Liberty Posted December 8, 2014 Share Posted December 8, 2014 Another change today: 36% Fairfax Financial 17% Liberty Media 17% Biglari Holdings 14% Oaktree Capital 16% Cash Vinod, Liberty, You see what I mean when I say I don’t think investing should be something static? In a matter of just 4 trading days I have practically halved my cash reserve. And now I think I will gradually build it up again! ;) Gio Who said it should be static? Sometimes you seem to argue against things that were never said... But glad our arguments seem to have influenced you and that you didn't wait for a lower Schiller CAPE or a happy Hussman or whatever before buying something you find cheap... ;) Link to comment Share on other sites More sharing options...
giofranchi Posted December 8, 2014 Author Share Posted December 8, 2014 Who said it should be static? Sometimes you seem to argue against things that were never said... Well, I think it was Vinod who asked how my cash reserve would change if FFH, LMCA, and BH were at certain price levels… Anyway, let may ask you a question: how many times in the last 10 years have you held a significant amount of cash for an extended period of time? My point is: the problem is not to hold or not to hold cash, the problem is those who hold cash tend to always hold it, while those who are fully invested tend to always be fully invested. ;) Gio Link to comment Share on other sites More sharing options...
Liberty Posted December 8, 2014 Share Posted December 8, 2014 Who said it should be static? Sometimes you seem to argue against things that were never said... Well, I think it was Vinod who asked how my cash reserve would change if FFH, LMCA, and BH were at certain price levels… Anyway, let may ask you a question: how many times in the last 10 years have you held a significant amount of cash for an extended period of time? My point is: the problem is not to hold or not to hold cash, the problem is those who hold cash tend to always hold it, while those who are fully invested tend to always be fully invested. ;) Gio I've been almost 100% cash on a few occasions, but that's beside the point. We were not arguing that you should be fully invested or not; we were arguing that the decision to do so would be better if not based on unreliable macro indicators but rather on what individual opportunities you are seeing. Link to comment Share on other sites More sharing options...
giofranchi Posted December 8, 2014 Author Share Posted December 8, 2014 I've been almost 100% cash on a few occasions, but that's beside the point. We were not arguing that you should be fully invested or not; we were arguing that the decision to do so would be better if not based on unreliable macro indicators but rather on what individual opportunities you are seeing. In my experience those who claim to do so end up being almost always fully invested. Clearly it is not your case! Glad to hear that. :) Gio Link to comment Share on other sites More sharing options...
vinod1 Posted December 8, 2014 Share Posted December 8, 2014 Who said it should be static? Sometimes you seem to argue against things that were never said... Well, I think it was Vinod who asked how my cash reserve would change if FFH, LMCA, and BH were at certain price levels… Anyway, let may ask you a question: how many times in the last 10 years have you held a significant amount of cash for an extended period of time? My point is: the problem is not to hold or not to hold cash, the problem is those who hold cash tend to always hold it, while those who are fully invested tend to always be fully invested. ;) Gio Gio, I was just trying to get you to answer this question: If the stocks you like are very attractively priced (the price at which you would go to your max allocation for that stock) but the stock market itself seems very overvalued, would you buy the stocks you like or would you hold off due to your concerns about market valuation. It seems you would buy the stocks you like regardless of market valuations - both from your actions via buying OAK and to my question earlier on buying FFH, BH and LMCA at various prices. Earlier in the thread you seem to indicate otherwise. Vinod Link to comment Share on other sites More sharing options...
giofranchi Posted December 9, 2014 Author Share Posted December 9, 2014 It seems you would buy the stocks you like regardless of market valuations - both from your actions via buying OAK and to my question earlier on buying FFH, BH and LMCA at various prices. Earlier in the thread you seem to indicate otherwise. I hope actions speak louder than words! ;) Gio Link to comment Share on other sites More sharing options...
giofranchi Posted December 9, 2014 Author Share Posted December 9, 2014 I've been almost 100% cash on a few occasions Liberty, One last question if I may: earlier in the thread you have said you are holding 0% cash right now. To imagine you holding 100% cash “on a few occasions” during the last 10 years is hard… I mean, you hold cash only if there is no investment that offers good value… And I can hardly think of any time in the last 10 years in which it was as difficult to find attractive bargains as it is today (with the possible exception of 2007)… So, could you please tell me when those “few occasions” have happened? Thank you! Gio Link to comment Share on other sites More sharing options...
