BG2008

The Marcellus region is notorious for lack of takeaway capacity. The $1 price that you quoted is for spot price that doesn't have committed pipeline capacity. In reality, producers with dedicated capacity can realize much higher price. There is also no shortage of companies building pipeline capacity to takeway production including EQT and Columbia Pipeline Group. The addition of new pipelines may encourage producers to drill more which may lead to additional production which may dampen prices. Any thoughts on this?

Large export or not, there are certain sectors that have more pronounced China exposure. Some of them may not seem obvious at first. NYC real estate is propped higher by Mainland buyers who are eager to pay all cash. Luxury brands such as LVMH have been hit hard. Obviously commodities is experiencing some of the toughest times ever. CNBC is full of idiots. I watch clips of it on Roku on large down days to amuse myself.

The flow of gas historically has been to import foreign nat gas into the US via the Gulf Coast and then transport them to the rest of the country. Now the Marcellus Shale is the most productive and least expensive region to drill for nat gas in the US (the world really). If you think about it, PA, OH, and WV is a lot closer to New York. Many pipeline companies are actually reversing flow from the Marcellus to the Southeast and the Gulf so that Nat Gas can leave the US and be transported to Europe and Asia. This is my high level understanding.

As a great admirer of BRK and Buffet, I find that idea to be quite troubling. I probably would if they separated the re/insurance business from the OpCos. I'm perfectly okay with owning the amazing sets of OpCo assets, but the speciality risk underwriting scares me and would keep me up at night. I think that it takes someone of Buffet's ability to be able to provide oversight on the udnerwriting standards for the various insurance entities. I would suggest reading the book "fatal risk" to better understand how Greenberg's forced departure from AIG might've lead to AIG's downfall. I also think that there will be more skeletons that gets flushed out when Buffet passes away. We do not know what they are now. Fiefdoms will likely occur as Buffet is clearly not keen on appointing a new CEO in the same cloth as him. My two cents. There's been an slow over-reaction for a long while already, purportedly due to concern over the transition. This is much more of an opportunity to go 100% into BRK. For those who would like to, can rationally do so over time. I'm one such, surely there are more out there. The headline like opportunity that you're talking about will be short-lived and the 100%ers are not likely in that pond.

I second Eric's opinion about hedging. If you believe that a certain position has 2-3x upside and you can buy a put at 10-20% below current trading price at a fairly cheap price, I would put 100% of my networth in that trade/investment. Granted, there are a few things to take into consideration. Is your networth already a huge dollar figure? Is your networth small and you can easily recover a 10-20% drop via time and income? Is your investment a solid 2-3x upside with virtually no downside? Or is there some sort of tail risk event that may render it impaired? The beauty of buying the put is that if the price of your underlining stock falls dramatically, you can take the proceeds from the put protection to either re-allocate towards a better idea or to own more of your existing position. Now you own a larger position in your favorite idea at a much lower cost. See how the fundamentals is very important here? If your thesis is wrong, then you have to move on and lick your wounds that you suffer a 10-20% impairment. I don't advocate the above strategy for everyone. This would be a terrible advice for a Walter Schloss type investor. I happen to own a fairly concentrated book and I tend to have a "feel" for what the catalyst for some of my ideas are. If you're naturally a diversified investor with 30+ positions, I probably would recommend that you never put 100% of your networth into a single idea. I agree - all I need is an options market in the stock I want to buy. I've done it with BRK, done with FFH in the past, done with ORH, and now doing it with VRX.

A bit dated, but I imagine that it provides a good glimpse of how the Greeks think about the situation

