Jump to content

What a lovely frickin day....to be reducing risk!!


bmichaud

Recommended Posts

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

Link to comment
Share on other sites

  • Replies 83
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

Even the most bearish people I know are finding value in this market, you guys are absolutely nuts, waiting for some pie in the sky capitulation that will never come, and even if it does, itll be a temporary phenomenon.

 

Grow up, find value, I thought we were all value investors not doomsdayers.

 

If value investors can't find anything to buy they shut up they don't complain about macro fears and market timing. First time I have ever seen value investors apply so much time and effort to convince themselves the market is dangerous after declining by 30% peak to trough.

Link to comment
Share on other sites

Here is what Santyana posted on March 2, 2009:

 

General Discussion / Re: Panic

« on: March 02, 2009, 01:49:34 PM »

I'm amazed how many people on this board have so quickly given up on the notion that we're entering a 1 in 100 year storm as Prem said a while back.  From a time point of view I think we're still closer to the beginning than the end.    We are witnessing a global deleveraging, and many parties are just now beginning to realize the situation.    Panic?  This isn't panic, this is an orderly decline.    October 1987, now that was panic.  I think we need to have panic before we can start to consider recovery.  A day with a big enough drop to cause trading to be halted would be a clue that we're getting there.

 

 

The guy totally missed the best opportunity to make money in maybe a decade. I personally made over $10 million dollars in incentive fees from 2009 to 2010, while Santyana was waiting for his bottom. Does that make me a better investor than him, OF COURSE! I worked hard to be in a position to have this AUM and to benefit from it, to deploy it how I see fit when the markets provided me with a once in a decade buying opportunity. I would seriously love to know what Santyana's net worth did between then and now.

 

Some of you will take this as though I am just an arrogant a hole but man we need to call a spade a spade, we got people here spending a lot of time sharing their thoughts, and after reading about how they live their personal lives I would at least appreciate knowing whether they even swing a significant line in the markets or are just hobby investors.

 

And guys including Parsad, please tell me if I am out of line here.

Link to comment
Share on other sites

Moore I tend to agree with you. Generally perma bears are perma bears and never end up deploying capital. Waiting until the market as a wholes hits Schiller or Granthams valuation metrics doesn't seem worth doing. Especially considering the fact that stocks rarely get to where Schiller ratios point they should be.

Link to comment
Share on other sites

That is my biggest concern with taking the ECRI side - it's a tremendous matchup Buffett versus ECRI, but I give the nod to ECRI (perhaps at my peril) given Buffett missed the last recession and the housing crash.

 

Buffett didn't dream about holding treasurys over the last two years, yet Prem loaded up on them.

 

Lots of d

ifferent opinions and time horizons. Sure, if you buy the market or something cheap and don't look at it for ten years you'll probably do fine. I'd rather hedge and prepare for events to play out in order to take advantage of the time when nobody wants to own stocks.

 

I get tired of repeating myself, but here goes.  Buffett's insurance business is not going to stop if his total investment portfolio (bonds and equity) drops 25-30%, whereas Prem's insurance business could stop if his total portfolio (bonds and equity) drop 25-30%.  And that doesn't matter what the macro-environment looks like.  If either of their portfolio drops considerably, one is far more likely to stop writing insurance than the other.  Buffett doesn't have to worry as much about macro. 

 

 

I'm amazed you still take the time to explain. ;)

 

---

 

You're correct imo Moore. People who claim we haven't see fear are looking at the wrong things. They are waiting for KO to drop to $30 before anything even happened. In the meantime Société Générale dropped 70+% from year high to low, to name one.The fifty largest European companies lost 35+% from year high to low, a few percentage points above the 2009 low.

Link to comment
Share on other sites

Yeah, 950 is not far from the last "fair value" estimates that I made last spring.  FWIW, here's a nice piece that shows a half dozen different ways of looking at "fair value," all of which indicate that we're probably still 20-40% overvalued today:

 

http://advisorperspectives.com/dshort/updates/Market-Valuation-Overview.php

 

 

With the broad market likely being overvalued, it's imperative to be selective about individual securities!

