Kraven
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On the side-topic of entrepreneurship and age, from a PBS article:
Research that my team completed in 2009 determined that the average age of a successful entrepreneur in high-growth industries such as computers, health care, and aerospace is 40. Twice as many successful entrepreneurs are over 50 as under 25; and twice as many, over 60 as under 20. The vast majority — 75 percent — have more than six years of industry experience and half have more than 10 years when they create their startup....
The lesson here is that ideas come from need; understanding of need comes from experience; and experience comes with age.
It's a stereotype that only/mostly young guys start companies.
Fair enough. My sample is obviously biased because I'm 24 years old, so most of my experience is with young people. There are young people who have a lot of ideas but come up with all sorts of excuses as to why they can't execute them; those are people that I write off as 'not the entrepreneurial type.'
I know lots of middle-aged and older men in the oil & gas business that started their own gig. That's my model of over-40 entrepreneurialism.
So I guess my data set is a bit skewed. But I'd still bet that someone who is young and has aspirations to start a business, but doesn't ever get around to it while they're still young, probably won't ever start a business; they're missing that entrepreneurial compulsion.
Not everyone has the resources, economic and otherwise, to have the luxury of starting a business when they're young. Some people also take longer to grow into themselves and find their way. Don't confuse the Mark Zuckerbergs of the world as being the common experience of everyone. Also, don't confuse a relatively narrow niche of tech startups with starting a business generally. For example, plenty of plumbing or electrician businesses get started and I doubt most of those are started by someone who is young. There are far more plumbers and electricians starting their own business than there are tech startups.
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Apparently coming out in November. Anybody knows anything about it?
For a long time on Amazon it has said that Christopher Risso-Gill (the author of There's Always Something to Do) will be coming out with a new Cundill biography in Spring 2014 called of all things "Routines and Orgies". Here is the exact statement:
"Christopher Risso-Gill is the author of 'There's Always Something To Do - The Peter Cundill Investment Approach'. He is currently working on a new, more personal Peter Cundill biography 'Routines And Orgies', which will be published in Spring 2014."
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Is Sanjeev to Monish's right or left? I
Would have said to his left, our right, far right side of the picture.
I'm the short, bald, chubby guy next to Mohnish in the middle. Alnesh is to Mohnish's left and Guy Spiers is to my right. Cheers!
I bet you're sorry you posted that pic at this point.
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I would take issue with a few things in your post. There are net nets like Buffett described, but you have to dig deeper to find them. They may not be in the U.S.
There was not mortgage securitization in the 50's as we know it today. Securitization was not the cause of the financial crisis. It is a vehicle, nothing more and nothing less. A car can be driven into a crowd of people and kill them, but a car by itself does not kill anyone. Securitization ended up being used in ways that contributed to the crisis, but it didn't cause the crisis itself. It's only as good as the assets that are securitized.
I am not sure that they were better at vetting mortgage applicants back in the day. It's just a different market. There are tons of community banks that operate in the same way they have for dozens of years. There are many small banks that have the same high standards that existed in the past.
But yes securitization is the symptom of society looking to screw things up during propsperous times. So yes guns don't kill people, people do. And we will keep finding ways to shoot ourselves. hence I believe the markets are not getting more efficient...
I believe mortgages were quite common in the US before the 1950s. They were a different form, much like Canadian mortgages currently are. They would be fixed rate for 5-10 years then would either float or balloon with the balance due. The current 30-yr US mortgage is a direct result of the Depression. Too many homeowners lost their houses when they couldn't refinance or pay off their loans quick enough. The 30-yr mortgage was created to lower payments and give homeowners time and security to pay down their debt.
My understanding has been that debt in all forms has been relatively common for hundreds if not thousands of years.
Yes just googled it, you are right. Although I always thought a mortgage is you basically pay it till it is all paid off (hence MORT-gage)
There were even mortgage securitizations of a form in the 1920's. There was a striking paragraph in Security Analysis that reminded me of 2008, with regard to certain mortgage bonds that individual investors would hold. I can't find it off hand though.