1. Lift weights - It increases your testosterone level and increases muscle mass, hence it helps to burn more calories while you're sitting. Plus, I find it much more fun than doing cardio. 2. Bring a book with you on the subway - You'll be surprised how much reading you get done 3. Download Earningscast and listen to your conference calls on your iPhone on the bus, out walking, doing cardio at the gym, etc. 4. Buy a kitchen timer. When you really need to focus, wind it up for 25 minutes. For 25 minutes you can't do anything else other than your task at hand. 5. Time savings tips for eating healthy a) Buy pre-made soup, ground turkey or rotisserie chicken, and kale or other healthy veggies. For ground turkey, heat up with a bit of olive oil and add soup and kale/veggies, put into tupperware container. For rotisserie chicken, pull apart the meat and add to soup. You now have multiple meals of healthy, high protein, high fiber meals that you can bring to work etc. b) Sweet Potatoes - Heat on high in microwave for 4 minutes, turn over and heat another 3 minutes, you've now got a high fiber, low glycemic complex carb c) Cast Iron Pan - Buy a cast iron pan and a stainless steel chainmail cleaner, you can cook your steaks, burger, etc on it and mimic the taste of an outdoor grill d) Fage non-fat yogurt and berries - Great high protein snack during the day with minimum calories e) Track your calories at myfitnesspal.com f) Buy Quaker's old fashion oatmeal and electric hot water boiler - Boil water using electric water boiler first thing in the morning, add to a bowl with 1/2 to 1 cup of Quaker's old fashion oatmeal and let steep while your brush your teeth etc. Add fresh blue/black berries or banana with brown sugar. You just had some complex carbs with lots of fiber in it. g) Poaching eggs - For breakfast, boil a large pot of water, drop a plate on the bottom, turn off heat. Gently put 3 egg whites and 2 whole eggs onto the plate and let sit for 5-6 minutes. You'll have poached eggs with runny yolks. You also don't have to scrub the bottom of your pot. 5. Buy book called Pomodoro Technique from Amazon, it's worth the money, buy a timer and force yourself to work on one task per 25 minutes 6. Read this pdf on how to improve your fund performance 10_Ways_to_Improve_Your_Fund_Performance.pdf

Something that no one has really talked about is your "expected rate of return". If your expected 5-10 year runway is 20+% return (speaking hypothetically here), I think it becomes a no brainer to contribute into a Roth. If you think you will compound at a high rate, you will wind up with a large sum when you are 59 years old. Even at a lower tax rate, the absolute tax dollars can be quite high. My feeling is that when I'm 59, my assets that generate income, Real Estate, securities, etc that throws off income will likely push me into a fairly high tax bracket anyway. Assume you own $10mm of assets when you're 59 years old and the assets throw off 3% income (assume normalized interest rate), you're in a fairly high tax bracket already. I think the Traditional Vs Roth argument applies more towards people who earn 6-7% rate of market equity return. If you're generating returns that beat that threshold by a meaningful amount, it's probably best to go Roth, take the pain today, and not have to worry about taxes down the road. Of course, the govt can change the tax rules and you can still get screwed, but I'll take that risk.

I'm faced with a thorny Roth IRA Excess withdrawal/Re-characterization question and I'm hoping members on the board can help with walking me through the decision matrix 1) I typically wait till year after to deposit money into my Roth IRA 2) Recently, I executed a trade where I was forced to deposit capital into the Roth IRA because unsettled funds can't be used to buy options (puts for hedging purposes) in the same day 3) Let's assume that the balance was $100 in my Roth IRA and I think that the balance at year end may be substantially higher, say $150-200 (strictly hypothetical, but let's entertain the idea) 4) While I'm not at the $180k contribution limit yet, but it's highly likely that I will hit that this year. This will render my Roth contribution to be disallowed My choices are a) Leave the contribution as is and wait till tax filing to determine whether I need to withdrawal the excess/re-characterize or if I can just leave the contribution as is or b) Withdrawal/re characterize today to avoid paying taxes on excess contribution. I'm leaning towards the withdrawal/re characterization in order to avoid additional taxes. Any comments on the pros and cons of either option is greatly appreciated. Anything to watch out for if I do make the withdrawal/re-characterization? Differences between Withdrawal versus Re-characterization? If I re-characterize, can I convert into a Roth if it turns out my income is below the $180k threshold? Many thanks!!

I think some of the names here take more concentrated positions than other. I think when some of the smaller funds taken concentrated 10-30% positions in industries that you can understand, it is a very meaningful signal. I find that Steel Partners tend to take control of companies and roll it into a the Steel Partners conglomerate. Steel tends to have their own agenda and it typically doesn't work that well for the minority. Royce's largest position is less than 2%, I find that to be hardly a signal. If Baker Street takes control of a net-net in an industry that you understand, it's probably a good bet to coattail them as they will probably put the company up for sale. However, their large cap and energy selection have been so-so lately. A pretty good list

Most charitable organization have mandatory 5% redemption each year for tax reasons. This introduces an interesting dynamic where if the endowment is down 30% in a given year, then you have to distribute 5% on top of it. Volatility becomes a big issue in that situation. Interest rates is very important. Having sit in a few investment committee meetings for a tiny endowment that I'm personally involved with, it's apparent that 1) decision making is done by committee 2) There's a lot of CYA from a legal perspective (does the by-law/mission statement specifically state whether we can allocate X% to bonds/equity/alts etc 3) As interest rate has fallen, reinvestment risk goes up. There was a meeting where people asked the question "do we need to go out the risk curve in order to earn a higher yield". It's interesting to see how risk takings gets ramped up on a wholesale level when interest rates is reduced. If we were asking those questions, then other endowments must be having the same discussion. We decided as a group that we are not going to chase yield. But those 6% 10 year treasuries from a decade ago surely do look mighty nice.

