ScottHall
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Posts posted by ScottHall
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Go get 'em tiger.
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WAAAAYFAIR YOU'VE GOT JUST WHAT I NEED
Um but seriously IDK. Cool real estate ops out there but haven't seen a lot of 100x yet... Been very lazy this sell off... only put a little dry powder to work.
May miss out. We'll see. Oh well!
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I know I will get annihilated here, but I have had more success buying and selling growth companies in a manner similar to momentum investors. When going value I got virtually no return.
Are there any others who have transitioned to more of a momentum approach?
I still believe in the Buffett idea of owning a business forever, though often this is unrealistic. Market forces change and can do so rapidly or slowly to the point you notice too late. And if this is in a privately held business, you can often be stuck.
I like the idea of selling if the price goes down a certain percentage as opposed to averaging down. Then redeploy the capital somewhere else.
I still do value investments but my style has shifted towards growth over the past five years. Giving value investors grief fun, but the style can and does work in some circumstances. It's just that most of its practitioners are not skilled at the art, which is unsurprising given the wide array of Xeroxes of Xeroxes that are easily read about the subject.
It encourages amateurs who don't know what they're doing, which is valuable in that it gets more people into investing, but unfortunate because a lot of people let those early learnings stunt their growth.
Nevertheless, value can be a successful style and my view is that its core concepts make sense as a base to add upon, rather than being the whole strategy by itself. Its principles make sense, but it's important to build on top of them and figure out where the heuristics of old are no longer so useful.
The big problem with value investing is that many of its practitioners are essentially cultists who refuse to even try to adapt their style. It makes them intellectually lazy and, surprise surprise, they end up underperforming because of it.
I've found a lot of value in creating my own style of investing. It's an endeavor worth pursuing, because it's harder to have unique insights if you copy & paste from the same sources as everyone else.
Congratulations on your success with growth investing, it's an admirable achievement to improve your style by trying new concepts.
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If reason doesn't work, try emotion.
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I don't get the bad reaction to alwaysdrawing. I agree with a lot of the points brought up, and think people are being too harsh. I don't see anything offensive about that contra view of Berkshire, part of which is similar to what I've expressed in the past. Berkshire is a great company but I'm not sure it's a great investment anymore, either, and sold my shares after the tax reform run-up.
I might buy them back at some point because a lot of its businesses are "old reliable" and there is a place for that in a portfolio, but for me, doubtful to be a "core holding" on account of I like stuff that's a bit higher octane than Berkshire but with much better growth profiles. I see Berkshire as an occasional "role player" for my "team" of stocks, but not something I would build my franchise around. I could see it playing a bigger role for others, though, depending on their risk tolerance and what they're trying to do.
One thing that I don't think a lot of investors appreciate is what sort of role a stock will play in their portfolios. Are its traits complementary to the stocks you already have or does adding it weaken the portfolio even if the stock itself is seemingly underpriced. It's something I have been thinking about more lately. I own Markel for similar reasons, it adds value for me because it's not another Google or Amazon or Facebook.
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What would you do if you had access to $1b margin for a month? Let's assume the cost of capital is similar to what IB charges, 2.5%. What trade will you make?
Put it all on red SPY same month calls. YOLO! 8)
Seriously, IRL I'd probably do nothing. Even with special situations, there is no guarantee they'd work out in a month and they likely won't be big enough to put in $1B.
The best trade would be one where you are likely make a little, but have a tail risk of losing a lot. I think this can be structured by selling out of the money calls and puts simultaneously (forgot how this is called). The thinking is that even make a little percentagewise with a high likelihood is worth quite a bit with this huge sum and blowing up with $1B is somebody else’s problem.
This, IMO.
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Poor Oroville; they are now saying that bankruptcy could be as soon as two years away! I hope there isn't a market crash because it could get really, really ugly in a lot of places.
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I think that was a fascinating comment by Munger and he will probably be right over time. The US may be the only large 1st world country without universal healthcare.
If Single payer becomes a reality, the US govt will put the screws to a huge swath of the US healthcare system. Profits will be massively squeezed at tons of companies.
Then what .. . Probably cheaper healthcare for everyone per capita but utilization up.
I am very against socialized medicine of the European pricing type. For sure in the US there is a ton of waste
but once you get low prices for all types of healthcare, innovation will plummet. With little incentive
companies, investors and innovators, etc. wont make super important R&D investments and then a big part of the
beneficial innovation of the US and world healthcare R&D system will be gutted. All types of innovations wont happen and end up killing and reducing healthspans vs what they would of been. A sad 2nd order effect.
