Klarman Holding 50 Percent Cash

[LC]

To translate to 2025: buy the f(*#ing dip!

[Blake Hampton]

At the end of the day, investing is about not losing money. That’s Buffett's #1 rule. A ton of ideas and activity that I see floating around are nothing short of complete speculation.

 

- Bitcoin and crypto in general? A president who is promoting it?

- No-growth companies selling at 40x earnings?

- Real estate selling at 6x the median household income?

- Record use of derivatives?
- Massively unsustainable fiscal and monetary policy?
- S&P 500 at 5.3x book?

 

Investing is not about blind optimism; It is about being grounded in data and using logic to make decisions. I try to back up my beliefs with quantitative evidence that I can point to if needed, and I could give you sources and figures for each one of my listed points above. I read annual reports, the WSJ, the NYT, The Economist, Barron's, Fortune, and a slew of books. Specifically, I also read the annual reports for both the Fed and the U.S. Government. Maybe I'm just some moron who doesn’t get it, and I'm warped in thinking that all of this isn't normal, but I'm not so easily convinced.

 

I will admit, there are some decent ideas where I do think the market is ignoring reality. However, I do think that these opportunities are quite rare at this point. Just because a company that's making some frivolous item is selling at 10x earnings, that doesn't mean it's cheap. You have to remember: with a company, you're paying for its cash flows 20 to 30 years out.

 

I have some serious concerns about the current environment, and I'll end on this: The last two major crises this country has endured have been BIG ONES, nearly Great Depression–rivaling events. Both of those times, our country was largely saved through stimulus and bailouts from the U.S. Federal Government. The concern now is that this is where the current problems lie. If your idea for buying equities is simply that "cash is trash," take a second to think about the implications of that.

[Blake Hampton]

But I'm also all-in on Fartcoin.

[Lazarus]

Some people need to learn the hard way. Good luck, friend.

[james22]

1 hour ago, Blake Hampton said:

At the end of the day, investing is about not losing money.

 

Invest in TIPS then. I'm looking to make money.

 

Investing is about risk-taking.

 

1 hour ago, Blake Hampton said:

A ton of ideas and activity that I see floating around are nothing short of complete speculation.

 

- Bitcoin and crypto in general? A president who is promoting it?

- No-growth companies selling at 40x earnings?

 

You've missed some of the best risk-adjusted investments in history sitting out Bitcoin and Tech.

 

1 hour ago, Blake Hampton said:

- Massively unsustainable fiscal and monetary policy?

 

You need to embrace "muddle-through."

 

1 hour ago, Blake Hampton said:

- S&P 500 at 5.3x book?

 

Compared to an asset-heavy S&P500?

[Whensthepaintdry?]

2 hours ago, Blake Hampton said:

. I read annual reports, the WSJ, the NYT, The Economist, Barron's, Fortune, and a slew of books

No offense, but did you forget to read common stocks and uncommon profits? A lot of Buffett fans seem to forget that he said he was part Fisher and just focus on the part Graham part.  

[Gregmal]

Studying is like 10% of the process. Simply getting in the market and earning some grey hair, the rest. Blake I think has it the other way around. 

[james22]

1 hour ago, Whensthepaintdry? said:

A lot of Buffett fans seem to forget that he said he was part Fisher and just focus on the part Graham part.  

 

And a lot of Buffett fans simply misread him.

 

When he says "never lose money," he doesn't actually mean: never lose money.

 

He'd never invest otherwise.

[Parsad]

1 hour ago, james22 said:

 

And a lot of Buffett fans simply misread him.

 

When he says "never lose money," he doesn't actually mean: never lose money.

 

He'd never invest otherwise.

 

No he means "never lose money."  That's not a misread by Buffett fans.  Cheers!