http://www.nytimes.com/2015/04/28/opinion/rent-a-foreigner-in-china.html?smid=fb-nytimes&smtyp=cur&bicmp=AD&bicmlukp=WT.mc_id&bicmst=1409232722000&bicmet=1419773522000&_r=0 While this is a silly practice. It has profound implications in that there are arms length transactions in large enough sample sizes determining the premiums assigned for various types of races. As expected, people overseas pay a larger premium for Caucasians. Comments regarding race based pricing starts at 2:00 Man the real estate bubble is quite bad in China!

Cut the cord about 1 year ago. Wife and I really enjoy the no-advertisement part of watching Netflix. I do miss ESPN and the sports from time to time. Initially it wasn't the cost of the cable as much as Time Warner thinking that they still have pricing power and jerked us around. Our bill would fluctuate by more than $15 a month without any explanation. The taxes and fees alone were 2-3x of Netflix. We said enough is enough. Now we get mail to beg us to come back to cable. At $8/month, I don't think we'll ever go back to cable TV. What's the deal with Netflix Blue Ray? Do they provide the latest releases? If Netflix streaming has a fault, it's that there are no new release like the Netflix DVD.

FWIW, I know some US based RE developers 2-3 years who were tired of "not making money fast enough developing RE in the US" and wanted to develop mega projects in China. Some of the conditions that they listed 2-3 years ago were quite ridiculous. There seems to be less of these exuberance lately. On the ground, no one from China has admitted that things are bad, but the consensus is that it's tough to make money in RE development in China in the last 1-2 years. Overall, I find the bunch to be way too optimistic. There was too much of the Chinese government will supply the liquidity, be the backstop, will never let it fail etc.

Tilson spoke at the 2015 Columbia Value Investing Conference in the short selling panel He along with another Long/Short guy laments that shorting stock is a terrible way of making a living. His advice is that if you're just starting out, don't do it. I've heard the same sentiment from many other L/S hedge fund managers. I wonder why fund managers don't stop short selling once they have this light bulb moment. Perhaps, it's a matter of selecting the "Long/Short" bucket when they launched their fund. Hence, every conversation that they have with their LPs involves selling a long short hedge fund product. Hence he's handcuffed to a strategy, albeit a less optimal one. Personally, I feel Tilson has an urge to be more than a hedge fund manager. He's like a girl who craves attention and will go to great length to be in the limelight. I feel like he'll do better if he just stick to his longs and buy some OTM SPY puts. I feel that over 90% of fund managers will do better if they just adopt that strategy.

Some suggestions You can offer more than one share class I think you should ask for lock ups - It automatically filters out the fast money - If someone is willing to lock up their money for 2 years, they are likely taking a long term view on investing with you You have to be realistic with what your third party fund admin is able to provide. Typically, it is a ton of trouble to give money back, i.e. 3% fee and then reimbursement. I forgot the exact reason, but it may involve tax reporting. It creates complication. What is fair is not market and sometimes you have to offer what's fair will create enough complication that the investors won't invest with you. There's theory and then there's what's practical. One thing that I am surprised about is that if you don't charge a management fee, i.e. 0,6,25, people are weary to give you money. They are worried that if you have sub 6% performance for 2 years, you won't have any income to live on. So, I would encourage that you charge 1, 6, 25.

Given that O&G production at the individual well level are public information at state Commission websites. Does anyone know how to 1) identify which well is owned by which publicly traded company or if you have a public company in mind, how do you find the wells? 2) Take the production data, plot the graph and try to figure out the total recoverable hydrocarbon? 3) How does one think about production cost and breakeven? There certainly comes a point when it is no longer economical to pump if the production rate is low and the price per barrel is atrocious. Is it possible to back into a total reserve figure by backing into the historical production figures?

Mrholty, Thank you for sharing your story. I am personally familiar with some of the names that you have listed. As someone why run a concentrated portfolio, I have printed out a copy of your post and put it next to my "checklist" as a reminder for myself.