 

funny a guy who has been in the trenches valuing businesses like a businessman would, making 30% plus a year, JG, says stocks have rarely been cheaper. Give me "real world" instead of ivory tower any day.  Another couple Billionaires Cooperman and Buffett have been buying hand over fist. Ackman and Berkowitz are both positive too. But none of them are academic egg heads! cheers!

 

 

Yeah, and are any of your billionaires foolish enough to be just buying the broad market?  No.  Without a doubt, they are being selective about the securities they purchase and are being cautious about their use of leverage.  That would seem to me to be a good approach to managing money in a (possibly) modestly overvalued market.

 

FWIW, I'd love to have a chance to invest in a market where an investor could simply buy the broad index, leverage the hell out of his investment and have a solid prospect of a stunning 10-year return.  But for now, the prospects of that are remote.

 

 

SJ

 

p.s. You never asked me what my current cash level is.

 

 

Link to comment
Share on other sites

I just watched some video's from investors over here at an investing conference and I am blown away once more by the irrelevance and short-sightedness of what they are all saying. 

 

No wonder they don't outperform the market. Most of them have very high levels of cash atm but are confident today (I bet they weren't 3 weeks ago) they will invest once the market drops another 5-10% under the current lows! I am talking about Europe here, where markets dropped 30%.

 

One actually said he missed the 2009 bottom but that he is determined now to buy in big once we drop significantly AND things get more clear. How is he going to do that?

 

Others are bullshitting about what great opportunities population ageing will bring and how attractive growth markets are today. The US and Europe are done for it seems. One market strategist (who was very liquid in oktober 2010 and is again now) is totally losing himself in macro items as usual. For example, he claims the S&P500 will have a P/E-ratio of 7 in 2020 because population ageing will cause tremendous selling pressure. Even if this was true, who would actually care about this shit?

 

The examples above are from people 40-50 years old and above. What the f* have they been doing the last couple of 20+ years while they were "investing"? Exactly this kind of bs; timing, measuring useless stuff, focusing on what is or will be hot, worrying about macro events and letting behavorial biases screw them over at every possiblity.

 

Mr. Market NEVER changes and this kind of idiotic group thinking and focusing on the wrong things is what will give others opportunities forever.

Link to comment
Share on other sites

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

 

Funny how you are associated the size of your wealth cock with your superior abilities....look what happened to John Paulson over this last year, look at Berkowitz. They made a huge call on the US economy and they are down big - they have huge net worths. Get the f$ck over yourself.

 

How about instead of your net worth you put up some performance numbers over the last 1, 3, 5, and 10 years, as well as performance from peak to trough October 2007 thru March 2009, then subsequent trough to peak March 2009 thru April 2011. Then we'll see what type of markets your strategy lends itself too.

 

I just saw Alexander Roepers' performance the other day and he was down 64% in 2008 - that is something I am interested in being down in a bear market. IMO, that type of decline is avoidable when the general securities market drops from being overvalued to fair/slightly undervalued. However, if we were to get down to a point where the market is fairly valued, THEN it drops 50% from there, I will be down even more than 50% b/c I will be 100% long if not 125% long in a fairly valued to slightly undervalued environment.

 

I NEVER SAID there are not bargains to be found in this market. I just am arguing that Buffett provided a good model back in his BPL days for buying stocks selling below liquidation while at the same time worrying about the overall level of the market, hence he put a portion of his portfolio in workouts - go read his BPL letters for the love of God. What I am advocating is no different.

 

Also - this is no different than any other hedge fund manager managing the net long exposure of his portfolio. You are a 2/20 manager, correct? You would know that HF managers manage the net exposure of their portfolio, I'm guessing.....

