Klarman Holding 50 Percent Cash

[SharperDingaan]

On 1/25/2025 at 4:25 PM, cubsfan said:

How did I get here - my painful investment journey - as told to the St Joe crowd.

 

Great post, and thank you for sharing.

 

The common element with many of these stories ... is that one has to get past oneself, and survive the process. One then has to survive the inevitable unexpected draw-downs while developing a trial and error process that works for you 

 

Good luck!

 

SD

[thowed]

Yes, another thanks for sharing.  Would have loved to have read this when I was younger.  But there is a certain comfort in hearing others who have been through journeys of discovery about their investing style etc. and that it is not just about what they teach you on the CFA etc.

[cubsfan]

@SharperDingaan @thowed - Thanks guy. I think @LC said something about investing being largely emotional/temperment.  Buffett of course, says the same. Too optimistic, too pessimistic - not good. Too arrogant, confident or fatalistic (Hussman), not good either.

 

I should have mentioned my entry to CobF... 

 

After 2001, when I was searching for answers - the Buffett education got my head right. So up until 2009, I read all the Buffett stuff. I attended all the Berkshire meetings while I was working. When I took those PTO days my coworkers made fun of me. When I lost my last tech job in March 2009 (height of GFC) - I decided to take 2 classes at U of C - accounting/finance.  I knew I needed to understand accounting better (Buffett said so at those meetings!). I was doing all this in preparation for, hopefully, private investor career or retirement. Then I started meeting all these great people from the Berkshire crowd, and felt out of place because of my lack of knowledge.

But if you keep at it, and invest in yourself - it's amazing how much you can learn without the specific degree - especially if you enjoy reading about businesses. 

 

When I went on my own, I budgeted (yeah, with my wife) $25,000 per year to attend conferences, investor subscriptions, etc.  I made a conscious effort that I'd spend that money to get better and learn. Back then there was no such thing as a "virtual conference" - which is a huge advantage today for young investors - no travel expense, etc.   I got to CoBF becasue Pabrai spoke highly of it - I think I joined in 2013.  

 

What I'm trying to say: set up your goals and your plan - and execute on it. Don't be afraid to spend money. I kind of laugh when I see guys on here talking about how little money they spend to find a source or something.  What I learned in sales was this: you need lots of contacts, meetings, appts, etc, etc - all this costs some money & lots of time. But in sales, I would always push my salespeople for activity - don't assume anything. You have to turn over lots of rocks (ideas/appts) and you never really know where you will find revenue. If you make too many assumptions on the front end - you're going to miss an idea that will make you many thousands of dollars. I'm not going to pass on a $500 subscription, if I think there might be a $10,000 idea in there. And of course you will make mistakes - but is all the Buffett/Ted Williams Science of hitting story.

You look and work thousands of pitches/ideas over your career - you bat .400, meaning you fail on 6 out of 10 - and you're the greatest hitter of all time. Investing is the same, you can hit .250 and still get very rich. And like Buffett says: all that knowledge is cumulative. 

 

A friend of mine calls it "pattern recognition".  When I say gregmal's EBAY idea, I immeadiately thought DVA - flat business, low valuation,  huge buybacks, moat, etc, etc.  - that's worth investigating. Might work, might be dead money - gonna be hard to lose much...

 

This place is a great source of ideas to get started. You just gotta put in the time.

 

 

Edited 2 hours ago by cubsfan

[james22]

My guess is most investor's progression is either from individual stocks to Indexer or from (401k) Indexer to individual stocks back to Indexer.

 

Probably not too many "real" Value investors? And even fewer Growth investors?

 

[james22]

May 2010

 

 

https://awealthofcommonsense.com/2025/01/margin-of-too-much-safety/

[Blake Hampton]

1 minute ago, james22 said:

May 2010

 

 

https://awealthofcommonsense.com/2025/01/margin-of-too-much-safety/

If this was in 2010, I’d imagine he’d be bald now

[james22]

Heading into the 2008 financial crisis Klarman has compounded his fund at 20% per year for 26 years! When an investor of that stature says he’s more worried than he’s ever been in his career, alarm bells start going off.

 

On 1/24/2025 at 5:16 PM, Blake Hampton said:

I have some serious concerns about the current environment . . .

 

When an investor of your stature says he's some serious concerns about the current environment . . .

[Blake Hampton]

37 minutes ago, james22 said:

Heading into the 2008 financial crisis Klarman has compounded his fund at 20% per year for 26 years! When an investor of that stature says he’s more worried than he’s ever been in his career, alarm bells start going off.

Was that article really written yesterday? Ben Carlson must read this forum cause some of that stuff is eerily similar.

 

I personally don’t think Klarman sitting on a little cash is some bad thing. I think people are overly discounting the Fed’s role in all of this.

 

Edited just now by Blake Hampton