moore_capital54 Posted February 1, 2012 Author Share Posted February 1, 2012 moore, It's great that you're doing well this year. A lot of great investors didn't do well last year. Would you be kind enough to share your results from last year too? Thanks man! -7% in value funds net of fees, -5% in resource funds. Link to comment Share on other sites More sharing options...
moore_capital54 Posted February 1, 2012 Author Share Posted February 1, 2012 As a cautionary note, I recall the board being rather aggressive during the downturn as demonstrated by the "What Did Everyone Buy Today" thread. Much of the outperformance YTD has to do with averaging down during the panic period, rather than "proving" correct about macro uncertainties. This post too falls under the conjecture bucket for me. Who's to say the day we posted the "What did everyone buy today" thread was not going to be the day stocks bottomed? The fact that stocks panicked further and we had to average down is only a testament to the fact that nobody really knows when the bottom is in. Our jobs are to buy securities when they fall below our assessment of intrinsic value, and historically, the best time to do so are during major down days. Macro should be disregarded, if enough margin of safety is presented by Mr. Market. Maybe there is more pain to come this year, but the fact that in 30 days most equities discussed on this board have risen by 30-50% indicates that they were severely undervalued. Link to comment Share on other sites More sharing options...
Rabbitisrich Posted February 1, 2012 Share Posted February 1, 2012 As a cautionary note, I recall the board being rather aggressive during the downturn as demonstrated by the "What Did Everyone Buy Today" thread. Much of the outperformance YTD has to do with averaging down during the panic period, rather than "proving" correct about macro uncertainties. This post too falls under the conjecture bucket for me. Who's to say the day we posted the "What did everyone buy today" thread was not going to be the day stocks bottomed? The fact that stocks panicked further and we had to average down is only a testament to the fact that nobody really knows when the bottom is in. Our jobs are to buy securities when they fall below our assessment of intrinsic value, and historically, the best time to do so are during major down days. Macro should be disregarded, if enough margin of safety is presented by Mr. Market. Maybe there is more pain to come this year, but the fact that in 30 days most equities discussed on this board have risen by 30-50% indicates that they were severely undervalued. There was no conjecture and nothing predicted. My point is to argue against the logic of your last statement, which implies that price movements over a short term "prove" investment theses. That many people on the board have made money does not "prove" diddly about Europe, China, or whatever is the latest macro fear bunny. PlanMaestro and Uccmal noted fundamental improvements in the BAC story, but those improvements have been in process since the 2nd half of 2010 despite volatile swings, which is exactly the point that I seem to be communicating poorly. Higher portfolio values feel better, but they shouldn't be used to validate an investment thesis anymore than the opposite case disproves it. Link to comment Share on other sites More sharing options...
Parsad Posted February 2, 2012 Share Posted February 2, 2012 As a cautionary note, I recall the board being rather aggressive during the downturn as demonstrated by the "What Did Everyone Buy Today" thread. Much of the outperformance YTD has to do with averaging down during the panic period, rather than "proving" correct about macro uncertainties. This post too falls under the conjecture bucket for me. Who's to say the day we posted the "What did everyone buy today" thread was not going to be the day stocks bottomed? The fact that stocks panicked further and we had to average down is only a testament to the fact that nobody really knows when the bottom is in. Our jobs are to buy securities when they fall below our assessment of intrinsic value, and historically, the best time to do so are during major down days. Macro should be disregarded, if enough margin of safety is presented by Mr. Market. Maybe there is more pain to come this year, but the fact that in 30 days most equities discussed on this board have risen by 30-50% indicates that they were severely undervalued. I remember my thesis was wrong in late 2008 and early 2009 too! Funny thing is, I was more concerned about macro last year, than I was in 2009, and I'm even more concerned now than I was last year. That doesn't mean I will not buy something that is undervalued. Anyone who thinks they can time it accurately, or that macro should decide when you buy and sell gives their own abilities far too much credit. Let me pose a few questions: - Was Wells Fargo a bad investment at $16 in 2008, even though it went down to $9 in 2009? - Like I said, I was buying a company through much of the last half of 2011, that traded for less than cash on the books after all liabilities. What am I going to wait for if it takes me months to accumulate a position at that price? If it goes lower, don't you think I would just buy even more? - Did Buffett stop buying investments because he was concerned about Europe or the United States debt? - For those of you that have believed for nearly four years that the world is in for a hell of a reckoning, and base your decisions on macro, politics, fiscal excess of soverign nations, etc...did Prem stop buying businesses, even though he was taking a cautionary position with the portfolio? View the world with skepticism, because that is what makes the value investor different than just any other investor. But hold fast to the credence of buying investments that are undervalued and provide a margin of safety. You toss that away because of macro views and you may be making a significant long-term mistake. None of us are buying the market! Cheers! Link to comment Share on other sites More sharing options...
