oddballstocks

This is our experience, cut cable eight years ago, at the time I told my wife she could buy whatever shows she wanted on iTunes up to $50 a month. Well, she never purchased a thing, we have NetFlix and Amazon Prime now, more than enough. We never flop down in front of the TV, it's a deliberate decision, there are many days the only time the TV comes on is for my oldest, he watches one kids show each morning on NetFlix. For sports doesn't everyone get over the air? We watch the Steelers on over the air, we have an antenna outside. On advertisements, anytime I watch normal TV now I can't stand it, there are so many ads. My son who has essentially only known TV as Netflix gets bored. We'll be at a grandparents house and when a commercial comes on he thinks the show is over, he can't pay attention during them and gets up to do something else.

Can't you get access to the shareholder registry? I have no idea how that works, but I think you have that right as a shareholder? In theory yes, all shareholders are legally required to have access. Usually a request goes like this: Shareholder: "I'm a shareholder I want to see the registry" Company: "Hmmm, I don't see you on the shareholder register" Shareholder: "Oh I own the shares in my brokerage account" Company: "We don't count those, you need to either sue us or register them in your name" Shareholder registers them in their name Shareholder: "I'm a registered shareholder now" Company: "Yes, we see you on the books, you're welcome to view them while standing in the CFO's office, let us know when you'll be here..." That's for a very nice company, most will stonewall until you send them a strongly worded letter written by a lawyer, or actually file suit.

I used to dabble in that too! I've found many 40% Kennedy halves but NEVER a 90% silver. 98/100 of the general public have no idea about 40% silver halves and dollars. There are reports of casinos that have slot machines that pay out in half dollars, and those are fertile hunting grounds. I think 90% is just too scarce. I have heard stories of people finding them, but I've never found one. The other great way to get the silver is to buy big bags of it from your local bank that has a change counting/sorting machine in the lobby for the customers. People will dump in their coins and not know. I think this way of finding silver is just about played out. There are radio ads in my market saying "Just say these 3 words and get silver from your bank!", it is an ad for some scammy newsletter, but they clue people in on the 40% halves. You also don't need a machine to sort halves. You can easily look through a couple thousand dollars worth in a hour...not like with pennies. You also can tell 90% silver halves a mile away (that are not 1964 Kennedy). Another area to possibly invest in is GOLD coins....but that is a story for a different post... Coins are funny, most have no idea what they're worth. My dad made a comment at one point about having some coins handed down to him from his father, they were in a shoe box. I purchased a book off of Amazon and started to take a look. Apparently my grandfather had an eye for these things, he had a set of coins from the 1870s that were very rare, they came from a rare mint as well, I want to say somewhere in Nevada. Anyways the coins were worth a few grand apiece. He then had loads of coins from the early 1900s worth $10-50 apiece and an assortment of other random items. I remember the shoebox was worth close to $15k, I encouraged him to put it in a safe deposit box. He literally had no idea. Here's the twist in this, my grandfather gave some coins to my brother, these were from the collection. My brother let them sit in his room for a while, then just spent them for face value. Given what the other coins are worth he made a very stupid mistake. My grandfather collected stamps as well. There's an even larger shoebox with the stamps, we have looked at it and become overwhelmed each time. He had some connection with the post office where he got proof sets or something. There are years worth of those, no one in my family has the patience to go through it, so they're still in a box in the closet. Maybe one of my kids will, by then they'll have another 20-30 years of value accruing to them.

I have so many single shares my accounts are cluttered beyond belief. This is actually a good thing because it helps keep me away from the day to day movements in stocks. I have a share in Coil Tubing Technology, it rises between 30-150% and then falls 80% almost every week. I've considered opening a new account and transferring all my single shares in there to clean things up. I love having a library of this stuff. I have a shelf in my office (looking at it now) that's filled with paper annual reports from a lot of these companies. Almost none are flashy, some are xeroxed and stapled and mailed out, others look like they were last redesigned in 1957. When I get a new report in the mail I'll pull the old copies and make notes and refer to notes in my previous annual reports. Maybe it's an old fashioned system, but it makes sense to me.

Yes, PDRX is cheap, I just ran through the numbers on it again, EV/EBIT of 1.12, cash of $2.19 per share, book value of $4.02. This is actually a larger position for me at 4% of my portfolio, I purchased between $2 and $2.50. I'm looking forward to seeing how they did this year, it wouldn't surprise me to see earnings back up slightly. The little microcaps like this are great. The company has a ROE of 21% if you strip out the cash, and they have asset protection. I'd love to be able to find another 5-10 companies exactly like this selling at about 50-60% of BV, unfortunately they seem to come along maybe once or twice a year. The stereotype of microcap investors is we're buying these melting ice cubes, but the reality (for me at least) is my portfolio is filled with a bunch of PDRX type companies. I don't mind that there's a huge understanding gap, keeps down the competition.

