Kraven
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Posts posted by Kraven
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Brands are really powerful. My wife still insists on buying Motrin. That's ibuprofen with a sticker on it...with a jazzy name.
Yep. My mother in law once brought her bottle of Heinz ketchup to our house because we buy the cheaper store brand ketchup..
Non-heinz ketch-up!?! Oh dear. I saw some Wal-mart ketchup in my brother's pantry once and I immediately became concerned about how his life was turning out. ;D
Appropriate here.
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For those reading Davis Dynasty the first 50 pages are slow. I would encourage you to keep going - it gets much much better and the Davis Dynasty is one of my top 5-10 investing books
The Davis Dynasty is certainly worth reading. There is some interesting stuff in there. Unfortunately it's poorly written and there's too much about his personal life in there. That would be fine if his personal life was interesting, but it isn't. All we really learn is how damn cheap he was with things like wearing the same sweater until it falls apart and using his kids as slave labor to build a pool (which didn't work, but apparently taught them a lesson that pools don't just materialize for the asking).
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I guess we are now measuring people's investing skills over periods of barely a week. On the other hand I guess Fairfax can still be proven right on the hedges.
A week? That's a long time. It now seems to get measured on the basis of hours or a day, but usually only in the case of Berkshire, Fairfax and Sears.
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I have a confession to make, I actually walked through a Sears store this weekend. It was pouring raining late Saturday afternoon and my wife wanted to go to the mall for something and it seemed like everyone else had the same idea. We couldn't find a spot anywhere, cars were following shoppers out to their cars and waiting for them to pull out. So I said to my wife, I'm going to go to the Sears entrance I bet we find a spot there, and sure enough we found one not too far from the door. As we were walking past the shoe department heading to the mall entrance I saw Craftsman and DieHard shoes and thought WTF? I don't know if DieHard underwear exists or not, but I wouldn't be surprised if it did.
So what was it like inside? I've heard of people going in before, but I thought those were only stories intended to scare children into doing what they're told.
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Well, he says he holds BRK in the book and pretty much that he won't sell. And he said he bought PKX recently. I don't know any other holdings.
I suspect that if you peruse the top 10 Berkshire holdings you will have a pretty good idea.
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http://finance.yahoo.com/news/sears-kmart-add-thanksgiving-shopping-171924609.html
Let's play a game. It's called "Guess the Sears and K-Mart Black Friday Door Busters!"
First prize is a trip to your local Sears or K-Mart.
Second prize is 2 trips to your local Sears or K-Mart.
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At the end of the day, The Intelligent Investor is a pretty short and quick read. I would recommend it but if you have had your fill of Graham then, as always, there are limited hours in the day and one can only read so much.
If you recommend it, I definitely will add it to my (slowly shrinking) list!
I've got to say though, value investing certainly makes it hard for you to read "everything" ;D
I do recommend it. I would read the 1st edition first though. It's the one where you get his clearest thoughts on investing without the changes that came about with more money, boredom with investing and different interests. Graham circa 1949 is different from Graham circa mid 1960's. Although the seeds of what he later become were evident in the 1930's and 1940's, his writing itself maintained a purity that got muddied in later years.
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This book obviously needs no introduction, at least the 4th and Zweig editions, so I'll just brag about my exploit.
Just picked it up this afternoon for $3. Hardback reprint of the original 1949 edition ($35 retail, $21 amazon). From one of the county branches of the Friends of the Library Bookstore. It first showed up three weeks ago for $6. I gambled by waiting a few weeks, because this branch marks prices down from their already deep-deep discounts if the books don't move.
I'm in 7th heaven, but feel free to shoot me down for risking letting this slip away.
I'd be more interested in hearing previews of how this edition is superior or inferior to later editions.
Congrats! ;D I am envious. You'll have to let us know how it is.
Kraven, have you read the third edition? I picked up a copy for cheap some years ago, but I'm a little hesitant to read it since there may be better editions to spend time on? Plus, after reading Security Analysis, I'm wondering if it will teach me anything new?
West, no I never did. I haven't read the 2nd or 3rd editions. In terms of spending the time on it in my opinion it's never a waste to read Graham. It's always interesting to see how his thought process developed over the years although frankly that's been discussed fairly often on the board so you probably have a good sense of it anyway.
