Kraven

My recollection is that he says somewhere that he realizes these letters will be distributed publicly (very modest since most likely he's the one distributing them publicly) and he has a second letter which discusses their individual positions, etc that is distributed just to clients.

Frank Martin who runs the shop has a couple of books out. I think one is Speculative Contagion and the second was Decade of Delusions. They are basically compilations of his annual letters from the late 90s until around 2009 or 2010 with some updated material, some commentary, etc. He's a good writer and a thoughtful and smart guy. That being said, I find his letters excruciating and couldn't even finish making my way through them. Anything that can be said in 10 words is said in 100 words.

Packer, very well said.

Buffett's punch card approach to emoticons? (This way your post can have a Buffett reference, as is your wont) You caught me. It is my wont.

The board is pretty decent but would be a million times better if there was somehow a software solution that would prevent "lol" from being written in the middle of a sentence. It's just so jarring to see things like "I guess the media just doesn't see how great BAC is doing lol and how much their earnings power is." In addition, the software would limit emoticons to 20 uses per person so that if they were going to use one they would really think long and hard about it since they would have limited ones left.

Either art or diet coke, first and foremost I need to KNOW what I am investing in. And in my experience to know a business well is quite difficult; on the contrary, to suffer the illusion of knowing a business well is quite easy. Not to fall prey of the illusion of knowing a business well, I let my circle of competence grow very slowly over time. Even so doing, I believe there are inside my circle of competence some businesses I don’t know as well as I think. Among the few businesses I think I know well, none are cheap right now (with the possible exception of the ones I already own a lot of). Gio Gio, you are a true artiste and a gentleman and a scholar. Me on the other hand, my circle of competence is just things that are cheap. I slum it.

Exactly. The myth of certainty and stability is the siren song of the investor. So what to do? Buy cheap. There is always tension between cheap stocks in a fairly priced or overpriced market. Timing is difficult though. One simply has to realize that even cheap stocks will suffer (hopefully) temporary declines if the market hits a speed bump. One thing I don't understand though is when people say they haven't bought anything in a year or there is nothing to look at. There are always things to look at. Always ideas. It comes down to the same discussion of whether one views investing as putting art on the wall to be admired or whether it's inventory for a store to be thrown in a warehouse ready to be sold. If the former, then sure, great art doesn't come around very often. If the latter, one can always pick up some more gum or diet coke or something.

It is broke. What is broken, exactly? Do you realize that if members had their way, they would have kicked you out a long time ago, but after a few experiences in the past with kicking people out, I've chosen to give people a chance on here. Rather than complaining, you should be grateful you've been given an opportunity here to express yourself, even though many don't want to hear what you have to say! You guys whine so much about a forum that is virtually free, operates with an inclusive culture, has monitored posts, zero spam, and has existed in one form or another for about 12 years this Thursday. Yes, we are slow in making changes, and progress has been gradual...and that is because things aren't broke by any means! We've grown 50-100% every year for the last five years, and added new and exciting members who have added to the dialogue while retaining most of the old-timers. How many message boards are out there that have actually improved and retained members? Value Investors...no! Fool.com...no! Yahoo message boards...yeah right! Stockhouse...nope! Tell me how many message boards have a thread like our BAC thread? Or discussions on call options that are as detailed and informative as Ericopoly's? Or track individual stocks and information about each of them like on our "Investment Ideas" thread? Or how many have a growing conference around them in Toronto? Even Mohnish Pabrai is now telling people this is one of his favorite sites? But yet it's apparently broken! By the way, good luck on starting a new board. Unless you want to spend a couple of hours a day looking after it, monitoring posts, dealing with member requests and posting on there as well, it is not going to be easy. This board was developed out of passion, not out of necessity, but has become a necessary tool for many when investing and networking. That happened because of the culture here and great members...not so easily replicated...especially when one guy would give up sleep for years to look after it with no pay. And to those that continue to show support for the board and aren't bitching, I thank you from the bottom of my heart! Paul will be inserting a mobile add-on that should give some mobile functionality in the next couple of weeks. The "search" feature is something we'll have to work on and tweak over time. Cheers! Amen brother!

I'd love a board where people don't post things constantly like "[insert favorite stock] is down 1.3% today? WHAT IS GOING ON?!!!!" Or, "[insert other favorite stock] just keeps going down. Day after day. That's all it does is go down. It's down 1.45% while [insert name of competitor] is up 0.9%. WHAT IS GOING ON?!!!!"

