oddballstocks

My biggest argument against concentrated investing is why not go all the way. If you have three ideas why dilute your best with your second or third best? So here we have it, someone is finally doing that, and amazingly this concept seems to be gaining traction. Buy one stock and buy a put. Sounds perfectly foolproof, nothing can go wrong, losses are protected and gains are ensured. As long as we can all pick the stock that will go up the most each year this strategy is foolproof. Do you use a max position size? If so, what is it and why? Sorry if you've talked about it before and I missed it. Nope, if something grows and keeps growing I let it go. My biggest position is MA at 17%. It started out much smaller and grew like a weed. I've sold down part of it for other ideas, but still have a large slug in it. If I am buying something as part of a group trade I buy tiny pieces maybe .25%-.50% depending on liquidity. Other stocks I like better I buy more of. I buy cheap banks as part of a group trade, but I have other bank positions that are much larger because I like the bank, it isn't a group trade stock. If I can't muster the faith to buy 1% of something I will pass. Ideas I like I might buy up to a 5% position over time. If something gets to 5% or higher it has to earn it's way there. If I held 10% of my portfolio in something it's due to appreciation, the stock earned it's place. Stocks that can grow into valuations and keep growing have earned their keep.

My biggest argument against concentrated investing is why not go all the way. If you have three ideas why dilute your best with your second or third best? So here we have it, someone is finally doing that, and amazingly this concept seems to be gaining traction. Buy one stock and buy a put. Sounds perfectly foolproof, nothing can go wrong, losses are protected and gains are ensured. As long as we can all pick the stock that will go up the most each year this strategy is foolproof.

Thanks, will be looking at this.

+1 "Someone will always be getting richer faster than you. This is not a tragedy." -- Munger Because investing seems 'easy' you simply read and click buy/sell. If Buffett can become a billionaire by sitting in a room why can't anyone else? If some guy in an office in Kansas can do 65% a year why can't anyone else? The thing is investing like anything else is part skill and part work. Some investors are truly better than others, but it's hard to recognize this. Compound that with the fact that investors are a competitive bunch. So someone comes on here and says they've done 65% annually betting on a stock that'll go up and suddenly there's a bandwagon trying to replicate the strategy. If I knew which stock in my portfolio would double each year why would I diversify? I would invest 100% in it, but why stop there? If you "know" something will double in a year why not mortgage the house and leverage into it at 200-300%+? The problem is I don't know, and if I think I know I'm just fooling myself. Yadayada mentioned that the key to Packer's strategy is to buy companies at low multiples. To me this is the key to value investing. I have never lost money on buying a company at 2-3x earnings or at a very low multiple of book value. This is true earnings, not one time adjusted earnings. Low multiples are the easiest way to make money, but it doesn't always take place in a year or right after a purchase. So true. Envy is one those sins we should learn to remove. As long as we reach our goals, who cares what others do right?

Yes!

I think you could call it partly differences in risk tolerance, but I've run very concentrated for about 7.5 years at 65%. But for instance this year I was a -10% vote. The way I look at it, if I'm not willing to put 50 or 100% of my money in a position I shouldn't be buying it anyway. You can buy a put to protect your downside while avoiding potentially devastating opportunity cost of not being concentrated - again becomes a risk tolerance question. Adding another 10 stocks would certainly not help my total performance and probably add some terrible emotional mistakes, and analysis oversights. Having read your some of your ideas, you could probably buy the best 3 or 4 a year with great long-term results if you don't mind being one of the poor votes on the poll every once and awhile. Wait, you had a 65% CAGR over 7.5 years? Curious how you achieved that. Yes - first stock I ever bought was mid 2007. Looking back, some of the most successful return-wise stocks were sum of the parts valuation discrepancies with a catalyst. Concentrated - generally one or two stocks at a time, averaging about a one-year holding period. Perhaps a bit cliché, but I have bought things that looked cheap and were doing something that made it more obvious to the market. A few more recent examples: Genworth mortgage insurance book improving, which made the consolidated financials look better last year - that was a double. Bank of America financials naturally improving after losses subsided. IDT improving after/during the crash - they were closing unprofitable business segments - made about 5x over two years my average cost. 65% a year for the past 7.5 years is crazy. If you started with anything more than $20k you're well into the millions now, a rare feat indeed. Nice job, you've had quite a run. Do you think the strategy scales at size?

Lancaster what? In the Midwest/East there's a Lancaster in most every state. Sounds like the pitch was fairly aggressive. I'd ask if the return is so great why hasn't the sales guy gone out, leveraged up and purchased it himself?