There was also this:
http://www.nber.org/digest/may10/w15650.html
Yes, I remember that part. I think it's in Chapter 10 of the 2nd edition.
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also keep in mind that Schloss managed when the market was much less inefficient. In my opinion (though I could be wrong) is that Klarman is a superior investor. He manages many, many billions more, does so in a more competitive environment and has beaten the S&P 500 by a higher level, I believe.
How do you determine that the market is more efficient now? Is there a study somewhere that proves this?
I have thought sometimes that maybe it is. The net nets have mostly dried up in the u.s. at least, except during major market crashes. But aren't stock prices as volatile as they ever were?
The massive influx of hedgefunds, CNBC, the fact that legendary funds, like SEQUX, while the performance is still solid, it's not the outperformance it used to be. The same can be said for other older funds.
Yes, it is clear that netnets like the ones Buffett described in the 50's no longer exist. The market is more transparent today, and information is much more available. HOWEVER, that is not saying that the market is overall more efficient at pricing. Back in the 50's I am sure there wasn't mortgage securitization and they were much better at vetting mortgage applicants. So as markets are more stable, we invent more ways to screw it up.
It is an equilibrium of booms and busts.
I would take issue with a few things in your post. There are net nets like Buffett described, but you have to dig deeper to find them. They may not be in the U.S.
There was not mortgage securitization in the 50's as we know it today. Securitization was not the cause of the financial crisis. It is a vehicle, nothing more and nothing less. A car can be driven into a crowd of people and kill them, but a car by itself does not kill anyone. Securitization ended up being used in ways that contributed to the crisis, but it didn't cause the crisis itself. It's only as good as the assets that are securitized.
I am not sure that they were better at vetting mortgage applicants back in the day. It's just a different market. There are tons of community banks that operate in the same way they have for dozens of years. There are many small banks that have the same high standards that existed in the past.
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Another option is to click the "print" button. You will see it in a thread...just below the last post of the page. This puts the entire thread into one page.
Are you kidding me?! I put the entire Fiat thread in a word document to read it over the weekend a few months ago. Thanks! I feel a little stupid for never looking for a print all button earlier...
Additionally. Try a program such as "PDF Complete". Once you have a thread in a single page format you can "print to pdf". You just print as you normally would but you select pdf complete as your printer...click print...and you have the entire document in pdf format. I'm sure there are alternatives to "PDF complete"....but thats what I use. Hope that helps.
Along those same lines, if you put the Kindle app on your mobile device you can print directly from your computer and it will show up there as a document.
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For someone as publicity shy as Klarman he sure is making some noise. He's on his way to becoming the next Marc Faber.
To be fair man, it does say "The Baupost Group declined to comment" according to FT. ;)
Like when Howard Marks' letters say "Confidential" on every page.
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These types of threads are interesting and frankly full of inconsistencies. People like to proclaim that they are "bottoms up" investors, but then spend all their time attempting to figure out the macro. It's trying to predict the unpredictable. Even Buffett gets in on the act a bit. He talks about the market cap/GDP indicator (a favorite of many on the board here), yet in his latest letter says "in the 54 years we [buffett and Munger] have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions". The latter part is particularly interesting.
On the other hand, someone could argue that the macro is just another data point for figuring out whether a stock is cheap or not, yet Buffett says it never even comes up. But in other places he says the market cap/GDP figure is his favorite indicator.
There is so much angst these days. A cheap stock is a cheap stock. If interest rates being 100 or 200 bp higher changes that determination, it wasn’t a cheap stock to begin with. Market volatility will come and go and I’m sure we are due for a big decline at some point. I really enjoyed the latest Buffett letter. I liked the part about his personal investments and particularly the tribute to Ben Graham. I think folks would do well to keep in mind his take on Mr. Market when he described a neighboring farmer standing at his property line shouting out prices every day.
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For someone as publicity shy as Klarman he sure is making some noise. He's on his way to becoming the next Marc Faber.
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I mean, not to feed what I imagine is an ego that's tough to control after such phenomenal success, but I look at your track record and brilliance and see a recipe for becoming a self made billionaire.