Wow, people seem pretty intense on there, in the comments I see them talking about buying boxes and never opening them. It seems like the trick is buying a rare set, however you define that. To whomever was saying Lego's margins will fall, I'm not sure they will. They have an effective monopoly on this, their moat is huge. The competitors blocks appear cheap in comparison to Lego, and the kids want the Lego brand, not the value block with the giant tag line on the box "Works with other major block brand."

Lego's U.S. sales in 2012 totaled to 1.32 billion dollars. So maybe not tens of millions, but a million could potentially be possible given a long enough time period. Worldwide sales were around 4.2 billion dollars. It's not quite a new frontier of asset class, but it could potentially be the first time an institution has looked at them seriously as an asset, collectors have often turned into speculators, websites like http://www.brickpicker.com and bricklink have led to collectors to turn into speculators of sort. Since most legos are consumed in the sense that children tend to lose them, it doesn't really act like gold, but more like oil (not quite as inelastic but you get the idea). There may be a concern that the lego market will turn out to be like the baseball card market did, and implode due to ever expanding supply combined with a depreciation in quality. This seems unlikely however, given that the vast majority of legos are not bought to be saved in mint condition like baseball cards were, but rather to be consumed, reducing the likely hood of supply exploding. Now whether a particular lego set holds value relates primarily to the scale of the set, the rarity of the pieces and the quality of the brand (starwars, harry potter...). A quality brand tends to grow in value rather than just retain it, Star Wars is probably the best out there as far as retaining value goes, Prince of Persia would be one that destroyed the Lego's value by essentially being bad at retaining or growing fans. The quality of the brand associated with the set matters a lot more than the set itself. As per the scale of the set, large sets geared towards collectors have historically done well, but I'm concerned that this might backfire, as people nowadays are more likely to preserve their set's value than previously. Mid range sets probably make more sense, as it is more likely to attract both collectors and Lego's intended customers. Rarity of pieces and quality of the set are also pretty important. I think if there was a way to analyze or even estimate sales trends per set then finding the right mix of sets would be quite possible. Then again given storage and everything this might not be feasible, or even safe to do with a million dollars, not too sure about that. I have experienced the Lego market first hand recently. My son plays with the Duplos (very large Legos) and loves them, he has a number of sets. He has a train set and in the instruction guide there is a picture of a bridge set, he's asked for it a few times. Lego apparently releases a batch of sets, then a year later you can't buy them anymore, this bridge was one of those sets. The original set was maybe $40 original cost, now it costs $200 on Amazon or eBay. It got me thinking, how much are other Legos worth? When I was a kid I loved playing with those things, and my parents kept them all and gave them to us for our boys. I started to Google this, I was searching random sets that we have and some are very expensive now. I have a train car set that goes for over $150 on ebay, a simple train car. Now the issue with these is we never kept them in mint condition, we played with them, the pieces are faded at times and in other sets pieces are missing. I don't plan on investing in Legos, but after looking at eBay my wife and I have repeatedly said to each other "we're not throwing these things away!"

Just prep work for the next CEO...

Ugh, such a scummy business. Yes, not sure of the reputation for this in Holland, but in the US it's a gutter business. Someone who runs a local strip club is going to garner more respect than someone doing traded life interests. There's also some question as to the legality of this in the US.

One other counter point to quality when you have control. There are hoards of very rich people who got that way on the backs of crappy businesses. They didn't all own insurance companies, or asset management firms. They owned things many on this board would never even consider touching, carpet cleaning companies, landscaping companies, restaurant chains etc.

When starting a business, yes quality is desired, you have a great point. But I don't think it's required when making an investment. Imagine your business is offered an opportunity to invest in a gas station in town. It's not what your company does, but the opportunity is to invest at 50% of book value and 4x FCF, would you take it? What if the manager is lazy and could double FCF if he advertised more? I'm guessing you'd probably take the investment, it's not a long term compounder, and doesn't have a great manager, but it's a decent asset at an excellent price. If they paid the cash as a dividend you could re-allocate it where you like. We often have the choice, invest in someone who's a great allocator, or play the role ourselves.

BG2008....awesome post!

Ahh, my mistake, I misread your comment. I read it as saying create a table with the following column headings instead of showing it as a template for table design. After re-reading your comment I agree, that's the best way to design a database for this. You might think optimization doesn't matter, but a poor structure is a complete pain to maintain, trust me. Things throwing together have trouble growing, and eventually die because you'll need to spend too much time refactoring. Build it correctly from the start.

