oddballstocks

Depends on what's out there though. I've limited above the offer on some illiquid stuff because after talking to a market maker I've learned there are a number of shares slightly higher that I can take out at once. Or I can coax someone into the stock by offering a higher price, if I offer the bid I'll never get shares. I'd rather have a position at a percent or two higher rather than have nothing in some cases. Sure, I sometimes buy at the ask as well, but two things to consider: 1. If you are indeed buying something that will go up 100% saving few pennies isn't important. While I usually think that the things I buy have that kind of potential the truth is that in reality that's usually not the case. I think for most people generating 5% alpha would be an impressive result. If you incur a couple percent trading costs when you buy and sell, and your average holding period is a year than almost all your possible outperformance disappears. Saving a couple percent can be very very significant I think. 2. How often do you buy something that only goes up after you bought it? Usually I get an opportunity to buy it cheaper, so you don't need to be in a rush to enter your position. I agree with your points, although I have had a number of opportunities with extremely illiquid stocks where the price was low, but if I didn't step up and buy in size at the ask I'd never have a chance to buy at that price again. For things that trade somewhat often I agree, the price will dip lower. For many other things the price might never get lower, I don't think Conduril's price has ever come down from my initial purchase, I've averaged up with it over time.

Anyone read the details on this thing? Looks like it's a big clunky DRM reader that you have to install on Windows to view this stuff. It won't allow printing, won't allow reading on a iPad or mobile, won't even load if you have a screen capture program installed. If you purchase a new laptop you have to buy a new subscription for the laptop, or if you want to use two computers you need a subscription for both. I understand this guy has a famed newsletter that he seems to believe is extremely valuable, but the DRM and closed mindedness about the content is disturbing. If you want to print a page to save for reference it's impossible, you need to take notes with a pen and paper. You're at the mercy of this company to access the content, and based on their history of reliability that's a big gamble to take. I know in the past OID had access to some interesting investors but it seems the torch has been passed. For my money I'd rather subscribe to the Manual of Ideas. The Manual of Ideas people seem to be more current and have a great network of uncovering new and up and coming managers. Plus they distribute their reports as PDF's that can be printed and read anywhere.

Depends on what's out there though. I've limited above the offer on some illiquid stuff because after talking to a market maker I've learned there are a number of shares slightly higher that I can take out at once. Or I can coax someone into the stock by offering a higher price, if I offer the bid I'll never get shares. I'd rather have a position at a percent or two higher rather than have nothing in some cases.

