Kraven

Welcome aboard! I think we can help tons of people. Believe me, investment gains are nice, but nothing like the feeling you get when you help in those matters of the heart.

I hadn’t answered till now, because I think most of you already know what I do and what my background is. :) Though, I really envy your day job (besides investing, of course!)... ;D ;D ;D I don't envy that day job at all. It sounds insanely stressful. Maybe I just don't have the personality for it. I always hate giving people advice on anything of importance. If I do something and I'm wrong I can live with that. But if I give someone else advice that turns out bad, I'd have a really hard time with that. It takes a certain confidence in oneself to do that type of thing that I certainly don't have. I'll stick to designing circuits. Yes! But you know Kraven very well by now… He is full of self-confidence… Especially when matters of the heart are concerned!! ;D ;D ;D Gio I mean absolutely no offense to Kraven by saying this, if giving advice is in fact what he does, but I would've put money on it that he has said he invests full time and was thus kidding when he said "career advice and matters of the heart". Investing is what I do to pay the bills, but providing advice is what gives me joy. Nothing makes me happier than helping someone. It's what I do. It gives me that twinkle in my eye. Look at what I did for Gio. Thanks to my advice he now has someone special in his life. Not everyone is able to do this. Somehow I am able to both focus on investing and care deeply about others at the same time.

Career advice and advice on matters of the heart.

Seems as if a lot of board members do not sniff the coke but only smoke the sensimilla.

2008 top: ~$95 2010 bottom: ~$56 One can argue about how much intrinsic value is really fluctuating. But it doesn't look anything like a cash alternative to me. There is no alternative for cash which is almost as good as money.

I would agree. The problem though with the books isn't the ideas, but the writing and organization. The books are complex in my view not because the concepts are advanced but because in order to find them one must peel away layer after layer of stinky onions. I find his focus on the balance sheet to be influential as well and consider it, along with Schloss's ideas, to be extremely beneficial to me. What I dislike is, as I've mentioned before, the weird acronyms which are defined endlessly, the poor organization and writing, and the ranting about subjects in ways which are gratuitous. Whitman clearly enjoys standing on a soapbox. The other annoying thing is his mischaracterization of Graham. For example, he claims that Graham focuses primarily on what market prices will do in the near term. Sometimes he references different editions of Security Analysis which is also odd. He focuses a lot on the 4th and 5th editions which everyone knows are not really Graham's voice any longer, especially the 5th edition which couldn't be less like anything Graham would have written. All this being said, the books are worth reading as there are definitely some key and important ideas in them.

Whitman's books have some good ideas in them, but they are painful to read. The writing is terrible and they scream out for a better editor. He uses tons of weird acronyms, but then goes ahead and defines them over and over again. For example, instead of shareholders he calls them Outside Passive Minority Investors (OPMI) to distinguish from activist investors, control investors, etc. But it's a painful term. Despite having a defined term, he will sometimes write it out. Whole chunks of text are repeated verbatim numerous times. He also has a thing with Graham and Dodd and rails against them constantly. He says Graham stands for things that for the life of me I can't see even though I've read Graham numerous times. All that being said, if you dig through the crap you can find a few diamonds. I don't know what you mean (IDKWYM), Whitman's books are not confusing (BANC) at all due to the acronyms. Maybe he's a great investor because he thinks in acronyms. Marty's thoughts: TSIUV, IHBVGAGE Translated: This stock is undervalued, it has book value growth and great earnings. I can just see him now running around the office IFACS, IFACS, IFACS. All his employees are quickly looking the term up on the reams of acronym translation cheap sheets hanging on their cube walls..."ah, he found a cheap stock.." I guess you think you have both know-how and know-who. I imagine you'll be talking about Graham and Dodd (G&D) and saying that Graham and Dodd (G&D) only talk about outside passive minority investors (OPMI), that is only outside passive minority investors, and believe in the primacy of the income account as opposed to net asset value (NAV). After that you'll be talking about taking SOTT (something off the top) in the NTM (next twelve months) as opposed to the LTM (last twelve months). Perhaps you will discuss E&P (exploration and production) companies that engage in E&P (exchange and purchase agreements). I bet too you are not just a GARP (growth at a reasonable price) investor but a GADCP (growth at dirt cheap price) investor. It all makes perfect sense.