3rd order effect: China, understanding the strategic importance of long term investment, picks up the slack, allowing it the distinction of being able to helicopter into developing countries with new medical discoveries it can give away to extend and cement its soft power in countries that are going to be relevant in geopolitics 20 - 30 years from now.
We're in checkmate here folks, we just haven't figured that out yet. We got fat and lazy while the Chinese have been working to throw us off the high horse.
It reminds me of the intro to Rocky 3, where we see that Rocky has lost himself to the glitz and glamour of his fame. TV commercials, magazine photoshoots, the "perfect" family Christmas and his face on merchandise everywhile
Meanwhile we are introduced to Clubber Lang, a young fighter making his way up the rankings. We see him brutally knock out his opponents while Rocky is beating up a bunch of palookas we later discover were set up as tomato cans for Rocky to squash by his manager Mickey.
And while we see Clubber Lang dedicate all of his time to improving himself to better his chances at his chosen profession, we see Rocky making appearances on The Muppet Show and shilling for American Express. Rocky had grown soft and the Rocky brand was more valuable with him beating up tomato cans than risking his title against legitimate competition.
But sooner or later, if you don't take the fight to your competition, your competition will take the fight to you. Rocky couldn't duck Clubber Lang forever, and when he eventually did fight Clubber Lang he discovered that his match ups with the palookas hadn't prepared him to face real competition again.
Ever since the Cold War ended, we've been like Rocky. We've been resting on our laurels and beating up palooka countries like Iraq and Afghanistan, while China has been investing in its domestic infrastructure, building up its soft power around the world and rising up the rankings.
The day is coming soon that the US will get knocked out cold and be unable to answer the 10 count, and it's our own fault for letting our country fall apart. All that wasted money for wars could have been used to reinvest in America and make us more competitive, but I guess reinvesting in your economic moat is a tough sell when many people believe American Exceptionalism alone has imbued us with our gifts, and that philosophy has made us arrogant and lazy.
We're in checkmate; when you're in checkmate, how can you win? You've already lost, and you can't win a game that you've lost. At least, not conventionally. But there is another alternative, famous in Go clubs around Asia... The Nuclear Tesuji.
You flip over the board and the pieces go flying everywhere. It's total chaos, and the usual rules and expectations no longer apply because we're no longer playing the same game. China has been besting by building up their strategically important infrastructure.
It's time we do the same, by issuing trillions of dollars worth of bonds to build up our own domestic infrastructure to catch up with China. And we need to do this while we still have Donald Trump in office, because he is uniquely qualified to deal with the next step of the operation.
Being the first of the major powers of the world to default on its obligations to the others. Donald Trump has had six business bankruptcies so far, that is not an easy skill to hire for. And dare I say it's one we've NEVER had in the oval office before.
We are going to build up our own domestic infrastructure with the money of foreign governments, and leave them holding the bag. It's Economic Judo, and it's something Trump is very familiar of pulling on his creditors. He can do the same thing for ours, but first we need to build as big of a foreign debt as possible.
The more money we borrow, the more we make up for our cumulative trade deficit to these countries since free trade became the flavor of the day. We'll have had the benefit of decades of lower prices and we'll get the last laugh by pulling back all the money that has been sucked out of the pockets of American families by free trade with our Nuclear Tesuji.
ScottHall for Secretary of State!
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at the very least:
ScottHall for Anthony Scaramucci! 8)
Thanks Jurgis. Stay tuned, because I have a lot to say on the matter of financial responsibility and how we should really be treating our multi-trillion unfunded liabilities. According to Stanford, here in CA we could be facing $1 trillion ALONE through our pension system. But the state is saying $150 billion unfunded, but guess what, they are also saying 7% returns from their pension system going forward. They haven't come even close, on average, over the past decade. And if those mediocre returns keep up, well, the numbers get really big, really quick.
It is going to take some major financial ingenuity to solve these massive obligations we have made to ourselves. I voted John Chiang for Governor because he has been Treasurer or Controller since 2007, finding one rabbit after the other to pull out of the hat to keep us going.
That is the sort of guy we are going to need to navigate the pension crisis. Oroville says the city is going to run out of money in 4 years, and then bankruptcy. Most cities in the state are in the hole big time, many thousands of dollars per resident.
Too bad he is going to lose, nobody loves a technocrat anymore. Then we are going to be stuck with Gavin Newsom, who is a showboat, and most likely this guy John Cox who has campaigned for office 13 times and hasn't won a single one of them.
John Cox has views that just cannot win in modern CA, and he has been turning the election into a base race so that he can coalesce support among conservatives to make it out of California's jungle primary alive.
In CA, everyone running gets places in one giant pool of candidates. No separation by party. The top two vote getters in that pool then go on to the general election. It doesn't matter if it's a Republican and a Democrat, two Democrats, two Republicans, or even third parties/independents.