This came up in an EconTalk podcast with Fama, I've copied the response below, Fama is "Guest" The full transcript: http://www.econtalk.org/archives/2012/01/fama_on_finance.html

Wow, this thing is sounding very official! I'd be interested in hearing the outcome. I've met up with investors in Pittsburgh, we usually meet in a bar, have a few beers and talk about ideas. It's low key and enjoyable, nothing like the formal setup you have going. But there are details that are forgotten (intentionally or not) at a bar that wouldn't be missed for you guys. If this is taped, video or audio I'd love it if someone could post a link, sounds like a very cool thing to listen to. Great job on organizing!

I completely agree with mikazo, as I read the above answers I cringed. Once the database grows how do you index those key-value tables, how do you do mass updates on them? Really think through your structure, I'd create a table for each type of high level data structure, then possibly a calculation table for each. If you have the original data calculations are easy and can be tweaked real time and the results happen for everything. If you are building this for financial data I'd advise you look at building a data warehouse with a star schema. They're optimized for reads not writes, but writing won't happen often. Everything is pulled together with joins which are much more efficient. Third normal form can make sense, but for what you're doing I'd go with a warehouse. Information is repeated, but that's intentional, you're optimizing for reads. Now if you need to do a lot of updates then normalizing makes sense. Databases are powerful, extremely powerful, but only if they're setup and used correctly. No one uses a screwdriver to hammer in a nail...

Same answer as Tim, I'm really hoping someone can state this definitely. From experience I don't believe that you need to file anything for dark companies, although some funds decide to anyways.

This is a strange but fascinating scenario. Park City Resort (the ski resort in Utah) has rented their land from United Park City Mines for close to 40 years. The ski resort sits on top of an old mine. A few years back a company named Talisker purchased United Park City Mines, Talisker is owned or controlled (unclear) by Ian Cummings of Leucadia fame. Talisker owns a number of other ski resorts under their Powdr company. Park City had a 20 year lease coming due in 2011. Talisker alleges that Park City paid it two days late and backdated the payment on their option to renew. Since the letter of intent was received late Talisker is suing for control. Here's the twist, last year Talisker leased Canyons, another property of their to Vail Resorts (MTN), and leased the United Park City Mines land to Vail as well if Vail agreed to pay all litigation costs. Vail decided to serve a motion on Park City to vacate the premise, and Park City has said they're not leaving. Allegations are that Talisker and Vail devised a scheme to use the lease renewal as a way to take control of Park City at a below market price, potentially for nothing. If true that would be enormously value accretive to Vail Resorts. Also worth noting is that Park City's lease is $155k a year, a price set in the 1960s. Park City spent over $100m in improvements in recent years with the understanding that they'd be able to renew their lease to 2051. This is a really interesting situation to watch, I found out about it on a ski forum I frequent, an incredible thread with more details than I could ever hope to include is linked below. The forum has a number of lawyers and local experts who've uploaded copies of the lease agreements and court documents. Park City is selling season passes stating that they plan on operating this season. I've skied there a day the last two years, they have a deal value investors would appreciate. If you fly into Salt Lake City you can get a free lift ticket the day your flight arrives if you pre-register online, and bring your boarding pass to the window. I've enjoyed my free skiing, Park City isn't the best (head to the Cottonwood Canyons), but free can't be beat! http://epicski.onthesnow.com/t/121382/this-sounds-messy-park-city-mountain-resort-receives-eviction-notice

mais, mais, mais.....

HAHA, I'm screwed as well. I agree with the spirit of the article that "value" now is buying the big stocks with moats at attractive prices rather than buying low P/B, low P/E, low EV..heck low anything. I offer a few thoughts: -Start a thread about some smallish profitable stock selling at 50% of BV, you'll get one or two responses. Start a thread about the value du jour that Buffett might like and you'll have 45 pages within a week. -While everyone seems to give lip service to the buy low P/B, valuey stocks not many do it, moat companies are seen as 'safer'. -All of the older funds that were doing the net-nets, low P/B stuff in the 1970s and 80s have grown and graduated to the Buffett value, moats etc due to size. Quick, name five mutual funds that are investing in the Graham/Schloss tradition. -I have thousands of readers on my blog, I blog exclusively about these little value stocks, I can't even begin to count how many people have said they enjoy reading me, but would never invest in anything I write about. I would conservatively estimate that's about 70% or more of my readers. -Look at most of the newer value investing books, they all universally disparage net-nets and low P/B stocks with comments like they were around in the 1930s when Graham was investing, but don't exist anymore. Personally, I could care less what label is given to me. I've found a style that's suited to my personality, and suited to my intelligence. Many of the threads on this board are way over my head, I will probably never price and option or know how to create these complicated trades, I'm not sure I could do a DCF without cheating and lookup up the formula. But if I see a little ignored company at 50% of BV I'm usually smart enough to pull the trigger, and at the end of the day that alone has served me well enough.

