arbitragr

... and I thought I was a concentrated investor!! :o

Too much flux going on in the media industry for my liking. old media vs. new media rah rah ...

Is there a reason why the yields are so low in Vancouver/Canada in general? If the downturn and unemployment is a concern then those low yields should be easing somewhat. In some markets overseas there's justification for low yields due to high rates of household formation from population growth and immigration, whilst supply is low/shortage b/c of low land inventory or availability of brownfield land to develop on (e.g. Hong Kong, Sydney) ... hence yields are remaining perpetually low despite the economic downturn. That is to say, whilst prices are high/inflated/bubble-like, they're not necessarily going to go down or crash like they are in the US. The US markets are very unique in the sense that there is a huge inventory overhang as a result of the over building during the boom years, and also the unique securitization and lax lending standards by the banks that prevailed leading up to the crisis.

By any chance, does anyone know what the general rental yields are in major Canadian cities or suburbs? rough ball park ...

Now ... would be low volatility would it not?? Back in early 2009, and late 2008 ... that was high volatility ... He must buy long dated put options, b/c whenever volatility spikes, options all of a sudden get expensive ... buying short dated options would be expensive ...

So basically he sits around buying put options all day hoping for a black swan. In the meantime he bleeds alittle everyday by paying small premiums. This means WEB's derivative contracts, which are the sales of put options, which is a Niederhoffer strategy, should go to the dumpsters. It's an okay strategy, Taleb has made money in this crisis. But it's not my style. It's a trading strategy, as opposed to being a business-man and buying/running a business. How does he figure out what is most likely to produce a black swan (i.e. 9/11 event)? Or does he just roll dice on anything and everything?

In my experience if someone wants to pull their money out, they should be able to whenever they want. If you don't allow them to, they'll just get irritated and more annoyed at you and you end up harming the relationship down the road. If you don't want this, then you have to put it in legal terms that there will be a lockup period and do this beforehand. Managing money is a professional and serious business, especially after and in-light of Madoff. Things can (and in this crisis it has) turn out worse than expected. If you think you might lose some friends (and possibly family) over this, then I would think very carefully about taking this on. Money/business and friendship don't mix IMO. Madoff screwed over his closest friends and even family to try in vain to keep a good thing going. Unfortunately for him, he didn't realize when he was getting delusional. I personally don't like to manage my friends and families money, not because I don't love them, but because I care about the relationship too much. If you've never done this before, then I would suggest that you try and get a job within the industry somewhere first, even if it's just back-office doing trade reconciliations or working on distribution dealing with client matters, and learn the ropes and soak up all the knowledge you can. Legal and admin fees will only get more prohibitively expensive going forward as a result of this past crisis, and most funds that have started up in the last 2-4 years have completely gone out of business or are sitting on -20%+ with very little funds under management. Try and give a presentation to new investors and showing them -20%+ returns ... it doesn't look to good and is hard. If the current downturn is going to be long and protracted, which I think it is, then most new funds that have started up recently will likely stay in negative territory for a longer while yet.

The problem with all this govt. meddling is that you get heaps of uncertainty. So one could assume that we could get inflation when the govt. prints money, so you can short long term treasuries e.g. via TBT. However the problem with "Quantitative Easing" is that the govt. is actually going out there and purchasing long term treasuries too, thereby pushing the yields of long term treasuries down, hence the value of TBT would go down. However just as quantitative easing can produce inflation, the govt. can also control inflation by raising interest rates again, this would send TBT back up again, and commodities down. Jim Grant doesn't like the Federal Reserve and thinks it should be abolished. I can understand why. They're creating all sorts of untended consequences, whilst in the short term we are all sitting there scratching our heads.

http://www.cnbc.com/id/31493290

I'm not a big real estate investor, but prior to this, I was hoping that there would be a serious Great Depression #2, so that world prices on everything would crash. Prior to the credit crunch, I was mainly in cash and was hoping to buy everything, even real property at bargain basement prices. Unfortunately the US Govt. stepped in and bailed out everyone, which sucks. In the end, still stuck to equities/securities/bonds, rather than real property. Where I live, the govt. has made things even worse by giving people tax incentives and govt. grants to purchase property, which has inflated prices even more than they should really be. The crash that was supposed to happen, never happened. I wish they would just let the free markets work sometimes and play out (crash in this instance), it's unfair to those who have done the right things leading up to the downturn and not get themselves into a sh*&tload of debt and ruin themselves. I can certainly see where the arguments for NOT bailing Wall St are coming from.

Most bonds are over the counter (OTC), or the most in-demand ones with best yields/terms. At a retail level you probably won't get the best up-to-date pricing.

I find it unusual that you would use a DCF or a variant of it (Gordon growth model) to value BRK. Never seen that before on a professional level.

experience counts. it gives you a better sense for markets and how to take advantage of them. you see more patterns and models, and you can sense stuff like mgmt BS alot more. experience is why ffh bet on cds in 2007 and won as the credit crunch unfolded. however if you're 50 and still got clobbered then you haven't learnt from history at all. most younger analysts in the industry are often accompanied by a more experienced lead analyst or portfolio manager.

If you need US residency there are investment based visas that you can attain, especially in regards to property whereby you set up a property investment holding company and manage your investments.

Hi Sanj. Are you still thinking about moving? Are you a US citizen? Wouldn't you need a Visa if you were to move?

Buying to invest, is not the same as buying to live/occupy. On an investment level it might seem reasonable, a bit like buying REIT securities. But I would never live there, with all the firearms concentrated there, your chances of getting shot increase dramatically.

"Detroit struggles as recession hits hard": Detroit - Industrial Ghosts: http://www.youtube.com/watch?v=pz_vDOrqOOQ http://www.youtube.com/watch?v=HuFBdjdhBVg Detroit crime: Detroit is certaintly not a place I would live in.

Detroit has one of the highest crime rates and is one of the dangerous places to live.

Nice. Thanks Sanj.

Bonds (munis, corporates) were on pretty high yields last quarter, like 20%+. Whilst their risk was quite low aswell. Additionally, I think with the bond markets WEB can just deploy way more capital than he can in the equities markets, the aforementioned bank holding rules being just one of the restrictions placed upon him.

I don't think WEB does DCF. Well not alot anyways. I don't think you need to. Just yield (or BV) comparison to alternatives on the market.

I've read bits and pieces of Snowball. It's just lying there waiting for free time to be read. I like the personal stuff actually, it gives insight into what makes Warren ... Warren. I think it's a good book for people who are experienced in investing and know about his philosophy and methods already. It sort of adds the finishing touches, and helps you understand why he behaves in certain ways and why he makes the decisions he does at a higher, more fuller, and meaningful level, not just financial. Some of his business decisions are not financial in nature at all, and are in fact of a personal sort (for example Washington Post and his commitment to integity and honesty). If you guys have time, have a look at page 15 of the photos in the book; the one where Warren is "at home in his kitchen, wearing a favorite threadbared sweater". Gosh he looks like a mass-murderer or someone psychopathic there. lol :D ;D P.S - Bertie Buffett was hot! :)

Yeah I mentioned a simlar thing about the bond market here:

Yeah, welcome back. You were always one of the boardmembers who had a lot of thoughtfulness in your posts. Anyways good to have you back. :)

I think this is getting way out of hand. Obama recently gave a speech in the Middle East. Not sure if you listened to it, but I think it might be a good listen just for some perspective. http://www.youtube.com/watch?v=tG34VmBucmE Respect and The Golden Rule. Let's move on. Peace. :)