So naturally this has led to the Republicans running to try to out Trump each other to be the one the conservative wing rallies behind and make it out of the jungle alive. Unfortunately, running a base race in a state where Republicans have 25% and Democrats have 44% is a sure way to lose a general election.
So Goofy Gavin is going to be Governor, and this whole charade continues another four or so years... and then maybe the state turns into Newsom's Nightmare and he takes the blame for being the one holding the potato when the music stops.
Maybe then the local Republicans will have their shit enough together to capitalize on the fallout and win the Governor's mansion for the first time since Schwarzenegger. Or maybe Gavin will just get replaced by another Democrat in the jungle primary and the Republican party stays as irrelevant as ever because of their refusal to budge on social issues.
But one thing is for sure, we need someone with some financial sense running the state. They're bragging now about the $10 billion budget surplus but that surplus is going to be a drop in the bucket compared to what they need if the worst comes to pass. Or, god forbid, a recession comes and whacks the market and the pension's % funded status along with it.
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I think that was a fascinating comment by Munger and he will probably be right over time. The US may be the only large 1st world country without universal healthcare.
If Single payer becomes a reality, the US govt will put the screws to a huge swath of the US healthcare system. Profits will be massively squeezed at tons of companies.
Then what .. . Probably cheaper healthcare for everyone per capita but utilization up.
I am very against socialized medicine of the European pricing type. For sure in the US there is a ton of waste
but once you get low prices for all types of healthcare, innovation will plummet. With little incentive
companies, investors and innovators, etc. wont make super important R&D investments and then a big part of the
beneficial innovation of the US and world healthcare R&D system will be gutted. All types of innovations wont happen and end up killing and reducing healthspans vs what they would of been. A sad 2nd order effect.
3rd order effect: China, understanding the strategic importance of long term investment, picks up the slack, allowing it the distinction of being able to helicopter into developing countries with new medical discoveries it can give away to extend and cement its soft power in countries that are going to be relevant in geopolitics 20 - 30 years from now.
We're in checkmate here folks, we just haven't figured that out yet. We got fat and lazy while the Chinese have been working to throw us off the high horse.
It reminds me of the intro to Rocky 3, where we see that Rocky has lost himself to the glitz and glamour of his fame. TV commercials, magazine photoshoots, the "perfect" family Christmas and his face on merchandise everywhere.
Meanwhile we are introduced to Clubber Lang, a young fighter making his way up the rankings. We see him brutally knock out his opponents while Rocky is beating up a bunch of palookas we later discover were set up as tomato cans for Rocky to squash by his manager Mickey.
And while we see Clubber Lang dedicate all of his time to improving himself to better his chances at his chosen profession, we see Rocky making appearances on The Muppet Show and shilling for American Express. Rocky had grown soft and the Rocky brand was more valuable with him beating up tomato cans than risking his title against legitimate competition.
But sooner or later, if you don't take the fight to your competition, your competition will take the fight to you. Rocky couldn't duck Clubber Lang forever, and when he eventually did fight Clubber Lang he discovered that his match ups with the palookas hadn't prepared him to face real competition again.
Ever since the Cold War ended, we've been like Rocky. We've been resting on our laurels and beating up palooka countries like Iraq and Afghanistan, while China has been investing in its domestic infrastructure, building up its soft power around the world and rising up the rankings.
The day is coming soon that the US will get knocked out cold and be unable to answer the 10 count, and it's our own fault for letting our country fall apart. All that wasted money for wars could have been used to reinvest in America and make us more competitive, but I guess reinvesting in your economic moat is a tough sell when many people believe American Exceptionalism alone has imbued us with our gifts, and that philosophy has made us arrogant and lazy.
We're in checkmate; when you're in checkmate, how can you win? You've already lost, and you can't win a game that you've lost. At least, not conventionally. But there is another alternative, famous in Go clubs around Asia... The Nuclear Tesuji.
You flip over the board and the pieces go flying everywhere. It's total chaos, and the usual rules and expectations no longer apply because we're no longer playing the same game. China has been besting us by building up their strategically important infrastructure.
It's time we do the same, by issuing trillions of dollars worth of bonds to build up our own domestic infrastructure to catch up with China. And we need to do this while we still have Donald Trump in office, because he is uniquely qualified to deal with the next step of the operation.
Being the first of the major powers of the world to default on its obligations to the others. Donald Trump has had six business bankruptcies so far, that is not an easy skill to hire for. And dare I say it's one we've NEVER had in the oval office before.