Guest Posted December 9, 2014 Share Posted December 9, 2014 I've been almost 100% cash on a few occasions Liberty, One last question if I may: earlier in the thread you have said you are holding 0% cash right now. To imagine you holding 100% cash “on a few occasions” during the last 10 years is hard… I mean, you hold cash only if there is no investment that offers good value… And I can hardly think of any time in the last 10 years in which it was as difficult to find attractive bargains as it is today (with the possible exception of 2007)… So, could you please tell me when those “few occasions” have happened? Thank you! Gio I'm not liberty, but it's just something to point out. There were plenty of bargains in 2007 - look at all those banks, investment companies, etc! Plenty of value managers were loading up on them. Link to comment Share on other sites More sharing options...
Liberty Posted December 9, 2014 Share Posted December 9, 2014 I've been almost 100% cash on a few occasions Liberty, One last question if I may: earlier in the thread you have said you are holding 0% cash right now. To imagine you holding 100% cash “on a few occasions” during the last 10 years is hard… I mean, you hold cash only if there is no investment that offers good value… And I can hardly think of any time in the last 10 years in which it was as difficult to find attractive bargains as it is today (with the possible exception of 2007)… So, could you please tell me when those “few occasions” have happened? Thank you! Gio It was non-market reasons. I didn't know what I wanted to own at one point, so I owned nothing. Or I wanted to move to higher quality companies because I realized that fit better with my style, so I cleaned the plate while figuring out my next moves. Stuff like that. Link to comment Share on other sites More sharing options...
Yours Truly Posted December 9, 2014 Share Posted December 9, 2014 why not rename this thread title to Giofranchi's blog? Link to comment Share on other sites More sharing options...
giofranchi Posted December 9, 2014 Author Share Posted December 9, 2014 It was non-market reasons. I didn't know what I wanted to own at one point, so I owned nothing. Or I wanted to move to higher quality companies because I realized that fit better with my style, so I cleaned the plate while figuring out my next moves. Stuff like that. Ok! Thank you! Gio Link to comment Share on other sites More sharing options...
giofranchi Posted December 9, 2014 Author Share Posted December 9, 2014 why not rename this thread title to Giofranchi's blog? Don’t worry… Next time I want to share something with Liberty, I’ll send him a PM… Promised! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
peter1234 Posted December 9, 2014 Share Posted December 9, 2014 why not rename this thread title to Giofranchi's blog? Don’t worry… Next time I want to share something with Liberty, I’ll send him a PM… Promised! ;) Cheers, Gio Please do not do that. It is easy to skip posts that do not interest me. Harder to do the other way around (reading what is not written.) ;) Link to comment Share on other sites More sharing options...
LC Posted December 9, 2014 Share Posted December 9, 2014 why not rename this thread title to Giofranchi's blog? Don’t worry… Next time I want to share something with Liberty, I’ll send him a PM… Promised! ;) Cheers, Gio Please do not do that. It is easy to skip posts that do not interest me. Harder to do the other way around (reading what is not written.) ;) Agreed, I find these discussions informative even when not participating. Link to comment Share on other sites More sharing options...
DanielGMask Posted December 18, 2014 Share Posted December 18, 2014 More undervalued posts from the financial blogosphere: second-order thinking. http://abnormalreturns.com/2014/12/17/undervalued-posts-financial-blogosphere-second-order-thinking/ Link to comment Share on other sites More sharing options...
Liberty Posted December 18, 2014 Share Posted December 18, 2014 More undervalued posts from the financial blogosphere: second-order thinking. http://abnormalreturns.com/2014/12/17/undervalued-posts-financial-blogosphere-second-order-thinking/ Thanks. I think this deserves to be highlighted for people who judge everything based on indexes and ratios based on indexes: The pseudonymous Jesse Livermore at Philosophical Economics in “Dilution, Index Evolution, and the Shiller CAPE” that looks a rarely discussed issue. Livermore notes that much of the index-level valuation data we use and discuss has a significant flaw. To simplify, we treat today’s index as being substantially similar to the index 5, 10 or even 20 years ago. We do this despite the fact that company turnover and sector shifts inevitably change the underlying nature of the index over time. In short, today’s S&P 500 is not your father’s S&P 500. Livermore uses the example of Ireland’s ISEQ to show how the financial crisis had a profound impact on the composition of the index, thereby making historical comparisons moot. This second-level thinking has applications to the US and broader European markets as well. Most importantly it shows us why we should not take index level data at face value. The short hand of indexes is valuable in talking about broader market trends but should be scrutinized to a greater degree when it comes to making actual investment decisions. Link to comment Share on other sites More sharing options...
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