 

Link to comment
Share on other sites

Guest misterstockwell

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

 

I'd take your bet. I manage money for a living as well. If my assets are 1% of your net worth, you are the Queen of England. My clients pay me to manage their money--period. They don't demand I invest in equities. I have guided their money safely through almost 15 years of ups and downs, and they have made many multiples of their initial investments. When there I think there is nothing to do, they might have whole portfolios of merger arb stocks. When the time is right, they will own equities. They still have some, and always do. Our basis in QCOM is a dollar something. We keep those long term winners. Your perception of my investing is so wrong, and you are obnoxiously rude in voicing your assumptions. I don't care if you are forced to buy equities. I won't call you an idiot. It takes all types in a market, and there are many ways to win. So, pound your chest, and flaunt your huge net worth as a reason for your investment method. I don't care. I'll take care of my clients, and you take care of yours the best way you know how while soaking them for 2 and 20.

Link to comment
Share on other sites

Am I the only one who doesn't understand this argument?

 

Is there risk in the market? Sure, there almost always is...

 

Are some companies trading for 2x - 3X normalized earnings? Well, actually, yes...

 

Is there a possibility those companies may trade for 1x - 1.5x earnings? Sure, there almost always is...

 

Does it matter if your cheap company becomes cheaper? Not from an investment standpoint, but possibly from a business risk standpoint if you run money (redemption possibility) -- so long as there's no reflexivity in your companies.

 

Does anyone really think that a well-selected group ofindividually undervalued securities won't work out over the next five to seven years?  I really doubt it, but I guess people could differ.

Link to comment
Share on other sites

Buffett stated that most of us should have a punch card with 20 holes in it. If we can only make 20 investments in each of our lifetimes, we'll think about things a lot more differently.

 

I believe Buffett stated you can only really "time" the market over a few times in one's investment career.

 

So, let's say for market timing, you only have 5 holes. Do you guys really think now is a good time to use one of those punches?

 

 

Link to comment
Share on other sites

Buffett stated that most of us should have a punch card with 20 holes in it. If we can only make 20 investments in each of our lifetimes, we'll think about things a lot more differently.

 

I believe Buffett stated you can only really "time" the market over a few times in one's investment career.

 

So, let's say for market timing, you only have 5 holes. Do you guys really think now is a good time to use one of those punches?

 

 

For a young investor (Or maybe any investor) looking at a long time horizon (Using one of your 5 punches) when Berkshire B as an example was recently down in the mid 60s that would have absolutely been a good time to buy.
Link to comment
Share on other sites

I think this sort of explains why Buffett's businesses can be doing well despite all the bad news out there:

 

http://www.lyricstime.com/la-tour-people-are-still-having-sex-lyrics.html

 

Have you noticed, that people are still having sex. all the denouncement had absolutely no effect. parents and counsellors constantly scorn them. but people are still having sex and nothing seems to stop them.

 

Do you realise, that people are still having sex, they’ve been told not to, perhaps they are perplexed. when you see them holding hands they’re making future plans to engage in the activity, do you understand?

 

People are still having sex, lust keeps on lurking. nothing makes them stop, this aids thing’s not working.

 

 

Link to comment
Share on other sites

I will never, ever understand the confusion between valuing the market and timing the market. I am making a valuation call, NOT a timing call.

 

Zero different than not buying a $1 bill for $1 and waiting for it to sell for $.50. NOT timing, VALUING.

 

As Buffett did in his BPL days, when the market was overvalued, he put a good portion of his capital in controls and workout EVEN THOUGH HE WAS BUYING SANBORN/DEMPSTER/BERKSHIRE AT $.50 ON THE DOLLAR.

 

I happen to greatly admire his model and believe it's a prudent strategy especially considering the risks in the market.

 

Again, I'll be 100pc long at fair value, and will get crushed if the market pulls another March 2009. I'm not hedging against the extreme.

Link to comment
Share on other sites

I will never, ever understand the confusion between valuing the market and timing the market. I am making a valuation call, NOT a timing call.

 

Zero different than not buying a $1 bill for $1 and waiting for it to sell for $.50. NOT timing, VALUING.

