merkhet

Illiquidity most likely -- there were two 50K+ share transactions within a very short period of one another that might have sparked the sell off.

It's not what you don't know that kills you. It's what you know for sure that just ain't so.

I glance at this once every couple of months or so... http://www.gurufocus.com/stock-market-valuations.php Not S&P500, but I figure it's roughly correlated...

Math and Neurobiology here -- I think there were only about 3 girls in my math programs. Thank goodness for pre-meds in Neurobiology.

If I remember correctly, at one point Japan's real estate (Japan is the size of California) was worth about 4x all the land in the United States...

I love this idea -- I think the knock-on effects of soaking up inventory will be very helpful in supporting our slow recovery. Folks who think that things would be better by now if we let the banks and other TBTF institutions fail... ... even if all the real estate came to the market at once, and we bottomed very quickly... even assuming that we had better employment than we did today... exactly how would housing recover if we had massive bank failures across the board? Who would be lending them money for the other 80%?

Good reference, tombgrt. I'd combine that with the following: Now, I'm sure some might respond to this by asking -- how did this work during the Great Depression (dunno if there's enough data there) or Japan in the last twenty years (probably enough data, but not sure if anyone has worked on this). I have no idea, but I'd be interested to find out... What's interesting is that every investing discipline, to some extent, operates on faith. For value investors, we subscribe (on faith and limited experiential observation) that "in the short run, the market is a voting machine but in the long run, the market is a weighing machine." I think the two sides that are arguing at this point can effectively be reconciled purely by saying, "there's a lot of risk out there (true) and it wouldn't hurt to increase your margin of safety requirements (also true)." Additionally, I think people are confusing investment style vs. business style. Investing in a 50 cent dollar now and having it drop to a 25 cent dollar in a year before becoming a full dollar three years down the road is not terribly worrisome when considering investment risk -- so long as the business is chugging along fine. The business risk of redemptions and investors freaking out, however, is a different story -- and reasonable people can differ as to how and whether to dampen volatility to assuage the psychology of their investors (or themselves).

Am I the only one who doesn't understand this argument? Is there risk in the market? Sure, there almost always is... Are some companies trading for 2x - 3X normalized earnings? Well, actually, yes... Is there a possibility those companies may trade for 1x - 1.5x earnings? Sure, there almost always is... Does it matter if your cheap company becomes cheaper? Not from an investment standpoint, but possibly from a business risk standpoint if you run money (redemption possibility) -- so long as there's no reflexivity in your companies. Does anyone really think that a well-selected group ofindividually undervalued securities won't work out over the next five to seven years? I really doubt it, but I guess people could differ.

I think Warren has previous said that he prefers a committee of one (the guy looking back at him in the mirror). At some point, he was asked about putting 40% of his funds into AXP, and he said something to the effect of "can you imagine trying to get a committee to agree to that?"

I love Groupon's deals too, but that Adjusted CSOI thing just strikes me as accounting voodoo. "We'd be SOOO profitable, if you just ignore our largest costs..."

I seem to recall a Fortune article indicating that Charlie was brought on because of his restructuring expertise. Perhaps there's just not a lot of restructuring stuff left for him to work on... In any case, I think Fairholme has always been a one-man show... would be interesting to hear the official reasoning though.

Yea, this is quite a surprise.

ZH gets some interesting news every now and then, but they definitely have a bias towards doom and gloom. I can't remember where I saw this, but there was a joke going around a few months ago with a fake headline from ZH -- "ZeroHedge once again disappointed that meteorite fails to annihilate Earth." or something like that.

Person A has a debt on his boat and another on his sportscar. He has no liquid assets to invest. Person B is a billionaire and has no debts. How does eliminating capital gains tax help person A pay down his debts? I can see how it helps person B, but person A? Person A already has a large incentive to pay down his debts -- the interest rate on his loans is much higher than interest rates available elsewhere. Why does changing the capital gains rate have much to do with anything related to deleveraging? Why do most people keep forgetting that Warren's plan was to bring the passive income of the ultra-rich (50,000 people) to 30%-ish rates? Warren's not dead wrong on taxing passive income since it has little to no effect on those 50,000 people's consumption... The actual plan being touted by the administration is a different plan than the one Warren initially envisioned...

More people should run a concentrated fund -- if I remember correctly, Bruce Berkowitz at one time in the 90s held only two stocks --> Berkshire and Fireman's Fund. (I don't remember if he was running money for others at the time though...)

Owned land is a little under 100 million sqft. I haven't updated my spreadsheet on that in a couple years though, so it may have dropped a bit more recently. The value of the real estate is tricky though. Owning 100 million sqft and having leases of various lengths and terms for another 200 million has significant value. Is it more than $10 billion? Maybe. But, the trick is how and when you monetize it. biaggio and zarley, where did you guys find the breakdown for ownership vs. long-term leases for SHLD? I took a quick look at the annual report, but I must have missed it...

I don't think so -- I think that was pretty much everyone else. Richard Koo is in the camp that blames Japan for fiscal consolidation too soon -- twice.

I wouldn't count out Paulson just because he had a bad year -- that would be as fallacious as counting him in because he had a good year. Sorting wheat from chaff takes time...

That's the side I'm coming down on -- when you can't depend on investment income given yields, you can really only decide to increase your prices.

they use the + sign. for example. aig is aig+. wfc is wfc+. bofa has two. bac+a bac+b. Hope you get the idea. If I put in aig+ Google finance is not able to recognize the symbol. Am I doing something wrong? Thanks Vinod Vinod, it doesn't seem to work through the Google Finance website, but if you're using the =GoogleFinance() function in Google Spreadsheet, it works fine. Thanks peter_burke_ceo -- the =GoogleFinance() function is so much faster and more reliable than =importData() using Yahoo Finance.

He was one of my greatest heroes, and I'll miss him greatly. http://news.stanford.edu/news/2005/june15/jobs-061505.html

Portfolio is set up using Google Spreadsheets importing Yahoo Finance quotes. (only because I have no idea how to get warrant quotes on Google Finance.) Watchlist is set up using Google Finance. I jump between Google and Yahoo to check out stocks.

I think Jamie might have a good amount of insight into the stage we're in for debt cleansing given his access to JP Morgan Chase data. However, I'm wondering whether post-debt cleansing, we might have what Richard Koo labels "debt rejection syndrome." People are more reluctant to borrow given their experience with debt. So then, we'll recover a bit better than we're currently doing, but not quite near where we're used to since it's not being fueled by imprudent levels of debt -- but then again, people are habitual creatures....

For me, it's the former. I've been shifting some stuff around in my portfolio. Still about 30% cash, but I've shifted some of the makeup of my other 70% towards more undervalued issues.

UCCMal...I actually don't think AIG as much as LNC/MET/PRU...also how doesn't GWO CN continue to trade at multiples of book when it is just north of the U.S. border and does material amounts of business in the United States and Western Europe... I agree here -- AIG's life insurance runs through SunAmerica. (There's 2% exposure via Chartis International, but that's negligible, IMO.) AIG's "revenues" come to about $77 billion and SunAmerica accounts for $15 billion of those --> of which only about 50% comes from life insurance. I'm guessing what killed the life insurance companies was contracts set with certain yield assumptions that got blown out when yields dropped from 7%-8% to 1%. I don't believe our yield assumptions were as high for domestic life insurance companies as they were for Japanese life insurance companies...