Uccmal Posted August 13, 2012 Share Posted August 13, 2012 In response to a question about people following brk and Buffett into stocks, Charlie Munger said that it wouldn't necessarily work out badly (classic Munger!). He also said that they went through their stock purchases over time and found that in fact anyone could have beaten market returns simply by buying what they sold! I did that with Russell Metals - Rus - Bought after Ffh had exited, more than tripled my money. Also copied board members here more than anyone else. Link to comment Share on other sites More sharing options...
Sportgamma Posted August 13, 2012 Share Posted August 13, 2012 The main benefit that I see in copying is if there is a good chance that the investor that you are copying is a successful activist as it could give you more certainty on how a worst case scenario would look like. I also thought this quote might fit the discussion: https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIBygYyITBInjNA2F%2f9X3Sdy1%2bKjwsV6N%2bX2pD6sXa1S85tJ0F7avyzmVC%2bWr%2bQ5rfRFT2VzSooE4IjewKtjeYGp%2bYF%2b1%2bgJIcb1PbNFtk5Syg%3d%3d Neuroscientists have discovered an alarming aspect of our interaction with “experts.” Using MRI technology, they busily recorded brain activity while study participants made simulated financial decisions.1 During each round, the participants had to choose between receiving a risk-free payment and trying their chances in a lottery. In some rounds they were presented with advice from an “expert economist” (surely an oxymoron if ever one existed) as to which alternative was preferable. The results of this experiment are worrying. Expert advice attenuated activity in areas of the brain that correlate with valuation and probability weighting. In other words, the expert’s advice made the brain switch off some processes required for financial decision making. The players’ behaviour simply echoed the expert’s advice. Unfortunately, the expert advice given in the experiment was suboptimal, meaning that participant Link to comment Share on other sites More sharing options...
Guest hellsten Posted August 13, 2012 Share Posted August 13, 2012 The main benefit that I see in copying is if there is a good chance that the investor that you are copying is a successful activist as it could give you more certainty on how a worst case scenario would look like. I also thought this quote might fit the discussion: https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIBygYyITBInjNA2F%2f9X3Sdy1%2bKjwsV6N%2bX2pD6sXa1S85tJ0F7avyzmVC%2bWr%2bQ5rfRFT2VzSooE4IjewKtjeYGp%2bYF%2b1%2bgJIcb1PbNFtk5Syg%3d%3d Neuroscientists have discovered an alarming aspect of our interaction with “experts.” Using MRI technology, they busily recorded brain activity while study participants made simulated financial decisions.1 During each round, the participants had to choose between receiving a risk-free payment and trying their chances in a lottery. In some rounds they were presented with advice from an “expert economist” (surely an oxymoron if ever one existed) as to which alternative was preferable. The results of this experiment are worrying. Expert advice attenuated activity in areas of the brain that correlate with valuation and probability weighting. In other words, the expert’s advice made the brain switch off some processes required for financial decision making. The players’ behaviour simply echoed the expert’s advice. Unfortunately, the expert advice given in the experiment was suboptimal, meaning that participant Interesting study. In other words, use a checklist and your own judgement before following "expert" advice. Damodaran recently blogged about activist value investing: http://aswathdamodaran.blogspot.com/2012/06/activist-value-investing-be-your-own.html Given that most of us do not have the resources to be activist value investors on our own, is there a way to still make a play with this approach? Here are two alternatives: a. Follow the activists: You could invest in companies that have been targeted by activist investors and try to ride their coat tails to higher stock prices. Since the bulk of the excess returns are earned in the days before or on the announcement of activism, there is little to be gained in the short term by investing in a stock, after it has been targeted by activist investors. In the long term, you can perhaps make money by focusing on the right activists, looking for performance cues (improved operations) at the targeted firms and hoping for hostile acquisitions. Overall, though, a strategy of following activist investors is likely to yield modest returns, at best, because you will be getting the scraps from the table. b. Lead the activists: You can try to identify companies that are poorly managed and run, and thus most likely to be targeted by activist investors. In effect, you are screening firms for low returns on capital, low debt ratios and large cash balances, representing screens for potential value enhancement, and low insider holdings, aging CEOs, corporate scandals and/or shifts in voting rights operating as screens for the management change. The first part should be easy to do but the second part will be more challenging, requiring a mix of quantitative and qualitative assessments. To help on the first, I did a preliminary screening to arrive at a list of 25 companies that trade at less than 8 times EBITDA, have returns on capital <7.5%, book debt to capital ratios <10%, cash as % of value>10% and insider holdings <10%. The rest is up to you! Link to comment Share on other sites More sharing options...