Maybe I would have an ego about it if I could actually analyze the companies myself, but I can't. I have very little confidence that I can continue these results.
Eric,
While others are in awe of your options trading strategies I am in awe that you rode an incredible wave, and had the ability to get out on top. Many people who have a run like you do fuel the urge to get "just a little more". It usually doesn't end well, you have done well for yourself and your family. Congratulations!
+1 I would completely agree with Oddball here. You know yourself well. I like the self deprecating modest approach. You are obviously very smart and very good at what you do. It reminds me of this scene from The Joy Luck Club (yes, I have a wife). It's about 1 min 45 seconds in.
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Today I bought $120 strike 2016 IWM puts. Maybe that will help me calm down.
And half the board just went into panic mode selling everything not nailed down.
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And one observation of our own: Since 2009, the easing by the Federal Reserve combined with the explosive growth in China, backed by higher interest rates, has resulted in huge inflows (‘‘hot money’’) into China. The near unanimous view that the renminbi would strengthen has resulted in a massive carry trade where speculators have borrowed at low rates across the world and invested in China, almost always backed by real estate. The shadow banking system in China – i.e., assets not on the books of the major Chinese banks – is estimated by Bank of America Merrill Lynch to be approximately $4.7 trillion or 51% of Chinese GDP. Oddly enough, prior to the credit crisis, the U.S. had $4.5 trillion in asset-backed securities outstanding or approximately 31% of U.S. GDP. You know what happened then. When the flows reverse in China, watch out!
This is really scary for the entire world... :o
This is a seriously flawed analogy and only meant to incite fear. It's the equivalent of showing a chart of 1929's stock market vs today's and asserting we're in for the same result. The aggregate amount of asset backed securities was not the cause of the crisis. Certain securitized products contributed to the crisis, but I am not even sure many of those would have been counted under the rubric of "asset backed securities" (most of which were actually perfectly fine).
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5 newspapers in a couple of hours? Word for word in every section?
Since you are again addressing the entire board, I'm not sure if you are referring to my exact post. Though I believe I was the only one discussing newspapers....
I said one could conceive of reading 500 in a day if that included scanning 5 newspapers in a couple of hours. You missed the entire point of my post (again assuming that's what you are addressing), which was 500 is possible if it is not ACTUAL reading as you point out.
I have no idea who posted what. I skim (and skip) many of the posts and focus on what is interesting to me . . . just like most people read.
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So if I just read 500 pages a day, drink Coke, eat hamburgers, and buy good companies at great prices I'll be as rich as Buffett right?
This is like Michael Jordan saying he warms up by throwing 100 free throws, and some high school player thinking that throwing 100 free throws is what makes him great.
I'd argue that it's the synthesis in Buffett's brain that makes any reading he does more valuable that us mere mortals might do.
Blindly reading 500 pages because someone said that's what they do is worth less than reading and thinking and considering something thoughtful that might only be 30 pages.
The average person reads one page a minute, that's the average, so 500 pages a day of truly reading every single word at an average speed is 8 1/4 hours of reading a day. I would hope these guys pull their heads out of a book for at least an hour a day to maybe think about what they're reading, instead of just mindlessly plowing through all this material.
I get that some of you guys on here are super-human and can somehow read 500 pages by the time they're done with breakfast. I have trouble reading dense legalese and comprehending it quickly. Does everyone who reads 500 pages before breakfast also run a 4 minute mile and do 200 pull ups before lunch as well? This is the Internet, so I understand, we're all skinny and married to supermodels as well.
I won't argue that there are probably a lot of members who are just sitting around in big comfy armchairs reading all day straight. Some of us don't have that luxury. We have jobs, families, kids, houses to maintain. If I need to read 500 pages, then sit and think about it for four hours I'm left with barely any time to eat or go to the bathroom before I need to sleep. Call me crazy, but I'd rather forget the books and enjoy life.
