Liberty

What don't you like about it?

http://www.cbc.ca/news/business/prem-watsa-fairfax-probed-by-quebec-in-insider-trading-investigation-1.2725043 Prem Watsa, Fairfax probed by Quebec in insider trading investigation

I have learned that I can only stick it out if I have some grasp on a highly predictable earnings future that presents me with a nearly certain massive earnings yield. Every time I've lost money it has been because I didn't start off with a company with a highly certain future earnings stream that offered a gargantuan earnings yield. -ERICOPOLY

One quarter does not mean much, but still, nice combined ratio, kudos to the guys & gals at Fairfax.

"Ever since the crisis, financial entertainment seems to have shifted from hot stock picks to big macro theories." “Generals always fight the last war”

Thanks for that. Around 13 minutes in, that banker who advises/represents Herbalife is asked how much due dilligence he did before signing up to defend the company after Ackman called it a pyramid scheme, and he literally says that it's not about doing due dilligence, that he knows the people, the CEO is a personal friend, so when they called up he said yes. Wow. That guy is going to end up in so much trouble some day...

Now I can't tell if you're playing it straight ;) I was kidding about Enron. Just riffing on your Arthur Andersen reference.

I just had a 'duh' moment. Of course it must be localized for the US, since tax and advantaged retirement vehicles and various other laws are different in the US... Otherwise you'd have been reading about RRSP and provincial tax. Does you version recommend buying Enron shares?

I believe Wealthy Barber was also a big hit in the States. I recall reading actually a couple editions of it in the 90's at some point. That was a pretty good book for what it is. I remember the story around which Chilton weaves the investment advice was well done. I always remembered the first part of the book when the main character talks about how great spring is because school is almost over (I believe he was a teacher) and one had the Tigers, Pistons and Red Wings on tv all at the same time (he's supposed to be in Detroit). Interesting. Looks like they made a version localized for the U.S., because Wikipedia says the story is set in Sarnia, Ontario: https://en.wikipedia.org/wiki/Wealthy_Barber Wikipedia also says: "The basis of the book is Roy's advice to "save 10 per cent of all that you earn and invest it for long-term growth." In that, it draws from the advice first set forth in The Richest Man in Babylon. "

I've read about a third of it last night and realized that it's the inspiration for A Wealthy Barber by David Chilton, a best-seller in Canada that basically has the same premise (couple people go ask their barber how he became wealthy, and he talks about paying yourself first and making your money work for you and multiply). My father made me read that book when I was a teenager, and I think it had a pretty big impact on me. I guess I can indirectly thank Richest Man in Babylon.

You could add ROIC metrics to the screen. A business with high enough ROIC could return a big part of its earnings and still do better than one that retains more but with a lower ROIC.

No idea. But he certainly believes in printing money as part of achieving a 'beautiful deleveraging' and helping the real economy. I don't really care about that as long as the logic is sound. People are not right in function of their portfolio or reputation size. John Paulson hasn't exactly been right on his gold call... And I wouldn't be surprised if he's investing millions of his own money. If you follow him on twitter for a while, he sounds a lot more like an experienced investor/trader than an academic economist, despite his brilliance there too.

Agreed. I've been reading his blog for a while and have posted a few of my favorite pieces in the Macro Musing discussion thread.

There's always something that is blamed when things go wrong. Price controls, the cold war, OPEC embargoes, hedge funds, HFT, globalization/outsourcing, wars, politicians, etc.. Personally I'm not as down on the fed as you are. I used to be, but the more I learn from smart macro guys like Dalio, the more I realize that deflation is bad and that when credit goes "poof", you need someone to step in and add liquidity or you get in a downward spiral that is very hard to get out of. If the fed wasn't doing what it's doing, we might be wishing it was (see the great depression when monetary policy was tight at the wrong time).

I think there's a big difference between a correction and a bubble bursting. I don't think anyone here is saying that a correction is unlikely at basically any time. You just need some random event to want to make everybody hit sell at the same time. But a bubble bursting usually takes years to sort itself and wipes out whole sectors of the economy, and it scars people about a certain asset for a long time. I think we could have a correction tomorrow, but I doubt that we're in a bubble/mania. I don't remember who said it, but there was a quote in another thread about how we're the bubble generation and seeing bubbles everywhere because we had 2 in a decade, but for most of the past century, bubbles weren't really a frequent problem. There were corrections and recessions, but it's not a given that there's going to be a bubble every 5 years.