As to whether it adds anything that a Security Analysis doesn't, I think it does. The Intelligent Investor was teed up as the layman's Security Analysis. It is, in part, but I always felt the thrust of it was more towards the emotional aspects of investing as opposed to just the technical. I would say that even those areas are certainly covered in Security Analysis but perhaps in a less accessible manner.
At the end of the day, The Intelligent Investor is a pretty short and quick read. I would recommend it but if you have had your fill of Graham then, as always, there are limited hours in the day and one can only read so much.
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This book obviously needs no introduction, at least the 4th and Zweig editions, so I'll just brag about my exploit.
Just picked it up this afternoon for $3. Hardback reprint of the original 1949 edition ($35 retail, $21 amazon). From one of the county branches of the Friends of the Library Bookstore. It first showed up three weeks ago for $6. I gambled by waiting a few weeks, because this branch marks prices down from their already deep-deep discounts if the books don't move.
I'm in 7th heaven, but feel free to shoot me down for risking letting this slip away.
I'd be more interested in hearing previews of how this edition is superior or inferior to later editions.
Superior to the 4th and the Zweig version. The Zweig version is ridiculous in my opinion. The 4th (without his commentary) is good, but the 1st is better.
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I started reading this one, read maybe 150 pages out of 1300 (ebook pages..) and I can't say I'm enjoying it too much. Has anyone else found it to be slow going in the beginning and not always so well written (they kind of assume - at least so far - that you know who Gupta is, what Galleon is, etc). Does it improve as you go deeper in, or should I just give up because it's all similar to the beginning?
I thought the book was very good. I am not sure exactly how far into it you are, but there is a lengthy description and background on both Gupta and Galleon (via Raj). I am pretty sure Gupta's background is near the beginning so maybe give it a little more of a chance. At some point the book starts alternating between Gupta's and Raj's back story with the more current events.
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Maybe I'm being bitchy, but does anyone else think Brit Cool should stop giving advice and interviews until she has actually done something? She's 30 years old and the only thing I'm aware of her having done is hire the husband of a friend of hers to run Benjamin Moore and subsequently fire him when he cheated on her friend with a secretary.
http://finance.yahoo.com/news/advice-buffetts-30-old-hand-174812229.html
No, you're not being bitchy but it's pretty clear you don't understand. I will help you here. I could give you a long winded explanation, but instead I will go a step further. There are several truisms in the investing world that the sooner you commit to memory, the easier your investing will be. If after reading through these and digesting them you still don't understand please let me know and I will discuss further.
In no particular order, here they are:
1. Any decision by Buffett is correct.
2. Any statement by Buffett or Munger is witty, profound and embedded with the truth of the universe.
3. Fairfax will compound book value at 15% a year.
4. Any time the market falls more than 0.1% Fairfax's hedges are proven correct.
5. Eddie is a genius and the more his decisions are incomprehensible to the average person, the more genius they are.
6. Eddie is a kick ass capital allocator and, thus, his capital allocation decisions are kick ass.
Hope this helps.
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Kraven you are on fire today. Picture him pitching that process to investors. I imagine that guy had to come up with a better story than that to attract capital.
I was going to post this earlier but I thought it was too far off topic, but it looks like we are well off the original topic anyway. I liked the interview with Gottfried but the thing that I noticed was him saying that everything has to line up for his investments. The thing I've realized is that many times you have a great investment where 9 out 10 factors don't line up, but there is one big factor that overshadows the negatives. For example, geico in the early 70's, early berkshire before people understood the plan, or for a lesser known example take Mexican Restaurants. In each case you had kind of a murky situation and you could sit there and name all kinds of negatives,but you could also pretty much sum up why you should buy it anyway in one sentence.
Oh, I actually liked that story. Now maybe it wouldn't play well from the standpoint of attracting investors, but for an individual investor I had no problem with it at all. I firmly believe that investing comes down to just a few key variables. While I wouldn't necessarily suggest investing like this guy did it does show that simple and straightforward works.
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I think people differentiate between quantitative and qualitative screens
I think it depends on how broad you define the word "screen."