There were discussions in the past on the board of credit cards that allow you to defer payment for 6-18 months @ 0% interest. I found them to be extremely helpful because it allows me to defer payment until year end which allows me to put an additional $5-20k to work in the market. It also solves my monthly cash management issues as I no longer to keep move cash around (this is probably the bigger benefit). Please let me know if anyone is aware of any good deals with a large limit and a long duration.

The fighters are picking Cormier to beat Jones. Any thoughts from the board?

One way of thinking about protecting your cash is buying a "death put" in your broker. For example, if your prime broker is Goldman, buy the April 2015 $100 put at $0.21 per put. This gives you 476x protection in case GS goes under. You will have to roll the puts 4x a year.

A bunch of value investors want to watch Bones and Cormier smash each other? What's the world come to? A fan of MMA here, been following the sport from the early style versus style tournaments to its present form. It's amazing how quickly the sport has evolved and answered so many of the age old questions of "who's really gonna win a fight among elite fighters." Have never bought a PPV. I guess that's me, hard for me to shell out $50-60 for a PPV. I tend to watch "free fights" on youtube. A bunch of the guys fighting, Chris Weidman (my best friend beat him back in HS wrestling), Eddie Gordon (wrestled in my weight class), Matt Serra (hometown), grow up in the Long Island area. Most of the guys from my HS wrestling team at one point or another had tried a fight or two in the lower circuits. There's a pretty hilarious interview with Chris Weidman about how his older brother used to physically abuse him. I mean some of the crap that Charlie Weidman did was pretty crazy. During the county tournament my junior of HS, I was in Charlie Weidman's weight class. Charlie was walking around with a dog bone in his mouth. http://www.cagepotato.com/video-so-chris-weidmans-older-brother-sounds-like-a-really-nice-guy/ Starts at 9:20 or so.

Huge fan of Shake Shack. I truly believe they have the best burgers out there. Got have the Shack Stack with a beef patty, fried portabella breaded with cheese. It's just so sinful and wrong, but so good. You can kind of use food porn words to describe the experience. Juicy, succulent, feels so wrong, yet so good, etc. I see a ton of red flag on this IPO. P/Sales multiple at 8X. Although, there is a time where P/Sales does make senses, i.e. 10x P/S for a single location that can be successfully rolled out nationwide. At $1bn valuation, it's tough. I think that Shake Shack has limited market to penetrate. NYC is a great place to start shake shack when a slice of pizza cost $4, it's "okay" to pay $9 for a shack stack burger, and another $6 for a its frozen custards, etc. Basically a meal at Shake Shack for two with fries, drink, and burger will run you about $30. It's an amazing experience, but I seriously doubt whether the rest of the US and world can afford that type of luxury. What's more troubling is the intention of the IPO. It seems like it's a mechanism for the insiders to cash out rather than raise capital to grow the store counts. Also, $12.5mm of G&A for running a burger joint that does $82mm in sales? I've noticed concepts that stars in NYC tend to have very high G&A as everything is expensive. According to the filing, Shake Shack plans to use the IPO proceeds to buy interests in a private partnership owned by investors including Mr. Meyer and private-equity firms Leonard Green & Partners LP and Select Equity Group LP, all of which own more than 5% of Shake Shack. (Alliance Consumer Growth, which invested in 2013, also owns a stake of at least 5%.) That partnership then will use some of the money it receives to repay a credit facility led by J.P. Morgan Chase & Co., which is a lead bank on the IPO with Morgan Stanley . The credit facility will be used in part to fund a $22 million payout to private investors before the IPO. Some of the money going to the partnership also will be used to fund new restaurants and renovate existing ones, the company said. It said it plans to open 10 new U.S. Shake Shacks a year starting in 2015 for the “foreseeable future.” After the IPO, the private investors also will continue to get payments from Shake Shack equal to 85% of certain tax benefits the company might receive, an arrangement known as a “tax receivable agreement,” according to the filing. The company said it expects the payments to be significant. Robert Willens, an independent tax analyst in New York, said the arrangements are common and can be controversial. But, he said, if they are “fully disclosed and…reflected in the IPO price, it’s probably not that objectionable.”

I also have a friend who works at a fund who mentioned that it is a pain in the ass to have to wait around for a K-1 when preparing taxes. Is this your experience?

NoCalledStrikes, Do you have to file or separately pay income taxes in your IRA due to your MLP holdings? How do you know how much depreciation is left? How do you adjust for what your purchase and exit prices are? I understand that it is your custodian who has to file a tax return and most of the time they don't know what to do any way. Why do you own MLPs to begin with? For income? Just trying to understand who are the natural owner base for MLPs.