Green King

they are just looking for confirmation bias. This should be treated just like a investment idea you have a hypothesis of the the business or this case event. You look for facts to evidence to support the hypothesis. If there is enough evidence you buy or say this is true. if not it is put into the too hard pile or become a unsolved case. evidence of a simulator is just noise and does not materially contribute to any conclusion.

How do you determine that the market is more efficient now? Is there a study somewhere that proves this? I have thought sometimes that maybe it is. The net nets have mostly dried up in the u.s. at least, except during major market crashes. But aren't stock prices as volatile as they ever were? The massive influx of hedgefunds, CNBC, the fact that legendary funds, like SEQUX, while the performance is still solid, it's not the outperformance it used to be. The same can be said for other older funds. Yes, it is clear that netnets like the ones Buffett described in the 50's no longer exist. The market is more transparent today, and information is much more available. HOWEVER, that is not saying that the market is overall more efficient at pricing. Back in the 50's I am sure there wasn't mortgage securitization and they were much better at vetting mortgage applicants. So as markets are more stable, we invent more ways to screw it up. It is an equilibrium of booms and busts. I would take issue with a few things in your post. There are net nets like Buffett described, but you have to dig deeper to find them. They may not be in the U.S. There was not mortgage securitization in the 50's as we know it today. Securitization was not the cause of the financial crisis. It is a vehicle, nothing more and nothing less. A car can be driven into a crowd of people and kill them, but a car by itself does not kill anyone. Securitization ended up being used in ways that contributed to the crisis, but it didn't cause the crisis itself. It's only as good as the assets that are securitized. I am not sure that they were better at vetting mortgage applicants back in the day. It's just a different market. There are tons of community banks that operate in the same way they have for dozens of years. There are many small banks that have the same high standards that existed in the past. It's not Securitization its nor the assets. It was a system that was create tp incentives those give people what that want. (make them if they don't exist) people wanting them because they wanted something low risks and give above normal returns. people who believe in them since they are incentivsed to give them. Just human nature nothing more just lake last time and just like next time.

Looks like a good add on idea +1

how does one know if that is true ? how would one know if that is happening ? i would like to know how someone measure that.Also wouldn't they just do the same thing they did here.

lolz ;D we are human after all.

Sorry, Green King, I only now saw your response. About the supply situation. I've been following the sector and it's different companies for at least 10 years. And if you list up the expansion investments all these companies did over the last 15 years, they all have some common things : - first a period from 1998-2002 after the Asian crisis during which there were very few expansion investments. During this period, palmoil prices were relatively low and in combination with the bank sector problems at the time there was no money to invest in expansion. - from 2003 on, palmoil prices started to firm, not coïncidentally 5-6 years after the period of under-investment. The plantations started to get higher cash flows, loans got refinanced and expansion planting started again. - this continued until 2008, and with the crisis, expansion basically stopped in 2009. Things picked up a little bit again in 2010, but from then on, there was a lot more restrictive regulation because of environmental concerns. Companies didn't get no permits to expand and some farmland previously destined for palmoil such as peatland got there permits revoked. It's a lot thougher at the moment to expand plantations, even as the cash is available (consider Anglo Eastern with lots of net cash). This thing is not company specific, but can be identified industry-wide. So, as we know that a tree takes 5 years to start producing and 8 years to fully mature, the palm grow cycle induces that production will level off from about 2015, and that should be supportive for palmoil prices. Thanks for the reply My first investment was on Agricultural commodity sector. Most of the profit is generated is when you plant at the point where the prices for your commodity is the lowest and the finance for expansion is non existent. Rest of the time marginal return is produced. What i have problem with is the fact that this is not a good business and a lot of the cash flow has to be reinvested base on my look at the statement of Cash flows. Can you tell me what is Purchase under investing activities ? At the end of every year you end up with 30 to 20 million of new cash left and the rest has to be put back into the business. (from what i read) Other than that this looks like a very safe long term investment. (Maybe i'll buy it for retirement) With a huge pay off if the country starts to develop. I don't know much about market valuation of land per hec since its not back up by cash-flow. Asset plays are uncertain you could end up with Sears or JCP a lot of asset value but slow to realize them. when not backed up with great productive economic activity. What do you think the numbers will look like in 5 to 10 years ?

Hey TTD, I was just curious about the idea. Its something i pitched to the members. I'm thinking building a public track record and maybe getting financing easier could be a positive. We got turned down for financing on a property where we had 30 percent down. It was distressed and 50 percent of the revenue was for staff payroll! Instead of 21 employees we figured the property only needed between 10-12 people. This reduction would have made the property cash flow positive. The bank didnt accept that rationale. This is a family holding company which 95 percent of the assets are real estate/undeveloped land. If the cost makes sense i think floating 10 percent to the public might be worth it to build a public track record and maybe obtain financing easier. Anyway i'm thinking out loud. It all depends on the cost and how the others feel about it. How did you find deals like those ?