I have often thought this same thing as well. If I had the capital to buy a small public company why would I want to put myself through that hassle instead of just investing the capital and relaxing? The truth is no one buying these companies is using their own money, they're using someone else's money which is why this suddenly becomes attractive. You get to buy a public company with someone else's money, then earn fees on that money and get paid a salary. You can then use your earnings to buy out your partners and consolidate your ownership. From there you start to buy other companies, build an empire, justify a high salary and hit the links. This is truly the ultimate game plan for how to get rich if you have no capital to start with, use someone else's money. The brilliance of this is you don't even need to be a good investor, just good at raising the initial capital. Once the initial capital is raised and a company is purchased there are all sorts of tools the manager can take to ensure they will never be kicked out by shareholders (how about reincorporate in Indiana or Ohio...). The problem with this is I don't see many tiny companies issuing capital at attractive rates who aren't using scummy brokers to sell the offering. There isn't exactly a thriving secondary market for companies in the $5-15m range. Heck, most of these companies are trying to flee the markets quickly. I have kicked around this idea for maybe the past year and a half with a friend. We found a company trading at an insane valuation, where if the CEO were kicked out this plan could work. The problem is the CEO's golden parachute payout sucked up a lot of the margin of safety in the investment. It's potentially still attractive, I even recently had someone offer to front the cash for the entire deal. The problem is the outcome is binary, if it goes well it goes really well for everyone involved. If it doesn't succeed, and there are a million reasons why it wouldn't, I would probably end up broke and in lawsuit hell. The company is dark and the only way to get financials is to hold registered shares, mine are sitting on the desk right next to me, constantly reminding me of the potential.. It's always other people's money, unless you are some rich trust fund brat or inherited a significant amount of wealth...this accounts for about 50% of money managers by the way! ;D I have no problem with people using other people's money to generate wealth both for those people and themselves. The question, and this may simply be semantics, is how fair is the compensation structure and is it in alignment with the long-term interests of shareholders, especially in terms of the risks and amount of work the CEO will be undertaking. I was ok with Biglari getting $900K a year. I was ok with Biglari even having an incentive fee structure if it was something like a 8-10% hurdle, and 10-15% incentive fee. I was even ok with Biglari having both a salary and a reasonable incentive fee. I was not ok with Biglari having an incentive fee identical to a hedge fund, since there were enormous structural advantages of captive capital. Where people's opinions lie on these matters will vary across the spectrum. But almost everyone will have a point where things become excessive...be it in partnership form or a public corporation! Cheers! I agree, the trick is finding a way that both shareholders and management can both benefit. The problem with a public company is you might have fantastic results but the share price is unmoved. The work you did would earn you an outsized salary but shareholders would have nothing, unless you return the gains as a dividend. SharperDingaan is onto something with private companies. I really think the sweet spot is running an unlisted company that files on OTCMarkets. You don't have to worry about the SEC or filing fees, yet you do get a market multiple assigned to your shares which is important. The only other thought I have is that running an operating business is far more time consuming than just investing. There are so many things that require attention. I know Buffett has this hands off approach, but I'm not sure how common that is. Many owners who are looking to cash out don't want to run the business anymore. Or the ones that do want too high of a price.

I have missed out on too many stocks because I've tried to buy at the bid, or nickel and dime on the buy price. As no_free_lunch said if you think the stock is going to rise 50-100% or more why do a few pennies matter? If I am sitting at the keyboard thinking about pennies around the bid I need to ask if my investment thesis is sound.

I have often thought this same thing as well. If I had the capital to buy a small public company why would I want to put myself through that hassle instead of just investing the capital and relaxing? The truth is no one buying these companies is using their own money, they're using someone else's money which is why this suddenly becomes attractive. You get to buy a public company with someone else's money, then earn fees on that money and get paid a salary. You can then use your earnings to buy out your partners and consolidate your ownership. From there you start to buy other companies, build an empire, justify a high salary and hit the links. This is truly the ultimate game plan for how to get rich if you have no capital to start with, use someone else's money. The brilliance of this is you don't even need to be a good investor, just good at raising the initial capital. Once the initial capital is raised and a company is purchased there are all sorts of tools the manager can take to ensure they will never be kicked out by shareholders (how about reincorporate in Indiana or Ohio...). The problem with this is I don't see many tiny companies issuing capital at attractive rates who aren't using scummy brokers to sell the offering. There isn't exactly a thriving secondary market for companies in the $5-15m range. Heck, most of these companies are trying to flee the markets quickly. I have kicked around this idea for maybe the past year and a half with a friend. We found a company trading at an insane valuation, where if the CEO were kicked out this plan could work. The problem is the CEO's golden parachute payout sucked up a lot of the margin of safety in the investment. It's potentially still attractive, I even recently had someone offer to front the cash for the entire deal. The problem is the outcome is binary, if it goes well it goes really well for everyone involved. If it doesn't succeed, and there are a million reasons why it wouldn't, I would probably end up broke and in lawsuit hell. The company is dark and the only way to get financials is to hold registered shares, mine are sitting on the desk right next to me, constantly reminding me of the potential..

With your track record do you really have problems with partners trying to pull their capital at inopportune times? Have you ever considered going the CEF route? You can raise capital much easier, and you don't have to deal with those pesky partners anymore either, they become nameless shareholders. The ongoing fees are much smaller than an open ended mutual fund, and you essentially have the permanent capital you desire.