 

"Over the past 50-60 years, Charlie and I have never permanently lost more than 2% of our personal worth on a position. We've suffered quotational loss, 50% movements. That's why you should never borrow money. We don't want to get into situations where anyone can pull the rug out from under our feet."  - Warren Buffett 2/15/08

[LC]

Investing is 90% in your gut. The other 40%, it's all in your head. But 100% of investing success is about being 60% right, 20% of the time. 

[james22]

34 minutes ago, Parsad said:

No he means "never lose money."  That's not a misread by Buffett fans.  Cheers!

 

"Over the past 50-60 years, Charlie and I have never permanently lost more than 2% of our personal worth on a position. We've suffered quotational loss, 50% movements. That's why you should never borrow money. We don't want to get into situations where anyone can pull the rug out from under our feet."  - Warren Buffett 2/15/08

 

Yeesh.

 

My point: even Buffet, as good and careful an investor as he is, cannot say he's never lost money.

 

His rule is intended to minimize loses, not protect against them. The inherent (speculative) risk is still assumed.

 

[73 Reds]

13 hours ago, Blake Hampton said:

At the end of the day, investing is about not losing money. That’s Buffett's #1 rule. A ton of ideas and activity that I see floating around are nothing short of complete speculation.

 

- Bitcoin and crypto in general? A president who is promoting it?

- No-growth companies selling at 40x earnings?

- Real estate selling at 6x the median household income?

- Record use of derivatives?
- Massively unsustainable fiscal and monetary policy?
- S&P 500 at 5.3x book?

 

Investing is not about blind optimism; It is about being grounded in data and using logic to make decisions. I try to back up my beliefs with quantitative evidence that I can point to if needed, and I could give you sources and figures for each one of my listed points above. I read annual reports, the WSJ, the NYT, The Economist, Barron's, Fortune, and a slew of books. Specifically, I also read the annual reports for both the Fed and the U.S. Government. Maybe I'm just some moron who doesn’t get it, and I'm warped in thinking that all of this isn't normal, but I'm not so easily convinced.

 

I will admit, there are some decent ideas where I do think the market is ignoring reality. However, I do think that these opportunities are quite rare at this point. Just because a company that's making some frivolous item is selling at 10x earnings, that doesn't mean it's cheap. You have to remember: with a company, you're paying for its cash flows 20 to 30 years out.

 

I have some serious concerns about the current environment, and I'll end on this: The last two major crises this country has endured have been BIG ONES, nearly Great Depression–rivaling events. Both of those times, our country was largely saved through stimulus and bailouts from the U.S. Federal Government. The concern now is that this is where the current problems lie. If your idea for buying equities is simply that "cash is trash," take a second to think about the implications of that.

How many great ideas do you need?  The beauty of investing for the little guy is you can pick and choose and your investment universe is unlimited.  This place is a gold mine.  My guess is, if you bottled up the top 10 or 20 investments discussed here into an ETF you'd do really well.  "Not losing money" is easy but taken too far is a poor mindset for success.  

[Blake Hampton]

9 minutes ago, 73 Reds said:

How many great ideas do you need?  The beauty of investing for the little guy is you can pick and choose and your investment universe is unlimited.  This place is a gold mine.  My guess is, if you bottled up the top 10 or 20 investments discussed here into an ETF you'd do really well.  "Not losing money" is easy but taken too far is a poor mindset for success.  

Well if we're talking about Buffett, he would say one good idea every year or two. His equity portfolio has normally consisted of about 5 to 10 equities with a turnover rate of about 5 to 10%. I also believe that if he were only managing his own money that he'd be more concentrated. I think what made him so successful at a young age was that he could put half or more of his net-worth into one idea, and that takes some balls.

Berkshire's 2022 Shareholder Letter:

 

"At this point, a report card from me is appropriate: In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. In some cases, also, bad moves by me have been rescued by very large doses of luck. (Remember our escapes from near-disasters at US Air and Salomon? I certainly do.)

 

Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire. Let’s take a peek behind the curtain."

