nkp007

I have a rule. Never pay attention to the macro. With one exception. If there's imminent contagion and things are fairly valued, it's worthwhile to hold lots of cash. I'm trying to figure out if China and its leverage can lead to global contagion. They want everyone to believe that they have it all under control. And they do. Until they don't.

If you look at all the incentives involved, they all heavily line up on one side.

There's nothing materially wrong with this board. If anything, the current format with long threads filters out many of the people who would rather not do the reading (and therefore filters out people who likely will not make worthwhile contributions). Sanjeev: 1) The vast majority of people are wholly satisfied and probably will not comment in this thread 2) When investors cannot find anything cheap, they get cranky. That is what you are mainly seeing here and will continue to see until a panic hits 3) From now until eternity, valueInv is our lovable troll. And like my cranky grandpa, he helps break up the monotony

Funny how the increasing prices of the preferred and common shares give holders of those shares even more incentive to fight harder. What a virtuous cycle. And it's not like the rewards (cash flow) are shrinking as time passes. Every day, the pie gets bigger and the stakes get a little bit higher. It's like a bully stole your pet rabbit and put it in his pocket. He's going to look a little foolish when it turns out it was pregnant and ten end up scurrying out of his pants.

These guys always have great letters.

Apparently even Zerohedge takes issue with the truth of this: http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppage-cash-transfers-china

Amazing how much shallow hatred there is for Tracy. Everything I have read on her has been good. Hopefully she stays at Berkshire for a very long time.

What in particular keeps you away? Capex needs, debt? Yes. 1) High levels of capex many years out which means that you could get a supply of new ships at times when you may not need them anymore. This can devastate an industry for quite some time 2) With dry-bulk, you're looking at the ultimate commodity type situation. Absolutely no pricing power most of the time 3) Generally very high levels of debt If things got cheap enough, I would take a look. But I wouldn't be able to get comfortable with the lack of recurring earnings combined with the high levels of debt.

The first book did its job. I intend to stay far away from this industry. If I ever forget that, I'll read the second book.

Haha. On a less dramatic note, it is totally within Sanjeev's rights to say as much or as little as he wants. There are a number of fantastic posters here. No need to pressure anyone to do anything - that's not what we're all about. Sanjeev created this ecosystem. That's more than enough for me.

I made sure that in the middle of our coffee table in the living room we have a nice, bright blue copy of "Poor Charlie's Almanac" staring at us everyday. Nice reminder that human psychology and investing go hand in hand. Our business decisions have been greatly improved since the book became a staple of our lives.

I'm with you. Very ignored and misunderstood situation despite this year's price gains.

What? You never heard of a $100k+ "call option". That whole conversation had so many cringe moments. So much confidence and man with hammer syndrome via Buffett principles.

I was rejected from VIC three times. I don't think the quality of my ideas was that good since I had applied when I was in the initial learning process about investing. Honestly though, if I applied now (after 6 years of experience), I'm still not confident I would be accepted. I appreciate that they still allow people to see the ideas on a delay. It's still helpful to read other people's analysis as a learning tool. In the meantime, I've made an incredible group of friends with fellow investors on this board and via Twitter.

Oh man, year's not over yet...!

Looks pretty solid to me. I wouldn't be surprised if the motion succeeds. The weak point is the claim that the intent of the Third Amendment was to strengthen the enterprises and reduce their cost of debt. But if the rest of their arguments are solid, that doesn't matter because the lawsuits will be thrown out. Lot of straw-man arguments in the motion. I don't know what the judge will do, but there are many holes.

Well said Liberty. The entire industry is incentivized to keep the ball rolling. All the bubble thumpers seem to be using reasonable rationale and logic. It's scary that all sides agree that real estate is expensive and there will be some sort of correction. It's the extent that is being debated (soft landing vs crash).

Some great people to follow on twitter if you want to keep up with the day-to-day musings of Canadian real estate:

I don't intend to ever put money into Bitcoin, but it's fun to watch the ride.

"How to destroy a relationship in one easy step" by Kraven

It's all family and friends, people I know well and barraged with various investor quotes over the years. Over time, they bought in to the philosophy. I was lucky in that I had certain tools at my disposal (people close to me with cash balances, ample time to read and learn- started reading about investing in 2008 right out of college, and a huge tolerance for pain). Luck played a huge role. Be aware of what tools are available to you and leverage them.

I am not sure I understand. So you are making no money from your fund? In 2016 you'll start making money ideally. You are viewing this as getting the opportunity to build a track record? I can see why you would do this and commend you for it, but seems as if there is a lot of risk involved. Say you had started this not in 2011, but in 2007. You would be making nothing and have walked into a shit storm. There is a lot of risk involved in managing money that I think this thread has not adequately illustrated. Lose money for clients and those good souls may not be so good. That's when the lawsuits start to fly. Hell hath no fury like an investor scorned. I treat it like any new business; the first few years are rarely cash flowing. I gave myself five years and saved enough (and cut spending enough) to give myself the best possible chance to make this work. Luck will always play a role. This business isn't guaranteed in any way. You need to love bathing in the seas of uncertainty.

Started a fund in 2011 with $1 million. Currently at $7 million. Startup costs (legal fees) were around $25k (amortized to the fund) and annual costs are approximately $15k. At $1mm it was a bit tight, but really no big deal. At $7mm, the operational costs are unnoticeable. I won't charge any fees until year 5. My investors put a lot of trust in me by writing my checks and giving me free reign. They essentially gave me a free education by allowing me to invest as I see fit when I had no track record so that's the least I can do in return. After year 5, will do 20% performance fee (no asset fee). Most important part is to raise the right type of capital that won't flee when you need it the most. That involves rejecting potential investors.

I think the real estate industry would be against this plan. Lack of government guarantee will increase mortgage costs. What's to say this entity doesn't MBIA itself and overextend while reducing underwriting standards at some point in its existence? If that's the case, we are back at square one. Obviously this plan works well now that all new mortgages are pristine.

american voters don't go ballistic as long as their internet connection works. vast majority don't even know what this is about, won't understand it, and won't care. F+F create visceral reactions in voters, but maybe you're right. They can hate them all they want, but as soon as you tell them the 30 year mortgage is at risk, you'll have a true revolt. Americans will wonder, why is everyone bailed out except the everyday American who has a 30 year mortgage. The real estate industry has the American populace in its palm at virtually all times.