learned. I might have to skip the mega threads, though, like SHLD and SD.

I haven't perused this space in years. I usually just find my own ideas and run with them. But, recently, I found out SD went bankrupt and remembered a huge long thread on here. I also remembered FFH also bought SD. I'm going through that thread and it's pretty interesting to read the thoughts and musings on there. Hindsight is 20/20, but still it is entertaining to see how members' ideas and theses played out by going through some of these threads. KMI is another thread I just finished reading. But, I'm just wondering, what were some of the major blow ups here? I see VRX, CHK, SD, the mlp's (actually, oil and energy related stocks in general), SHLD (which, at one point, I thought about trading after reading the board post but decided not to since it was outside of my normal strategy), ZINC, SUNE, TWTR... those are the only ones I can see. Are there any more? Do people on here do post-mortems on these things? I suppose it only makes sense for the ones with permanent loss of capital (bankruptcy). But, I think it would be great to peruse them and figure out some lessons-learned. Thanks for reading.

It seems like I'm seeing lots of X-posts from Reddit on here. Anyways, I share a lot of his same macro sentiments. Except, instead of buying gold, I'm just in cash now looking at muni bonds for the time being.

I think the price action of oil is getting interesting. Yesterday, I thought that if oil closed much higher than the open, there is a lot of strength in the buy side. Today just confirmed it. It seems to me that the market is looking for any reason to push oil prices higher. I think that's a good sign for a short term trade going long. Long term, though...who knows

Cardboard, no offense, but you remind me of what I find wrong with a lot of value investors nowadays: the need to be right. Instead, I think you should have the need to win.

For one, S.A. was burned before by supporting prices and cutting production when other countries did not. In the end, if S.A. cuts production from S2 to S1, and prices go up from P1 to P2, they are probably still going to be making the same amount of revenue but lose market share. S.A. has already said they can increase production by another million barrels. They probably will to make up for lost revenues.

Oil futures down by 5%. I hope to see Brent back to the 30's. F U oil, LoL! I just want to see all the weak hands completely purged from the oil markets.

Doha meeting went kaput. Not surprising since Iran has been saying over and over again it will not cut and S.A. is ready to go full on oil war on those guys. Monday is going to be interesting.

Wow. I haven't kept up with Mr. Chou's funds, but damn, those losses are now putting his returns well below average. This past year has been pretty bad for some of the big name value investors. Really humbling and makes me wonder about my own strategies going forward.

http://gregmankiw.blogspot.com/2016/01/putting-oil-prices-in-perspective.html Another way to adjust oil prices for inflation. It is interesting to see that even after several decades, oil prices have no noticeable upward trend.

Sounds like all out war between Russia and SA: http://www.telegraph.co.uk/finance/economics/12046185/russia-opec-saudi-arabia-bluff-40-oil-price.html Wasn't this done in the 80's?

Shoots, haven't read through this entire thread yet. Been away and forgot about it. I should apologize to anyone offended by this post. I posted this topic without much consideration, and I was pretty drunk to boot. After reading it, I realized it was an asshole thing to do. Again, apologies to all those offended. Besides, we all make investment mistakes. No one is perfect, especially in this game. Anyways, I'm starting to get interested in some of the oil majors. I am going to peruse all of the oil threads again. But, do you guys think dividends will get slashed if oil stays in the 40'ish range for the next 10+ years?

Bumping up an old thread as a tale of caution.

I hate to rub it in, but why were people plying into oil companies on here when oil was priced at ALL TIME adjusted highs??? I have to ask again, because what happened to the critical thinking on this board?? And now, when companies are priced to perfection amongst excess liquidity, why are you guys still buying equities? Where are people finding true value nowadays? Because, besides the USD, I can't find anything worth buying.

I also feel like the markets are way overvalued. I don't know about 1999, because back then, the bubble was mostly in the Nasdaq. It was completely ludicrous, and I remember telling everyone back then to pull out of the markets, and to not leave their safe haven fortune 500 tech jobs for the start ups. Nowadays, I don't really see that. What I do see is a high probability for a mean reversion event in equities. The signs are everywhere. We've already seen commodities pop. The next big thing to go is the bond market. When interest rates rise, the equities markets will tank. We've already seen over 10-15% drops in equities when QEx was about to end. Last Nov, when speculation of interest rates were going to rise happened, equities tanked by 10% before the Fed came in with dovish language--basically a rescue. When they do increase rates, I think markets are going to tank hard. Also, you have a lot of people talk about the lack of value in the markets, and some people even blatantly saying that markets look pricey. The Fed's new chairman even said this recently, but bit her tongue as to not stir markets. Buffett has even come out and said there is a dearth of value in the markets, and before he died, Irving Kahn said the same thing. I've been hearing a lot of notable value investors say that there are barely anything worth buying nowadays. If one looks for more evidence, we all know about CAPE, Tobin's Q, GDP to Total Market Cap, all of which are near all time highs. Interest rates are at an all time low, profit margins at near all time highs, corporate buy backs are insanely high (which makes me think that we're reaching market tops as the "dumb money" is misallocating capital), valuations in tech do not make sense (SnapChat, Uber, Facebook, etc...) somewhat like the dot com bubble valuations. Also, this is second in line with the longest running bull market, and we haven't had a recession in the current business cycle and we're well over due for one. All in all, everything points to a large mean reversion event coming down the pike. My bet is sometime within the next two years. Going all cash wouldn't be a bad bet right now. That's what I'm doing.

There was supposed to be a strong el Nino last year. That got downgraded by NOAA, and actually, we really never got one at all. There were barely any storms worth mentioning this year. I will just take the wait and see approach.

Wow, lots of really interesting and useful replies. Thanks everyone. To answer some of the questions, I was in IT but made a break from it into management consulting. I had an oppty to get into a really junior role at a local asset management company running a value investing fund (200 mil AUM), but I decided to forgo it for government work. I would like to make a break from what I'm doing now to do portfolio management for public entity pension funds. Maybe working at CalPERS or CalSTRS. I am curious, though, for those who felt that it did help your careers, are you in finance? If not, what field(s) are you guys working in? Just wondering if I should do the CFA or MBA instead. Maybe MBA would open up more different kind of doors.

I am thinking of writing the CFA 1 exam and perhaps do the entire charter. Although, at my age, I don't know if it would help me in terms of my career--which is not in the financial industry. I was wondering, has anyone done this later in life (over 40)? Had it made a significant impact on your career?