arbitragr

Hi all, I was watching this interview with Guy Spier the other day on Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aA7KzcE854zE, and he talks about Buffett doing bad things in his youth (stealing things) at about 3:25mins. If anyone has read the Snowball or know where he or an author mentions this (what did he steal? is it just minor stuff?), could someone shed some light on it? Just doing some research, and trying to get an idea of how 'imperfect' WEB is ... and how 'human' he is. :D :D Cheers.

I know this is old hat, but with the bottom two quotes from the recent letter, am I correct in assuming that Warren tries to predict the future earnings and profitability of a business on a bottom up basis, but that he never tries to predict the market, industry or macro outlook at all (despite the fact that he has made some top-down calls in the past)? Quote 1: http://i163.photobucket.com/albums/t314/ripleyx/berk1.jpg Quote 2: http://i163.photobucket.com/albums/t314/ripleyx/berk2.jpg My take on it is ... that Warren is looking for businesses where he can reliably predict the future earnings stream the company produces with high probability, and that he is looking for solid, stable, predictable earnings ... and as a bonus ... a growing earnings stream into the future as far as the eye can see ... much like a bond and its respective interest payments. Hence why he bought Burlington Northern ... because the future earnings is predictable ... and also b/c Burlington is a large company, which he needs to move the needle. Many people have been confused by his purchase of BNSF, myself included given its valuation, however when you look at it from this angle, it makes a bit more sense i.e. predictable earnings stream.

He prefers to talk about that on CNBC and other media outlets. :)

Doh! I've already bought some! ;D Ah anyways, this goes back to our previous discussion/thread about WEB buying up Munich Re and Swiss Re and the Bermuda reinsurance companies:

Thanks for the heads up Sanjeev. Insightful. Finally some of his secrets come out. Not so sophisticated after all, mainly position and swing trading ... looking for catalysts. Some emini trading there too. Now ... if only I can get my hands on one of SAC's pds'.

These reinsurers have been doing quite well. They probably have even a better outlook given that the Fed 'won't raise rates for many months'. http://i163.photobucket.com/albums/t314/ripleyx/reinsurance.jpg My picks are RE and ENH, given their high quality combined ratios and higher AM Best ratings. If I recall correctly, Einhorn/Greenlight has a stake in RE. ENH recently beat analyst estimates by a wide margin for their most recent earnings announcement.

Better be a brawl ... or someone better get concussed for tonights game. :D Hope Ovechkin goes crazy. See his hit on Jagr? Baaym! .... I bet he's aiming for Crosby this game.

You should check out the unbundled commission structure; http://www.interactivebrokers.com/en/accounts/fees/stocksPricing2.php?ib_entity=llc So e.g. the last example; - sell 200K shares @ $5 each = $1M - cost = $1000 so cost as % of trade = 0.1%

If you're a large volume trader/investor you should maybe change to the unbundled commission structure. Works out cheaper. Might be a bit confusing though at first. Still, $15 commission (for both legs) is like 0.08% cost per trade (both legs). I think you've got worse things to worry about with that cost structure, especially if the stock goes down. ;) You should open up a paper trading account to get used to the system first - it's free.

Hi Hoodlum, What I mean by demand/supply is underlying demand using household formation and population figures, not the level of inventory. Such data might show a different picture.

Do you know what the demand/supply situation is like? Does anyone here know? Just a curious question.

Yeah you're gonna have to know Japanese. I've tried looking at Japanese stocks in the past, but they're not as 'foreigner-friendly' as other jurisdictions.

Looks like a quasi private equity/venture capital fund company. They are an early stage investor in commodities and resources companies, which means alot of the things they are investing in are 'exploratory' and speculative. There are hardly any producing assets. If you look at the investment portfolio it should show you this ... so what you're seeing on the balance sheet probably isn't 50M in investment assets at all. It's their valuation of it. At the end of the day you're going to have to trust management with their judgment in picking the right resources - whether they are of any quality and whether they have the potential to be scaled up to production. Having good resource assets is one thing, but getting contracts and getting it up to the stage of production and producing revenue is another. There are a multitude of hurdles to get natural resource assets to the stage of production; unforseen production problems, delays, financing issues, farmout agreements, lease expirations etc.

In the words of the poet: "One looks for thorns and finds them". :( Would you expect anything different from an analyst who has an investigative/critical eye? ;)

I hear that there are some drug and slum problems on the east side of the city.

There are lot more traders these days, and things like high frequency trading popping up with the use of sophisticated computers. Hence the shorter term time frame.

Yes. That's why I said 'trailing p/e'. :) It's still a good yield though, if you normalize it. Looking forward it's gonna depend on the sugar market and sugar pricing, as aforementioned.

Just on sugar ... I was having a look at this little company called Imperial Sugar (IPSU) a couple of weeks ago. They recent had a lawsuit decided in their favor. The result? Their earnings per share for this year will be about $15/share. Their current stock price? $14!!! ... i.e. eps > share price. :D However next year's eps figure will be around 1-2 dollars depending on the outlook for sugar price. I don't own it, because I don't know enough about the sugar market. But it's an interesting anomaly. If sugar prices sky rocket it could be a good stock to buy. Trailing P/E is like 1x. Crazy. :)

I think it could be cashflow. I haven't analyzed the actual debt ratios, but it's the same thing with US Debt/GDP ratios. The US is in deeper debt than Greece, way more. However what distinguishes the US is that they have cashflow and can keep up with the interest payments (bond payments). Greece does not.

If you're a global investor here's a neat site that provides a visual overview of ETFs on a country by country basis (similar to finviz): http://www.capitalmarketmaps.com/cmm/index.jsp Can also use Yahoo Finance.

Try it out now if you want. See how it looks. Instant feedback. :)

The index funds and pension managers probably had to buy up BRK since it's now part of the S&P500, technically speaking. Bloomberg FYI - You know you could just type "GRAB" then press "GO" --> a screen will pop up and let you enter your email address, ---> type your email address then 'send'. This will give you your charts in a GIF or picture file. Instead of producing a pdf all the time.

http://www.cbc.ca/technology/story/2010/02/08/tech-brain-money-loss.html

You do realise that the VXX is a volatility index ETF ...? So it's based on market skittishness a la VIX. I notice that you're also Canadian given the -N concatenation on the ETF symbols.

Hi Gordoffh, Why did you choose VXX? Wouldn't SPY be better? SPY = most widely S&P500 hedging tool. Best liquidity + volume. ??? ??? I assume you've been short (not holding long).