Whitman's books have some good ideas in them, but they are painful to read. The writing is terrible and they scream out for a better editor. He uses tons of weird acronyms, but then goes ahead and defines them over and over again. For example, instead of shareholders he calls them Outside Passive Minority Investors (OPMI) to distinguish from activist investors, control investors, etc. But it's a painful term. Despite having a defined term, he will sometimes write it out. Whole chunks of text are repeated verbatim numerous times. He also has a thing with Graham and Dodd and rails against them constantly. He says Graham stands for things that for the life of me I can't see even though I've read Graham numerous times. All that being said, if you dig through the crap you can find a few diamonds.

Michael Steinhardt going off on Buffett. Looks like this was from a couple of years ago. http://csinvesting.org/2014/01/05/the-temptations-of-saint-warren/

I think you have missed the point. Comparisons are fine. More data is fine. If there is something that can be done better, than one should do that. There is a difference between eyeing your neighbor for informational purposes and coveting what thy neighbor has. If you can use the information to better yourself, then that is good. If it makes you do things you wouldn't normally do and be comfortable with that is not good. Your last two sentences contradict each other. Part of improving is doing things that you wouldn't have done before. The trick is to figure out what you should change and what you shouldn't, and there are no shortcuts for that, some learn better and faster than others. I agree with you that there will be those that attempt to replicate this years results taking way more risk than they should but doubt that this thread has anything to do with it, it is just human nature. Perhaps I didn't state it eloquently enough for you. I apologize for trying to do 3 things at once. I think you understand what I mean. There is a difference between improving in a natural way and attempting to do things that no matter how much someone wants it or tries one isn't capable of doing. I know that everyone likes to believe they are a resident of Lake Wobegon, but unfortunately they are not.

I think you have missed the point. Comparisons are fine. More data is fine. If there is something that can be done better, than one should do that. There is a difference between eyeing your neighbor for informational purposes and coveting what thy neighbor has. If you can use the information to better yourself, then that is good. If it makes you do things you wouldn't normally do and be comfortable with that is not good.

This is great advice. Greed and envy are an unavoidable part of being human. Until about five years ago I earned my living via employment and was paid salary + annual bonus, and the bonus was substantially all of my total compensation, so basically I was paid once per year. When I was in my early thirties I received a monster (at the time) bonus that represented over 10 times what I had been paid in any given year of my life, and more that my own father ever made in a year. Time for confetti and champagne, right? Crazy as it seems, my reaction was anger, Why? The guy next to me got paid 30% more than me!!! Oh my god, the humanity! I took me some time to recognize the absurdity and years later I finally understood that life is not a zero-sum game. Year after year I witnessed the same reaction from younger people in my organization. Some got it, others didn't. Onyx, this is great. So true. Some get it, some don't. Those that do are much happier in life. At some point you realize that "ready, fire, aim" isn't a fun way to live and you just don't feel like getting up each morning ready to bite the ass off a bear.

Just following up a bit on Uccmal's very good post, the problem with these kinds of threads is that they inspire greed and envy. That's a deadly combination. It makes people do things they might not ordinarily do. As Oddball posted the other day with a link to the Bogleheads board, average people don't have anywhere near the returns that even the "poor performers" on this board have achieved. There are people lamenting 20% and 30% returns like their world has come to an end and they might as well hang up their investing spikes forever. So what will happen? It's the same thing here as in the threads on leveraging up with options. People will look at those who got gaudy returns and try to emulate them. The thing is that the people who got these returns are very smart, very experienced and very good at what they do. It's not the kind a thing a novice is going to just pop in and do. Yet, that is what many will try. The problem is that when the music stops the experienced will grab a seat while the novices will be left dancing for a few minutes until they realize the music hasn't been playing for a while. Know thyself. Figure out what you are good at and what is comfortable for you.

Sigis, I have only tagged your note as an example here. Not personal. In 2013 the S&P returned about 21%. Lots of us had a very good year. I was investing for 7 years in a haphazard value methodology before I found my groove - Learned enough and made enough mistakes to work out what works. That is why I only report 9 years back, in part. the other reason is that before that my portfolio was constantly being added to by me, making annual calculations grossly inaccurate. I feel like we should all put a disclaimer at the bottom of this thread. It is unlikely that I will get a 60% return again this year. My goal entering 2014 is the same as it has been since 2009. I don't want to lose money. I want to make money, but I really dont want to lose money. We are entering a risk off environment so I would expect returns to come waaaayyyy down in 2014. BTW, I never set targets... I manage risk. As BAC, AIG, or whatever rises in value my position will get smaller and smaller, particularly in the leveraged instruments. There is only soft targets. I expect to be totally out of BAC derivatives well before $25.00. like the SGT. Says: let's be careful out there! +2 -- 1 for the post and 1 for the great Hill Street Blues reference

