Valuebo

And what about the poor folks in Europe? :(

There's an AIQ thread in the ideas forum that is quite thorough and provides a very clear thesis. The GAAP earnings figure is rather fictitious with this one. http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/aiq-alliance-healthcare/ I am with tombgrt and have been buying more here. If it weren't for the illiquidity this would be in my top 3 holdings (am concentrated). Jup. Sorry I missed the earlier comment. I picked up some more at $20.5. Now 20%+ of portfolio, illiquidity be damned. Not really sure what else to buy tbh! ;)

Munger's heirs might not be as talented investors as Pabrai. Can someone explain this better: Why isn't he simply trying to be buy the best value (defined as expected risk adjusted returns) regardless of the cash he has left? He seems to imply that higher potential returns correlate with higher risk while in practice it can often be the other way around. (A bit in the same league as saying that volatility equals risk, while it's often more an indicator of opportunity that can provide return.) I'm probably misreading what he meant though.

AIQ. Market keeps ignoring this one. Superlow daily volume driving the stock lower again.

And to counter some doom and gloom: http://ec.europa.eu/economy_finance/eu/forecasts/2015_spring_forecast_en.htm

Maybe foolishly sold out of my EUROB for a quick 45%+ gain at the end of last week. My very large holding in Intralot made me nervous about losing gains in either name. Also sold a part of my NTLS holding last week after buying a lot more in the $4.4 range recently. Still hold a good position. Lesson: Patience is improving but I really have to learn to let winners run. Should have learned this by now! Also starting to run out of ideas, especially in the US. Seeing very little that I could invest 20%+ of my portfolio in and that offers 100%+ potential without too much risk. :(

Stopped watching cable when I moved together with gf. Saving 500€/year which for me is slightly more than a week's pay after taxes. It has the additional benefit of missing out on all the garbage on tv and having more time to read or do other things. It is insane how many people waste time watching tv. And often they aren't even watching the good series or films but utter garbage. I've watched my fair share of classic films and series so that makes it easier to skip on a lot of things. Had Netflix for a while but stopped my subscription as I had watched most things worthwhile. :D I now use an alternative that is much better than any legal alternative. Sorry... :-X

Damn, you really have a skittish mind! ;) Selling dimes on the dollar imo for a market correction that might happen and could impact the stock price of your stocks. Bought some EUROB last week sub $0.10 and more NTLS below $4.5 a few weeks ago. Corrections be damned! They are the reason I buy anything in the first place.

Of course it's good to go against it. But there is a difference between buying a new car and spending a few bucks on a few books or an upgrade for your computer that you would have bought anyway. Investing returns shouldn't affect spending habits (especially in the short run) but you shouldn't agonize over every dollar either, especially when doing well! I just agree that it can feel somewhat annoying to hoard every dollar when you made a lot of money recently. In a way it's absurd but it's sensible to guard against falling in the trap of overspending like you said.

Great stuff. Thanks for sharing. I can totally related to the disconnect between the sums I invest and what I spend on my daily life. I'll sometimes hesitate and agonize on whether I should be ordering a few more books or upgrading a computer and then turn around and invest 2 years' worth of expenses into a company... +++ This feels especially stupid if you just made a few thousand on a stock that you just bought and made a quick gain on by nothing more than pure luck (that it appreciated so quickly thus the much higher CAGR). On the other hand it's probably sensible to review all expenses versus what you make in your day job and not versus temporary portfolio successes or drawdowns.

Yes, fun riddle. Embarrassed to say that I needed quite some time to solve it completely. Don't think it will be too hard for many here, especially if they have done things like this before. I remember someone here posting Einstein's five-houses riddle once and a lot of us solved that one and this one is easier. Still a lot of fun and a challenge! :)

OT: Is it good? Could you link to it or tell me what it's called? I'm trying to practice my French and this seems the perfect way to do it. TIA!

It would be odd if you didn't find mostly introvert, thinking and judging (this last one maybe the least of the three) people here. Interesting to read however that only 2% of people are INTJ. Should be 6.25% if the personality types were equally divided so that is quite rare. We should have made a poll! :)

edit: seems like I forgot to answer two. More later! Was INTJ now. Tried again on 16personalities.com Came out ISTJ now. So Intuitive changed to Observant but this was close in both tests. Couldn't really find myself in some of the characteristics and am definitely leaning more to INTJ.