Liberty Posted February 2, 2012 Share Posted February 2, 2012 I ended 2011 flat, but so far for 2012 I'm up about 15%. But I wasn't one of those who thought it was the end of the world. I've been deploying my cash pretty much as I got it since many companies I like have stayed quite below IV. I'm basically all in, and quite comfortable with what I own - I wouldn't mind if the stock market closed for 5 years. Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted February 2, 2012 Share Posted February 2, 2012 I put 50% of my portfolio into Cemex when it went below $3 back in October. Still holding onto it as I figure a U.S. economic turnaround will help the company immensely. I commented at the time that I didn't see Longleaf backing out of it since it was a long time holding. And figured once it went below $3 they were backing up the truck on it. I thought I should join in. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 2, 2012 Share Posted February 2, 2012 50% into one stock? May I know what's the size of your portfolio relative to your income? Link to comment Share on other sites More sharing options...
Guest Hester Posted February 2, 2012 Share Posted February 2, 2012 ...but the investors and article writers in my main stock have been going full retard for the last week... If I didn't know any better I would think this was written by Shakespeare or Hemingway. Forget investing, you are a damn poet. I'm very curious which stock. Link to comment Share on other sites More sharing options...
twacowfca Posted February 2, 2012 Share Posted February 2, 2012 Grats to all longs. Went 98% long in August. +31% since Oct 1, and +16% ytd. Helped by good moves in MSFT 17.5 LEAPS, BAC, WFC, WRB, BRK, and a handful of special situations some of which are working out very, very well. I'm enjoying the moment, but not too much as market emotions can change in a day. The good news is the BAC B warrants are up about 2 1/2 times the $0.30 we paid for them in Dec. The bad news is that this somehow through a bizarre set of circumstances turned out to be a small position rather than a large position. We are now moving into another European Bank that also looks like it has a lot of get up and go. We'll tally things up EOY. Short term tallys merely serve to reinforce confirmation bias. Link to comment Share on other sites More sharing options...
Aberhound Posted February 2, 2012 Share Posted February 2, 2012 Down 13% to October 31 then up 20% which amounts to a small 3% gain. Since inflation is likely understated that amount the actual result is close to even. There is a high correlation in the gains since Oct 31 causing me to believe that there is a computer buying everything without discrimination. 7 of 9 stocks all up similar amounts despite differing results. Link to comment Share on other sites More sharing options...
Rabbitisrich Posted February 2, 2012 Share Posted February 2, 2012 View the world with skepticism, because that is what makes the value investor different than just any other investor. But hold fast to the credence of buying investments that are undervalued and provide a margin of safety. You toss that away because of macro views and you may be making a significant long-term mistake. None of us are buying the market! Cheers! In practice there isn't much distinction between a macro view and a fundamental view, particularly when you talk about giants like WFC with trillion $ assets and 240K+ employees. Buffett's wrong assessment of the housing bubble and consumer spending in 2006 led to purchases of WFC in the mid $30s. His view on the elasticity of oil demand in 2008 resulted in the COP buy. I'm actually fully long with a heavy bias towards financials, but it's important to constantly remind oneself of the downsides, especially when the market is cheering you. Link to comment Share on other sites More sharing options...
racemize Posted February 2, 2012 Share Posted February 2, 2012 ...but the investors and article writers in my main stock have been going full retard for the last week... If I didn't know any better I would think this was written by Shakespeare or Hemingway. Forget investing, you are a damn poet. I'm very curious which stock. lol, I'm not sure how sarcastic you are being, but I'll take it as a compliment. Anyways, it is just one of the Apple suppliers, with which I am very familiar. Fortunately, or unfortunately, the traders and analysts involved in it don't seem to understand how the company/revenue works or only pay attention to it relative to Apple earnings. e.g., it pre-announced a blow out quarter on Jan 3rd or thereabouts, causing a run-up. Then Apple posts a blow out quarter and all the suppliers run up again (ignoring the fact that the revenue/earnings are already known for this one). Then articles start coming about "expected revenue" and how it might be higher based on the blow out quarter from Apple, when in fact it is already locked in (Forbes once again shows its incompetence). Then the results happen and it gets sold off because it didn't blow through the expected (announced) earnings. End result is that it's not cheap anymore, but the stock movement and commentary was just silly. The whole situation makes me have even less respect for the market, but it is probably just a particular group of people rather than the whole. The same sort of thing happens just about every quarter at Apple announcements, though it was particularly egregious in this case. I should just trade the opposite of the herd since they don't bother to research... Link to comment Share on other sites More sharing options...