Hi Kraven, yes, I agree! And I repeat my “7 lean years + 3 boom years” model for FFH: 7 years of no return, followed by 3 years of 35% cagr… therefore, 3 more years of no return to go! ;) Cheers, Gio Gio, I would maintain that your projection is speculation and not knowable. At the end of the day we all do what makes us comfortable. You are smarter than me though so what do I know.

What I find interesting is that people keep talking about how we will see if they are right in the future. It's been 5+ years. Doesn't there need to be some kind of time component to a determination of whether someone is "right" about a course of action? Broken clocks and all that. It's like predicting that San Francisco is due for another major earthquake. If it occurs in 2024 are you right?

Schloss made it work with the local paper, Value Line, a pencil and a pack of gum.

Maybe some of the chain restaurants get squeezed? I'm thinking along the lines of Ruby Tuesday, Darden, etc.

I was thinking about this and realized I didn't quite understand what all the fuss was about. I then consulted my own latticework of mental models and realized it's what I would call the Superfan bias. It's when someone is so enthusiastic for someone or something that they become obsessed with it and will stop at nothing to possess even a small part of it. It reminds me of when I was a kid and your favorite band would put out a new album. Everyone would line up at the local record store to be among the first to get it. Once you had it in your hot, sweaty little hands, you'd run home or go to a friends and play it. This would be the first time you would have heard any of the songs so you had no idea whether it was good or not. Yet it didn't really matter. You wanted it no matter what. To some extent I think the same thing is going on here. Many people seem willing to invest sight unseen. Don't get me wrong, Pabrai is a great investor, but there are a lot of unknowns here. Here are some questions I came up with: - What's the valuation going to be? - This will be an insurance company. Who is going to be leading the underwriting? - How will Pabrai's investment style work in a regulated entity? - To my knowledge his AUM is in the $500-600 mil range. How will adding hundreds of millions more or possibly billions change his style? How will it limit the opportunities available to him? - How will he allocate investment opportunities between the fund and the insurer? This is a huge deal for managers of different vehicles and there will be insurance regulations that impact allocations. I ask this more rhetorically than anything. I am not expecting anyone to have the answers, but I thought the questions should be raised. I truly hope it works out well for him and anyone who invests, but I would not be someone chomping at the bit to invest at the beginning.

I meant people at other teams in the same firm. My colleagues all had very low bonuses so part of the reason is definitely because the business is not making money. It is just that I am penalised so much worse. Also the "star" performer of the team also got very low compared to other similar ranked person in other teams. I know it sounds like I am a little arrogant.. but isn't it much better to get into an easier business now that I am young than slog it out to become like the star indispensible member of the team but still get paid very very low. Also I don't envision myself doing this for the long term. I ended up here due to certain unforeseen circumstances. The team that I was meant to join didn't have headcount from senior management so I was pushed here to do some work. I would say if I exceed all expectations then my total bonus can probably only go up to $10,000 (still lower than the average) Basically there is a rating / feedback system. I got a 3 out of 5 (60% of the firm gets 3, ¬20% gets 2, 10% gets 1 and 4, and 5's get fired) .. people who get 3 range from my bonus to $35,000. I know it is easy to attribute this to that I'm at the "lower end of the 3", but this amount is still very unjustified and if I don't change now I will be stuck in a lousy business. I think while you are there follow the advice the others gave and do the best you can, become indispensable, etc. But your reasons for not wanting to stay in your current seat sound fine to me. So the simple answer is to just start looking. Whether that means hooking up with a headhunter or something else, there is no time like the present to get started. Once you have a position in hand, if you would consider staying at your current firm if you were on another team, then you can go to the powers that be and say you want to move internally and you have another bird in the hand if not. Like Onyx, I took years to learn some of the concepts he set out. I wish I could go back and shake some sense into my younger self. Young people always want to start at the CEO level. Always in a hurry. There is always a sense that if you do such and such for a while then you'll fall behind or waste those years. It couldn't be further from the truth. Learn as much as you can and help as many people as you can while you're there. Then when the time is right and the opportunity presents itself move on, but be gracious and respectful. Don't burn bridges on the way out. Praise your colleagues and bosses even if you don't mean a word of it. Try to stay in touch and don't knock your old place once gone.