Team members has an actual human ring to it. My experience has been most businesses (at least that I'm involved with) have been going the other way and calling employees/people/workers "resources." As in "I'm not sure I need as many resources going forward next quarter" translates to "I'll be firing a few of my employees"

I'm guessing this is via a reverse merger? I know of a company whom many investors love on this board that did it for $12k. If you're interested in doing this I can get you in contact with the Director who orchestrated the reverse merger.

Now you have my interest piqued! What sort of public housing is up in the Arctic? Is this something where you own a property and the government subsidizes the rent for the inhabitant? What types of challenges do you have up there? Maybe to the Canadians the Arctic isn't anything special, for me at least I think of it as probably one of the most forbidding places on Earth.

Or the poll reflects the bullishness of the people who like the stocks available for a vote. I looked at the list and didn't see anything I owned or knew much about so I didn't vote. My current portfolio has a heavy slug of cash.

Whitman's books have some good ideas in them, but they are painful to read. The writing is terrible and they scream out for a better editor. He uses tons of weird acronyms, but then goes ahead and defines them over and over again. For example, instead of shareholders he calls them Outside Passive Minority Investors (OPMI) to distinguish from activist investors, control investors, etc. But it's a painful term. Despite having a defined term, he will sometimes write it out. Whole chunks of text are repeated verbatim numerous times. He also has a thing with Graham and Dodd and rails against them constantly. He says Graham stands for things that for the life of me I can't see even though I've read Graham numerous times. All that being said, if you dig through the crap you can find a few diamonds. I don't know what you mean (IDKWYM), Whitman's books are not confusing (BANC) at all due to the acronyms. Maybe he's a great investor because he thinks in acronyms. Marty's thoughts: TSIUV, IHBVGAGE Translated: This stock is undervalued, it has book value growth and great earnings. I can just see him now running around the office IFACS, IFACS, IFACS. All his employees are quickly looking the term up on the reams of acronym translation cheap sheets hanging on their cube walls..."ah, he found a cheap stock.." I guess you think you have both know-how and know-who. I imagine you'll be talking about Graham and Dodd (G&D) and saying that Graham and Dodd (G&D) only talk about outside passive minority investors (OPMI), that is only outside passive minority investors, and believe in the primacy of the income account as opposed to net asset value (NAV). After that you'll be talking about taking SOTT (something off the top) in the NTM (next twelve months) as opposed to the LTM (last twelve months). Perhaps you will discuss E&P (exploration and production) companies that engage in E&P (exchange and purchase agreements). I bet too you are not just a GARP (growth at a reasonable price) investor but a GADCP (growth at dirt cheap price) investor. It all makes perfect sense. So awesome!

Here's what I do, just think about things in simple terms. Imagine you own a piece of land that has property taxes due yearly. You don't have a job and your savings is dwindling. What are the outcomes? Either you get a job and keep the land, or you're forced to sell. A third outcome is you borrow to pay the taxes until you can't borrow anymore. Then the bank takes the land. The same is true for your scenario, they turn around operations, liquidate the land, or borrow to carry it until they end up in bankruptcy.

Whitman's books have some good ideas in them, but they are painful to read. The writing is terrible and they scream out for a better editor. He uses tons of weird acronyms, but then goes ahead and defines them over and over again. For example, instead of shareholders he calls them Outside Passive Minority Investors (OPMI) to distinguish from activist investors, control investors, etc. But it's a painful term. Despite having a defined term, he will sometimes write it out. Whole chunks of text are repeated verbatim numerous times. He also has a thing with Graham and Dodd and rails against them constantly. He says Graham stands for things that for the life of me I can't see even though I've read Graham numerous times. All that being said, if you dig through the crap you can find a few diamonds. I don't know what you mean (IDKWYM), Whitman's books are not confusing (BANC) at all due to the acronyms. Maybe he's a great investor because he thinks in acronyms. Marty's thoughts: TSIUV, IHBVGAGE Translated: This stock is undervalued, it has book value growth and great earnings. I can just see him now running around the office IFACS, IFACS, IFACS. All his employees are quickly looking the term up on the reams of acronym translation cheap sheets hanging on their cube walls..."ah, he found a cheap stock.."