CassiusKing1 Posted February 2, 2012 Share Posted February 2, 2012 I recall that last time we had a topic like this, we got hit with a major downturn. So I am double checking my thesis on my holdings..... :This: ;) Link to comment Share on other sites More sharing options...
bmichaud Posted February 2, 2012 Share Posted February 2, 2012 Well its been nearly 2 months since the majority of this board felt the world was going to hell and a hand basket. We are printing money here at XXXX XXX Capital, LLC (Almost slipped and told ya :) up nearly 22% in the value funds and 7% in our resource funds. Some investors that are definitely doing well are probably Ericopoloy, and Parsad who were as bullish as I was all through the August-December period. I can't imagine Bmichaud or Munger are doing that great... Would love to hear and see how some have positioned themselves. Were still totally long, not taking a cent off the table. Longs are flat, shorts are up - do the math. Long portfolio is chock-full of good event stocks that won't necessarily participate in a month-long, low volume rally. Just recently swapped out of a multi-year holding that the market is getting a bit too excited about (including Mr. Cramer) into a name that is trading at less than 7 times FCF to equity, has a 12% total payout yield and is a potential takeout candidate at a market cap of $10 billion. All that said, the portfolio is in phenomenal shape for any environment going forward with good hedges in place, "events" set to transpire within the year, and a huge position in a severely undervalued business that has a balance sheet I can understand. Mr. Hamilton made a wonderful call on the market rocketing above its 200dma. What's curious to me however, is why someone that claims his stock picks have averaged over 50% annualized returns over the past ten years is writing free essays on the direction of the market as oppose to keeping his "secret sauce" to himself and making billions running a hedge fund. I remain skeptical - however, after giving his essays a "trial run" if you will, I will certainly take his opinion into stronger consideration when putting on hedges. His analysis has absolutely obliterated Hussman's outrageous weekly perma-bear musings. Link to comment Share on other sites More sharing options...
moore_capital54 Posted February 2, 2012 Author Share Posted February 2, 2012 Well its been nearly 2 months since the majority of this board felt the world was going to hell and a hand basket. We are printing money here at XXXX XXX Capital, LLC (Almost slipped and told ya :) up nearly 22% in the value funds and 7% in our resource funds. Some investors that are definitely doing well are probably Ericopoloy, and Parsad who were as bullish as I was all through the August-December period. I can't imagine Bmichaud or Munger are doing that great... Would love to hear and see how some have positioned themselves. Were still totally long, not taking a cent off the table. not everyone in the world aspires to run a hedge fund and bathe in a bathtub full of cash, or be a master of the universe. Hamilton took a break from his old life to life in North Dakota, and do what he loves which is watch the markets and write about them. No doubt he is personally worth 7-8 figures as well just by being so good. Longs are flat, shorts are up - do the math. Long portfolio is chock-full of good event stocks that won't necessarily participate in a month-long, low volume rally. Just recently swapped out of a multi-year holding that the market is getting a bit too excited about (including Mr. Cramer) into a name that is trading at less than 7 times FCF to equity, has a 12% total payout yield and is a potential takeout candidate at a market cap of $10 billion. All that said, the portfolio is in phenomenal shape for any environment going forward with good hedges in place, "events" set to transpire within the year, and a huge position in a severely undervalued business that has a balance sheet I can understand. Mr. Hamilton made a wonderful call on the market rocketing above its 200dma. What's curious to me however, is why someone that claims his stock picks have averaged over 50% annualized returns over the past ten years is writing free essays on the direction of the market as oppose to keeping his "secret sauce" to himself and making billions running a hedge fund. I remain skeptical - however, after giving his essays a "trial run" if you will, I will certainly take his opinion into stronger consideration when putting on hedges. His analysis has absolutely obliterated Hussman's outrageous weekly perma-bear musings. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted February 2, 2012 Share Posted February 2, 2012 not everyone in the world aspires to run a hedge fund and bathe in a bathtub full of cash, or be a master of the universe. I wonder though if you were to open a spa in New York or Los Angeles, how much would customers pay to bathe in a bathtub full of cash? Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 2, 2012 Share Posted February 2, 2012 In practice there isn't much distinction between a macro view and a fundamental view, particularly when you talk about giants like WFC with trillion $ assets and 240K+ employees. Buffett's wrong assessment of the housing bubble and consumer spending in 2006 led to purchases of WFC in the mid $30s. His view on the elasticity of oil demand in 2008 resulted in the COP buy. I'm actually fully long with a heavy bias towards financials, but it's important to constantly remind oneself of the downsides, especially when the market is cheering you. There are downsides and downsides,. Short term movements consequence of market sentiment I do not care. Hits to long term profitability I do. Nothing being discussed on macro today is a hit to the long term profitability of the banks. Those Warren buys at $30, that is also close to today's price, were cheap: 50% of intrinsic value as of today. Actually the crisis opened the possibility for Wells to buy Wachovia at a fire sale price. It is only a matter of time. Crisis can be good if you are prepared. Link to comment Share on other sites More sharing options...