Spot on. Attitude is everything. The key to working for others is to cheerfully make yourself indispensable to as many people as you can. This attitude works wonders for your compensation and future prospects. Do the work others are unwilling to do. Pay attention to details. When asked to do something, follow-up later the same day and let your boss know that you have made progress and give a specific date/time when you will finish the assignment. Do this even if you believe the project is worthless or a waste of time. Respect his authority, and just do it. Be humble, quickly admit when you are wrong, and never make excuses. Your reputation will grow and so will your leverage. People will take you seriously when you tell them you want to earn more or take more responsibility, and you will be presented with other opportunities inside and outside your firm. Most people in your age range feel underpaid, so you are not alone. If you are legitimately underpaid (not just whining), you are probably doing good work. Recognize that in the future you will likely be overpaid. Compensation is never neat and tidy so don't let it distract you from your key goal which is to gain a reputation for effectiveness. At 25, you have lots of time. I took me years to understand these concepts and I made some bad mistakes along the way, but applying the above and a little luck allowed me to walk away from formal employment at 48 with more money than I will ever need. +1 for both what Onyx and Uccmal said.

I should add that I assumed that when you referred to peers that you meant people you work with. If you did mean people at other similar firms then it may just mean as Packer said that it could be a financial issue and they just can't pay as much. I still don't love the "reasonably good job" part. That isn't a ringing endorsement.

I assume you are in some kind of job in finance (i.e. at a fund, investment bank, etc.). If not, that could change some things. But assuming you are, here are my thoughts. Money is the yardstick by which all else is measured at these types of jobs. So be honest with yourself. Are the "peers" you refer to doing the same things as you? Are they senior to you, doing more complicated work, etc.? If you are all similarly situated, then yes, getting $2k while the others got $15k is a sign that you are not as well liked there. There could be reasons outside of the actual work. Do you have a rabbi who might be more low key while some of the others have a more in your face rabbi? Try to think of the whole situation holistically. At the end of the day, as I said, money is the yardstick at a job in finance. They did give you something, so it isn't a message to leave most likely, but is a sign that you might be lower on the totem pole. So try to get outside yourself and figure out what the problem is. The answer "I just got shafted" isn't helpful. Maybe you pissed someone off. Maybe they just don't like you. Figure out the reason. You almost certainly can. He did tell you you are doing a "reasonably good job". That is code for you are doing enough to stay but you aren't doing great. So why aren't you? Is your heart not in it? Is it too advanced? Figure it out. Finally, never, never, never leave a job by choice without having a new one in hand. If you decide that this is a slap in your face, then start looking, but don't quit without a new job. In truth, I note some sense of entitlement in your post and I don't mean that to be offensive. You are young. It comes with the territory. But you should think about whether this attitude is coming out at work. More senior guys won't like it especially if you aren't killing it there. Hope this helps.

Very interesting. I didn't realize Pabrai had a background in insurance. It's a tough business. Best of luck to him.

There go your chances at being told the secret handshake.