[73 Reds]

2 minutes ago, Blake Hampton said:

Well if we're talking about Buffett, he would say one good idea every year or two. His equity portfolio has normally consisted of about 5 to 10 equities with a turnover rate of about 5 to 10%. I also believe that if he were only managing his own money that he'd be more concentrated. I think what made him so successful at a young age was that he could put half or more of his net-worth into one idea, and that takes some balls.

Berkshire's 2022 Shareholder Letter:

 

"At this point, a report card from me is appropriate: In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. In some cases, also, bad moves by me have been rescued by very large doses of luck. (Remember our escapes from near-disasters at US Air and Salomon? I certainly do.)

 

Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire. Let’s take a peek behind the curtain."

So what are you waiting for?  Buffett's self-described "satisfactory" results made him the World's greatest investor.  And it was harder for him that it is for you; he managed other people's money while you only have to worry about yourself.

[Vish_ram]

A portfolio of 5% IBIT, 50% VOO and 45% QQQM will outperform 99.5% of all COBF readers. 

 

You can read this forum for fun and spend rest of your time with

1. Travel

2. Spend time with kids

3. Making love 

 

[james22]

1 hour ago, Blake Hampton said:

In some cases, also, bad moves by me have been rescued by very large doses of luck.

 

Huh.

[Blake Hampton]

1 hour ago, Vish_ram said:

A portfolio of 5% IBIT, 50% VOO and 45% QQQM will outperform 99.5% of all COBF readers. 

 

You can read this forum for fun and spend rest of your time with

1. Travel

2. Spend time with kids

3. Making love 

Had to look up IBIT.
 

At this point, I feel like I’m being trolled because this portfolio is unbelievably risky.

[73 Reds]

4 minutes ago, Blake Hampton said:

Had to look up IBIT.
 

At this point, I feel like I’m being trolled because this portfolio is unbelievably risky.

How is a portfolio largely consisting of the world's greatest companies unbelievably risky?  I think the issue that you should consider is how to define risk.  To me the ultimate risk is fear, i.e., doing nothing.

[Blake Hampton]

1 minute ago, 73 Reds said:

How is a portfolio largely consisting of the world's greatest companies unbelievably risky?  I think the issue that you should consider is how to define risk.  To me the ultimate risk is fear, i.e., doing nothing.

I don’t know specific metrics regarding the NASDAQ currently but I assume it’s outrageous.

 

Please someone fill me in on how QQQM and IBIT are good investments.

[james22]

3 minutes ago, 73 Reds said:

To me the ultimate risk is fear, i.e., doing nothing.

 

Exactly.

 

Cash exposes you to the risk of never reaching your goals.

[73 Reds]

Just now, Blake Hampton said:

I don’t know specific metrics regarding the NASDAQ currently but I assume it’s outrageous.

 

Please someone fill me in on how QQQM and IBIT are good investments.

Why are you stuck on metrics that everyone can look at?  Its the intangible factors that make the difference.  Other posters have already alluded to the notion that you have to use some insight into the future rather than simply dwelling on the past.  Risk management is all about percentages and odds.  Play those that you perceive are in your favor; ignore the rest.

[james22]

1 minute ago, Blake Hampton said:

I don’t know specific metrics regarding the NASDAQ currently but I assume it’s outrageous.

 

Who are you to question the Market valuation?

 

1 minute ago, Blake Hampton said:

Please someone fill me in on how QQQM and IBIT are good investments.

 

Numbers go up.

[Blake Hampton]

Just now, james22 said:

 

Who are you to question the Market valuation?

 

 

Numbers go up.

[Luke]

4 minutes ago, Blake Hampton said:

@Blake Hampton Its simple, treasuries pay what, 4%? So is a significantly growing 3% yielding wide moat business overvalued at 3% earnings yield? Or 2.5%? Not that easy to say as you make it to be.

Edited Saturday at 04:19 PM by Luke

[james22]

8 minutes ago, Blake Hampton said:

 

The answer is not in the readings.