We are going to build up our own domestic infrastructure with the money of foreign governments, and leave them holding the bag. It's Economic Judo, and it's something Trump is very familiar of pulling on his creditors. He can do the same thing for ours, but first we need to build as big of a foreign debt as possible.
The more money we borrow, the more we make up for our cumulative trade deficit to these countries since free trade became the flavor of the day. We'll have had the benefit of decades of lower prices and we'll get the last laugh by pulling back all the money that has been sucked out of the pockets of American families by free trade with our Nuclear Tesuji.
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Maybe there's hope for the old GOAT after all.
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Personally, I think I'm in serious need of some serious trash talking from fellow board members about Mr. Klarman's book - on twitter, etc. - basically everywhere - the more Biglari, Sears & Valeant-style here on CoBF - the better!, writser! [in short, I'm just such a cheap-skate!]
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Back to topic.
Margin of Safety is basically just an $800 copy of You Can Be A Stock Market Genius IMO. Both books cover a lot of the same sort of material, but I thought Greenblatt's was better. I enjoyed all the case studies.
MoS is not bad necessarily. But there's not a lot of "new" in there to justify the price if you already have had a broad exposure to value philosophy.
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Hey,
As most if not all investors are constantly improving their knowledge, I have recognized that I have to improve how to market myself within an organization. As a professional investor I am a researcher, focused on numbers; however, when it comes to do marketing for myself internally, I just do not know how to do it in a sincere and effective way. Are there any recommended seminars or books? Something a la Dale Carnegie Public Speaking for Buffett.
Thanks
It's not specifically for self marketing, but I recommend reading Tested Advertising Methods for marketing generally.
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My #1 advice for learning to beat the market is diversification.
I have >30 stocks and am up ~19% so far this year. There are risk benefits to diversification but also second order benefits. One of the biggest second order benefits is that because of wide diversification, it's not such a big deal if one or two of them blow up, allowing you to do more research and development positions.
When I buy, I seldom ever put even 15% into any one stock. When I do it has to be an obvious winner for me. Most of my allocations are single digit. The reason why I like this style, as opposed to the concentrated style I used to employ, is that I kind of want one or two of them to blow up.
I know that sounds strange, but I have found value in it. Every year I allocate a small amount of the portfolio to R&D investments in new styles I am not as familiar with. The idea is that by entering fields I don't know a lot about, I will probably take some beatings, but I will gain a lot of general knowledge too. And by doing so I may pick up insights to improve my investing style.
This is how I finally got over my aversion to growth investing, starting with a very small investment in Amazon. From there it became a spiral and I have GOOG, FB and so many other growth stocks. They've been big winners for my portfolio.
It's harder to do R&D positions when you're putting your whole stack on the line on a handful of securities. You get more exposure to your best ideas that way, certainly, but at some cost of internal development that may prevent you from expanding your universe of "best ideas."
For those playing the long game, I like the diversification strategy. Over time I want to build as big of an investable universe for myself as possible, and so much of that comes down to exposure.
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Everyone is talking about how great it is that Buffett is going to win his bet that the hand-picked hedge funds are going to lose to the S&P 500 index, but how about we ask some tough questions around here for once instead of worshipping a fallen god?
Let's face it, folks. Berkshire's 2016 growth in book value per share clocked in at 10.7% vs an S&P 500 that was up 12.7%. It was another year of ass dragging by Uncle Warren, not that we should be so surprised at that anymore. Berkshire has failed to compound book at a rate exceeding the market for four of the past five years.
It is not for Warren Buffett's lack of talent. No, rather it is because the glory of his past success has now become an albatross; he's stuck with a huge amount invested stocks of companies that used to represent the timeless quality of American business. The very best of the best.
The operative words are "used to." Now he owns a big slug of Coke, American Express and Wells Fargo with massive unrealized gains that he can effectively never sell because the deferred tax liability represents an obscene portion of their value. This float is supposedly not a real liability, despite the fact that it has shackled Berkshire with large equity stakes in declining businesses. Some are declining directly, like Coke, while the others have simply been eclipsed by a new breed of companies with zero capital intensity and nearly unlimited growth runways.
Maybe they'll do okay, but is it really any shock he's lagged the market when his internal R&D for understanding these companies failed? It's like in the new Cars 3 movie trailers where Lightning McQueen gets the shit kicked out of him by the new sleek, high tech race cars. My nephews will be so sad, but to me it's a great lesson that unless we constantly improve ourselves, we will become dated before our time.
The fact is that just like Lightning, many of the companies in Berkshire's portfolio are losing relevance in the modern economy, and in a market dominated by tech giants that enjoy economics that were previously not thought possible, they're likely to continue to do so. If anything, the trend will probably accelerate.
