Kraven

At this rate, Sanjeev is going to be out a lot of money. He already is going to owe me $1 at the end of the year when BAC doesn't pay out $7 bil or more on the common. A pint too? Better pick some good stocks!

Ha, very nice!

It's basically just Fairholme plus a little Fairfax, he doesn't necessarily size his positions by number of COBAF posts. :) But I do see a problem. VAFGX 1.64% FAIRX 1.00% You're probably right. But, now that you mention it, how can we be sure Bruce B doesn't lurk here.... I am sure he does, but would never admit it. I think people want to think that "superstars" don't do things like check out a message board. He is just a guy sitting in a home office. He almost certainly checks in from time to time.

Congratulations!

Gio, you're welcome. I think you'll enjoy it.

[amazonsearch]Tombstones - A Lawyer's Tales from the Takeover Decades[/amazonsearch] I recently re-read this book and thought that some on the board might enjoy it. It's primarly about the start of the modern M&A boom (i.e. 1970s-1980s). The interesting part about it is that it's told from the perspective of a lawyer on the deals. Lederman was a partner at Wachtell Lipton which as many know is probably the premier firm in the M&A area. Lederman had a front seat for many of the big deals in those days and recounts his views. It's a quick and easy read and gives his background starting off at Cravath in the 1960s and then moving to Wachtell in the mid 1970s. I read this book about 20 years ago when it came out and recalled enjoying it at the time. I liked it just as much this time. I thought about it when reading The White Sharks of Wall Street about Tom Evans. Lederman was Evans' lawyer in the Missouri Portland deal and Tombstones was used as the source for much of that discussion. Interestingly, Lederman was also involved in the Macmillan deal from the 1980s with Evans' son, Ned, which also was discussed in White Sharks. In any case, this book is long forgotten and probably never known, but it's a good one for those interested in that period and especially since it isn't told from the usual perspective of the bankers or CEO of the company. The book is out of print, but is cheap used on Amazon.

Great song. I actually like the Siouxsie & the Banshees version the best.

I think it's "Sell in [insert Month] and go away because the market will be crashing imminently since if you look at a chart it matches up exactly with that from 1929. or if not 1929, 1937, and if not 1937, 1973, and if not 1973, 1987, and if not 1987, 2000, and if not 2000, 2008, or at the very least it's pretty much exactly like Japan, but if not like Japan, the Shiller PE is really really high and besides ECRI calls for a recession, but even if they are early timing really doesn't matter and it will almost certainly be within a few years, but even if not within a few years, hey, shouldn't you be prudent?" Something like that anyway.

Kraven, if any prediction about the stock market with attached timing is right, it has to be luck. Markets are intrinsically unpredictable, as the weather, in a chaos-like fashion. So nobody can really predict anything, stricto sensu. But you can look at numerical estimators and calculate probabilities. If the CAPE is 10, you know that it is more likely that stocks will go up than down. But nothing precludes them going to CAPE=7. If the CAPE is 24, you know that it is more likely that stocks will go down than up. But they can still keep rising, as they have been doing for quite a while already. That's why I talk about Goddess Fortuna. Everything is probabilistic. I have my own timing indicator, but it has only flared like this 3 times. So how can I know whether it is right? Thrice is not a broad enough sample. But it adds to the probabilities. And an elemental rule is that, the higher the probability, the closer in time the event will be. That's my point. There are probabilities and there are predictions. Plenty of people had been posting essentially saying a crash is imminent. Not that the the probability of an adverse market had increased, which is fine of course, but that such adverse market is in fact immiment. I think what you're saying is correct.

I am not arguing for the sake of arguing, I am really trying to understand.... So based on the above, if one were to position ones' self based on micro and macro factors that he or she believes will lead to a 50% decline in the market - perhaps not imminently, but within a 3 year time frame - whether you agree or not on those factors, you would not have a problem with said positioning? It appears you have more of a problem with a fact-lite prediction of an 'imminent' 50% correction, correct? Here are 2 different statements: 1. How can anyone possibly invest right now given the high levels of profit margins, market cap to GNP, unrest in the Middle East, Japan blowing up any day now, etc.? Further, if you look at a graph of the stock market it mirrors exactly what happened back in 1929! Therefore, it is obvious that the market will crash very soon. Or, 2. Given that profit margins are at historic highs, the market cap to GNP is high, there is unrest in the Middle East, etc, it is prudent in my view to allocate funds in a more conservative manner. It is not clear exactly what will happen - it never is - but all I can do is prepare myself in a way that makes sense to me. The first is a prediction. The second is not. Any talk of how much we will decline in exact numbers is a prediction. That's fine if someone wants to do that, but in order to be correct there has to be a time frame on it. Otherwise, you know, broken clocks and all that.