If you're a big TV watcher then it's probably worth spending up on something you'll enjoy. We purchased a 40" at Costco for maybe $350, it seems nice enough. We're not big TV watchers, many days the TV won't come on at all (for my wife and myself, kids generally watch a show a day). The TV is good enough and didn't cost much. If you watch a lot of movies maybe look for a surround sound system as well. Relatives have one and watching a movie on a big TV with surround sound really adds to the experience.

Agreed, which is a shame because the low expense approach has merits. When I help family members set up a portfolio, I just recommend low cost index funds they can set and forget. They don't care about investing, most don't even log into their accounts once a year so a cheap fund like Wellington or something similar is fine for them.

A follow-up to my last post, I'd highly encourage anyone to read that thread. Now granted a lot of the 10-15% returns are coming from 50/50 portfolios, but even people in 100% equities investing in indexes are barely doing over 20-25%. Also note as a bit of perspective people on that thread are patting themselves on the back for 15% returns. I think as a whole our expectations are too high, they're great, but we've lost touch. I agree with fareastwarriors, that is a great site on saving and investing prudently. Probably 90% of investors would be better off if they regarded that advice. Often good threads on career advice, home improvement etc.

Your perspective reminds me of the research on luck vs skill within investing. The EMT people will essentially look at any length of time and say "2/5/10/25 years isn't long enough to know." I've even heard debates around whether equities outperform because 120 years of data isn't a big enough sample size and we truly won't know until we have hundreds of years worth of samples. I have family and friends in mutual funds of their own choosing, they nearly matched the market or underperformed and are happy about it because the benchmark did so well. If you want to see how the average joe did check out this thread: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=129562&newpost=1906410 (index fund investor performance thread)

I personally find this result (and Nate's as well) just as impressive as the higher gains with the more concentrated portfolio's. With more positions there is a higher probability that skill instead of luck is the driving force behind the returns, and you have a lot less risk as well (especially with the cash position). Kraven and I have discussed "know thyself " on and offline. Whenever I have tried the Graham/Schloss style of of investing I have blown up or at least lagged badly - I have a knack for backing up the truck for loads of crap. So For now I stick to the style that works for me which is similar to Eric's. Do you call it luck that I have held BAc for nearly 4 years, AIG for two, Seaspan for 5. Maybe its luck or maybe its a bit of an intuitive understanding of market psychology. I also tend to load up the winners. IMO, there is a lot of soft skill involved in risk managing a concentrated portfolio. I am certainly adaptable and ready to try a different path, should that make sense. At this point it doesn't. I have had one down year in 10, and it was 2011, not 08, or 09. And it was due to style drift. Yes, this along with what LC said are very important, one of the main reasons I'm skeptical of coat-tailing major investors. Earlier in the thread I was looking at someone's five stock portfolio and played a little mind game with myself. I thought what would happen if I sold everything and purchased those five stocks? I concluded I'd most likely do worse than the poster, I would have no idea when to sell unless they gave me a call or something. Some people do blow up buying the Graham companies, there are surely enough potential land mines. This is where I incorporate the Buffett thinking, if something doesn't look like a home run to me (which for myself is a 50-100% potential gain) with a safe balance sheet I move along. If I wanted to lower my standards there are probably about a dozen or more companies I would have purchased this year, instead I passed, too much debt, too many potential problems in a bad market, yet a few were 30-50% of BV and 2x earnings. Know thyself and don't swing at every pitch are the two maxims I'd say are required to be successful.