The "Timeliness" rankings in Value Line are interesting in this regard. Some people consider it a screen, but others don't because there are proprietary "quality" and momentum factors added.
It seems as if everyone's answer to "how do you find ideas" is to say "we are different, we don't screen for stocks"
So if all value investors are doing the same different thing of not screening then maybe using a screen is truly different? Food for thought.
In public interviews, the professional money manager HAS to say this, even if he unconsciously doesn't believe it. He has to justify the existence of his business, that his process adds value to simple indexing or a mechanical quant approach.
I recall an old Money magazine story about a retiree who went to the public library every week. He held all the stocks listed on the 2 pages in Value Line that were ranked 1 or 2 by Timeliness. Any stock that dropped off the list he sold, and bought any new listing. He beat the S&P by 5+% annually long-term. He also beat Value Line's own funds, which cherry-pick individual stocks based on their Timeliness rankings, and have expense ratios > 1%. This is more than good-enough investing for most people, and very humbling to many of us board members.
So I doff my hat to the guys with the guts to manage outside money publicly. Hope springs eternal, and Buffett-like returns will occur, but extremely rarely.
Along those same lines there was this great story.
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Wait, so 'Graham & Doddsville' isn't a new sitcom airing on CBS this Fall?
It is actually. It will be a dramedy set in present time at the value investing class at Columbia. Bruce Greenwald will be played by Danny Aiello. There will be a room full of students, but the primary ones will be played by Zac Efron, Kirsten Dunst and John Cho. Each episode will have a flashback to the early days of value investing at Columbia. It will be shot in grainy color so that people know it's supposed to be from the olden days. Ben Graham will be played by Wallace Shawn.
In the first episode there's a hilarious misunderstanding as the Zac Efron character is overheard telling some of the others he has to "get me some coke". The others, believing he has a drug problem, arrange for an intervention only to find out that he really was just talking about buying KO. Crisis averted the gang go out for cherry cokes and burgers to celebrate the fact that there isn't actually a drug addict in their midst.
Early reviews have come in positive. USA Today says it the "funniest thing to happen to investing since . . . well, there's never been anything that funny about investing until now!"
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One thing I've noticed from these newsletters which struck me recently. It seems as if everyone's answer to "how do you find ideas" is to say "we are different, we don't screen for stocks"
So if all value investors are doing the same different thing of not screening then maybe using a screen is truly different? Food for thought.
Further to that they paint a picture as if the way they find ideas is the equivalent of wearing a tuxedo and drinking tea with their pinky in the air while screening is like digging ditches.
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After reading the interview with Wally Weitz I wonder why anyone would invest in his funds instead of just buying Berkshire directly. He's like Buffett's Mini Me. Might as well go direct to the source and not pay a fee.
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True Sears Canada stories, after Eddie took over:
Trying to buy a bassinet for my newborn daughter - We stood by the floor model, while the employee was looking in the back. She came back and told us they had none in stock. She didn't offer us the floor model at a discount preferring instead to keep it to show others what they could buy if it was in stock - 5 years ago.
Going to Sears To try and buy Jeans. Lots of Jeans but no fitting rooms. Then trying to find an open cash. I nearly got fed up enough to walk out with the product in hand, to get some attention. I figure if anyone noticed I would be justified in saying I tried to pay, but no one was around.
Sears furniture store - massive anti-customer gift card fiasco. It seems gift cards I had forgot they were gift cards. This was the last time I will ever set foot in a Sears. I had unused points in my account, spent a half hour on the phone getting them reactivated. I was trying to buy a mattress. The last straw was being told I had to buy something small to reactivate my account before I coukd buy the mattress - went to sleep Country instead. The Sears employees tried handling this themselves, while I watched the manager dodge into a back room, and never reappear.
No idea Eddie strikes again.
You are obviously short the stock and don't get what's happening here.
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The good:
It's very well written and Carlisle has the ability to explain things in a sophisticated, yet easy to understand way. I agree with some of the prior posters who appreciated the investment stories mixed in with some of the quant research. It's interesting and I think people would enjoy it.