The way I see it is that it not a prediction as much as being aware of the environment you are in. We know there are times when it is more dangerous to drive a car, like when there is severe freezing snow. We do not know for certain we would get into an accident, but we know that the chances of getting into an accident is much higher when driving in freezing snow than when driving on a bright sunny day with low traffic. We would drive much more carefully and more slowly (20 MPH instead of 60 MPH). Being aware of the various valuation measures is just similar. We know we are in a much more dangerous territory and we approach investments much more cautiously. Each of us have different tolerances for risk and choose to hedge/reduce allocation, etc at different levels of the valuation measures. I have chosen to position my portfolio very defensively when S&P 500 is around 1600. I have no strong particular view of how the market would behave going forward, just that we have entered a territory where the medieval cartographers used to mark as "Here be dragons". Vinod Yes. See the post I just made. I have no problem with what you said. The issue I see is that many appear to believe they are a value investor in Elaine Garzarelli's clothing. That's it.

You've missed my point entirely. I am making no assertions about the market whatsoever. My only point is that predictions themselves are inherently flawed. It's one thing to attempt to position yourself based on whatever factors, macro or micro, one deems important. It's another thing to say there WILL be an imminent crash. Many on the board are doing the latter.

LOL! Kraven, if you think Road House is a classic film, then that would make Footloose the 80's "Singin' in the Rain!" Glad you invest and don't produce films! ;D Cheers! No need to insult me. Everyone is quite aware that the 80s Singin in the Rain is either Grease 2 (with a young Michele Pfeiffer) or Staying Alive (which was essentially Saturday Night Fever 2 and had the added bonus of having Frank Stallone, Sly's brother in a starring role alongside John Travolta).

Because a prediction without some kind of timing parameters is virtually worthless. Think of these predictions: there will be another world war; someone you know will die; humans will walk on Mars; beam me up Scotty won't just be a line from Star Trek. Is it really a prediction to say sometime in the future these things will occur? Yes, the market will fall, but it will also rise. What about a prediction that the market will go up some year 50%? Is that a valid prediction if it occurs in 2019? I stand by my earlier post. If someone thinks we are going to crash imminently they should sell what they own right now and wait for the better prices that are right around the corner. Sell it all. I don't understand hanging on to BRK, FFH, MKL, etc. They will all fall too, likely around the same amount or more than the market as a whole.

For all you budding Elaine Garzarelli's out there, tell us when the market will crash within one week of your prediction - and do it twice in a row - and I will be impressed. The rest, to borrow a line from the one of the classic films of the past 30 years, Road House, is like putting an elevator in an outhouse. It don't belong.

You're one tough jew. :) Lepke, Lansky, Siegel, Rothstein . . . we don't talk about these things.

You can always count on Kraven to make you laugh. You mean, let me understand this, 'cause, ya know maybe it's me, I'm a little fucked up maybe, but I'm funny how? I mean funny like I'm a clown? I amuse you? I make you laugh, I'm here to fuckin' amuse you? What do you mean funny? Funny how? How am I funny? ;D !! Why that line isn't in AFI's Top 100 Movie Quotes of all time, I'll never know. Seriously, it isn't? I would have thought top 10 at least. I mean it's classic. Right after Bogart says "here's looking at you, kid" to Bergman in Casablanca, this is what he says to her. Seems as if they've really messed things up here. Yep classic, right up there with "I think you're going to need a bigger boat". I am partial to "General, would you care to step outside?" myself.

You can always count on Kraven to make you laugh. You mean, let me understand this, 'cause, ya know maybe it's me, I'm a little fucked up maybe, but I'm funny how? I mean funny like I'm a clown? I amuse you? I make you laugh, I'm here to fuckin' amuse you? What do you mean funny? Funny how? How am I funny? ;D !! Why that line isn't in AFI's Top 100 Movie Quotes of all time, I'll never know. Seriously, it isn't? I would have thought top 10 at least. I mean it's classic. Right after Bogart says "here's looking at you, kid" to Bergman in Casablanca, this is what he says to her. Seems as if they've really messed things up here.

You can always count on Kraven to make you laugh. You mean, let me understand this, 'cause, ya know maybe it's me, I'm a little fucked up maybe, but I'm funny how? I mean funny like I'm a clown? I amuse you? I make you laugh, I'm here to fuckin' amuse you? What do you mean funny? Funny how? How am I funny?

I would agree with this.