 

As Buffett did in his BPL days, when the market was overvalued, he put a good portion of his capital in controls and workout EVEN THOUGH HE WAS BUYING SANBORN/DEMPSTER/BERKSHIRE AT $.50 ON THE DOLLAR.

 

I happen to greatly admire his model and believe it's a prudent strategy especially considering the risks in the market.

 

Again, I'll be 100pc long at fair value, and will get crushed if the market pulls another March 2009. I'm not hedging against the extreme.

 

You can find values. Buffett is finding values and he works with tens of billions. Valuations are not hugely stretched or anything like that.

Link to comment
Share on other sites

Lots of different opinions and time horizons. Sure, if you buy the market or something cheap and don't look at it for ten years you'll probably do fine. I'd rather hedge and prepare for events to play out in order to take advantage of the time when nobody wants to own stocks.

 

Follow-up to indicate we possibly are already in this situation here in Europe. Now from some 'experts'.

 

 

Moles le Bailly (Rothchild): ‘Houd vandaag zeker 50 procent aan in cash.

-> "Hold at least 50% in cash."

 

Casselman (KBC): ‘Veel cash, maar we staan klaar om in de volgende zes maanden in aandelen te beleggen. We hebben het dieptepunt van de beurs nog niet gezien. Dat zal allicht in de loop van 2012 gebeuren.

-> "A lot of cash, but we are ready to invest in stocks in the next 6 months. We haven't see the lows yet. This will probably happen in 2012."

 

Vranken (BNP Paribas Fortis), idem: ‘Vandaag zijn we zeer voorzichtig. Cash dus, ja.

-> "We are very prudent today. Cash, yes."

 

Timing is hot again. History shows the bottom could be very near or already happened.

 

 

I agree with you bmichaud that, as a professional with the possibilities at hand with preservation of capital as main focus, diversification in workouts and controls is a probably a very efficient way to steer away from some of the system risk we are facing today. No one will argue against this. But individual, value-oriented long-term investors not using any leverage can find extreme bargains in today's market. All they have to do is be patient, ultimately they will come out on top.

 

Link to comment
Share on other sites

This is an interesting discussion however there is no correct answer but the debate is still worth while. It seems that investing in an over valued market can still be a worth while endeavor. It is a market of stocks as well as a stock market. Waiting for an undervalued mkt using for instance Mr Schillers criteria means that you pretty much sat out the mkt for the last 12 years with the exception of the brief period of time in 2009 when it ventured briefly into under valued territory. I on the other hand managed to find enough value situations since Jan 1 2000 to compound my dough @ 14% on an unlevered basis. The only change I make in my investment style is I am willing to hold more cash when mkts appear expensive and I am more willing to use leverage when mkts appear truely cheap.

Link to comment
Share on other sites

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

 

So you're personally worth over a billion (which I highly doubt), you're still acting like an ass.

 

I'm not a professional investor, just a regular guy that goes to work every day and is very happy with his financial situation and managing it himself.

 

A year or two will tell who's right?    I didn't realize you were arguing for short term trades, my timespan is a bit longer than that.  Maybe you are right, but I don't like to time the market.

 

I'm sorry your mommy doesn't love you.  It doesn't mean you're insignificant, so no need to project.

Link to comment
Share on other sites

Here is what Santyana posted on March 2, 2009:

 

General Discussion / Re: Panic

« on: March 02, 2009, 01:49:34 PM »

I'm amazed how many people on this board have so quickly given up on the notion that we're entering a 1 in 100 year storm as Prem said a while back.  From a time point of view I think we're still closer to the beginning than the end.    We are witnessing a global deleveraging, and many parties are just now beginning to realize the situation.    Panic?  This isn't panic, this is an orderly decline.    October 1987, now that was panic.  I think we need to have panic before we can start to consider recovery.  A day with a big enough drop to cause trading to be halted would be a clue that we're getting there.

