Valuebo

Added to my short at opening. Almost 25% short, 50% long and rest cash. Anyone ever short something like SPXU (when you assume market is done going lower of course). Because it's inverse 3x leveraged you can make a lot when the market goes up again. It can also kill you if you take too big a position I guess.

Pfft lucky timing again... With PMI under 50, the market is taking things seriously again. Let's see if VXO can close above 45 once in the near future, hopefully at much lower prices!

SPY late last week for around 15% of portfolio. Also hold 45%+ cash. Also sold most "meuuh-ideas" where I would find it dificult to hold on in a real downturn. Strong return this year and at this point I can't seem to be bothered with most ideas. Aside from the "flash crash", the last few weeks barely produced anything in terms of bargains and I'm somewhat surprised how many people seemed to disagree. Waiting for the no-brainers and if they don't come I'll look elsewhere. As a sidenote, mentally it's great to have a lot of cash for once so that's a plus. It's like a little mental vacation, away from the pressure to perform. I don't mind if it lasts a while.

I saw FDN down 20% after you mentioned it was down 40% and I did not buy it. I'm an idiot too. ;) Nah, these things require really fast fingers, great broker, fast thinking. ETF opportunities were real, but some other thinly traded stocks were not: they were down 10-15% with no volume so nothing really went through. So don't beat yourself. You got what you got, can't get them all, tomorrow's another day, etc. Peace. Yeah unlikely I would have had the balls to buy such an ETF for 30% or something of portfolio and make a quick 10-15% but still.. Good to know for the future.

I should have tried to buy those ETFs through IB... I'm an idiot.

It's days like today you want a decent broker like IB to handle your orders...

Nothing explains it, I think the system failed and some people got great bargains.... Also bought LMCK.

By the way, etf's like FDN traded down 40%, are these buyable?

I bought some Fairfax as well following Dazel. I guess it makes sense. After all Gio is out as well, great contra-indicator! VXO at 45 btw. I'm stuck at work trying to get some orders filled through the ib smartphone app. Fun. >:( Damn, both GM and JPM warrants were down some 25%. CSU down 15%+ or something briefly. Efficient market my ass.

I was too slow for GM at $25 so I just bought some FFH... Don't expect this to be over yet anyway.

I think my computer is broken, Nasdaq down 8%? Lol! GM down 15% to $25. Yihaaa.

Which is exactly why I figured buying FFH now (or earlier) is maybe too early. On the other hand, if they do make outsized returns from here and the market figures it out, you could miss the boat. As a side note: It will be interesting to see who will be buying if sh*t hits the van. Early october 2011 many seemed to have missed the boat even though VXO was very close to 50, indicating some serious fear in the market.

Jumping the gun a little Dazel, China is still only at the level it was at the start of this year and we haven't seen anything implode yet in the US aside from commodities etc. We can also just have a normal correction without any fundamental economic change. But to be fair, I sure miss my puts from last year (many went to zero or were sold after I figured I really couldn't time any of it). All I hold is 40% cash and some CRM puts (the only frikkin' stock that keeps going up). Dazel do you expect this to be a prolonged correction/economic downturn? Because why would you rather buy Fairfax instead of other high quality stuff that gets cheap? Or do you hold and buy now to sell in a few months?

Good points Dazel, thank you for your comments. Stocks like Disney were up 50% in a year after quadrupling. It's still up YTD! They were hardly cheap on any metric and could easily lose much more. But I guess it's one of those "relentless compounders at any price" as we discussed a few weeks ago. These kind of stocks could see a 1987 like crash in a matter of days and people would act all surprised. ;) I'm by no means saying they will or that they are severly overvalued but cheap and safe is something entirely different... I'll be rooting alongside you and Fairfax, this market is way too boring!

I care what they did in the past as it can be an indicator of future actions. I can't just look at the good (track record over long term) and ignore the bad and the ugly. We will see. You are right that we have had a crash in parts. Even in equities many stocks are already correcting. It seems like only a handful of expensive stocks are "keeping up appearances" while we still trade at market all time highs. It will be interesting to see whether everything gets infected. As a side note, isn't it very rare to not have any crashes over the span of a few years? There is always something ugly going on. In any case, I hope you are right Dazel. My watchlist is too long and my list of holdings is too short!

