Green King

Also it doesn't look like you have same businesses characteristics as Cimpress.

I like this a lot. https://www.amazon.com/Good-Strategy-Bad-Difference-Matters/dp/0307886239 There many cases out there. It is best to get to the granular details of your businesses and judge things on a case by case basis.

The first question you have to answer; are you in a immature or a mature industry? If you are in a mature industry you follow standard practices and try to catch a change that will restart the industry dynamics like the cloud or the iphone. If you are in a new industry you have to figure out the economics of your industry dynamics, is it winner take all or winners take all. Your main focus should be becoming the winner or joining forces early to helping a near winner to control the market. In general capital allocation decision has two area of importance one being ROI and the other durable competitive advantage. The amount of allocation is based on subjective judgement of the allocator with the most important factor being ROI. If your business is very sticky then invest heavily on sale and marketing once you get to scale or a certain market share you can just buy or copy the better product offering. If not sticky lowest cost the best product wins. There is a market voting element where the investment community decides the winner with a high stock price or cheap capital. But most importantly before any major decisions, you should a spend a lot of time with people in the front line since they have the best information flow. As far as I can tell capital allocation is best done by people who are closest to the action with the correct incentives. You really need to be sure what is needed in terms of numbers to win and reward accordingly. capital allocation in large organizations also has a political element tread lightly and watch out career risks. Amazon way in capital allocation deals mostly with businesses that require little to no tangible capital operate.

Did you guys miss the point of this story? Slaying dragons and being seen outside the herd is a very dangerous activity. Look at what happened to Burry. Most likely Buffett didn't know about it. If he did there are multiple layers of hidden risk involved in the trade. There is a reason Buffett presents himself the way he does. When you look at his moves you know he is the GOAT. Imagine the blowback if he did the trade. Thanks to thelads. Things that happened to me makes more sense now.

I hear you. I went through a similar emotional rollercoaster last year at a start-up. It was really hard to get things done correctly when people in charge didn't what they were doing, acted like they knew everything and took credit for everything that worked out well. It also looked like risk management in your case didn't understand risk. It has never been about notional risk or losing money but more about blow-up risk. Thanks for the contribution, this Thread was something that I would not have experienced otherwise.

Thanks. That made my day. I laughed hysterically for a bit. I guess this is how you print great numbers in a bull market.

I am sorry I am extremely slow and I want to know this for sure. Is this right? Payoffs Is it like this At Par 20 to 30 bps negative carry with call duration 2 years At .5 Par you make 5000/20 250X of outlay In years 2 still at par you call back you CDO and loses 40 bps. Call back costing you BPS extra. You can do this because you are the dealer. People assume the housing market was going to move up. Who is taking the other side? this is LTCM like trades. I am assuming only AAA would want these.

So are you saying the call feature effectively lower the pricing on the short because if something goes wrong the CDO manager can buy it all back effectively squeezing the shorts? But in the Systemic market event, they could not since no one would have had the money to and you rip their face off. Or are you saving you can short super senior with a synthetic put @ a few hundred to one pay off? If the underlying goes to zero.

Yeah, but how valuable can that real estate be if it's next to a latex factory? You guys are forgetting the hidden cash cow - bottle collection and transport to Michigan for that 10cent recycling windfall. $$$ That loop Hole has closed. http://www.npr.org/sections/money/2013/02/20/172512177/why-people-smuggle-empty-cans-into-michigan

Things that are worth doing are always murky. Once a problem is solved or verified the value get arbitraged away. IV is based on the result all possible outcomes. That is why there are many layers of heuristics after the initial IV is done. Position sizing, Margins of Safety, handicapping and most importantly the expected businesses characters in the years follow the investment. (to know when to sell) The principles are easy to understand but hard to apply in real life. You are always taking on risk when you make an investment the most important question is, are you correctly compensated for taking it or Is it mispriced? Damodaran and most people spend too much on coming up with a believable number to show people. When in reality he should spend almost all of his time on the risk or the characteristics of the cash flow. Which is beyond the realms of numbers.

format it please I can't read this.

I mostly do this. Great. Do you have examples...more is better. No. Examples or evidence won't change your mind, you will block it out and look for evidence that aligns with your view. Unless you understand & acknowledge anchoring bias... This is the hardest thing of them all. This is what Makes Buffett and George Soros great the lacking in path dependence. It is best to try and avoid it with a good process than to think you can have such power of clarity.

Since we are near the note of smoking week and watching cartoons. You need to do things to recharge your batteries. For me, it is walking watchings movies and playing games. Sometimes I go on week long bike rides where I do around 70K a day for a week. Investing is not about quantity of work but the quality of work and that resources at least for me drains quickly. There is also faults on doing too much work when I was starting I once read 15 years of annual reports to do an investment in an oil company. The reports didn't matter only one thing mattered the price of oil and their cost of production. I lost around 50% of the investment. The management has lost their shirts. They got lucky with oil prices back in the 2000s. Investing are about heuristics that are time tests here are some. Sometimes doing to much work also hurt you due to consistency and commitment. Sometimes talking about your ideas to the public hurts you since you are pounding it in when you share an idea with others making it hard to sell when more information is revealed. There is also a difference between knowing something and having evidence of something. If you look at enough companies you can tell within the first few minutes of looking at the financials and price, to continue or pass. There is also a difference between having evidence and knowing something. Knowing something takes months to years having evidence takes a few hours to a few days.

You are supposed to do both. The 10-Ks are just homework. But on the next level investing is allocation time and money. In some investments, the 10-K doesn't say much. You have to effectively allocate all your resources. On another note, there is also execution. If you are making 1to 2 percent bets on multi-baggers with high convexity exposure to the upside you don't even need to be right half of the time.

It's hard. I've looked. Also, China is in early stages there are not many great companies. I just looked again they look overvalued ATM. In retrospect, I did miss a lot of opportunities back in 2013 to 2014 period when I look at a few hundred companies. But I was just young and ignorant back then so maybe next time.

Nail, head... I think they are serious. when Buffett said the best way to learn about the stock market is to look at companies from A to Z Which I did, I have looked at all the companies on the TSX. It was an extremely rewarding experience once I got to the last 100. But there is no way for me to do 12 hrs on a long term basis and absorb the information. They must be pretty special like major league athletes. I am a bit skeptical of its returns on time spent since most of the world's information and insight is run by 10% to 20% of the ideas. He should be getting to diminishing returns pretty quickly at that paste.

That was the most interesting part to me. I wish I could just go to a CEO in the industry I'm looking at and ask them to explain to me what's most important, the market dynamics, what they think of each competitor, etc. could learn so much faster that way. Keep up compounding maybe we all can have such edge in 30 years. :)

wow, 12 hrs of reading. That informational and experience edge from owning many private businesses.

wow, that alpha didn't last long. Hope their investors got out ok. edit nvm that was back in 2011

Keep in mind when people are doing new things that haven't worked before. It is not about it working, it is more about trying new things. Since every trail and error brings new information about the world that we didn't know before. New information is what we need to advance the Civilization.

When I first heard about the hyperloop I thought he was trying to Tom Sawyer other people into doing the early Technology for his electric plane idea.

Yeah, I've noticed that before. Unfortunately, I don't even have a twitter account. Get one you are missing out. Fintwit has great information flow if you get used to filtering out the noise.

Hang in there. There is an innate conflict of interest built in the process since your taxes pays their salary. With budgetary problems they are facing dragging their feet is perfectly normal.

LOL, you got me at. Cheers Thanks for the information from the Streetz

Look into my eyes. :D