I think Buffett probably understands this, which may be part of the reason he's invested in Apple. It's funny to me, to watch so many people criticize him over this. Don't you realize that constant internal R&D is what made him so successful as an investor? Charlie Munger alluded to this recently, and it's obviously true. If he had never gotten beyond that Ben Graham mindset, he'd wouldn't be what he is today. If he never got past his "I don't understand technology" phase, his lessons could be relegated to the dustbin of history as dated and no longer applicable. That'd be a very sad thing to see, for a man who has contributed so much to the field.
What I care about is what Berkshire and Warren Buffett have taught me about human nature and the internalization of wisdom. All of those value guys shit talking Buffett because of his Apple purchase? They're so interesting to see; because they learned from him, and are now using his own teachings to reject him.
I want to touch on this, because I think it's probably the most underdiscussed aspect of investing and the art of learning it, and many other humanities subjects.
The internalization of wisdom can come with some horrendous side effects; in some cases, becoming a better investor actually cuts you off at the knees. I know this from experience, because I used to be a value guy that rejected growth. Out of hand. You're paying 100x EPS for that? You're stupid. Dumb. The history of investing doesn't support it. There will always be a better mousetrap. It'll never grow long enough to justify that value.
All of these beliefs were based on wisdom I internalized from the past. Buffett taught me how to become a business-focused investor, and he says he doesn't understand tech. It must be uninvestable. If my idol can't do it, how can I?
The key insight is that our progress as learners necessarily suffers from path dependency; from the time we are babies, we learn one new thing about the world, and build upon the foundations we were taught previously. But if those foundations are wrong, we are building a defective latticework that may serve to hinder us from future growth, even if it is sufficient enough to provide us with a decent result. Because wisdom is branching, having a defective branch not only stops us from learning positive mental models... the truth is, it can actively create negative ones, which can infect our other ideas.
In a previous thread I discussed how it can be useful to be wrong. If you block yourself off from one style of investing to focus purely on deep value, for instance, there's a pretty good shot you'll become good at that niche. But in doing so, you're foregoing potentially even more profitable situations by refusing to do the mental work required to understand them. Opportunity cost becomes a very real enemy, and errors of omission become more frequent.
The trouble is that this may be unavoidable at the outset. We all learn from each other; there is no one who is successful on this planet who has not built their foundation of wisdom on the ideas or work of others that came before them. It's made us an incredibly versatile and successful species, but it comes with one major downside.
The downside is that we don't always just absorb the wisdom of our teachers, but their defects too. Instead of letting Buffett teach us just about the business and investing techniques that have worked for him over the years, we might also pick up his aversion to tech & growth stocks more generally. And through social conditioning, over time that can become the accepted standard for being a value investor in forums just like this one. I like to call these Second Order Traits, because we pick them up by accident through learning from our predecessors and colleagues.
Smart people and thought leaders don't only have good ideas, or good traits; at the end of the day, their shit stinks too. By mimicking them, and by studying them, we can learn much about the world. Intergenerational transfer of wisdom has been a boon for society. But while we internalize what made those thought leaders successful, we can inadvertently internalize their mistakes that kept them from becoming as successful as they could have been.
The trouble with Second Order Traits is that they're hard to get rid of, once you have them. Path dependence being what it is, what we learn often ends up leading to the next subject we learn. I got hired as a junior investing analyst for an investing newsletter publisher, and because of that, ended up learning about marketing & copywriting in particular. Path dependence; learning about investing led to learning about marketing.
So it can be hard to go back and look at what we've learned, at what has been so successful for us... and admit that we're wrong, and that there are alternative, better paths. For years I refused tech stocks out of hand. It took some long and hard thinking, and direct and indirect guidance from investors who already made the transition, for me to get over that bias. I started investing in my own account in early 2008; it wasn't until 2014 that I really allowed myself to abandon this Second Order Trait.
It was so hard, because guys like Ben Graham and Warren Buffett helped inspire me to become an investor. They had taught me things that made me a lot of money, it felt like I was turning my back on them and my beliefs. But, because wisdom is branching, it opened me up to a whole new world of investments and I'm glad now that I bit the bullet and rejected that part of the value dogma.
I describe myself now as a hybrid investor, because I don't shy away from pretty much anything. I've read textbooks on bankruptcy law, stuff from Peter Thiel, Marc Andreessen and other Silicon Valley boys, and all of the classic value tomes. That's not to say that I'm without fault; I fuck up all the time. ALL THE TIME. And it'd be absurd for me to claim I've internalized all of the lessons these people have to offer just because I've read their shit.
But that's part of the system. When you do constant R&D on your investing style, you will fuck up. It's a cost of doing business, but net-net it has been very rewarding. That's why I think it's odd when people ask me why I'm always changing my style up, when what I have works for me. The reason what I have works for me is because I do change my style up and make investments in styles I'm not familiar with.
