Valuebo

I am now a long term FFH holder, too :). I am still thinking how to trick myself into not selling in the next 10-20 years. Make it hard to trade. Different brokerage account and throw the login passwords away/erase them from memory. Contact your broker for a new password in 10-20 years. ;)

By far the best joke of the thread!

Thanks guys! If there is one guy I have cloned (and learned) from more than anyone else, it's Packer!

Do we already know who's sorry? Certainly not the shareholders of most MONO stocks. Zero fear.

Do it if you want to enjoy your hard earned money a little. Don't do it if you ever want to reach your goal of becoming a billionaire. ;)

Ha I had no idea, thx!

Dshachory: f you are interested, I think there was a topic like this a few months ago where someone asked what you would buy as a long term (5y+) investment. +1 If I had to choose: IBM, JPM, maybe BRK. Cheap compounders with moats, big and strong enough to survive almost any storm.

Hi. If I can ask, how do you think about valuation, especially for MA? I own MA, and have owned since a month or two after the IPO. This is one of my few 'moat' companies. I am just holding on tight. Valuation might be stretched now, but if you think out 10 years the world will be increasingly digital vs cash based. MA is going to benefit from this. I prefer MA over V because MA includes Europe whereas Visa does not. Is this an incredible value play, maybe not here, but I think I'll be happy in 5-10 years verses where shares are at now. What do you mean by this? I think I misunderstand you as my credit card is from Visa. We have both here? ya, well I was kicking myself for not getting in last may, I don't want to repeat that mistake again. I wouldn't call that a mistake. No called strikes right? Generally for me it's a mistake to do anything so I try to be patient. ;D I have bought but just not that much. I'd prefer to be at least a little fearful before buying a lot more. A mere 10% move up (or down) shouldn't really change my decision to buy or sell anything.

Nothing today, hoping the US markets go a little further than a lousy 10% decline!

Bumping this old topic. OPAP down another 5% today. How do people here think about the risk of a possible currency devaluation for Greece? I think for companies like Intralot the effect would be much smaller as the get 95% of their revenue outside of Greece. But OPAP is a pure Greek play and outside investors might suffer some serious consequences in a devaluation. After going to Athens earlier this year, I'm reasonably confident however that gambling is the national sport and that revenues won't plummet even if the crisis worsens. And what if things improve 5-10 years out? You'd own a great moat (legal) monopoly company with a big dividend and a nice capital gain.

Another 40% to go, no? If you want a replay of 1929-1937, look at the Greek stock market. ;) Full disclosure: Fully aware that the stock can half from here (like any stock) and it hurts but I bought more Intralot today. Almost all revenue is coming from outside Greece. Stock tanked 30% in a couple of days on volume of 500k euro. Not bad for a company that - could - (someday...) have a market cap a couple of times todays. Also eyeing OPAP if this get worse. Anyone got other good greek names?

Well you have the greek stock market plummeting and the possible problem in The Netherlands so maybe it shouldn't be surprising. The stock also traded down to half this level (!) a few years ago which makes me a little nervous to buy more. Irrational but I know how tempting it is to buy more when you start averaging down because of the endowment effect. On the other hand it's one of those stocks that everybody loves to hate, even here. Maybe that is a positive (but equally useless) sign. ;)

I feel for you guys. Hope this was a joke Cardboard.

Good points thepupil. And to achieve a minimum 15% CAGR over a rolling 10-year period, I guess FFH has to achieve 20-25%+ CAGR (I am to lazy to make a decent calculation now) in the next 6 years. Or am I not thinking long term enough? ;x

Why sit on a crappy product with ok margins when you can develop better products with much higher margins that also help the long term success of the company? Some companies can improve products and returns, others can't. Telecom etc is mostly in the latter group. Or they often can but the rewards aren't worth the effort/risk. Not everyone is fine with switching back and forth between windows/apple/something else. The moat exists out of more than this but it is a vital part of it. Plenty of repeat costumers out of habit and convenience. Sooner or later every moat ceases to exist as moats are breachable. KO's moat would be breached one day if they stopped marketing their products for example. In the same way Apple prefers to keep digging dirt out of that moat to maximize current and future returns. That's only the sensible thing to do.

Haha that unsubtle mentioning of his book, nice.. Guess he needs the money. Maybe he can ask Warren to buy it? What? So high quality products with the latest software, the Itunes ecosystem, the huge app store, compatibility of all products, brand value, .. don't constitute a moat? They simply are in a business were doing nothing means losing, that doesn't mean they don't have a moat. Doing nothing would simply mean they lose there moat slowly and then quickly. Thus they try to stay ahead of their competitors so that they can keep those margins. But I'm preaching to the choir here..