Nate, from reading your blog, I'm very impressed with your process. You have clearly identified an advantage that you have -- which is a combination of GREAT patience, strong analysis, and excellent experience/familiarity? with "oddball stocks" . You've identified a niche that clearly works for you. That's very impressive. Thanks, I agree that I've found my fit, it's really all I can do, what I know and am comfortable with. I guess in reading the numbers on here I wish my fit would have been found in a higher performing strategy. I for better or worse have always been worried about losing money. I want to find cheap stocks that are safe from a total loss. The strategy I've sensed from this board is cheap stocks with high upsides, but not often safe, and sometimes leveraged. In aggregate you might have a few positions that blow up, but the rockets more than make up for it. I in turn don't seem to blow up, but I just continually hit singles and doubles, no grand-slams. To put this into football terms, since it's New Years.. I'm the team grinding out four and five yard runs repeatably. Many teams on here have a few three and out series, then throw 80 yard passes for touchdowns. I'm not envious as much as amazed, like watching a very talented athlete. I am awed by the talent here, it's fascinating to see. One other general thought, it seems most posters are retail investors, this thread just proves the advantage most of us have. I think a few on here run funds, but you don't see guys running $500m or $2b with 50-100% returns. There is a definite advantage to running a small amount of money!

Some incredible returns, based on this thread I take it no one had a bad year? I'll admit, I'm envious of how many of you guys invest. I invest in a way that suits me, but man, I wish I could pick 10 stocks that would all do 50-100% year after year. They say there are no crystal balls, but I'd be lying if I didn't think a few members on this board couldn't see the future clearly...dang!

I have talked to people who can answer these questions, I know someone who started at zero and had grown it into a $3b bank from scratch. Also know someone else who grew a small community bank. I'm not sure what answers you'll get online but here's my recommendation. Contact the CEO at a few community banks near you and ask if you can talk to them for 30m or get coffee with them. People love to talk about themselves, and love to get advice. The best advice and information you'll receive on this topic will be over coffee with a current CEO or former executive. You'd also be surprised at how willing to meet many of these executives are, just make sure you can speak intelligently about the subject and you'll be fine. This is networking 101, but once you have a few contacts ask them for contacts of other people they think you should talk to. Pretty soon you'll have a whole list of names that you can call on. As for a de novo bank in the current environment, I saw one was recently granted a charter, an Amish bank in Pennsylvania. De novo banks are near impossible to start right now, although there are some discussions about loosening regulations.

I put together some rudimentary performance stats for the portfolio. I used to rely on Fidelity until I realized when I moved cash from USD to a foreign currency they treated it as a withdrawal and never kept track of foreign holdings. Overall it looks like I did about 39%, although that's understated maybe 1-5% because I had a large cash withdrawal midway through the year I didn't account for. Half my stocks are international, half US small caps, my target benchmark did 24% for the year (50% EAFE, 50% Russell 2000 value), so I'm happy with where I ended up.

Haha: nah. It's a case of if you have to ask how much, you can't afford it. And even if I could, why not just plow all that into bitcoins :P However, there is some data on bloomberg.com, which I guess would be the same as what is in a Bloomberg terminal. So for the few data points that are there, I could check for correlation with what FT and others spit out. Do they? I may be computer illiterate when it comes to their site. I only see a US screener, and its only for NASDAQ, NYSE, and AMEX (NYSE MKT). I've looked at ADVFN too, but it seems like they only has US and CA screeners. What about level 2 quotes? Do they even have these for international stocks? And then, to pick minds further, for anyone that uses IB, what is the optional data feed fee actually provide? It just looks like it gives information that I could get at any other site for free. I believe a Bloomberg costs between $1500 and $2000 a month for a single seat license. You could always enroll at a local business college that has access and use theirs. I'm imagining it's cheaper to enroll in a single class and use the Bloomberg rather than subscribe. There is no one source of global stock information. But just like the US has the SEC most developed countries have their own SEC. I know Japan has EDINET, France has their Autorité des marchés financiers, Portugal has the CMVM etc. Often the local exchange has some summary financials or links to the companies or a link to the regulator. This is really a process you need to go through for each company, often the regulators pages are in the local language and are tough to navigate. The level of information differs as well, I know in Belgium you can find financials for ALL companies, both public and private. The problem is financials vary between Dutch and French, and the PDF's aren't translated well because they're often scans of handwritten forms. You've discovered the reason there is value to searching for international stocks. There is no one source of information that's accessible to anyone.

Is there an easy way of getting the financials for any company in the world, aside from going through each company's website? I've compared some financials and FT and the balance sheet items seem right for the most part. Purchase a Bloomberg?