One of the biggest benefits of having a diversified portfolio is that it allows you to do more internal R&D on your investing process without betting the farm. If you have 20 positions of 5% each, it's not that big of a deal if you take a 100% loss on a few, because your winners are likely to make up for it. As a result, I actively look for unusual situations; no one stock is likely to make or break my returns at 31 positions, but the mental models I pick up from trying out so many different styles are likely to be useful. Some ideas lead to each other (FB led to GOOG for me) and it's a much broader universe to learn from.
Being a concentrated investor gives you more leverage to your favorite ideas. Being a diversified investor gives you more leverage to learning new investment styles without a lot of risk. You can do this without heavy diversification but the way my mind works, it's best for me to have a brokerage account that I can look at at the end of the day. It's real; those are the decisions I made, staring in my face every morning.
Path dependence in learning is a very real thing we should be aware of. All the time, we're picking up bad habits that are embedded inside good ones. And over time, unless we can cut out that cancer, those habits will stunt our growth.
I'm going to be straight with you. I don't really care about Berkshire or its ass dragging ways. It's a single digit percentage of my portfolio. Intrinsic value per share probably is growing at or above the market return, despite book. But it was useful for framing, and since when have I let facts get in the way of a good story?
Everyone is talking about how great it is that Buffett is going to win his bet that the hand-picked hedge funds are going to lose to the S&P 500 index, but how about we ask some tough questions around here for once instead of worshipping a fallen god?Scott, here’s a tough question. What has been in your portfolio (key contributors) over say the past 15 years? I think it’s important to include the last downturn because if not for the good fortune of government bailouts and FedReserve market meddling portfolio design and cash on hand matters most in downturns.
As for Gods. If I knew God existed and that it created the universe, I think I’d worship it even if it hadn’t done much since.
Well, I didn't start investing until age 16 so I can't give you a 15 year view.
Early on I was heavy into value, I started investing in early 2007, heading into the crash. I was running a concentrated portfolio and actually ended up making it through totally unscathed - and made quite a bit of money. My big investment at the time was GGP, the profits of which I used to finance a trip to England. Then my next big investment was Samson Oil & Gas, which was a triple in about a year.
I sold it, fortunately, as now it trades for pennies a share.
I got hired at a company then and my views about investing drastically shifted once I did. I moved to diversification and also a heavier growth component of the portfolio, with longer holding periods. That's where I'm at now. I recently took a massive gain on FB but am back in now based on board member rec.
My current largest percentage winners are AMZN, W, FSBW, MKL, NVR, MAR, CAOX. I have 33 stocks; the 16th best one is LSXMK which is up 40%. My worst stock right now is PDER, down 17% from purchase (but a lot more considering opportunity cost).
Hope that helps.
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Scott
Thank for linking here on the "Berkshire 2018 Annual Meeting" topic.
A big little stimulus for paths checking you'd posted here.
I think that it's as basic as evolution. only the fittest survive and prosper and in order to be fitter than the next guy, in a changing environment, one has to adapt, get more tool, get rid of these which are obsolete etc.
I agree with you 100%, Reader. And you're welcome. :)
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Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.
Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!
I don't care if anyone knows I smoke pot. John Hjorth asked me not to post about it here, so I stopped, and then he decided to bring it up anyway. It's not about my use of pot; I'm very proud of that, and have written about it extensively. But when you ask me to stop bringing it up, and I do, and then you start bringing it up yourself, that means you're now the instigator and have no room to speak.
I hope John doesn't mind if I start posting about weed every week again, since he likes to talk about marijuana now.
The way I see it nobody can stop you from posting income anything - well except Sanjeev but he's pretty liberal in that way. What I would say is that you should try to post your best. Post if you have something to add. If you try to do that i don't think that John's opinion should have anything to do with it. Maybe whether you or him bring pot up should be something you guys hash out privately.
But honestly, you can post your insights about pot and I just don't give a shit. So I just overlook anything you say. I simply don't care for that information. So you have a choice. You can be a troll, and I don't think anyone will stop you from that and lots of people will just ignore you. Or you could try to post your best and be considered a valued contributor.
Now, maybe you've turned a page - some of your recent post don't feel that trolly. But it takes time to rebuild a reputation. Sins of of the past are called that for a reason. You can't just say that you've turned a page and everyone should move along and shut up.
I never said anything about not "trolling." That is one of my biggest value adds here, whether you believe it or not. My use of copywriting helped inspire one person to leave their job and start their own business, because they believed they could make use of the same techniques I was showing off in order to improve their life.