 

 

The guy totally missed the best opportunity to make money in maybe a decade. I personally made over $10 million dollars in incentive fees from 2009 to 2010, while Santyana was waiting for his bottom. Does that make me a better investor than him, OF COURSE! I worked hard to be in a position to have this AUM and to benefit from it, to deploy it how I see fit when the markets provided me with a once in a decade buying opportunity. I would seriously love to know what Santyana's net worth did between then and now.

 

Some of you will take this as though I am just an arrogant a hole but man we need to call a spade a spade, we got people here spending a lot of time sharing their thoughts, and after reading about how they live their personal lives I would at least appreciate knowing whether they even swing a significant line in the markets or are just hobby investors.

 

And guys including Parsad, please tell me if I am out of line here.

 

Actually the best opportunity to make money in the past decade was from the end of 2007 until early 2009.  How did you do then?  You want to know how I've done since early 2009, how have you done since late 2007?  Again, you seem to love looking at short time periods to gauge whether you are "right" and then call others out on market timing.

 

Yes, you are an arrogant a hole and are out of line.  My guess is that you are living in your parent's basement and have a 5 --low 5-- figure account.  Rather than be ashamed of it, try to realize that there is more to the world than market outperformance.  You'll be a lot happier when you grow up.   

 

 

 

 

Link to comment
Share on other sites

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

 

So you're personally worth over a billion (which I highly doubt), you're still acting like an ass.

 

I'm not a professional investor, just a regular guy that goes to work every day and is very happy with his financial situation and managing it himself.

 

A year or two will tell who's right?    I didn't realize you were arguing for short term trades, my timespan is a bit longer than that.  Maybe you are right, but I don't like to time the market.

 

I'm sorry your mommy doesn't love you.  It doesn't mean you're insignificant, so no need to project.

 

I think I've found a potential tester for the 2 and 20 male enhancement pump that I was thinking of marketing.  Promises to make a retail investor feel adequate.

Link to comment
Share on other sites

Santyana Misterstockwell and Bmichaud, this is not necessarily a fair argument, but I am willing to bet that the combined line you swing in the market in terms of assets is equal to maybe 1-2% of my personal net worth.

 

I am sorry I had to resort to this but you have to put things into perspective. I am a professional investor, a fiduciary and a capital allocator that serves clients who demand I allocate their capital and provide exposure to equities.

 

You guys are waiting to time the market with your small lines, but there is no doubt that even if you buy at the bottom of bottoms on the perfect low of the day of the lowest low the markets print, my nominal performance will be substantially better.

 

Now we can debate about this all we want, but I have absolutely never met a professional investor with your frame of mind, only small time RRSP style investors with $50-500k to invest, who go to sleep at night thinking they're the next buffets.

 

I get paid 2 and 20 to deploy capital on a daily and monthly basis.

 

Take this however you feel, but time will prove I was right. We can check back in a year or two.

 

You guys waste so much time thinking about capitulation wet dreams because you can afford to, your swinging a small line in the markets and your insignificant, you are retail investors, that most probably clip coupons as well.

 

Good Night.

 

So you're personally worth over a billion (which I highly doubt), you're still acting like an ass.

 

I'm not a professional investor, just a regular guy that goes to work every day and is very happy with his financial situation and managing it himself.

 

A year or two will tell who's right?    I didn't realize you were arguing for short term trades, my timespan is a bit longer than that.  Maybe you are right, but I don't like to time the market.

 

I'm sorry your mommy doesn't love you.  It doesn't mean you're insignificant, so no need to project.

 

I think I've found a potential tester for the 2 and 20 male enhancement pump that I was thinking of marketing.  Promises to make a retail investor feel adequate.

 

;D

Link to comment
Share on other sites

Let's cool it.  It's not about who swings the biggest, uh, let us say, line.  But what we do with what we've got and even more, how we do it.  :)

 

Yes, Twa is correct guys!  Chill and let hindsight do the talking in a couple of years.  Cheers!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now



×
×
  • Create New...