Ah, the airing of grievances. The highlight of the celebration. Here's several. 1. If you're part of the seemingly every growing contingent of younger posters still living at home, please don't offer life advice. 2. For newer posters, please don't feel the need to weigh in with your views on every single thread. 3. If you post about how much angst you have with your investments and you don't know if you're investing properly, etc, please don't then 5 minutes later offer advice to someone else who asked an investing question. 4. If you're under, say, 30, please feel free to get rid of the world weary tone like you've seen and done it all. Ah the good old sarcastic holier-than-thou tone, every time I look up for the poster's name it ends up being the same guy. Do you ever contribute anything besides complaining about other people's posts? This board is free to leave if it's such a drag on your life, you know. New around here? Search Kraven's post history. He's crushed the market investing like Schloss. While most around here are doing 20-30% with 10 stocks or leverage Kraven is doing similar numbers with 100+ stocks and 20-30% cash.

Which excites you more? Where did you get along better with the people? In my experience people make or break a company, great people and dull work can be exciting. Incredible work and terrible people is just terrible. Sounds cheesy but I've done pro/con lists for things like this. Just putting thoughts down on paper can help. Sometimes you have trouble coming up with any pro's for one item and that's the nail in the coffin.

As expected a few 30%+ returns and the obligatory 70-80%+ returns. I know it's great to be on top but just watch, someone is going to roll in here with a 100%+ return. It never fails, this thread always makes me envious, I'd love to compound at 40-70% a year, but I also realize it's unlikely to be sustainable (for me at least). I'm not even sure what I'd have to do to double my portfolio in a year, maybe trade options or something. For those of you at 70% or 80% did you use leverage? If not was your portfolio completely concentrated in one lucky stock, or two lucky stocks for the year? How repeatable do you think the results are? Some people talk on here as if they know the outcome of their investments. I don't know if this is some weird overconfidence, hubris, or if people really can tell that something will do well. I know from experience that buying very cheap things works, but I never have any idea when or how, that's the mystery and part of the excitement. I guess to get to 50% plus a year you'd somehow have to 'know' that a stock was going to work in a year. Anyways great returns, congrats. A few more years like that and there'll be a "Ask whomever" thread with new posters worshiping at your feet.

I hate these posts because they often turn into who is the best. Yet at the same time I like it because it's a good gut check, I don't typically check my performance until the end of the year. So putting out publicly how I did is a nice form of accountability. Not entirely sure how accurate this is but looks like I did about 10.7%. Fidelity is claiming much higher results, but I believe that's because I have about 20% in cash or so and they do some funky performance calculation ex-cash. Failed to beat the S&P, but looks like I beat the Russell Microcap Value index and KBW Regional Banking indexes by about 10%. I beat international small caps by about 15%. My portfolio is primarily microcaps, small banks and small international stocks, so those are much more appropriate benchmarks compared to the S&P. Good, bad? Not sure I care either way, I didn't lose money and I like what I hold. A successful year. Addendum: Spent more time looking at Fidelity, they exclude foreign positions from their performance calculation. On my US holdings I did 17.5%, my foreign holdings were mostly flat, and Japanese holdings negative which brought my overall performance down. I guess if I compared myself to a small cap international benchmark as well I did ok.

Sure, not sure if this applies to JBird or a friend or whatever, but I'd say the thoughts still stand regardless of who this is. I guess the only situation it wouldn't matter is if JBird is some sort of divorce attorney or works in that field building new products. Then he only cares about how to hide assets verses the actual divorce.

the thing is, english isn't an official language in switzerland. most of the people there speak german or french. Came on to say the same thing. I believe German, French, Italian and Romanish are the official languages in Switzerland. Good news is that French and Italian translate into English fairly well. Here's a trick on foreign companies, often the website will have investor filings but only show the links in their native language. This works for TIBN. I went to their site in both English and French, the "Company" pages were the same. I visited in German and found this link: http://www.titlis.ch/de/header/unternehmen/investor-relations

Are you already getting divorced, or is this something pre-marriage? This is a really tough question, when I got married all we had to our name was debt. Any and all wealth came after our vows, so if we were to split I don't see why half wouldn't be hers. But let's frame the question a different way. You're worried about marrying someone who's going to take half your money. How would you feel trust-wise if the situation were flipped? So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get. And they get to control the strings. Marriages where one person 'controls' the other don't last long. So if you're in a situation where you want this money and you want to dole it out as an allowance or something and control it you will encounter problems. Part of the deal with love and marriage is there's a risk involved. You're trusting your life and all your stuff with someone else. I get it, divorce happens, but it's so rough because this trust is broken. I just don't see marriages that work where one person domineers over the other. Maybe this is a gut check. If you have legitimate concerns about this person divorcing you then maybe there's a trust issue, or maybe you need to re-think marriage. I couldn't imagine the horror of living my life with a cloud of doubt about my spouse all the time. I know you were probably looking for a clever financial structure that lets you do whatever, but I'd encourage you to step back and look at this from a wider angle.