Then try looking for evidence to suggest that you're wrong. Munger has a name for this. An iron prescription, I think. In my view, what you're saying is akin to the following: I don't see how someone else's checklist could be of any help in one's flying. There is no right way to fly a plane. The primary goal is to protect your safety and thus put yourself in the best possible position to get from Point A to B. How you go about that is an individual, not a group, decision. As a wise man once said, "now the world don't move to the beat of just one drum, what might be right for you, may not be right for some". Of course, plenty of pilots would be dead today had they not totally relied on someone else's checklist. I agree there is no "right way" to invest. That the goal is to limit downside and to maximize upside. And I agree decisions come down to the individual. But it does not follow from these premises that using someone else's checklist cannot be helpful. As an investor my returns would be half what they are had I not totally relied on someone else's checklist. Boom, a Munger quote. I am obviously wrong. You got me. In reading what I wrote, I should not have said it's of no help. That's clearly incorrect. It could be of some help in ensuring that one is asking the questions they want to be asking. Personally, I find checklists in investing to be worthless though. Investing is not analogous to flying a plane or medical care. Just my opinion. You don't need to throw out another Munger quote or a Buffett quote to prove me wrong. "if all you have is a hammer everything looks like a nail" I agree with Kraven, investing isn't like flying or surgery. Every company is different, do you think the same way about investing in a bank as you do an industrial manufacturer? Do you have checklists for each industry? A checklist is great for a process or procedure that's repeatable every single time. I have used checklists extensively with things I've done professionally because the process needs to be the exact same. Checklists work, but with investing items vary each time, they're not the same. I can see the value in a very high level macro list, but the detailed stuff seems crazy. I've seen checklists with things like "Does the CEO have a good track record of acquisition integration?" For anyone who's been a part of a merger you know that no two acquisitions are the same. Most acquisition success is related to the personalities of the people involved, not how strong willed the CEO is. I've been at companies where one acquisition worked extremely well, and one a year later failed, not due to products or the market, but all personalities involved. Pardon me while I digress... I wonder aloud if there is a lot of thrashing in the investment world because of the personality types who are drawn to investing? This isn't an attack on anyone in this thread, but this thread has me thinking. I see a lot of people talking about maintaining massive spreadsheet watch lists, or huge checklists, or reading piles of 10-Ks so they're "prepared" for an investment. The impression I've had is that most investors are detail oriented structure type personalities. When I think about those two things it makes perfect sense. Many investors are the same people who make detailed packing lists before they go on vacation, or plan and structure their vacation down to the hour. I am not a detail oriented person, I'm far from it, I'm big picture at best. I'm detail oriented about things I care about. If I'm researching a company I will suddenly care about the details, but I can't keep a watch list for the life of me. I like to think about the marginal return from more research. The marginal return from looking at the financial statements vs not looking at them is huge. The marginal return from reading the notes vs not reading them is smaller, but still sizable. The marginal return from reading the notes from an annual report 12 years ago is almost zero. I'd take this level of thinking even further, if I were to look back in time I'd say the return from reading the BAC thread on this board far exceeded reading their entire 10-K. Yet many investors read the thread, then read every shred of paper out there on BAC. I don't think the additional information helped them make a better investment, but it made them feel better about it. I think there's a sweet spot in researching, and it's finding enough information to make a great decision, but not drowning yourself in information to feel better about a stock. If the numbers are ok, and the company is ok it's not necessary to feel good about an investment. The investment itself isn't the problem, it's the emotional temperament of the investor that's the problem. I think some people assuage their doubt about an investment by over-researching the investment. Over-research can be dangerous because it can lead to someone loving a stock instead of being dispassionate about it. The truth is that no matter how much we research and how much we know none of it makes a difference in the outcome. If I invest in a great company and spend a year researching, then the CEO has an affair with a staffer and half the execs leave I have no control or way of knowing that, or even changing it. There is so much unknown and unknowable unless one goes Philip Fisher and starts to interview employees and learn about the culture. My sense from this board is that no one does that. To pull this full circle I think it's important to know yourself and know your flaws. If your flaw is that you continually miss the same information when you invest then maybe a checklist is important. But it's not the end-all be-all. I'm fully aware that I've probably killed this thread, or will be ignored, but I've said my peace and now I'm content....carry on! Absolutely killer post that absolutey no one will pay any attention to. How can they? There's no time. IBM's 1968 annual report is just begging to be read!

But the same can be said for 2012 and 2013...... The above statement, honestly, seems like a contrarian flag to me. If hedges were high probability winners, they wouldn't call them hedges. :) Great response. I liked it.

Then try looking for evidence to suggest that you're wrong. Munger has a name for this. An iron prescription, I think. In my view, what you're saying is akin to the following: I don't see how someone else's checklist could be of any help in one's flying. There is no right way to fly a plane. The primary goal is to protect your safety and thus put yourself in the best possible position to get from Point A to B. How you go about that is an individual, not a group, decision. As a wise man once said, "now the world don't move to the beat of just one drum, what might be right for you, may not be right for some". Of course, plenty of pilots would be dead today had they not totally relied on someone else's checklist. I agree there is no "right way" to invest. That the goal is to limit downside and to maximize upside. And I agree decisions come down to the individual. But it does not follow from these premises that using someone else's checklist cannot be helpful. As an investor my returns would be half what they are had I not totally relied on someone else's checklist. Boom, a Munger quote. I am obviously wrong. You got me. In reading what I wrote, I should not have said it's of no help. That's clearly incorrect. It could be of some help in ensuring that one is asking the questions they want to be asking. Personally, I find checklists in investing to be worthless though. Investing is not analogous to flying a plane or medical care. Just my opinion. You don't need to throw out another Munger quote or a Buffett quote to prove me wrong.

I don't see how someone else's checklist could be of any help in one's investing. There is no right way to invest. The primary goal is to protect capital and thus put yourself in the best possible position to make money. How you go about that is an individual, not a group, decision. As a wise man once said, "now the world don't move to the beat of just one drum, what might be right for you, may not be right for some".

You should totally ask him if he'll refund your $20. What a bait and switch!