oddballstocks

Are you referring to ERICOPOLY's recent lack of posting? ;D No, when I wrote this I was thinking of HarryLong and a few others of his time.

Watched a TED talk by the guy who started Benzinga, Jason Raznick. The video is here: Jason had a few stories that were powerful. The first was he was written off by a teacher who told his parents he'd probably never be able to read. His parents determined they wouldn't let that happen. He said he had to work harder than other kids, but was able to do well in school. But he spends a lot of the talk discussing how much power there is in just asking for things and being persistent. He went to college and decided he wanted to work at a hedge fund. He had zero experience and had no idea how to get a job but decided he wanted to work for Daniel Loeb. He said he created a newsletter The Daniel Loeb letter and emailed it to him weekly. It consisted of investment ideas and commentary on trades. Jason said he didn't hear anything for a while, then suddenly out of the blue Loeb started to respond to the newsletters. Eventually he sent him one "give me a call" and the door was opened. Jason had another story like this about Roger Goodell. Apparently Goodell got his start in the NFL in a similar manner. It's amazing what both asking and persistence can do.

Give me a list of counties and I can give you a list of banks that are headquartered there. I need state/county. What sort of data are you looking for, just the names, or some basic stats?

Warren Buffet eat your heart out... This thread reminds me of the childrens story the tortoise and the hare, clearly the hare is jmp8822, but we all know the tortoise (value investing, patience and long term results) wins eventually. But you can't tell the hare that, he's going to fast. Like those guys on the Sears thread who put the majority of their wealth into that stock I truly get concerned about investors who are so confident in their own abilities that they risk blowing up. I'm not against concentrating, I strongly believe in it when one has the ability to influence the outcome. Putting 100% of your wealth, or 200% of your wealth into your own business is alright in my book. Putting 100% or even 80% of your portfolio into a company that you have no control over is foolish. Some learn from the mistakes of others, some need to learn from their own mistakes. Forgive me for upsetting you - I was hoping we could have a conversation without the attacks. I've been around here long enough to see a number of posters similar to yourself come and go. People will come on and claim they have this incredible market beating strategy and they're so much smarter than everyone else. Then suddenly they disappear to never be heard from again. When I read your posts they sound very similar to that pattern. Maybe you're different, I have no idea. But if it quacks like a duck, walks like a duck, and looks like a duck...

Warren Buffet eat your heart out... This thread reminds me of the childrens story the tortoise and the hare, clearly the hare is jmp8822, but we all know the tortoise (value investing, patience and long term results) wins eventually. But you can't tell the hare that, he's going to fast. Like those guys on the Sears thread who put the majority of their wealth into that stock I truly get concerned about investors who are so confident in their own abilities that they risk blowing up. I'm not against concentrating, I strongly believe in it when one has the ability to influence the outcome. Putting 100% of your wealth, or 200% of your wealth into your own business is alright in my book. Putting 100% or even 80% of your portfolio into a company that you have no control over is foolish. Some learn from the mistakes of others, some need to learn from their own mistakes.

You fool yourself when you think that way. See it as 50% of your networth in call options and then ask yourself if this is a prudent thing to do. 2 full losses after one another will wipe out 75%, after 3 you start from 12.5% of your networth again. According to Kelly formula you can be sure to overbet in most scenarios with this allocation. When you do it with 25% you are closer to the optimal bet, but i am pretty sure that these 100% returns are not achieveable that way. 10 stocks diversified over different countries and truly different businesses is safer, because what counts is the permanent loss of your money not the volatility. Clearly jmp8822 is much smarter than the rest of us here. Us mere mortals can't fathom what it's like to "know" what will do well in the future. I've seen many crash and burn, I wish you the best. I had a friend years ago who could do no wrong, every trade was successful and he was making money hand over fist. Then suddenly he stopped talking about trading, which was strange because previously he'd send out chats and emails about how much money he made per trade. Clammed up and said his wife told him to stop. So I asked myself, why would such a successful guy stop if he had the golden touch, it was because the golden touch doesn't last forever. As mrholty said, he could do no wrong for 10 years, but once the golden touch was gone it was gone. This friend had his shirt handed to him eventually, hasn't touched stocks since. There is a reason the investing greats talk about risk, downsides and not losing money. It isn't because they're a bunch of old fuddy-duddy individuals, it's that they've seen a number of market cycles. There is some great wisdom and advice on this board. Many in this thread have said once they hit a certain point risk management is important, I'd concur with them. I heavily concentrated on a few positions when I was starting out, but I also had the ability to save my portfolio's value in a year. That's not true anymore, yet at higher portfolio values compounding is more important than outsized gains. I'd rather compound at 12% verses have a portfolio that's up 50% one year and down 35% the next and up 60% after that. The path to wealth (in anything, not just money) is compounding. Little bits daily add up to a lot later.