How exactly are they "reaping the benefits"? The have incurred major losses on them and at the same time sold of "cheap long term holdings" and raised capital to pay for those hedges and other crap like BBRY. I think I made a silly post (probably the only kind I make) in 2012-2013 asking whether people in 2015-2016 would finally view the Fairfax bets (don't call them hedges at this point sorry) as mistakes. I guess I don't have a long enough time frame. I can't count the times anymore that people post these comments after a mere 4% market drop. Can't we just wait and see whether we actually go down 40%+? With a lot of cash on hand I would definitely like to believe someone could time down markets but I don't believe there is a way for anyone to know. In any case, if Fairfax does finally reap the benefits of the equity hedges (meaning another '08 like crash otherwise it was all for nothing), we might all have bigger problems than a battered portfolio.

Idk, maybe they like how Biglari took all control away from shareholders?

The problem comes with calculating IV? Isn't that exactly what you are trying to do when actively investing? Why bother then if you don't have a raw estimate of IV? Sure with high growth companies things might be harder and changing faster but the principles stay the same. This doesn't mean you shouldn't at least try. If you don't you could just as well go for an ETF and sit back no? In the case of GOOG (with very raw numbers): I'd say that at for example a 400B market cap around end Q4 2013 - Q1 2014, I would easily have found better value. Assuming around $13B in earnings in 2013, you'd need 20% earnings growth for the next 5 years and an earnings multiple of 25 to get a double from a $400B market cap. That is a 15% return over 5 years and a very high target for such a large company. I aim for much higher to hopefully get that 15% return over the longer term. Anyway it's certainly a point where I would consider selling. You get zero return if you get just 12% earnings growth for 5 years and an earnings multiple of 18. I understand there are taxes involved for most but not for me so that makes it even easier.

This so much. Many seems to gravitating to (acquisition) compounders. Hardly any valuation happens because many are happy to simply extrapolate past growth ad infinitum, hooray! Let's just buy quality at fair prices any price and get market beating returns without any work at all. Should work great! Damodaran hits the head on the nail in his latest blog post: http://aswathdamodaran.blogspot.ca/2015/08/narrative-resets-revisiting-tech-trio.html

After selling NTLS I'm "stuck" with 33% cash. Don't feel like buying large caps with maybe 50% upside or compounders that are decently priced either. This too requires patience I guess. Am I alone in having this problem? Many seem to be buying hand over fist. I just don't see many obvious buys. Only briefly but it didn't seem as attractive at first sight. In hindsight of course neither was Eurobank! Definitely was lucky there. I haven't yet but have seem those topics fly by. :) Very hard to read everything here these last few years so sometimes I miss a few. Thank you for the heads-up, I'll look them up!

Berkshire and Fairfax are in the realm of reasonable valuation. Very hard to tell whether they could deliver outperformance at this point so I'll stay away. Berkshire was very obviously cheap for almost 5 full years (!!) and isn't really now. No point in lowering my investing standards just because there are no alternatives imo.

After selling NTLS I'm "stuck" with 33% cash. Don't feel like buying large caps with maybe 50% upside or compounders that are decently priced either. This too requires patience I guess. Am I alone in having this problem? Many seem to be buying hand over fist. I just don't see many obvious buys. Only briefly but it didn't seem as attractive at first sight. In hindsight of course neither was Eurobank! Definitely was lucky there.

This so much. Many seems to gravitating to (acquisition) compounders. Hardly any valuation happens because many are happy to simply extrapolate past growth ad infinitum, hooray! Let's just buy quality at fair prices any price and get market beating returns without any work at all. Should work great!

Agreed. I wonder if we are seeing "It's far better to buy a wonderful company at any price than whatever man". Certainly feels like it! Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%. Sorry Ross, read DISCK as DIS. My bad! :) Have been looking at DISCK myself given the price action and Malone influence. DISCA/K and FOXA are quite cheaper than DIS. DIS has bigger moat, stronger brand. Does that justify the price spread? I guess for some people it does. I own/buying some DISCA/K, FOXA. No position in DIS. Yeah agreed. Read DISCK as DIS(ney). Time to get some glasses I guess...

Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.".