I like this comment. But, I do feel that a part of it may be bit harsh -- people come from all different backgrounds with different kinds of pressures (perceived or real) and realities. If they're young, my vote would be to cut them some slack BUT do impart your wisdom -- because you have the privilege of having a lot of it. I'm older than these people contacting you, but I can tell readers here that having exposure to all the different stories here has been extremely edifying and has giving me wisdom about what actually does matter to me. The common thread, in many cases, is the idea of achieving independence and freedom through wealth (not for the sake of Greed) but the real message is to take the wealth and enjoy it and don't sacrifice anything (but your absolute financial security) for the stuff you call "life" . Some of the younger people contacting you may just be trying to figure out what Guy Spier figured out (on display in the recently posted interview). Some might think that they need great numbers to make going on the investing journey worth it. Overall, your response reminds me of a comment Munger made once (paraphrase): "Younger people ask me all the time - 'How can I become as rich as you but just a little faster?'" Wisdom, wit and irony only by adding the phrase "...but just a little faster." Finally, others in this thread commented about Buffett's lack of balance. I would say that I, too, was a bit shocked by the treatment he suffered at the hands of his mother. He needed to figure out how to get the unconditional love he never could get from his mother. His route was better than becoming a serial killer. Still, having an inkling of what a mother like that can be like, I think Buffett handled life pretty well even if, coming from a blank slate, his early years might not be what one would write on the slate given all options. Moreover, it isn't clear to me that he neglected his family but maybe he did. He certainly spent more time with his kids than my pops did with me -- it has only been in recent months, reading this board, that I realized this wasn't common. Good points, I guess I was going at the Munger angle. People want to become rich, but not in their 40s-50s-60s, but in their early 20s. Sure it happens to some who strike it rich with Facebook or Instagram or something, but not many. The tried and true path is to work hard and save. Getting there quicker requires a boost, from either starting a business or investing wisely. I've just had a number of emails from people who say their goal in life is to get rich. If that's the goal satisfaction is rarely obtained because there is always someone richer. You bring up a good point about background and pressures, I hadn't thought of familial pressure. I have worked with foreigners who will absolutely kill themselves for meaningless failing projects working 80+ hours because this is what they do, and they are working to make their parents proud. This isn't just a presumption on my part, I've had these conversations. They are honored to have the type of job they have, and they view their role is going 200%, even if it seems strange to others. The goal really is finding balance, and viewing money as a tool. Death is the great equalizer, no one takes anything with them, so whether you had a billion or died in debt the end is the end. Use it as a tool now. One parting thought is to echo something a few have said in the thread already, save for tomorrow, but don't neglect today. We all presume we'll live well into old age and die rich and happy, but that's not reality. I've seen people go much younger than they should, and it always puts things into perspective. We need to plan for the future, but enjoy today, nothing is guaranteed. Enjoy youth, I know many rich older investors would give up significant portions of their wealth to be young again.

Can't up-vote this enough!!!

Congratulations, what an awesome story, from poor to a millionaire in 16 years. I think one lesson from your posts is patience, you didn't become a millionaire overnight, it took a while, but you persevered through two tough market downturns and are the better for it. I get emails from newly minted graduates who "want to be rich" and in a lot of ways it saddens me. I believe that anyone with a good job and a high savings rate can become rich, but it takes a long time. It's important to enjoy the journey as much as the destination because it isn't something instant. Most don't become rich overnight, and being so myopically focused on becoming wealthy can lead one to miss the joys of life chasing after the wind. I've enjoyed reading your posts, and it's clear you've enjoyed the journey, which is something so many people miss.

I think this is very much an emotional decision, not a math one. If you live your life in spreadsheets then under many scenarios it would make sense to lever up as much as possible and invest the cash. There are many on this board who are wealthy from doing just that, it does work. I look at things like this, will it cause me to lose sleep at night? We have a small mortgage, everything else is paid for. Our investments could pay off the house today if we needed, but I'm doing better than my interest rate (3.5% fixed) and we can easily pay the payments out of monthly cash flow, plus extra. So we're happily paying down the house, but also investing. I've never regretted paying something off completely, and thankfully if I did I could just go out and borrow against that item again to fix my regret if I did.

This intrigues me, only because it seems like it would be fun to go up there and meet board members. What's the plan for events, this shareholder dinner is the night before the Fairfax shareholder meeting correct? Would I need to be a shareholder to attend? I have no issues with buying a share so I can attend, but just curious. Is this dinner only about Fairfax, or is it a general meeting of like minds who all happen to be Fairfax shareholders? What else happens the day of this dinner? I ask because Toronto isn't that far away (less than 5 hours driving), I'm wondering if it would be feasible to just leave the morning of the meeting and then spend that night. A follow-on is what's parking like in Toronto, do they have usurious rates like NYC, or is it more reasonable?