racemize Posted February 2, 2012 Share Posted February 2, 2012 Those Warren buys at $30, that is also close to today's price, were cheap: 50% of intrinsic value as of today. Oh man, I hope you are right--I was thinking more in the 40-45 range than 60. Any reason you have it that much higher? Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 2, 2012 Share Posted February 2, 2012 Those Warren buys at $30, that is also close to today's price, were cheap: 50% of intrinsic value as of today. Oh man, I hope you are right--I was thinking more in the 40-45 range than 60. Any reason you have it that much higher? http://variantperceptions.wordpress.com/2012/01/24/charting-banking-xxiv-pre-tax-pre-provision-earnings/ Link to comment Share on other sites More sharing options...
treasurehunt Posted February 2, 2012 Share Posted February 2, 2012 Those Warren buys at $30, that is also close to today's price, were cheap: 50% of intrinsic value as of today. Oh man, I hope you are right--I was thinking more in the 40-45 range than 60. Any reason you have it that much higher? http://variantperceptions.wordpress.com/2012/01/24/charting-banking-xxiv-pre-tax-pre-provision-earnings/ My estimate is also in the 40-45 range, but I am rooting for PlanMaestro to be right. :-) PlanMaestro, in your write-up you say that 10x PTPP corresponds roughly to 15x earnings. This doesn't look right to me. Taking WFC as an example and assuming 1% normalized losses on about 800 billion in loans, I get the following: PTPP -> 30 billion (your estimate) Loan Losses -> 8 billion Earnings -> 15 billion (assuming 7 billion of taxes on 22 billion of pre-tax earnings) So 10x PTPP equates to about 20x earnings, which is rather optimistic. At 15x earnings, the IV is about $41 per share. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 2, 2012 Share Posted February 2, 2012 My estimate is also in the 40-45 range, but I am rooting for PlanMaestro to be right. :-) PlanMaestro, in your write-up you say that 10x PTPP corresponds roughly to 15x earnings. This doesn't look right to me. Taking WFC as an example and assuming 1% normalized losses on about 800 billion in loans, I get the following: PTPP -> 30 billion (your estimate) Loan Losses -> 8 billion Earnings -> 15 billion (assuming 7 billion of taxes on 22 billion of pre-tax earnings) So 10x PTPP equates to about 20x earnings, which is rather optimistic. At 15x earnings, the IV is about $41 per share. At the end of the write-up I mention that the banks are expending more in mortgage servicing than any LT provisions would merit. They also have substantial non-earning assets. Link to comment Share on other sites More sharing options...
Liberty Posted February 3, 2012 Share Posted February 3, 2012 not everyone in the world aspires to run a hedge fund and bathe in a bathtub full of cash, or be a master of the universe. I wonder though if you were to open a spa in New York or Los Angeles, how much would customers pay to bathe in a bathtub full of cash? I dunno. Cash is dirty. But maybe if it was brand new bills (supplied by Fortress Paper?)... Link to comment Share on other sites More sharing options...
jch548 Posted February 3, 2012 Share Posted February 3, 2012 Looks like many of you are doing quite well. I didn't really go heavily into the distressed financials though I do have positions in the Hartford warrants and Woori Finance. Up around 12% ytd but thats with a base that includes alot of bonds and cash so I can't complain. My largest positions IMOS and AFR.L have done very well. Lately I have been buying some french reits along with RSE and some Renault. Link to comment Share on other sites More sharing options...
twacowfca Posted February 3, 2012 Share Posted February 3, 2012 not everyone in the world aspires to run a hedge fund and bathe in a bathtub full of cash, or be a master of the universe. I wonder though if you were to open a spa in New York or Los Angeles, how much would customers pay to bathe in a bathtub full of cash? That might be considered to be torture under the Geneva Convention. Currency bills are loaded with pathogens, more than found on a toilet seat. A new take on the concept of filthy lucre. Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted February 3, 2012 Share Posted February 3, 2012 not everyone in the world aspires to run a hedge fund and bathe in a bathtub full of cash, or be a master of the universe. I wonder though if you were to open a spa in New York or Los Angeles, how much would customers pay to bathe in a bathtub full of cash? That might be considered to be torture under the Geneva Convention. Currency bills are loaded with pathogens, more than found on a toilet seat. A new take on the concept of filthy lucre. A clean fragrant alternative http://www.liquidmoney.com/ Link to comment Share on other sites More sharing options...
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