Instead of blindly mimicking Buffett et al, why not switch on the brain and think about shortcuts to this. I would prefer to find a system where I have to read a small amount and have similar results. I'd rather find a system where I minimized the time I spend for similar results.
I'd love to see some sort of an equation of performance broken down by time spent on an investment. I personally do this, I have a return on research. I look at how many hours it takes to research, then my potential gain. If the potential gain for the amount of research isn't as high as my hourly wage the investment isn't worth it. I guess the formula breaks down for people managing millions or billions, but it would be cool to see something normalized.
Sorry for the rant. I'm tired of the blind Buffett following. Maybe he said pages per week, or maybe per day, or maybe per month. Maybe he's older and doesn't remember perfectly. The guy's not God. I have this sense that if he said everyone needed to wear a pink tutu and dance a jig each morning to find great investments we'd see threads about where to find the best tutu deals...
Yes, exactly. I find it hysterical the cavalier attitude some on this thread have about reading 500 pages a day. First, like anything anyone says of this nature it isn't meant to be exact. No one counts their pages per day (well, apparently some do since they think Buffett et al do). Second, no one, not Buffett not anyone, is reading something like an AIG 10-K in a "few hours". I just looked, it's well over 300 pages of dense text, numbers, etc. Maybe it's skimmed and few sections read in detail. It's impossible to read that cover to cover in a few hours and digest it.
For those who said they believe it includes things like newspapers and the like, I would again call bullshit. 5 newspapers in a couple of hours? Word for word in every section? So Buffett is sitting there and reading every word in the Style and Metro sections? Or is he flipping pages like everyone else does when they "read" a newspaper concentrating on the articles that interest them.
A number of people have said this is very doable. In my view there is reading and then there is reading. If one means skimming, fine, that's I guess doable in part. But reading, really reading, is a different animal altogether. So here is an interesting experiment. For anyone who claims this is easy, they should be provided with approximately 500 pages of reading. The types of things that a good value investor should be able to read easily. Everything from articles to 10-Ks to prospectuses. They would have 8 hours to read it. At the end of the 8 hours they would be asked 5 questions that someone who read and understood all 500 pages should be able to answer. There isn't anyone who could pass that test.
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It never ceases to amaze me how literal people take Buffett's statements and any statements by anyone remotely connected with him. There was never any way they were reading 500 pages a day. Think about it from the standpoint of some easy reading, like a mystery paperback or something. Certainly that would read faster than a dense 10-K. Does anyone really think they could knock out a 500 page paperback daily? Yet these guys were supposedly digesting 500 pages on a daily basis. Even if they had said it it was clearly hyperbole. Anyone who has worked with large documents would have realized in a heartbeat that it was impossible to have ever remotely reached this goal.
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Hi guys… This is really hard to admit… But there is no point in hiding it…
I have just been officially dumped…
Therefore, I will come to Toronto alone.
And, Sanjeev, you can give away the second ticket I had bought to whoever you’d like.
I know with such a failure I must be leaving Kraven seriously down… But perhaps part of the fault is also yours… After all, you had given me a lot of PUAs’ tricks and routines… but no strategies to manage a relationship!! ;)
Jokes aside, it is not a good day for me…
Gio
PS
Until a few days ago I was thinking: “Ok, I am bad as an investor, but I must be a good lover indeed! Just look at my girlfriend!” … Now, it is a true race: am I worse as an investor, or as a lover??!! ;D ;D
Gio, Gio, Gio. Did you tell her her best friend is really hot? Did you introduce her to people as the "ball and chain"?
I'm sorry. These things can be painful, but the cliches are true. They hurt a little less each day until they don't hurt anymore. Think of it as the proverbial when a door closes, a window opens. Hang in there, my friend.
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What would be really cool is if WEB retired from Berkshire and coordinated with Bill Gates to leave his foundation. They could do a show together on CNBC. It would be called something like "Hangin' with Warren and Bill". They would just talk about the day's events, really anything that caught their fancy. Of course there would be tons of special guests. How awesome would that be?
WEB should definitely do this, I mean I'm sure CNBC would pay him more than the pithy $100k he makes at Berkshire. He should also look at writing a book "Manage your company like Warren Buffett" and maybe even open some sort of online MBA program.