Many seem to assume I post these things malevolently rather than out of a sense of comedy and humor, and to help people learn about techniques that are being used on them literally every day without even realizing it.
A lot of conservative political operatives started in my little subdomain, so anyone in the U.S. is exposed to a more sinister version of this on a daily basis. Many just don't realize it. In some ways the modern conservative movement was built on such techniques. You have to read a lot of my posts with second order thinking in mind to truly grasp them.
Book rec about the topic above: https://www.amazon.com/Americas-Right-Turn-Conservatives-Alternative/dp/1566252520
I've laid out the roadmap on here several times, and I get PMs and e-mails all the time from people who have read them and are taking the teachings to heart. It's okay if you're not one of them or if you don't get it. Not everyone has to like it, but my posts have helped create real, tangible value for forum members who bother to look beyond the veil.
If you can't get past those biases, that's up to you. But it probably will make you more likely to miss my obvious winners like CAOX at $1k, because of underestimation. So far that has proved to be the reader's loss, not the author's. Maybe John is right and that won't be the case going forward, who is to say. But so far so good.
I will hazard a guess and say that I have a different view of what best is than most of you, probably because of my background. It's very unusual. My grandma was a witch and she raised me while my mom went to school, so I lived in a mountain town of 500 people. I dropped out of the fourth grade there and later talked myself into a job that I ended up leaving after 4 or 5 years because of severe depression with regard to my gender dysphoria.
I now work in marketing and replace that income by working fewer days per year, because of my copywriting ability. The point of writing copy is to write in a way that incites response, rather than writing as a way to convey pure, unadulterated information. It's in the name DRM - Direct Response Marketing. This usually means using lots of colloquialisms and writing in a very visual way.
It's a different style of writing compared to what most people are used to, and it does have a lot in common with the more harmless varieties of internet "trolling." Basically because to a large extent, in my copywriting career, I've often ended up playing devil's advocate for ideas that were someone else's. It didn't matter what I thought of them, but I needed to be able to write about them in a sense as if they were my own.
And you have to write them compellingly, because if you don't, your client is not bringing in any sales and you're not getting paid.
What I have done here in the past is essentially the same thing, except I have more control over the subject matter. Sometimes they're chicken scratch ideas I'm just beginning to work on in my head for my own investing philosophy, and writing them in this way helps me think them through a bit more, and gets other people to contribute as well because the format of writing helps to excite them.
Other times it's because I want to test the reaction to a certain viewpoint that I may have to incorporate in a future campaign. It's important to have practice to make sure you're hitting the mark with people who pretty closely represent your target demographic but who are miles away from who you are yourself.
I don't see anything harmful or nefarious about this; use strong language to hook people in, and then serve the main course. Sometimes people will view that in a negative or villainous way because the targets might be some of their heroes, but that is helpful sometimes because that perception can serve as a lightning rod for response. In the social media age, that can be quite a valuable thing.
When people open up to the idea that I'm trying to help them, they tend to learn and learn quickly. But I get that it's not for everyone.
It's for some people, though, and so long as I keep hearing stories about how my posts have helped improve the lives of people who have read them, I do not intend to stop writing the way I do. I view it as my responsibility to share my knowledge with the world.
If you aren't cool with that, it's fine. I'm just trying to expose this forum to a new set of what can be powerful mental models. Some have opened themselves to these ideas, others "don't get it" and just see a troll or an idiot and will just ignore me. I'm totally cool with that, too.
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Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.
Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!
I don't care if anyone knows I smoke pot. John Hjorth asked me not to post about it here, so I stopped, and then he decided to bring it up anyway. It's not about my use of pot; I'm very proud of that, and have written about it extensively. But when you ask me to stop bringing it up, and I do, and then you start bringing it up yourself, that means you're now the instigator and have no room to speak.
I hope John doesn't mind if I start posting about weed every week again, since he likes to talk about marijuana now.
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... and a lot of people on these forums think I'm one of the biggest idiots on here. ...
To be totally honest, straight, bordering to being brutal here, Scott: For my part: Not. But please stop ruining your smart brain with pot, and come back. Furthermore, there seem to me to be at least some kind of correlation between you trolling here on CoBF and being under influence of pot, or whatever. If you hereby don't grasp how much damage your're causing, then, yes, you're one of the biggest idiots here on CoBF.
Unprovoked you bring up my marijuana usage, which I haven't mentioned once in this thread. It's an activity you intensely dislike, supposedly. Yet here you are promoting it to thousands of users and giving me a bigger microphone than I would have otherwise had due to that attention.
You're promoting personal behavior you don't approve of so that you can call me out on a message board topic you apparently felt offended by.
