valueorama

Congrats James. It is nice to see so many humble participants in this board.

I think shipping and For-profit education are in recession. Shipping is due to cyclicality and For-profit is due to structural/regulatory reasons.

Can i call this a black swan event?

Congrats and very good returns.

Let me throw my hat in the ring. 1. Regarding inflation of >5% in the next 10yrs. I have no idea but the taking history as a guide. I think US might not see inflation at the level. Japan on the other hand may see high inflation. So i say 49% chance for US to see >5% inflation. Japan may be 70% chance. 2. USD as reserve currency for next 20yrs. For some reason I am pretty confident that USD will be reserve currency for next 20yrs. Here are necessary conditions for reserve currency: 1. Wide acceptance. or Trust in currency. 2. Rule of Law for business and personal freedom. 3. Need to be transparent. 4. No hindrance on capital movements. 5. A deep and liquid Bond market. 6. military/economic strength. Just looking at the size of the economic bloc, i would say the following are possible candidates for reserve currency status: 1. US dollar. 2. Euro. 3. Chinese Yuan. Of the 3, Chinese currency will pass the least of the Qs. Even though there are Creditor nation and will be the biggest Economy past 2016 as per IMF projections. Euro has good chance if they get their act together. But again, they dont have a Euro bond market just a single currency. In my opinion USD will be Reserve currency for next 20yrs so i put the probability at 95%. There is always an outside chance of good Bond market developing in Eurozone or China. But China has to do more than just have a bond market. Those are all low probability events.

He is looking to have a distributed generation instead of centralized generation. Each has pros and cons.

couple of links for the bulls.... http://finance.yahoo.com/news/bear-market-checklist-goes-perfect-181933478.html http://www.cnbc.com/id/100718511 My issue is if Roubini is bullish may be it is time to get bearish. ;) Valueorama.

Just an FYI. Whether a person has logged in or not is not really private info in bloomberg terminals. Any user can find that out. User profiles even used to have phone numbers.

one more guy worrying about S&P 500 valuation(he is a gold bug). http://zealllc.com/2013/spxtopval.htm

This is what worries me. You had a ton of cash in Q1 and then you changed your mind and invested...not based on fundamentals, but market psychology. I havent invested yet. I just changed my opinion on market correction. Regarding cheap stocks. Yes there are far and few. But the good old BAC, AIG, SD and MBIs are still cheap.

I think this worry is over rated. Just because an index is making a new high grabs headlines. I was worried too much in the first quarter of 2013. I have 60% cash. I changed my mind. Here is why, when everybody is expecting a correction market goes up. Even today, WSJ paper edition had statistics about how Dow has never behaved like this except in 1958(??). For the market to correct, we need everybody to get euphoric. Right now it is not there. But sentiments change quickly. But having said that, i have to say that the leverage utilized is high(somebody with Bloomberg terminal can take a snapshot), Shiller PE is high, Total Marketcap / GDP is high, Profits as percent of GDP is high and VIX is at an all time low!!. Everything points to a correction. Yet we have not seen one. ABout investment gurus with high cash, i think for some it is normal to have high cash positions. Unless they go out of their usual range, i wouldnt get worried.

I really like that discussion on Credit Markets. With Milken holding court. It is top notch and these guys are very much Value Investors. Last 2yrs, the theme was to go long Structured Products debt. Now they are going into Cash. Since, it is all structured products, you get cash in drips and dont have to sell/look for bids. I am sure, if the bid went high they might sell. Key take away this year seems to be in Cash and less equities. But the whole thing is also little shady. Milken is a genius with ethics problem. Most of the guys in the discussion group owe him something. mostly Ex-Drexel guys but they are good. Milken seems to have run into hotwater this year with SEC for dealing with Guggenheim partners. I still can't digest the fact that this guys built the High-yield market and ruled it and gave it all away for a few extra dollars. I mean he paid something like $1.1billion in fines and restitution and still left with couple of billion. Even in such damaged situation, i am sure he can raise few billion dollars for a fund if SEC allowed him.

To some extent it is true. I dont think information is an issue. I see issues in pricing. If you have fidelity account, you can look up bonds. YOu will see price difference in the same bond for different sizes. You will get better yield on a bigger notional. Until bond trading goes completely computerized, it will be like this. Good news is that lot of the big Wall st firms are going towards computerization. So in next 5yrs we will get there.

Based on that chart, it looks like we will be in low rate environment for a long time. I just guessing based on reversion to mean. Mean rate seems to be around 6%. So, rates stayed too high for too long. :) now we must suffer the low rates for similar period to compensate. :) I lose nothing by making such predictions. :)

Thank you. Unfortunately, the download feature is disabled.

I would not say CDS was totally luck. But i have to admit, luck plays in your search. You may come across after something has played out. Paulson was nobody before that trade. I think he just saw that once-in-a-lifetime trade and just bet big.

In my opinion the key statement in this whole interview was that, his position was 1% of his portfolio. For all the media coverage on this topic, i felt it was a huge position. Apparently he is long Structured Credit (MBS, ABS and CDOs) 90% of portfolio. So sizing is important and the bet would be 300 to 1. May be he was able to get a JGB CDS which payout in terms of restructuring or default ?? Given low interest rates and 2nd biggest economy the credit risk was worth 1bps?

I have couple of feature request which i think will improve user experience: 1. Next page/prev page link. Especially helpful when you have discussion threads going 100s of pages. 2. Adding Tags to the first post. Tags can be used to search and pull up information faster. Other than that i think this format is fine.

So, if IRA, 401ks are capped at $3mm, does it mean that public pensions, 403s get capped at $3mm too. Because, i can show a lot of people drawing $300k a year after retiring as members of Board of Education.

What is amazing is that ex-wife is pursuing since 1990(year of divorce). That is 23 yrs. That is some hate, perseverance and ego.

Indians usually touch the feet of elders/teachers to show respect/get their blessings. I think Mohnish followed that tradition as he feels Buffett is his guru(teacher).

my observation on markets is that yes we are seeing these random folks now talking about stocks and at the same time, CNBC is looking for correction. This makes me believe we might have no correction for sometime. Personally, i have unusual amount of cash at hand and want a correction.

Some what late reply to derivatives question: If you are talking about Interest-rate swap derivatives, in my opinion it is not much of an issue. Here is an interesting point, if you are talking about credit default swaps(CDS) derivatives, especially on MBS/ABS or corporate, the term is usually 5yrs. May be Corporates are little longer. So, anything written in 2007/2008, risk exposure will be done this year. In my opinion, derivatives exchange for these CDS will be a big positive. But given that Fixed income securities dont have exchanges like equities, it is going to hard. If you are going to establish derivatives exchange, then the underlying securities need to in an exchange too. It is mind boggling that the fixed income market is bigger than the equities market, yet trades are done by phone only.

I feel Congress's hands are tied. Fannie and freddie are the mortgage market as we speak. Private business is negligible. If you say no more fannie or freddie, private mortgage lenders would demand a much higher rate and will kill housing market. I see very little risk of Congress killing Fannie or freddie for the near term (1-3yrs). But given that all profits are to be paid as dividends to govt held preferreds., essentially the public preferred+common gets nothing. it needs to be treated as a call option on a future action by congress to retain profits.

Well the gist of Carl Ichan's position as he mentioned on-air is he is putting his personal money in Herbal life. About $500mm. It is mainly long Call and short Put options, in various time tranches. His average cost is around $36?? He talked about an LBO / going private. When asked about tender offer, he didnt get into details? which kind of makes me think he is going to do it!