merkhet

Cool. In the same vein, I've been itching to read The Art of Learning. I just haven't had time.

What if you already have a mind for numbers? Is this still interesting?

Fair enough.

Again, you are getting tripped up in semantics. Whether or not the value crowd is able to apply the same analysis as the growth crowd is largely irrelevant. They are both, as I stated a few posts ago, trying to lay out less money now than what they would receive in present value from the future cash flows. I know nothing of soccer, so allow me to use American football terminology. It doesn't matter if you have a running game or a passing game. The goal is the same for every single team. This is what Buffett and Munger mean when they say there is no difference between value and growth. Teams that depend on a great passing game don't necessarily excel with the running game and are usually exposed when the passing game is cut off. Just ask Peyton Manning. So it does matter whether you win with a passing game or a running game, and being good at one doesn't mean you are good at the other. Yes, and being good at one does not mean that you are necessarily bad at the other, as you have suggested previously in this thread. I think they are very very different. The people who are good at picking deep value micro caps WILL NOT be good at analyzing TSLA and AMZN. Editor's Note: The CAPS are mine. Some people are good at math and bad at English. Some people are good at English and bad at math. It does not follow that all people who are good at math are bad at English and vice versa.

I'm flying from IAD to LAX, and I get in around noon the day before. Would be great to meet up with some folks from the board.

Again, you are getting tripped up in semantics. Whether or not the value crowd is able to apply the same analysis as the growth crowd is largely irrelevant. They are both, as I stated a few posts ago, trying to lay out less money now than what they would receive in present value from the future cash flows. I know nothing of soccer, so allow me to use American football terminology. It doesn't matter if you have a running game or a passing game. The goal is the same for every single team. This is what Buffett and Munger mean when they say there is no difference between value and growth. Again, semantics. There is also a difference between how you evaluate GM and Maserati. One company sells a ton of trucks. The other company does not. The type of people that buy trucks are different than the type of people that buy Maseratis. Does this mean that someone who can evaluate one cannot evaluate the other? Of course not. I'm assuming you agree with me on the relevant metrics for GM and Tesla. (If not, please let me know what you think the relevant metrics might be.) We don't even disagree on the fact that Tesla's metrics are far more uncertain than GM -- where we disagree is whether or not this means that someone who can analyze GM cannot similarly analyze Tesla. Or vice versa. If you come out to a conclusion that things are "too uncertain," it does not mean that you have "failed" at analyzing a company vis-à-vis other investors. It's possible that the objective truth is that no one is able to analyze the company and those that think they have are fooling themselves. Please explain to me the legitimate case for owning FB. I have never heard one, but I'd be happy to hear one now. And just because the stock has performed well since it IPO'd two years ago means nothing -- let's not forget about Mr. Market. I could have made a similar statement about a number of companies from 1996-2000 (that the stock performed well for a full 24 months) and have been dead wrong in the end. And saying a lottery ticket can be a great investment if you find a way to raise your odds of winning is like saying that a horse can make a great plane so long as it's made out of aluminum and has jet engines. Your latter comment fundamentally changes the first comment.

I wouldn't say that growth investing doesn't work at all -- it can work so long as you're not paying for growth. If I buy a company for 10x FCF (hopefully less) with the knowledge that there is some growth defined by the function where growth_rate=min(0,X) then it can work quite well. It's only growth investing at 25x FCF that tends not to work out. (Google is a notable exception, though, it may have been possible at the time to realize that the amount of growth Google had in front of it was immense enough to make 25x FCF not a terrible idea.)

I'm actually curious about this. So, if you exclude "sell to a greater fool" as a reason for buying, and an estimate of future cash flows as a reason for buying, what is the reason for buying Tesla? I just want to understand what you're getting at. Think of it this way - can you estimate TSLA, TWTR, or FB future cash flows? If you could, doing so requires ways of thinking that are totally different from value investing in say, a net-net. How many value investors do you see in these names? How many times do you see someone say "I'm going to put this in the too hard pile". Markets are pretty much segmented because investors fish in different pools. You're getting tripped up in a semantic problem. There is a difference between a priori and a posteriori calculations of cash flow. It's incontrovertible that the intrinsic value of a company is the present value of its future cash flows. The answer to your first question is that, for most people, it's not possible to estimate with any degree of certainty even the floor for the future cash flows of these three companies. (Though I think Tesla is probably an easier company to forecast than the other two.) Notably, this is not because value investors can't "see" what other people see. In fact, it is more likely that what other investors "see" is illusory. There is no difference in the way that you evaluate a company like Tesla versus a company like General Motors. In a general way, it's just a matter of (1) how many vehicles can the company make per year (and get absorbed into demand), (2) what margin can they maintain per vehicle, and (3) what is the likelihood of technological disruption to their business? Not all people are expecting to sell to a greater fool. I suspect many people are invested because they believe more highly in their powers of clairvoyance than they should given their track record of clairvoyance. And yes, it's possible that there is no legitimate case for investing in Facebook so long as there is no objectively passable way to know a priori the company's cash flow. The fact that it might work out well if Facebook can crack mobile advertising has no bearing on whether it's a good investment. A lottery ticket can pay out as well, but that doesn't make it a good investment.