By a brief look through my post history, at least by a quick glance, it looks like I haven't mentioned weed on this forum since around this time last year. I gave you what you wanted, out of respect kept it to my Twitter account and off the forums, and yet you still don't want to let it go.
I'm sorry, but which of us is supposed to be trolling in this particular thread? Maybe changing behavior starts by looking in the mirror, John.
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I think that all these comparisons to indexes miss the point that you have to be comfortable with what you hold.
Let's say that I didn't buy Amazon, or Netflix, or whatever. Yes I've missed on returns from those names. But it's not like I didn't know they existed. I didn't buy them because I didn't feel comfortable holding those. So then why would I put together a portfolio that has heavy weights in those names? After all the S&P 500 is just a portfolio of stocks.
Scorpion has the right idea, IMO. Perhaps Buffett is just waiting for a market pullback to buy the tech stocks. If the market crashed 50% all of them would probably be screaming buys.
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One possible scenario , rates double, berkshire stock stays flat , fangs crash 50 percent... Warren said in a recent interview investing is not as easy as just buying anything at any price . I predict in due time the value of moats won't change, high valuation for growth will come down as the noose of rates ratchet up. And the basic principles he describes will be made clear again because like mathematics or gravity its just basic math.
Yeah, then Warren gets to buy all the FANG stocks at the prices he originally should have. And I get to buy more. Not a bad idea!
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Humble contribution.
Investment is like a race and you have to choose the vehicle and the driver.
It is impossible to maintain a permanent edge. ScottHall's comments may be right that the time has come but (politely submitted) the comments remind me of an article I read in 1999 titled: "What's wrong, Warren?" when I was trying to define the rules of the race.
At a time when the value of moats is questioned, if there is a message that will stay, even after Mr. Buffett is gone, it is that Markets can sometimes be wrong and, in spades, spectacularly so.
Borrowed from "Get your groove back":
"Looking at the past in the rear view mirror,
Moving so fast I've never seen clearer,
Now I get a new way to feel ten times better,"
Here to learn but to win a race, you have to try to finish the race, even if there is no finish line.
More about investing being like racing, for those interested: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/sorry-warren!-another-year-of-dragging-ass/
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From NYT:
"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"
Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.
Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.
Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.
I'd say that is a little too negative considering size, market conditions and cash position. Ask Prem Watsa about true opportunity costs... Hell, ask most decent fund managers with a strong value bent. They'll come back in vogue at some point too. Buffett was buying in 08/09 while many were trembling with fear. And he still did some decent deals like you said. That's more than most can say. Nothing mindblowing but he has still kept up with the market and its soaring tech stocks with enormous cash levels. Maybe he got better with age but certain conditions make it very hard to see this. I'd love to see what happens if the S&P500 drops two or three years in a row! Also, selecting Todd and Ted, who both seem to be beating the market, is impressive in itself imo. They are not managing a few hunderd million...
So easy to say in hindsight that BRK did poor vs broader market. Maybe one of his biggest mistakes is not buying MSFT a few years back and going after IBM. (With IBM he fell prey to a backwards looking fallacy as someone else put it here. "They have always reinvented themselves thus they will do it again.") But who would have guessed Amazon, Google, Apple, Netflix, Facebook, ... would be where they are today. Five years ago, 99%+ of analysts, investors etc would have called you insane if you dared to predict this outcome. Do you know about many fund managers who got extraordinary outperformance vs the market? In any case, I would have slept better owning 100% BRK than 100% S&P500 in the last 9 years.
For the last 20 years, BRK has been a great stock to own in size at certain points in time. Good investors were best to trade around that. Early 2000 and 2011/2012 were two such occasions where the investment case was a no-brainer. Many didn't see it in 2000 and 2011 and I'm sure Mr Market will be blinded once again in the future.
I really don't think that's true. I and many others have made very good returns on Facebook, Amazon and Google over the past five years. I sold out of Facebook recently - I will buy back in - held it since 2014 and had 137% gain on the position. Still have AMZN and GOOG.
I didn't miss these stocks and a lot of people on these forums think I'm one of the biggest idiots on here. I beat Buffett at growth investing, so did a lot of others on this forum TBH. He owns up to his mistake and there's no shame in making mistakes, but to say that 99% of people couldn't figure those stocks out seems a little silly to me.
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From NYT:
"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"
Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.
Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.
Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.
I sold my Berkshire stock a while back, held it for a quick +20% on tax reform and redeployed to better opportunities. It'll probably do fine but not much more than fine, in the long run.
Investing Figures and metaphors as Professional Wrestling Characters
in General Discussion
Posted
Love this concept. Lot of my interaction on this forum was inspired by Andy Kaufman's run in Memphis.