My thoughts exactly. Cognitive dissonance is a b*tch. Case in point: I don't know and I don't care. I completely overlook those things when I think about a business. Gio You want trustworthy management but don't care for obvious shenanigans. Odd. Full disclosure: I'm not a business owner. My thoughts are possibly shit.

Great news. Congratz!

5% rent increases and a maintenance cost of only 0,33%? That is certainly optimistic! What does it cost to refurbish a room in a $3M home? What about a new bathroom, kitchen? Placing a new roof? Landscaping the garden? I didn't say $4m or $5m home. It doesn't take much to hit $3m here. As for optimism... that would be if I mentioned capital gains. Like if the property appreciated... 1% annually... it adds $30,000 a year tax-free (until it hits $500,000 total at which point it starts becoming taxable capital gains). Now, a $30,000 tax-free capital gain covers $30,000 of after-tax expenses. 5% a year rent increases for Montecito don't appear high -- the incomes have been growing at least that fast... this is not median income people, or low income people. The people in the upper income brackets have been seeing income growth in excess of that for quite a while. Good arguments Eric, can't really argue that. But while that may be the situation over there, it certainly isn't so everywhere! It's how I struggled to eventually pull the trigger and commit to buy (I bought a 3-yr purchase option locking the price). Even in housing, I'm playing with options. Too funny. :D That's great. What do you pay percentage-wise for such an option? Just curious!

5% rent increases and a maintenance cost of only 0,33%? That is certainly optimistic! What does it cost to refurbish a room in a $3M home? What about a new bathroom, kitchen? Placing a new roof? Landscaping the garden? I didn't say $4m or $5m home. It doesn't take much to hit $3m here. As for optimism... that would be if I mentioned capital gains. Like if the property appreciated... 1% annually... it adds $30,000 a year tax-free (until it hits $500,000 total at which point it starts becoming taxable capital gains). Now, a $30,000 tax-free capital gain covers $30,000 of after-tax expenses. 5% a year rent increases for Montecito don't appear high -- the incomes have been growing at least that fast... this is not median income people, or low income people. The people in the upper income brackets have been seeing income growth in excess of that for quite a while. Good arguments Eric, can't really argue that. But while that may be the situation over there, it certainly isn't so everywhere!

I think I recommended the book The Origin and Evolution of New Businesses on this thread. The author spends a lot of time discussing why most entrepreneurs go into low margin companies with low barriers to start. These are the companies mentioned in this thread, hotels, vending, plumbing etc. He then discusses why these companies can't scale and while they will provide a great living for the owner they won't become big companies. One other thing the author talks about extensively is that most startups have no original ideas. They are doing exactly as tombgrt says, they take an existing idea and make it different or better. I found this for whoever is interested: http://bhide.net/part1.pdf

5% rent increases and a maintenance cost of only 0,33%? That is certainly optimistic! What does it cost to refurbish a room in a $3M home? What about a new bathroom, kitchen? Placing a new roof? Landscaping the garden?

Hi all, This article with interactive charts from The Economist is certainly very informative. http://www.economist.com/blogs/dailychart/2011/11/global-house-prices What do others here think? Will future inflation, wage increases and/or higher rents make renters look foolish in the end, even in countries like Canada, Belgium and Australia? Or is there no way this could end well? I'm certainly leaning strongly to the latter but know that some believe the former is equally or even more likely. My girlfriend and me are in our mid-twenties and she would definitely prefer buying something sooner rather than later. Rationalizing that it seems to make little sense with prices 50%+ above long term averages (based on rents and income) doesn't really seem to work. Friends, family, colleagues, ... have the same general idea. It's hard to offer long term thinking to people who vote with their emotions ("I want a place of my own."). Opinions? Tom

Some good posts here, thanks. The average person is likely best to find a trade he can do very well and expand it as he starts to become unable to handle it all himself. You can be an engineer like Gio, a plumber, electrician, programmer, lawyer, ... Work hard and build something. There is a reason you don't see automated vending machines on every street corner. Margins are thin, insurance, stocking, money transport, ... The same is true for a lot of other businesses. Definitely not an easy way to get rich and with lots of risks. If you plan to be "really" entrepreneurial with an original idea, chances are much higher that you will fail than in you focus on building your trade and being the best that you can be. And if you do choose to go the more entrepreneurial route, learn and steal from the best. Take something that exists and make it better.