The topic is one I have great interest in. In a nutshell the thrust is that value outperforms growth (glamour stocks), but that this is primarily due to reversion to the mean. Interestingly, he notes that reversion to the mean applies both to stock prices (what goes up comes down and vice versa) but also underlying business performance. Further, even within value stocks he breaks it down into ones performing badly and those performing better. The ones that had performed badly outperform the "better" value stocks.
The bad:
It's pricey at about $65 for around 200 pages. There is a decent amount of filler in it too. Each chapter has a theme or discussion point and many of the chapters are principally derived from books many on the board would have already read. For example, there is a chapter on Graham that comes from Security Analysis and some of Graham's other writings. There is a chapter on Buffett which comes from Snowball. Much of the quant stuff is very similar to Carlisle's previous book, Quantitative Value.
I would estimate that at least half the book I could have done without. But the other half is extremely interesting and kept my attention throughout and I thought was worth the price of admission.
Overall, recommended.
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A Sears haiku:
Mall very crowded
Prefer to be by myself
I will go to Sears
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Confession time.
I went in one today. I went in for a long time. I went in and it was great. I went in and I loved it. I don't know why more people don't go to Sears.
It was a Friday, so in retail that's part of the weekend but nobody was in there. It was great, I had the whole 80 000 sq ft to myself!
There were no other customers to run into and no staff bothering me if they could "help" me.
I just wandered through all alone in my own little world. There's even some dark corners where the lights are off and I could have had a nap.
I may go again next week.
I hope you were careful. You could have been attacked by someone impersonating a Sears employee (or perhaps a real employee) and no one would have found you for days, maybe never even.
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This belongs here:
That clip was totally unrealistic. I mean it showed shoppers at the Sears. No way that happens in real life.
Believe it or not, Sears is still an actual company. They have locations and employees (and presumably) some customers. I just don't know what they are going to do when their customer base (over 70, no internet access, still has a rotary dial land line phone with a 25 ft cord and answering machine with a tape as the only way to get in touch with them, and sometimes uses their phones to order from catalogs) dies off? You've seen these people. They are the women with white hair that are always in the grocery store line in front of you trying to pay with a check then take 25 minutes to back out of their parking space in the parking lot.
They own K-Mart too, but I think it has been about 10-12 years since I've seen an actual K-Mart store, so I'm not sure if those still exist.
It's an actual company? Whatchoo talkin' bout Willis? I thought it was a store in the Neighborhood of Make Believe that Mr Rogers used to visit. But K-Mart? I know that's real. It's used frequently as a set for things like World War Z and The Walking Dead. Just creepy, desolate places.
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This belongs here:
That clip was totally unrealistic. I mean it showed shoppers at the Sears. No way that happens in real life.
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comparable to the shipping man?
I liked it better than the Shipping Man. Some similarities I guess. The difference I think is that the Shipping Man had a bit of the absurd to it - almost an attempt at writing in a Catch 22 like manner (taking things to extremes, etc) - while I don't believe Bankers Town had that aspect to it. If you've ever read anything by Stephen Frey, Michael Ridpath, Norb Vonnegut, Ken Morris, etc it's along those lines.
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ATLANTA, Oct. 22, 2014 (GLOBE NEWSWIRE) -- Premier Exhibitions (PRXI), a leading presenter of museum-quality touring and permanent exhibitions, announced today it has added a new concept to its exhibition portfolio. In partnership with Sears (SHLD), a premier department store company, Premier Exhibitions has developed a new exhibition based on department store museums.
The exhibition offers visitors an unprecedented opportunity to experience what shopping was like in the department stores of yesteryear. The exhibition is unique in that unlike Premier's other exhibitions which tour the country or are resident in a specific location, the Sears exhibition will open immediately in thousands of Sears stores across the country. Premier is working with Sears Canada on a similar show in those stores.
Premier's chairman said, "We are truly excited about this Sears exhibit. It will accomplish two goals at once. From our perspective it will require no capital expenditures as we found that the existing Sears stores are perfect just as they are for a department store museum exhibit. From a customer standpoint, it will enable this generation to have an almost Norman Rockwell sense of what it felt like to shop in a department store in the old days."
Brandes on Value: The Independent Investor — Charles Brandes
in Books
Posted
Thanks. Is it any different from his other book Value Investing Today? I thought that one was pretty run of the mill but would certainly read this one if it's better.