I don't think this line of reasoning has anything to do with Buffett's quote. Yes, a small bank trading a half of book value will be analzed differently than Tesla Motors. But that totally misses the point. TSLA, AMZN, and any "deep value microcap" will all ultimately be valued the same way: on their future cash earnings. Buffett's point, and it's correct, is that there's no reason to approach the analysis any differently -- what it's going to earn over time? Unless you can estimate the figure in some useful way, you're not investing. You're doing something else. Calling it "growth" or "value" is nonsense. It obscures the basic truth. And that's why a lot of people lose a lot of money investing in "growth companies" that'll never earn anything and "value companies" that are basically worthless. The point they make about no distinction between value and growth is just that intelligent investing is about paying less up front than what you'll get over time discounted back to the present. It doesn't matter one whit whether the future cash flows come from a rather mature company or a rapidly growing one.

"Bulls make money. Bears make money. Pigs get slaughtered."

So... I'm not white. And I haven't said that it isn't happening. You have provided data that African Americans are disparately impacted by the war on drugs. I agree with you on this. However, what you wrote is that this is a major cause of single parent households. You wrote the following: Where is that data that the people who are locked up necessarily have children? And/or that they are a major cause of single parenthood? This seems to be an assumption -- if the vast majority of them do not have children, then they're not a major cause. Btw, I'm not saying one way or the other -- I don't have the data for it -- which is why I asked for data. Because otherwise, we are just talking out of our asses here. Do you see what I'm getting at here? (Like I said earlier, reading comprehension is important.) Additionally, assuming arguendo that what you say is true, then welfare is not exacerbating this trend but rather a way for people to survive while their husbands and/or lovers are in jail. People in that case are not getting knocked up to get welfare -- they are getting knocked up, their providers are going to jail and then they end up on welfare. Open question whether welfare is a better option than working for a single mother, but in that case, you can hardly make the argument that those mothers are getting knocked up to collect welfare checks.

Which "real problem"? I agree compared to things like the US's foreign policy feeding the military industrial complex the welfare system is a very tiny problem. But my original comment was in response to someone who mentioned single parent households. There are two major causes of single parent households, which are the primary reasons that there are a lot of them now and were not many of them say 80 years ago. 1) is the welfare system (you get more of what you subsidize) and 2) is the war on drugs. So when you are talking about single parent households as "the problem" then yes, the welfare system is a major cause of it. Can you cite data for this?

Reading comprehension is important, people. (See quote.) I think that it's unlikely that all single mothers are incentivized by what one poster deemed "Uncle Sam's subsidies" for single motherhood. I think it's also unlikely that no single mothers are taking advantage of the system for subsidies. My sense is that the vast majority are not getting knocked up for welfare. Correlation here is probably not causation. As for poor people, it's also not nearly as black and white as people indicate. Many poor people are there as a result of terrible life decisions and/or life habits. It's unclear to what extent those life decisions can be attributed to their personal decision-making or to their circumstances. I suspect that where you lean politically will determine how you see this -- or perhaps vice versa. About a decade ago, when I was living in Washington, DC, I tutored some inner city kids at a charter school where attendance was based on a lottery. These were some bright kids, and they probably could have done well in life had they been given a chance. Unfortunately, some of those kids had single mothers that depended on them to work so that the family as a whole could eat. Some of those kids dropped out of the charter school -- now, on the one hand, dropping out can be seen as personal decision-making. On the other hand, dropping out of school can be seen as a result of the circumstance of needing to fulfill the very bottom of Maslow's Hierarchy. Once the kids drop out, there is some path dependency that sets in. Things aren't exactly black and white when it comes to things like this. Thinking that they are black and white makes your System 1 happy, but if you put on your System 2 hat, it's pretty easy to see that things aren't so simple. At least we're no longer talking about religion... :P

Because of the saying: "religion exists so that the poor people don't kill the rich" Upon reflection, I suspect it's because people are bored, and there's not much to do in the markets right now...

Location is 949 East 2nd Street, Los Angeles, CA.

Why are we talking about religion under a thread called "Habits of the Wealthiest People"?

How does Delaney hope to bring in the immense amount of private capital that would be needed for his bill to succeed?

How large is uncomfortably large? (If you're okay with sharing that.) Large enough to not want to share :) Haha, fair enough.

How large is uncomfortably large? (If you're okay with sharing that.)

Who said that people on this forum don't like catalysts? I've never once seen that. I was merely bristling at the 50% returns not being rocket science comment. Take it from someone who has compounded at pretty damn close to that amount over the last few years. It's damn difficult. Remember the old Munger quote. "Investing isn't supposed to be easy. Anyone who finds it easy is stupid."

Get a hobby. When you feel antsy, focus on the hobby.

And perhaps how have your returns been? Since 20% (random) or 50% (yada) returns seem not to be rocket science. :P

Compartmentalization is difficult. Sociopathy is not necessarily pareto optimal.

That's what you get if you started investing after 2008... Nope, you're not the only one. I'm moderately amused with the influx of (predominately new) people on the forum that think 40% and 50% returns are somehow easy to achieve and/or the norm for investors. This seems to dovetail coincidentally with the amount of people looking to start funds because they're sure that they can continue (begin?) to outperform.

Looks like Boaz is taking some heat as well... http://online.wsj.com/articles/investors-pull-assets-from-boaz-weinstein-saba-capital-hedge-fund-1405095210?KEYWORDS=boaz