Agreed, it's a strange thing. Retail investors are paying almost nothing to trade, yet I believe institutional rates are still high. Prime brokers don't come cheap. In a way this makes sense, brokers realize who is really footing the bill, not the millions of retail investors but rather the larger funds/institutions.

"North Korea's Internet user Kim Jung Un reported access is limited. He was quoted as saying 'this is a serious problem, I can't even access Facebook to keep up with college buddies. Of course this doesn't affect anyone else because no one else has access, but it's really stressing me out. Do you guys even know what it's like to be the only Internet user? I mean I'll see a great joke on Facebook and want to forward it then remember no one else has access, it's such a bummer.'"

My guess is that 75 of those 75 made their money from fees rather than investing their own capital. I remember seeing an article that mentioned if Buffett hadn't opened a partnership and only invested his own capital and earned the returns he did he'd have a few hundred million now. The only way to a billion is on the backs of investors.

Depending on the size of your cash pile and lock up outlook, pretty much any high liquidity instrument (1) will do since interest rates are volatile at the moment. 1. Probably need assets to be interest rate independent, would be nice if inflation independent, and valued in USD. Try BRK if you want higher returns? I specifically pick BRK because Buffett tries to get returns to match IV growth for shareholders. Obviously no guarantees. I wouldn't buy many other stocks as a cash proxy however. Not the best solution but I'm guessing you've heard of the more practical approaches. Are you honestly recommending BRK as a cash proxy? Seems to happen towards the top of every bull market. Of course BRK will fall with the market when the market falls. If you want to own BRK own BRK, if you want cash then own cash. Yes, you will 'lose' out because interest is less than inflation. But cash is cash, it's optionality. Cash gives you the ability to buy something on the spot, whether it's a hard good (TV, fridge, football tickets) or equity. If you think you will need to buy something then stay in cash, if you don't need to buy anything and want exposure to BRK buy BRK. Bottom line is if you're looking to juice cash returns you're playing a risky game. I remember all sorts of weird income investments before 2007 with investors looking to juice their cash returns. Some did alright and got out ok, others lost out and all those extra gains resulted in losses.

"History merely repeats itself. It has all been done before. Nothing under the sun is truly new." - Ecc 1:9 It's as if when people realize this they freak out. There is a quote from ancient greece about how kids, could be read today. Nothing is new, history/life/everything repeats. That's how it works. I'm happy to have these conversations, happy to repeat myself over and over if people benefit.

comes into the picture.. But I dont have the passion in reading 50'000 pages over the weekend as Buffett does, I dont have the passion in reading 10k on my honeymoon and therefore was hoping that it doesnt only come down to passion in reading... Frankly, Im getting tired even if exponential knowledge works like ecstasy for the brain.. maybe its just a xmas break that is needed without books and reports.. From birth I have been told that talent comes from working hard, "rise early, work hard, strike oil" kind of mentality... skip fancy words and jargon and dig in the ground until your hands bleed, then continue until you dont feel it... I love what I do, but having dinner with my family, realising that I havnt heard a word my kids said because I was which strikes me as going in the totally wrong direction.. Im being a bit abstract, but I guess you guys understand what I mean.. it maybe just comes down to this Take a break from reading, I'm guessing it isn't adding much at this point especially if you're burnt out. You need to decide what you want in life. Do you want to be some incredible investor who strangers love? Or do you want to know your kids/wife? My two cents on this, your family will love you back. Strangers you're impressing with never love you. There are many afternoons where one of my kids comes into the office and says "Daddy are you done working yet?" some days I'm deep in the flow and say "not yet" and continue on. Other days I'm just doing small tasks that can wait, I'll quit and go play with them. Maybe I'll never be 'the best' from this. I'm sure I'll miss out on opportunities, but life is richer for it. Reading endless 10-k's might put money in the bank, but money doesn't love you or appreciate you. To Uccmal's point, it's the appreciation that counts. Here's another thing, you run an investment management business. You need to do just well enough for your clients. If you meet their needs and they are satisfied you will get more bang for your buck finding new clients verses more performance. Sure, it's the dirty little secret of money management. Your time would probably be better spent selling rather than reading. A few sales calls will provide more lifetime value than another 10-K. Oh and don't read 10-K's on a honeymoon...seriously. Maybe this goes into the regret thread. "I regret sitting in the hotel reading 10-K's on my honeymoon instead of.....doing honeymoon things."