Skanjete Great post How do you figure the supply situation ? Just trying to learn how to do that type of fundamental analysis. TIA

+1 That is the best way. If can take the pain you can gain a lot in a short time. Cheers GK

nice thx for the note. :D

can someone walk me through the numbers please ? The stock looks high for me. Cheers

Got any more good talks you care to share.

Don't think such a things exists in the real world in real numbers. I think I recalled seeing two in the tsx and even those looked looked crappy.

Here is the Bloomberg Link Better quality http://www.bloomberg.com/video/contrarian-a-documentary-about-john-templeton-aD8U03jnSs2BFr4IuxF~IQ.html

Wow a blast from the past. I watched it become a 10 bagger. At the time I've looked at it and passed. I think it was 20% above liquidation. At that time I didn't have the understand of the post above or the relative scale to understand what kind of the barging it was. But over all it was above liquidation. Missed the timing today I would probably understand it better might have passed or had a very small position. Interesting how things changed. Might have brought if I can understand the economic benefit provided to the monopoly owner from JIN. Might look closer next time. Overall congrats.

+1

Yes but some are or I hope are stronger than the other. Like fear over powers greed. I think I instinct for species survival over powers or need to war. If major powers goes to war there is always a chance for Mutually assured destruction to occur and I think the major powers of today will not touch the thought of it. This is not going to be WWII were everyone get full utilization from government contracts and he demand for infrastructure is created from the bombings. GM Ford IBM etc make a lot of cash and gets new technology and capacity built from artificial demands created by the government. Besides we have move to a globalized market what's the point ? I just what resources we need.

major wars are no longer profitable also increase the possibility of species extinction if done between major powers. The weapon of war has become too powerful. Beating up the weak countries will still happen but that's nothing new.

Why does bitcoin belong in the same conversation as gold? Why is there a large margin of safety at current prices? It does belong in the same conversation as gold, it's just better than gold and still much much cheaper. This brings us to the margin of safety: 300k >> 1k. @hellsten: You could have made the exact same graph for any of the two previous super-exponential growth spurts followed by crashes (the two blimps in your chart). It will probably repeat the pattern and crash at some point. Long term I think we're going way, way higher. @SD: QE is the exact opposite of Bitcoin. Because of QE, the USD inflates more and Bitcoin (as valued in USD) becomes more valuable. Be careful these are situations were people lose the most money. When they have full conviction of the situation at hand and can see the future as an inevitability. This is when farmers lose the farm and hang themselves. Make sure your research and work is right !!! Wise you the best if you are right you'll make a lot of money or bit coins. If wrong there is a high chance of losing the principle investment and the option of compounding it at market return level from index funds overtime which will in 20 to 30 years be a lot of money.

You value them case by case basis. The price you give depends on your understanding of the business and comfort in terms of it future prospects. It is always best to get those characteristics for free. Since seeing the future is very hard and you never know what will happen.

Why do you always have the nicest stuff. :D

Hey Kraven! Be patient! You know I am in love… and it is obvious I have my head in the clouds… How could it be different?! You shouldn’t have given me such terrific advices, if you wanted a “rational Gio”!! Your fault!! ;D ;D ;D ;D Gio I do my best. Now that you are a couple, she needs to see that you are sensitive and caring. Tell her frequently that her best friend is really attractive and dresses quite stylishly. Make sure that when they are together and you come upon them that you hug the friend first and hold it a few seconds too long. When you release, say "that feels good and you smell really nice". This will show your girlfriend that you're not afraid to give compliments and are good with her friends. does that work ? wouldn't that led to arguments ? GK, You are still very young… As you grow older, you will realize you don’t have to ask!! Just do what Kraven suggests!! And you will forever be grateful!! ;D ;D ;D Gio I rather make my own mistakes. No else should the final say but after all he is not going to be around forever no matter how smart and all powerful he is. ;D

Hey Kraven! Be patient! You know I am in love… and it is obvious I have my head in the clouds… How could it be different?! You shouldn’t have given me such terrific advices, if you wanted a “rational Gio”!! Your fault!! ;D ;D ;D ;D Gio I do my best. Now that you are a couple, she needs to see that you are sensitive and caring. Tell her frequently that her best friend is really attractive and dresses quite stylishly. Make sure that when they are together and you come upon them that you hug the friend first and hold it a few seconds too long. When you release, say "that feels good and you smell really nice". This will show your girlfriend that you're not afraid to give compliments and are good with her friends. does that work ? wouldn't that led to arguments ?

This is better and more condensed than mine +1

Yup looks like toilet paper but the business statistics look good. For competitions you should look at the rules that decided the winner find a out what what won last year and why? Who are the judges their academic background. Schools are nothing like the real world. ( doesn't matter what others think just placed your chips and if your right you end up taking it all) There is politics for example the marketing competition when I was in school. Have a large teams from the marketing or communication department win every year. Their work were nothing to be envy of just the same old stuff.