I'm sure it's true for many. I know that if I made millions a year, I would have no problem spending 500k or whatever; my goal is to be independent, not to spend as little as possible. I'm not sure what I'd spend all that money on, as I don't have expensive tastes (technology has made most of the coolest things in life inexpensive... a top of the line iPhone and Mac, a fast internet connection, a good stereo, and all the books I can read.. not a very expensive proposition). I'd probably just get a really nice house in a quiet spot, get a Tesla, a cook, a helper for the kid, I'd add a few zeros to my donation to the SENS Foundation, and that's about it... But it's also true in general (maybe not on this forum) that many people who make a lot spend everything (and more) and don't have much saved. It's the old Ben Franklin line... I think about this sometimes. If I had a few million that I had to spend, but couldn't buy a house/car/boat/rv/lawyer how could I possibly spend the money? Maybe the guy churning through $10m a year can help answer, but I have no idea how I'd spend hundreds of thousands or millions a year without the big purchases. But to the guy spending $10m a year maybe a $1m house yearly isn't really big, it'd be like someone who makes $100k buying a $10k item yearly. Part of it is that I've never been wealthy and probably haven't been exposed to truly expensive things. I'm sure there are places charging outrageous prices for things that I'm unaware of.

You still in HS or college I'm assuming? I'd say those aren't "real" living expenses. You're getting a free house/food/utilities etc. It's like saying "my living expenses are almost zero, the prison provides everything!!" There's a real cost to your life it's just you're not paying it yet. No issues with living at home, we all did at some point. But once you graduate and fly the coop I'm sure they'll go up.

True. But the Mr. Money Mustache lifestyle is probably more like retiring on 600k, so 4 million is more like Mr. Money Monocle :) assuming a 4% withdrawal rate, $4mm = $160K isn't exactly champagne and caviar. that's just getting by (albeit nicely) in some parts of the country when you factor in housing/kids/private education a decent vacation here and there etc. I don't know what 40 yr old or 50 yr old wife'd and kids'd up me will spend since that's 15 or 25 yrs from now, but it's probably a lot more than $160K. Either you live in a very high cost of living area, or you've worked in a high paying job for a while. Earning $160k in most of the country (not the coasts) is a crazy high amount. As Liberty posted the median family of four is living on $53k a year. I have a family of four and up until recently our annual living expenses were in the $30-40k range a year. We aren't extravagant, but we're not Mr Mustache either. Kids are as expensive as you want them to be. It's not like having an extra light on or two costs much, and when they're young they eat like birds. They destroy clothes (boys do) so we have purchased ours second hand. That way when they decide it's fun to slide on the carpet until the knees on the pants rip we don't feel bad because we only paid $3. If you want to live a higher class lifestyle then it's going to cost a lot more. Most families have a few 'leaks' in their budgets that are easy to close. Eating out lunch and dinner daily is expensive. I can't leave a restaurant for under $45-50, and I'm talking diner type places are that much. Eat out daily for lunch/dinner, have kids in an expensive daycare and suddenly the salary starts to get pinched. It's an expectations thing. If you always expect to drive a BMW a Toyota will never be nice enough. Some people can't imagine living in a smaller house, or not buying every new gadget. For them more money is going to be necessary. But I'm very satisfied with life and it hasn't been that expensive for us. Ah, one last piece of advice. If you're not married (and your post indicates this) try to find someone who came from A) the same sort of money background and B) has the same outlook on spending. You'll reduce a lot of fights that way.

If you want a good shareholder meeting I'd recommend you exit the echo chamber and attend the meeting of a smaller local company. Buy a few shares of some local companies and begin to attend. In most cases that will be the best business education you can learn about a given industry in an hour or two. Much better than the platitudes that will be posted and regurgitated on the board for months.