This is getting off-topic, but I so envy people like you. I love music. I probably own over 2,000 albums of all genres, love discovering new things and immersing myself in the world of all kinds of artists. But I can't sing and I can't play. I tried electric guitar for years, and I had good technique but no ear for it. I have synesthesia so sometimes I think that I enjoy music differently than other people, and that this hurts my playing because I don't see the notes the way most people do in my mind's eye... Anyway. Enjoy your good musical genes for me ;) Will do, just picked up the guitar next to the desk for a few minutes. The problem with talents is that it's not easy to recognize what we're good at. The things we're good at are usually areas where we are hyper-conscious and aware of others who are better. Instead of comparing ourselves to others who are worse the natural inclination is to compare oneself to someone who's better. I know this is something I've always struggled with. There was/is always someone faster/stronger/smarter/funnier/better looking than me. Instead of recognizing that 98% of the gym class was behind me while running the mile at school I was focused on the two people in front of me. Contentment is under-appreciated. I think it's a key to life. Knowing our own limitations is really important. When we know what we're not good at we can rely on others.

Of course!... But I guess Slash loves playing guitar nonetheless… at least most of the times! And probably loves it much more than me and you could ever come close to understand… That’s why I agree: such a passion definitely is a trait! Then also Slash is just a human being… and like any human being he is sometimes subject to boredom and laziness! ;) Gio Maybe? Saw a documentary on Rush recently. They said they hit a point where they hated playing their instruments. At one point one of the guys said he didn't touch it more than two times in a year, just couldn't handle it anymore. Loved music, but hated the instrument. Speaking of music. My brother and I both have a natural talent for music in that we can hear something and play it note for note almost right away. We can compose things in our head they come out in our fingers etc. I never went anywhere with it, I'll play guitar or bass for fun. Recorded a bunch on the computer, but nothing much. On the other hand my brother practiced all the time, did drills, challenged himself, really pushed. He made it into a career, played on the Tonight Show a few years back, has recorded albums, toured the world etc. He has a natural talent and has pushed himself as well. He loves music, but doesn't always love playing. But he knows to keep up he has to continue to practice. Talent is essential, but hard work is the key to success. Talk to any professional sports player and they'll tell you the same thing. There were others who they played with in high school or college who were more talented, but they didn't do anything with it. You need that base talent level, but the work takes it from there. Not everyone loves what they're doing, but all who are successful have realized that there are non-lovable things they must continue to do to perform like they do.

Natural talent is clearly required to be a top performer in any field. There are few thing where someone can come along, just work hard and be the best. Those with talent who don't work hard don't perform at a top level either. How do you become better at business? Instead of just reading about businesses I'd encourage you to start one. That's where the rubber meets the road. You can read about playing guitar until you're blue in the face, read sheet music to understand what players play. But until you sit down and pick up a guitar and play it you won't fully understand. I believe investing is like that. Investors can read and pontificate about business like a bunch of thought-leaders having a pow-wow around a campfire. But until you run or start a business there is something missing. Buffett ran a few small companies, then his investment partnership (which is an asset management company) and finally he runs an enormous business now. We think of him as an investor, but he's the CEO of a massive conglomerate. And while he claims he never deals with company type stuff I know he does. Saw an article recently that said he would receive sales figures daily for a division at the holidays. When you get memos with daily sales figures that's a business manager role, not an investor. Daily figures don't matter to an investor, they are essential to a manager.

Interesting. Does current cost of legal services follow this oversupply? Not in my experience. If there's an oversupply the legal consumer isn't reaping any benefit.

This is a really good point. So many are waiting for "the next big one". We will get another crash, probably some smaller ones and bigger ones, that's how it works. But I'm not sure if we'll see a massive one or not, maybe we will. Seems these things are 5-10 years apart, and 2008 is getting further and further in the rearview mirror. Someone earlier said that everything makes sense in hindsight. This is very true, looking forward it's murky and foggy, looking backwards it seems so clear. At times there were career choices, or decisions that I regretted. I thought they set me back. But I've grown/matured and realized that it's all about the attitude. I've realized that what I thought was wasted time was valuable when I considered it as such. Some things I consider advantages now a few years ago I'd have classified as regrets. I love how the answer to this question changes with time. I remember about 10 years ago the common response was "I regret not buying Starbucks or Microsoft in the 90s." Of course at the time they weren't sure things either, well Microsoft was, but they had some dark clouds looming. This thread reminds me of my brother-in-law who told me "Next time you find a sure thing stock that'll triple call me up and I'll take out a loan to buy it." Sure thing buddy, that'll be right after I mortgage everything I own to buy. Sure things are only sure things in the past. Some people say to live without regrets, but that's usually a license to be stupid. I'd say a better route is to live in a manner where you can accept failure and grow from it. You will fail, you'll probably fail big, some will be epic. Just learn and move forward. Failing isn't really that bad, the one who hurts the most is yourself, others don't care much. Others are usually there to help you move forward, the biggest hurdle to overcoming failure is yourself.