merkhet
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Posts posted by merkhet
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I've just read The Little Book of Behavorial Investing (which was a true eye-opener and light read at once, recommended!) so I will definitely check this out. Thank you!
James Montier is one of my favorite writers. I would highly recommend his other book "Value Investing" for a deeper look into the concepts that he introduces in The Little Book of Behavioral Investing.
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Looks like there's a new James Montier piece out.
I'm not sure if anyone else on here follows him, but I've always found his writing to be both timely and brilliant.
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But last week under the post "Too much risk, lessons not learned", I commented that I had decided to go to a mostly cash position. Some replies to that decision were: "overly dramatic", "fighting the last war", "aren't investing", "return on cash is low".
I think that might have been a knee-jerk reaction to seeing you write 98% to 99% cash. I didn't comment on that thread, but I think the sense was that you were trying to top-tick the market -- which is not to say that was your actual intent.
FWIW, I'm currently about 66% in cash and likely on my way to 85% in cash, but that's largely a function of the fact that I was 10% in cash up until a few weeks ago when many of my positions started hitting their fair value marks. Since I've been expanding my margin of safety requirement to 50% from 40% (to compensate for increased risk), I'm not seing a lot of value out there, so my portfolio will likely remain cash heavy for the immediate future.
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I must be misunderstanding this discussion, because I'm a little confused.
The OP linked to a Seth Klarman article stating that (paraphrased here) given the surfeit of risk currently in the system, it would be prudent to require a large margin of safety. (If I remember correctly, Seth has very recently stated that he's more worried now than he has ever been in his entire career.)
Seth's statements don't necessarily mean that there are no cheap investments around. You can find value in such companies as JNJ and WMT if you're shopping in Seth's weight class or various other companies as well. I believe what Seth is saying is that if you previously demanded a 40% discount to intrinsic value, it may be prudent for you to demand a 50% discount to intrinsic value for the current environment. (i.e. increase your baseline for your margin of safety)
What's wrong with that?
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Who put the screening site together?
Not sure -- I got the link from Magic Diligence -- http://www.magicdiligence.com/toolpage
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Yup - the railroad. I think it was Greenblatt who said Buffett did a mistake or doesnt get it or something in that vein.
I believe it was Bruce Greenwald and not Joel Greenblatt.
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So it looks like Joel has a new book coming out:
Does anyone know have a sense of whether this is just a re-hash for The Little Book That Beats the Market? (i.e. - Magic Formula stuff?)
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Even the best of us turns to the "dark arts" of macro predictions every now and then.
Increases in commodities prices and high unemployment certainly feel like precursors to stagflation to me -- but then again, I wasn't alive in the 1970s, so maybe someone who was around could give us their perspective.
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I've had a position since last October or so. It's hard for me to see this being a great company and bad investment, though I suppose I might be biased.
The energy initiatives are certainly capital intensive, but I don't believe it means that they're going to be forgoing profits because of their "civic duty." If you'll recall the Microsoft letter that Buffett wrote a few years ago concerning a toll booth on the internet -- I believe that Buffett sees BYD as a toll on the new energy era. Right now, BYD has the best value/technology mix for batteries. (If I remember correctly, A123 might have a slightly better battery, but they can't build it profitably.) I think it's likely that BYD will continue to keep the best value/technology mix position, and that will make them akin to "Intel Inside" or "Microsoft Inside."
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At the 2010 Fall VIC, Kyle Bass and Whitney Tilson talked about opening up a fund to bet on the Japan situation as a way for smaller funds to participate in the thesis. I don't know the terms/positions/etc. but it might be worth it to reach out if you wanted to play this.
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I would love to be in 50% cash right now, and if things go as I expect over the next month and a half, I'm hoping to get there.
I would hold for the fat pitch since almost everything is expensive now -- maybe add a little bit to high quality large caps if you really feel the itch to buy something. (We've certainly all been there before.)