He might even make enough to move out of that tiny house in Omaha and buy a real car. Maybe he'll be able to afford to move out of Omaha to NYC where all the big shot finance people live. Everyone knows you're not a real investor unless you're from NYC...
Totally. Serious question though. Is there any truth to the rumor that WEB plans to join Squawk permanently once he retires and be one of the co-hosts? That would be so awesome. I can see it now. He and Becky could flirt a little. He and Kernen would bust on each other, while he and Sorkin could roll their eyes at each other over any conservative statement someone makes.
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What would be really cool is if WEB retired from Berkshire and coordinated with Bill Gates to leave his foundation. They could do a show together on CNBC. It would be called something like "Hangin' with Warren and Bill". They would just talk about the day's events, really anything that caught their fancy. Of course there would be tons of special guests. How awesome would that be?
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Try to figure out who you are from an investing standpoint. Things work best when they are most natural and not forced. Think about what type of investing style fits you. Are you a Buffett type investor? A Graham/Schloss investor? Or maybe equities aren't really your thing at all and you are more interested in the credit markets.
No one necessarily needs to be pigeonholed and it's not about slapping a label on yourself and thus ends the story. There is nothing that says that you can't like chocolate and vanilla, but when given the choice people will typically pick one or the other (although some prefer a swirl). So lay out some different hats and try them on. Do a lot of reading, of course, but no one ever got anywhere just by reading about things. As a wise puppet once said, do or do not, there is no try.
So get your feet wet. Open an account and make some small investments. Use an amount of funds that won't impact you as you make mistakes. Look at different types of investments. Look at compounding machines where you need to read 50 years of annual reports and look at net nets which are based on some basic numbers and metrics. Figure out what you enjoy about investing. Figure out who you are and what your investing philosophy is. There is no right answer except what is right for you.
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Hey Guys, another issue we should discuss is abortion. What does everyone think?
Kill'em all and feed them to the poor. Solve overpopulation (read The Population Bomb, pretty scary stuff) and world hunger in one fell swoop.
Interesting stuff. I like these topics. So what religion do people think is the best?
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Hey Guys, another issue we should discuss is abortion. What does everyone think?
Let me just go on record and say that I am a big fan of Kraven. No amount of scientific data will disprove that. Ever.
That makes you a Kraven ideologue...a "Kradeologue". Let me guess, you DON'T have a portfolio concentrated in 3 stocks, right?! Oh, and I bet you don't think Sears eliminated all of their liabilities when they created the non-guarantor subs. Am I getting close?
Friggin' well-poisoning Kradeologues.
The movement is sweeping the nation.
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Hey Guys, another issue we should discuss is abortion. What does everyone think?
Let me just go on record and say that I am a big fan of Kraven. No amount of scientific data will disprove that. Ever.
Of course you are. You have good taste.
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Hey Guys, another issue we should discuss is abortion. What does everyone think?
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Here's a value investing nerd drinking game. Read the MCM letter out loud and everyone is required to drink each time Buffett's name is mentioned. If anyone is standing after page 3 I'd be shocked. I finally realized why I can't stand Millers letters. He fancies himself quite the Buffett disciple and has clearly attempted to emulate his style. The problem is that while he has largely perfected the didactic tone, he has none of the charm and wit that Buffett possesses. I can never read one of Miller's letters in one sitting. They have to be broken up into a few pages at a time.
The Joy of Less, A Minimalist Living Guide - Francine Jay
in Books
Posted
Watsa's point has been missed throughout. There is a huge difference between being social and being able to speak in public. He has always been the former, but not the latter. He was social in the sense that he always interacted with people. As he got older and spent time in NY, both while at Columbia and while working for Graham, that he built up a large network of people that he could get ideas from, visit when he was in the city, etc. He had many good friends in the NY area. People he would stay with, go out to eat with and so forth. Many of these people grew very rich in their own right. Buffett, at least as described, was a collector of people. Friends never seemed to disappear.