I'm not sure if you posted this because I started about luck but I obviously agree. ;) As I said, the skills are needed. They are an entry pass to roll the dices of luck over the longer term. You could objectively be the best investor in the world and not come even close to others because you happen to lack some luck in some departments of life. No biggie, you'll do fine regardless. I didn't mean to imply that that's what you believed. I saw survivorship bias mentioned a few times lately on twitter and elsewhere, and this reminded me of this. Another interesting aside, cached thoughts: http://lesswrong.com/lw/k5/cached_thoughts/ Thanks for the article Liberty. I have been thinking about this a lot but had a hard time formulating my thoughts for myself. Luckily I found this article so next time I can rehash these cached thoughts. Or shouldn't I? :D I don't think we would want to know the disappointing level of unique, personal contribution we add when formulating "our" thoughts.

I'm not sure if you posted this because I started about luck but I obviously agree. ;) As I said, the skills are needed. They are an entry pass to roll the dices of luck over the longer term. You could objectively be the best investor in the world and not come even close to others because you happen to lack some luck in some departments of life. No biggie, you'll do fine regardless.

Hi Nate, To be clear, I completely agree on your premise that real success is extremely unlikely to happen without leverage. You made a good analogy with the G&Dville thing. You're right that not all usage of leverage by average folks is risky when done wisely and it's an important distinction to make. It's somewhat easier to determine skill from luck in those smaller and less complex activities that many people can undertake versus the complex world of business and investing. Thank you for expanding on your thoughts, I'll be thinking them over tonight.

Most people benefit from a normal job as starting your business and "leveraging your potential" entails a lot more risk than most would estimate. Success in scalable jobs and businesses is quite rare. It's a system of the winner(s) take(s) all, meaning very few winners and a lot of losers. So those failing people and businesses that took on leverage (in any way) are silent evidence (see Taleb's Black Swan) that people don't take into the equation. And how are you sure that (some of) the successful entrepreneurs didn't take equally excessive risks than those that failed but just turned out to be the lucky ones? You can't just assume that those that were succesful were able to effectively manage their risk. Luckily for them, wage slaves get paid regardless of what the business they work for does. 99.9% of people should stay clear of excessive leverage (be it through a scalable job or business, an enormous mortage, margin debt for portfolios, ... ) as most wouldn't even be able to handle the additional stress, let alone the possible financial despair when things go south. Also, I would argue that success in business is a lot like getting a good track record in investing. Generally markets are rather efficient and it's very hard to get ahead of the crowd by pure skill. You could look at options, portfolio concentration*, ... as the leverage in investing versus debt, scalability/fixed costs, ... for businesses. You can take on that leverage and have a small chance at becoming very succesful or you can blow up or at least perform subpar. But just like in investing you can become successful in business by exploiting market inefficiencies, there is no denying that. Anyway, over the longer term you need the skill but the luck is definitely a big boost. Even for The Outsiders (see the book) I would argue that it is hard to determine how much of it was skill and how much was luck. Gladwell also had a good example on Buffett's life in his book Outliers. But I'm confident that Nate will agree with me on most things here. Just some ramblings. ;) *Before all outperformers start replying: Do you hold 500 companies in your portfolio like your benchmark?

It has been said before in media but another option would be selling off one of the bigger islands like Kos, Rhodos etc. Sell it to the Saudis to build their paradise on earth or to Germany. Hell, sell it to the EU as an asset for future military base development. There is no shortage of assets to pay off those debts, that's for sure. I know this is probably nonnegotiable for the public and Syriza (not to mention the geopolitical objections and risks) but wouldn't selling just a few percent of their land solve the problem altogether? It has been done in the past. But as long as they believe that there is a chance that they wouldn't be worse of if they defaulted, they won't go for it anyhow. I'm sure there are tons of other reasons not to do it with which others can help me. :)