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Very interesting reading. Thanks!
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Well, Buffett fishes in a much smaller pool than the rest of us, so it doesn't necessarily mean there's no value left. However, it certainly does bear some consideration.
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Harry,
I don't really have a dog in this fight, but since it's the internet and that's never stopped anyone on the internet before, I'm throwing in my two cents anyway.
I think you have a lot of really great ideas. However, often times when I see what you write on this board, I can't help but think back to The Last Lecture by Randy Pausch. In that lecture, Randy relays the story of talking with one of his mentors at Brown University who told him that "Randy, it's such a shame that people perceive you as so arrogant, because it's going to limit what you're going to be able to accomplish in life."
When you write to ask "the prophets" whether any of them have "adopted risk control, as [you] have suggested" or whether they are "still in the throes of confirmation bias," you have to know that in addition to perceiving that you are helping them unwind an unprofitable trade, you are also needling them on. And in needling them on, you have to know that you're forcing them to choose between (1) announcing that they're sticking with the trade (unwise IMHO) or (2) suffering the embarrassment of saying that they might have been wrong to someone with which they have some bad blood. (From what I've read of your writing, you're a smart guy, and you've studied enough Cialdini and Ariely to know all of this. Why stack the behavioral psychology against people listening to your advice?)
I guess what I'm trying to say is that you can advise or you can provoke, but it turns out you can really only choose to do one at a time effectively. (Plus, given the post above mine, it looks like choosing the latter would not be wise.)
In any case, I hope you find a way to stick around.
Best,
Rob
[And yes, I know they needled you too throughout this thread, but honestly, each and every one of us on this board is too old -- i.e. past schoolyard age -- to push back just because we are so pushed.]
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Three comments:
(1) I'm stealing a lot of this for my own checklist, so thanks.
(2) Do you really care about why Wall Street has written off the company? There's a difference between doing thorough research so that you are familiar with the pitfalls and listening to Wall Street's siren song of short-term-ism.
(3) The content here is really good, but it might benefit from being streamlined into more of a checklist. Right now it seems like more of a worksheet as opposed to a checklist. I think that a reorganization might be helpful. Perhaps make it flow from a general view to a specific view.
So, for instance:
(A) Do I understand the industry? (Yes - No)
(B) Is the industry a good industry? (Yes - No)
© What is the company's position within the industry? (Leader - Middle - Turnaround)
(D) etc.
The way that the checklist is currently formulated, it looks like you're trying to value the company before asking if it's even worth it -- something that could cause anchoring, confirmation bias, etc.
Just my 0.02.
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globalfinancepartners,
That's an amazing site. Thanks!
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I'm both surprised and glad that this happened as peacefully as it did -- though I worry a little about how the transition from military control will go...
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You think they're going to make a run at Cohen?
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It it just me but Blackrock owns 6% of all my holdings.
Blackrock has popped up on my companies recently as well. When you've got trillions under management, you inevitably end up owning a bit of everything.
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I follow BYD Company.
I believe DB has a price target of $39HKD (recently came down) and CS has a price target of $34HKD on the company. It'll be interesting to see what happens when the 4Q earnings come out in March/April.
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Are you talking about the old Apple Newton?
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Well, I'm an unabashed Darren Aronofsky fan, so I might be a little biased. I think the easiest way to understand Black Swan is to know that it's a movie about a person descending into madness (sort of like Aronofsky's earlier work "Pi").
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I switched to Mac about six years ago. The learning curve isn't particularly steep. For what it's worth, I've only had one Mac crash on me, and that was a kernel panic because the hard drive was borked. (I'd dropped that laptop quite a few times, and I think it finally caught up with me.)
You can still use Office software and Matlab though you'll likely have to pick up Mac versions.
Gotham Capital vs Gotham Partners.
in General Discussion
Posted
Huh, I had no idea that Greenblatt was seeded by Miliken -- that's... disappointing. I really liked Greenblatt's first book.