I'm totally confused here. What is it exactly that people are predicting? Is it another financial crisis which would lead to a stock market decline, or is it just a stock market decline? What drives me crazy about predictions is the time element. We all know that the stock market will suffer a serious decline at some point in the future. It will also reach insane frothy levels as well. When will each of these things happen? A prediction just that they will occur is no prediction at all. Think about the broken clock. Further, for those who "know" the market will crash imminently, why hold any stocks at all? Why not sell everything and wait to re-load? And why the constant refrain from many about only holding BRK and FFH? I don't understand it. If the market tanks, they will likely tank just as much as anything else - more than some, less than others. Perhaps if one is predicting another financial crisis I could see wanting to hold "arks", but if you know its coming, why not sell it all and wait to buy in cheaper? If it's just a pricing decline, then how is holding BRK and FFH which are closer to IV than many other stocks better than holding something that's at rock bottom? Because remember, in this case we're just talking about prices, not the actual business environment. I think people are mixing up their predictions. Some say the economy is moving along, but there will be a crash. Then we get all the talk about market cap to GDP, profit margins, etc. That sounds more like a business slowdown discussion. At the end of the day, I don't love a market that just goes up either. I'd be lying if I said it didn't make me think, but I'm just not sure exactly what people are predicting here and what they propose to do about it. These threads pop up everytime there is no recent drop in the market. An imminent downturn has been predicted since the Fall of 2009 at least. So if it happens now is that prediction accurate? Guaranteed, the second we are down 2% all of the "I told you so's" will come out, just as they did a few months ago. Of course since that was an awful 3% decline it didn't last too long. I predict nothing other than people will make a bunch of predictions that don't make sense to me.

I would disagree. There was plenty of stock craziness at various times during the mid 2000s, 1980s, 1960s and 1950s. It wasn't just the late 90s and 20s. Whether or not the market is crazy now I will leave to others, but from the information I have both retail and pension funds, endowments, etc have yet to jump in here. Doesn't mean they will of course, I have no idea. But IF they did, things could get truly insane. Based on what financial history I have read, the 1929 and 1999 were the only times I heard of every average person and their dog wanting to be in the stock market. Perhaps you are right about similar mass hysteria in the times in between. However, I think we agree that things never do and certainly don't have to repeat exactly. I would agree that the late 20s and late 90s were likely the periods in the US at least of highest mass insanity for stocks. However, there was plenty of love for stocks in the other periods I mentioned. I would posit that we are no where near any of those periods at the current time. While those of us immersed in day to day investment activity, like the folks on this board, certainly feel that it's there, I don't believe the average person is stock mad like any of these other times. In fact, it's the opposite, they are scared shitless about the market. So what does that mean? I have no clue. I do agree that things don't usually and don't have to repeat exactly so it is very possible that the average person doesn't jump on board this time. However, one can usually rely on either greed or fear at all times. I think for most people it's been fear ever since the financial crisis and certainly once you add in the early 2000s and the flash crash in 2010. Never underestimate though that drooling greedy monster that resides in most people.

I would disagree. There was plenty of stock craziness at various times during the mid 2000s, 1980s, 1960s and 1950s. It wasn't just the late 90s and 20s. Whether or not the market is crazy now I will leave to others, but from the information I have both retail and pension funds, endowments, etc have yet to jump in here. Doesn't mean they will of course, I have no idea. But IF they did, things could get truly insane.

My wife is someone who only buys organic if available. She used to shop at Whole Foods primarily, but has shifted most of the shopping to Trader Joe's. The prices are much better and the selection is fine. There are still certain things that TJ's doesn't have that she gets at WF's, but her preference would be to shop at TJ's at this point. There is a new kid on the block too in this space (at least until TJ's goes public). They have the awful name of Natural Grocers by Vitamin Cottage (NGVC). Around 60 stores open so far and with big plans to compete in this space. They are opening stores at a good, but measured pace, and I believe not taking on debt to do it (or not much anyway). I am pretty sure they just opened one or 2 in Omaha in fact. They are trying to carve out a niche by not having any prepared foods and such and cater to the earthy crunchy crowd which is going mainstream. It's an interesting concept.

Haha what an age giveaway! I'd be shocked if more than a handful of people on this board have ever seen a Pee Chee folder! Kraven...is this yours? http://www.bing.com/images/search?q=pee+chee+folder&id=D94FEC4DF7CBDE19061D8C8823047FF864EF6F45&FORM=IQFRBA#view=detail&id=6A4E1CC2686B9A594B4DB913F2FE4DD3DB24DD86&selectedIndex=107 Ha ha. I know. A very dated reference. That's great! I wish some of those were mine. I used to be very envious of those more artistic than me. The one where it shows one basketball player with a hammer and nailing into the other guy was very commonplace. Half the guys in school had that in their folder. AC/DC, Rush, etc. Standard stuff.