Imo extremely low interests rates are engineered by central banks on behalf of governments around the world, simply because they cannot afford to pay higher interests on their debts. Period. And this might go on until prices stay very low or else go down. Higher interests rates will exacerbate the debt problem, therefore rendering the final outcome even more unpredictable and dangerous. Watsa has always said that in Japan the printing of a lot of money stopped deflation for 5 years after their stock market and real estate bubble burst… The US probably has printed even more money than Japan did! So I guess we still have to wait at least two or three years… And of course the next serious market correction! If financial assets start to go south, that would be very deflationary imo! After that, if we still have no deflation, I would simply let those CPI contracts expire. I don’t understand how the fact Sweden is the only example available means it should be relevant… But probably it is only me! :) Gio But I guess Watsa can point at a single example to make his case? What's the difference? He regularly points at two. But personally I think there's relatively little use looking at any of these examples except for context. Every economy and policy is different. There's evidence that QE has worked in the US and evidence that it is not working in Japan (other people would probably say the opposite). There's a good theoretical argument that what China needs is a tighter monetary policy, which is counterintuitive. It's useful to know that QE and its equivalents helped in Sweden (if it did - I don't know anything about that). But it's also useful to know that it's failed elsewhere and caused hyperinflation in yet more places. Analysis needs to be a lot more complete than just pointing to one example (no offence to Packer or Prem!). Of course and that is why I made the comment. "This time is different" is actually a generally correct statement, each situation really is different. Good post petec!

Imo extremely low interests rates are engineered by central banks on behalf of governments around the world, simply because they cannot afford to pay higher interests on their debts. Period. And this might go on until prices stay very low or else go down. Higher interests rates will exacerbate the debt problem, therefore rendering the final outcome even more unpredictable and dangerous. Watsa has always said that in Japan the printing of a lot of money stopped deflation for 5 years after their stock market and real estate bubble burst… The US probably has printed even more money than Japan did! So I guess we still have to wait at least two or three years… And of course the next serious market correction! If financial assets start to go south, that would be very deflationary imo! After that, if we still have no deflation, I would simply let those CPI contracts expire. I don’t understand how the fact Sweden is the only example available means it should be relevant… But probably it is only me! :) Gio But I guess Watsa can point at a single example to make his case? What's the difference?

Who knows? You are misleading yourself if you think you have any real idea. Look at those analysts thinking they were bold with their 1.16 predicition a few months ago. The best remedy against high (or low) prices are high (or low) prices. So while the Euro is down because of XYZ, the now cheaper Euro will in time make problem XYZ at least partly go away. That in turn will lead to a swing to the other side etc etc. I think it's not worth worrying about too much over the longer term exactly because of this mechanism of automatic balancing. I do think it should make more sense for US-based investors to take a closer look at some European companies but the forum is (understandably) biased towards US equities.

And just getting more brutal. Although my European holdings have done phenomenally well, I wish I had more in USD. ;) Remember when the most bearish EUR/USD analysts predicted the pair to be at 1.16 by end of 2016? That was just a few months ago. Do they now throw in the towel and stop predicting market movement? Of course not! Let's act as if nothing happened and predict 0.85. When they get there they can make another random prediction!

This is what I also don't get, especially in relation to the oil bets that are highly dependant on high oil prices. If those are meant as a sort of hedge, wouldn't it make more sense to hedge bet on other highly inflatable goods? (More comments later)

I think this will sound too bullish for most but here it goes: After reading Watsa's yearly letter last night, I was thinking about Greek banks a bit more. It seems he is still confident in recouping his investment and then some. I don't share his faith in the good intentions of the government as it is likely they need some more chickens to pluck and scapegoats to point fingers to. However I do believe that the four remaining banks will do great if Greece is able to recover. As Watsa wrote in his letter, the country was well on it's way to strong economic growth. As Einhorn pointed out, there are warrants available until the end of 2017 for two of those banks: Piraeus Bank and Alpha Bank. The underlying banks are trading at deep discounts to BV and are highly leveraged to the economy either way. As a non-European investor you also get a devalued currency to boot. Given this highly uncertain situation where no one really knows what the end result will be, it only seems logical to leverage that leveraged position to decrease your net exposure. The Piraeus warrants seem way too far out of the money. Imo Einhorn was overly optimistic (even in 2014 when things looked better) in assuming it could trade at 1.5 times book by the end of 2017. Even one time book seems optimistic. The Alpha warrants are less extreme. From current warrants price (0.55), it would return 400-600% if the stock traded at 1 time book or somewhat below that with some time value left. A lot of value guys bought a prices much above current valuations: Wilbur Ross, Einhorn, Watsa, Tim McElvaine, ... They saw value at multiples of the current price. What if the dark clouds finally drift aside over the next 2.5 years and the market realizes these banks operate in a consolidated market with a growing economy, some with exposure to EM?