To be honest with you it was a number I had chose with my wife when we were engaged. What I didn't mention was that all my investing was done in an IRA. At some point if I was going to live off it I would have to pay a large tax bill. My plan was take $1M in safe corporate bonds/government bonds to hopefully provide $50k (after tax) of income. Another $1M I would invest in some distressed hedge funds with guys I know are smarter than I. $1M was for me to start a couple of businesses that I want to start and for me to sleep well at night I'd rather not have the bank debt (even if I could find a bank willing to do so). This investement would be in an economically depressed area has had large population losses and it would be more of me trying to create an industry to help an area I love very much. The last $1M was to bet set aside for taxes (mentioned above), pay off the house, and use to invest myself. In reality what really wiped me out was I knew that I didn't need $4M but $2M would have been perfect so the DIMEQ investment could have gotten me to a number that I really wanted. Now, I've switched jobs, am happier and work harder and longer hours than ever before. This allows me less time to think about investments which in reality makes me a better investor. The reason for my post was that I heard myself in some of those previous people who were doing great. I still think the DIMEQ decision was wrong and know several others who feel the same and know others who lost more than me. What still bothers me about that one is that in two different cases JPM has stated two distinct and different things about how it was acquired. To be honest other than the position sizing I would have still invested in DIMEQ if brought forward today. Once I have a new idea I'll be glad to post it to the boards. Just started to work on something interesting last week but I don't know when I'll be done. Appreciate the candid post. The nature of message boards is you often hear about the success and when people fail they completely disappear. So it seems like everyone is killing it. Rather there are others who shared your experience it's just they gave up and disappeared. A post like yours is a great warning to everyone that nothing is guaranteed and sometimes shooting for the stars doesn't even guarantee a moon landing.

I'll take one free lunch, please. But seriously, read your post again. I want above-average returns with near-zero risk and zero time commitment. Many people spend serious time in hopes of just improving their chances at the first 2... Just my own opinion, but you should re-consider what you are attempting with your parents' money. Your expectations seem extremely lofty and it is probably worth ~1%/year to get an independent steward who's willing to spend an adequate amount of time on due diligence. I take your point, but I don't think I agree. My entire investing philosophy is based on the following thoughts: 1. The index has a lot of crap stuff in it. 2. It also has a lot of great stuff in it. Very long run businesses serving needs that don't change much with competitive moats and that generate cash while growing slowly over the long term. Or, jockey stocks with amazing jockeys. 3. If one puts in the initial leg work to identify great stocks, and one is selective about buying them at times when their valuation is low compared to history, one ought to be able to build a portfolio that doesn't need much attention and does outperform the index (compounded from the start, not in every discrete year) with near zero real risk* over the long term. 4. I would actually go so far as to say that doing due diligence AFTER the initial purchase might be actively harmful. Once I have satisfied myself that a business has a decent probability of lasting forever and can price with inflation and grow a little in real terms, I do everything I can to forget I own it. I'm usually not successful and so I sell things based on macro analysis, and usually regret it. For starters I'd look seriously at FFH MKL BRK KO PEP DGE CL NESN and their peers, of which there are lots MMM JNJ *I think of short term risk in terms of dividend income and long term (15y+) in terms of purchasing power. In other words, I judge my wealth on dividend income now and capital in the very long term. I don't judge it based on what Mr. Market quotes me for my stocks today. If the index has a lot of crap then wouldn't buying the entire index except for the worst five stocks provide material outperformance? Seems like an easy method to me, just figure out which five stocks are the worst and drop them..

Stahl had a piece in 2012 I believe that talked about this. He showed valuations of index components and then valuations of competitors that weren't in the index. In a few cases the competitors had better operating metrics and were selling for lower prices. The discrepancy could be attributed to the mindless buying of indexes. After reading this piece I was pointed to the website Stahl used to research this. I've since lost my notes and don't remember it, but it was cool to see.

Yes, came in here to say the exact same thing. Stahl really covers this, the implications and what it means for finding undervalued companies.

When I think of Lynch's books I just think of Leggs eggs. Being hauled around to clothes stores with my mom I saw those things everywhere. While reading the book I had this weird mental connection, "of course Leggs worked out, those things were all over the place!" I read the first Lynch book in 2006. I finished it on vacation in Florida and remember starting to think to look for what was popular. The impression I came away with was that new condos, new construction, banks, and housing related stores were popular. I remember looking at the Williams Sonoma and Restoration Hardware (two stores that were all the rage amongst our friends then) and couldn't back their valuation into their market price without some lofty assumptions. Thankfully I passed.