Why shooting so low? You should aim impossibly high so that even if you miss by a mile you still do great. So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years. See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer. I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire. It's akin to Munger's "Man with a hammer" approach. If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself. I'd agree with that, I probably should have put a smiley on my post, but I think that might be against Kraven's rules for 2014. lol. I don't really have a goal except to earn as much of a return as I can. Smileys, winks and other emoticons are ok so long as they are used sparingly. Think of it like the 20 punches. Imagine you can only use 20 emoticons in your entire life. If so you would be very careful when it was used. An emoticon combined with an lol should be counted as 3 punches (I originally was going to make it 5, but thought that might be too draconian).

I personally find this result (and Nate's as well) just as impressive as the higher gains with the more concentrated portfolio's. With more positions there is a higher probability that skill instead of luck is the driving force behind the returns, and you have a lot less risk as well (especially with the cash position). Kraven and I have discussed "know thyself " on and offline. Whenever I have tried the Graham/Schloss style of of investing I have blown up or at least lagged badly - I have a knack for backing up the truck for loads of crap. So For now I stick to the style that works for me which is similar to Eric's. Do you call it luck that I have held BAc for nearly 4 years, AIG for two, Seaspan for 5. Maybe its luck or maybe its a bit of an intuitive understanding of market psychology. I also tend to load up the winners. IMO, there is a lot of soft skill involved in risk managing a concentrated portfolio. I am certainly adaptable and ready to try a different path, should that make sense. At this point it doesn't. I have had one down year in 10, and it was 2011, not 08, or 09. And it was due to style drift. Good points. It's important for everyone to do what works for them. Graham recognizes this when he says (paraphrasing) if you can invest by forecasting the future or utilizing technical analysis, then that's what you should do. He just knows it doesn't work for him. So you have a strategy that you have been successful with. It's smart to continue doing what works. I think the problem many have is that they don't yet know who they are (in an investing context). They are constantly trying on different hats and seeing what might look and feel good. This is what many investors are doing - (retro Brady Bunch clip where Peter is trying on different personalities).

38.5% with 33.5% cash. Never less than 25% cash. Approximately 100 positions. No leverage. Like Oddball I am impressed with the results of many here. All I can do though is what is comfortable for me. Know thyself is the key to being successful in this game. As much as I want to be Gordon Gekko, I will always be Bud Fox.

I keep waiting for someone to say "Exercise to them?! That's it? I get intimate with my wife/girlfriend/significant other to them!"

Warren likes them, therefore they are fine and by definition the best possible option. So you are wrong, sir.

I haven't read the book, but it seems interesting. Price was a true innovator.

Interesting article on Sol Price. He founded Price Club, the precursor to today's big warehouse stores like Costco and Sam's Club. He merged Price Club into Costco in the early 90's. http://news.investors.com/123013-684527-sol-price-pioneered-big-box-retailing.htm?ven=yahoocp,yahoo&src=aurlled&p=4 I remember when Price Club had only been around a few years. It was such a revolutionary concept. I remember at the time people used to always say things like who would want to buy an industrial size jar of spaghetti sauce or 3 tubes of toothpaste at one time. Pretty soon everyone wanted to. My dad used to go all the time. He was a big Tab drinker and cases of Tab would be stacked in the garage. At the time Price Club was the only place one could buy that kind of stuff.

Those are some really good ideas. How great to be able to look back and have that kind of information and data.

Merry Christmas and Happy Holidays! I am blessed to have a wonderful wife and kids and am grateful for the friends I have made here.

--WikipediA Cheers! Gio I can't imagine there is anyone on this board that anyone wants to see sitting nude on a rock head in hand.

I won't speak to the fact that I think this is an awful idea. In terms of the actual proposed arrangement you may want to investigate the margin stock rules. It's been a long time since I dealt with them so don't recall the details but there are (or were) prohibitions on lending money for the purpose of buying stock. It depended on both the purpose of the loan and whether the stock was collateral for the loan. As I said though, my experience is dated and the rules may have changed. You should investigate though.