I was paying attention a little bit to the market, but I was just starting out managing my money. I was mostly in a low-cost bond index and cash, with a little in a TSX index, iirc. I remember constantly reading in the Economist about the goldilocks era, and then about some problems with the subprime and banks, but how it'll be contained... until all hell broke loose. Not that I can predict what the market will do, but now does feel different. You can't read two business articles without reading about 2008-2009, and there's frequently people on TV calling for a crash (well, I don't watch financial TV - don't even have cable - but I see the headlines and clips online). I kind of feel like people are happy about the bull market, but they can't really believe in it... Like their heart has been broken before, so now they have this fear of commitment.

One of the thing with permabears is that when they are right, they are hailed as visionaries, but if you look at the whole picture, I bet you'd often see that you'd have been better off buying an index fund and just riding through any crisis than trying to time things following their advice and ending up on the sidelines or hedged or in bullion or whatever, missing years of good performance (and the better you are an investor, the higher your opportunity cost of not spending these years finding good businesses). I prefer the approach of buying things that will do fine in good times as well as in a recession (either they have a good M&A track record and will pick up assets at low valuations, or do buybacks, or their competitors will suffer more than they do so the field will be less crowded, etc... just constructive stuff that will create value for the next up-cycle). That's easier than timing the market, IMO.

Ok hold on a second He got his PhD in Economics from Stanford. And he's been bearish for 5 years, right?

http://fivethirtyeight.com/features/billion-dollar-billy-beane/

I've never used TA, but thought this blog post was kind of interesting since it's written from the perspective of someone coming from a place similar to many here: http://investingsidekick.com/technical-analysis-value-investor/

I'm not Jay, but I thought it was surprisingly very good. Despite the descriptions, Schwarzman actually had relatively little role in the book. It was more a depiction of Blackstone generally with lots of discussion of individual deals in a manner I found quite interesting. I thought it was one of the better books in that genre. Thanks Kraven. I'll bump it up the list.

Does the Nano offer speed granularity between 1 and 2x or are those the only two choices? I guess if that's all you have, it's motivation to learn to get used to it. I haven't tried the nano for podcasts, but the iOS podcast apps I've seen - including the official Apple one - allow you to pick anything you want between 0.9x and over 2x, so that's another thing that might make your experience better.

Jay21, what did you think of King of Capital? TIA.

Thanks I'll check it out. I have a half hour commute each way and I listen to either audiobooks or podcasts every day at 2x speed (2 hours/day of content). So I'm always looking for something else to listen to. Marco Arment just released a new podcast player app (iOS only) that you might enjoy. There's 2 features that are killer: Voice Boost, which is basic compression and EQ that makes voices much easier to hear, especially in noisy environments like a car (reduces dynamic range so that you don't have parts that are too soft and other parts that blow out your eardrums). But most importantly, there's something he calls Smart Speed. It's very low-level audio manipulation that basically removes most of the silences between words and sentences. It still sounds pretty natural - you don't get artifacts of just speeding up - and depending on who's speaking, you can often go to 1.10x-1.20x just by removing those silences. And it's adds up on top of regular speed increases, so if you were to use smart speed + 2x, your actual speed might be 2.4x or something like that (I don't listen that fast, so I don't know how that'd work out, but if you're used to it, you might like it). There's a helpful dynamic counter that tells you the speedup in real-time. There's also cool smart playlist stuff with priorities and such... And it's a 1.0 that just came out, so it should keep getting better (feature set is not mature yet). I recommend it: https://overcast.fm Out of curiosity, how long did it take you to get used to 2x? That sounds way too fast to me right now. Update: thinking about it, I realize there's probably a big difference between listening to an audiobook with a very deliberate and slow narrator at 2x and a fast-pace 3-people conversational podcast at 2x. Do you vary speed by type of material?

http://greenbackd.com/2014/07/21/worried-about-a-crash-backtests-using-shiller-pe-to-time-the-market-1926-to-2014/