Is she a reader? If not getting a book thrown at her is the wrong thing to do. She probably likes when you explain this stuff because you're passionate about it, and when people are passionate about things they're engaging. Will she get that from a book? Maybe not, maybe a dry book with lots of math and finance geekery will turn her off investing. I'd recommend continuing to explain this stuff. It has two benefits, you A) teach her, B) learn yourself because you'll be challenged to learn more.

Found this short piece interesting. The comments are especially fascinating: http://krugman.blogs.nytimes.com/2014/12/27/the-fall-of-montgomery-ward/?smid=tw-NytimesKrugman&seid=auto&_r=0 Such as this one "Peter Boswell - There are some great pictures of Sewell Avery, my favorite shows him standing next to a huge chart of stock prices over time that showed every war from the Civil War onward was followed by a crash. He hoarded a billion dollars, letting the stores rot in need of repair, while waiting for the crash that was sure to follow WWII as Sears borrowed heavily at 2% and took over the department store market. By the way, surviving a year working for Sewell Avery and then being fired was considered a plus on any resume." "Professor Leo Loll, at the University of Alaska, from New York University, (wrote the first SEC broker test or something if I recall correctly) used to preach about that in our classes back in 1962. Part I liked best was that all the vultures soon learned of his stockpile and attempted to take control of the company in order to distribute a fat stock dividend." And a related article (which is excellent) with a picture of Avery being carried away by the Army in his desk chair: http://www.bloombergview.com/articles/2012-12-07/when-the-army-invaded-montgomery-ward In Security Analysis Graham discuses companies with giant cash hoards and government regulations prohibiting those hoards. How times have changed. Also interesting that Buffett's uncle (? I believe) held similar views to Avery. This is a cautionary tale to not let macro-economic predictions or political views taint your investing. There are markets all the world over in all political systems, and investors who are flexible and savvy are able to make money regardless of the environment. Those who tie themselves to a specific political ideology and let that drive their investment decisions usually don't end up with the same returns.

Are you sure it isn't still $250k per owner per institution per ownership type? All your individual account together gets $250k protection. All your spousal accounts together gets another $250k. The joint account with the spouse gets another $250k. So you and your spouse could get a total of $750k protection. But that is per bank, right? From the FDIC site: "The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category." Correct, per bank. So you can open accounts at two banks and get $1.5m in protection. Open accounts at 20 banks and it's $15m worth of protection. If you're an individual you can scale this fairly easily. The caveat is that these rules only apply to individuals. A business can't get protection beyond the $250k level as easily.

In retrospect I should have hedged my foreign currency exposure.

read greenblatts book, you will at least know they exist then. Not even Greenblatt's book, just look at a number of names, you'll eventually hit one. Conduril comes off the top of my head as a name I knew was worth 4x as much, it's up 3x so far. It hit 4x at one point although I didn't sell. Since the purchase the company has improved and it might end up being worth 5-6x my initial purchase price. Problem was it was extremely illiquid (only traded twice in 2010) and there was no certainty that IV would ever be realized. I've owned a few others that I knew were worth multiples, but often these things languish for years. The problem for me isn't finding absurd valuations, it's knowing when IV will be reached. You can run a screen right now for stocks trading for 25% of book value...ok, just did this, 2,956 stocks worldwide qualify. I'm sure a few in that pile are truly worth book value, 4x the current price. Just need to go through the hard work sifting through that pile.

Some brokerages have a cash product that spreads deposits across FDIC banks. I know SmithBarney used to have this, and Fidelity does as well. Fidelity has a SmartCash account where all of the cash appears in one account, but at each $250k threshold they put the money into a new bank. I believe they have five banks they work with, so you can potentially have $1.25m protected. Beyond that you can purchase CD's online in $250k chunks from different banks. I don't know how much you're trying to protect, but there are 6500 banks in the US, maybe only 1000 would open CD's for you out of area, but presumably you could protect $250m or so via CD's and accounts. Maybe even $500m if you were creative in how you named accounts with a spouse. Now granted it'd be a full time job, but if you wanted FDIC protection I believe it can be done.

