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WarrenWatsa

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  1. this is great...watch this from the point it starts (24:45) up to 30:47 a total of 6 minutes he explains how he started his first business while working (took him 10 months and about 25-35 hrs per week) after 10 months, he quit his job and focused on his new business full-time (at that point he had two clients) he later sold this business for $1m cash
  2. I don't know if you are right or wrong about this statement. But is there evidence to back this up? Quotes? He has spoken in terms of multiples if you follow his writings / quotes. eg. "I love newspapers and, if their economics make sense, will buy them even when they fall far short of the size threshold we would require for the purchase of, say, a widget company. …At appropriate prices – and that means at a very low multiple of current earnings – we will purchase more papers of the type we like." At the 2012 shareholder meeting, one analyst asked Buffett how he would value the non-insurance operations. Buffett responded that he would look to buy similar businesses for 9-10 times pre-tax earnings.
  3. Does anyone believe that Buffett (arguably the greatest investor of all time) does more than back-of-the-envelope calculations when making investment decisions? He barely knows how to use Excel and rarely touches a computer, so, think long and hard about that. The complexity of the calculations he uses when making investments are limited. Either he veers away from overly complicated businesses that he cannot value with his relatively simple methods or he figures out what kind of back-of-the-envelope calculation makes plenty of sense for the business he's considering. If it takes a Masters or PhD caliber of person / knowledgee to arrive at your valuation, the market will definitely never look at it like you do. Most market participants can't think on those levels and will never be comfortable with your thought process, therefore. I believe Buffett's purchase of Bank of America, despite the company's complexity, was based significantly on a back-of-the-envelope calculation that made a lot of sense...a la Bruce Berkowitz. And, I believe Buffett is a heavy user of multiples (derived based on his experience)...Alice Schroeder has said that all Buffett wants to do is make a 10% pretax return on his investment with little risk, for example. In his younger days (when he had less capital to manage), it was probably 15-20% instead of 10%.
  4. Thanks for sharing this. Great read. But, but... I would never look to Klarman for anything macro-related. It's simply not his forte, nor the forte of most value investors, for that matter. Few, very few investors can do both macro and micro investing well. The latter is much easier while the former requires much different knowledge and methods, IMHO.
  5. Why is this not massively bullish? Not saying it is, just throwing it out there... http://img829.imageshack.us/img829/9002/massivelybullish.png Uploaded with ImageShack.us Source: http://economix.blogs.nytimes.com/2013/05/08/stock-markets-rise-but-half-of-americans-dont-benefit/
  6. He's only referring to data from 1980 and later. I think that is highly misleading given that between 1982 and 2000, stock prices rose at historically unprecedented rates and traded at extremely rich valuations in America.
  7. Well, it's not a timing indicator. It does give you an idea of potential downside were a new cyclical bear market to begin sometime soon.
  8. How can looking at a chart of inflation-adjusted prices alone tell you whether something is cheap or expensive? A comparison to normalized earnings (or, to be even more conservative, replacement cost) makes a lot more sense. What that shows as at the end of 2012 (good bookmark to keep): http://www.smithers.co.uk/images/150313115226.jpg
  9. Twitter - from marketfolly: From London Value Conference: James Montier said GMO are now 50 per cent in cash. From London Value Conference: Montier also said that their 7 year asset allocation forecast is now negative for the S&P 500
  10. Whether they are logged in while you are logged in is not private. But, when they last logged in is indeed private - as far as I remember.
  11. Packer, are you referring to business valuation at the Big 4 or similar or instead at a boutique firm? What kind of clients do you deal with?
  12. In fact, all HFT firms are essentially in 100% cash at the end of each trading day. They aren't going to cause any six sigma event, let alone a three sigma event, given that they close out their positions very quickly. People forget that the cascading of the Flash Crash occurred due to a lack of liquidity (i.e. HFT disappearing) rather than due to the additional liquidity that HFT thankfully provides Volume is drying up everyday right now and I sure don't want to see what spreads would look like if HFT were to disappear. Be careful what you wish for. I believe HFT has aided most investors, including value investors, on a net basis.
  13. This volatility is not the value investors best friend, this volatility is the type that could derail markets for months of not years and only end in disaster. I seriously doubt that - please prove it. If it did, though, it would provide tremendous opportunity to those who have a 4-6 year outlook as opposed to what is typical of most market participants. A once in a lifetime opportunity, in fact, for value investors out there - if something was to happen on the order of what you suggest. As Mr. Buffett has opined: "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."
  14. higher volume = higher volatility higher volatility = greater opportunity Volatility is a value investor's friend.
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