No disagreement. When I was 25 I had my entire portfolio in five stocks, yup five. I did 60%+ in 2006 when the market returned 15%, I crushed it. I felt like I was king of the world, a genius. During the winter I spent some time looking at what I held and thinking about the future. I realized I was lucky, purely lucky and in the right place at the right time and I really had no way to replicate my success. I sold down and added new positions over the course of 2007. It was because of that change that I survived the crash. I think concentrating becomes harder as you age as Uccmal noted. I can no longer 'fix' a down year with savings, my portfolio has grown too large. A few serious down years and the opportunity could be too large to overcome. When you're young there is nothing like rocket fuel to a portfolio like a few positions that appreciate multiples. I have two parting thoughts on this. I have owned a 100-bagger, and recently a 10-bagger. Neither were identified as such when purchasing. For most of the holding period they only appeared moderately undervalued, but both companies grew substantially. The 100-bagger was a stock my grandfather purchased and passed onto me. It was originally purchased in 1984 and reached 100-fold in 2006. So when people talk about stocks appreciating significantly it took 22 years or so of holding to realize that. How many of you expect to hold your companies 20+ years? That's a really long time. I think about it some, it means a stock I buy today I might sell when my oldest kid (who is in preschool) is 27. He was born when I was 28, so conceivable this could be a stock I purchase and sell when I'm a grandparent if he has kids at a similar age to me...that's a lot of life during a holding period! While I hold 50 names I do allocate larger positions to ones I think are cheaper or have more growth potential. I think this is how any major value investor works. I don't do something mechanical where every holding is an equal weight.

I didn't even know they were still in business. I've had two lousy burgers there, and those are/were the only two visits I'll ever make.

I've never heard of Shake Shack. Looks like they're an East Coast + key destination cities chain. Are they IPO'ing to expand nationwide? In n Out vs Five Guys is difficult. I want to say I prefer In n Out, but I also realize that's probably due to the scarcity factor. I can have Five Guys anytime, I can only have In n Out when I travel out west once a year.

Is it concentrating or just thinking more about your investments? I ask because I hold about 50 positions, but I have noticed that many times my foreign stocks do better than domestic (although not always). So I asked myself why this might be. It's harder to buy a foreign stock, commissions are higher and there are currency movements. So my approach is more cautious. I have taken fliers on American stocks because it's so cheap and I figure "why not?" I've taken fliers on story stocks in the past (never again) but not foreign story stocks. In short I am much more cautious with my foreign holdings because of the friction costs. And because of that my foreign results are better. It's easy to draw the wrong conclusions about things. Instead of saying "well I only have about 15-20 foreign stocks so clearly I should concentrate" my conclusion was different, it was that I should be applying the same process to domestic companies that I am to foreign companies. So that's the approach I've taken. I ask this rhetorically, if you have two stocks that have the same expected outcome or 200 stocks with the same expected outcome would the portfolio return be any different? It wouldn't, and the 200 stock portfolio could potentially be higher if those two stocks don't appreciate quickly. My thinking is as follows, I have a return I'm shooting for, about 10-15% over the long term. If I can find companies that fit that criteria solidly then how am I diluting returns by adding additional companies? If they all truly have the exact same return characteristics I'm not. Now granted everyone on here is looking to triple their money in two years, I'm not looking for that. But to everyone looking to triple your money I'd ask how are you doing finding those stocks? If you expect to have a portfolio of six stocks that go up 2-3x every two years has that been true? Because if that's your expected return, and you're looking for that and fail to find it then you're underperforming your expectation. I'm not looking for eye-popping returns, rather I'd like to earn 10-15% over decades, not 500% in six years. So for me finding a company that will appreciate 15% a year for a decade is easier than finding one that will appreciate 50% a year. With a lower hurdle I've been more successful, and I have more stocks to select from. To me this is a marathon, or an ultra-marathon, not a mile sprint. Sometimes I think the 2-3x mantra in two years really means something else. It means that people are looking to hit it out of the ballpark, but tactically admit to themselves they feel it's unlikely. But at least if they swing for the fences they have a chance of hitting a 20-30% return. It's a gamble, and over the last few years of the bull market it's worked out. I prize consistency myself. I'd rather eat at a restaurant that's consistently good verses one that's either the best meal ever or unedible. Investors love to roll the dice so I can see the attraction to the high returns. In summary my guess is that when people concentrate they focus more on their investments as they need to. If you applied that focused process I don't think it matters how many stocks you have as long as they all meet your return criteria, and your return criteria is obtainable. The perceived ding against someone who diversifies is that they're viewed as an investor taking fliers on any and all stocks without regard to quality or safety. In this case I agree, it's better to own six things you've spent time on verses 100 things you are clueless about. But that's gross generalization that I don't believe applies.