BG2008 Posted October 2, 2013 Share Posted October 2, 2013 Can anyone provide an update on the "good" VIC users and any recommendation for Sumzero Users? Link to comment Share on other sites More sharing options...
Guest deepValue Posted October 2, 2013 Share Posted October 2, 2013 When I worked for a small-cap-oriented hedge fund, we did tons of research on companies we found ourselves but nearly all of the companies we owned were from leads provided by other investors. It made me wonder why we even put time into developing our own leads. Can anyone provide an update on the "good" VIC users and any recommendation for Sumzero Users? I haven't been on SumZero for many months now, but I pop in on VIC every now and then (maybe once per quarter). I follow: zach721 -> home-runs in tech/telecom Lukai -> same as above andreas947 -> small-cap tech endur -> small-caps (that go up) I don't really do tech/telecom anymore, but those guys usually have interesting write-ups. SumZero, you might look at Ryan Morris and Ephraim Fields. It really depends on what you typically invest in, though. Just look for write-ups on companies you own today and see what else the writer has posted. Link to comment Share on other sites More sharing options...
Yours Truly Posted October 2, 2013 Share Posted October 2, 2013 I follow the moderate to heavily concentrated 'guru's: Heavily: Berkowitz, Lampert, Greenberg, Buffett, ValueAct, Pabrai, Atlantic Investment Management, etc Moderate: Sequoia, Wedgewood, Lou Simpson, Weitz, Tepper, Akre, Loeb, etc Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted October 2, 2013 Share Posted October 2, 2013 Buffett John Malone Resource investors: Brian Dalton ?Rick Rule? ?Resource Capital Fund? Link to comment Share on other sites More sharing options...
CorpRaider Posted October 3, 2013 Share Posted October 3, 2013 Many of our greatest successes are a result of not following a great investor when he takes a major position in a company, but waiting to see if there is a much lower entry point and then jumping in with both feet if the investor's thesis still is valid and we understand the company and their strengths. Then, the upside is much greater than if we had slavishly followed a guru immediately after their stock purchase became public. :) Yeah and with value investors there is rarely a big rush to put on the position since they/we are usually early. Link to comment Share on other sites More sharing options...
Ross812 Posted October 4, 2013 Share Posted October 4, 2013 I follow the moderate to heavily concentrated 'guru's: Heavily: Berkowitz, Lampert, Greenberg, Buffett, ValueAct, Pabrai, Atlantic Investment Management, etc Moderate: Sequoia, Wedgewood, Lou Simpson, Weitz, Tepper, Akre, Loeb, etc Great list. Link to comment Share on other sites More sharing options...
Palantir Posted October 4, 2013 Share Posted October 4, 2013 I have been stalking particular investment firm, whom I'd rather not name, because a member of a forum I frequent works there. Apparently, they've kicked a$$, and have some fascinating small cap picks. EDIT: That sounds creepy. Link to comment Share on other sites More sharing options...
ASTA Posted October 4, 2013 Share Posted October 4, 2013 I think that Copycat investment's are very good. I have done this for three years now and getting satisfactory results. However I think that concentration is the best way of doing it. And only invest when the "stars" line's up is also useful. Its super easy regarding large cap's just select a group of guru's on Gurufocus and watch that 52 week low list of your selected gurus. My best home run was more focused on the size of the portfolio manger had in a particular stock that was OSTK. So SIZE maters ;D If COBF, Morningstar, Gurufocus and magicformula lines up on one stock it has been a wise bet to bet on that stock (at one point of time maybe not today). Example MSFT and Apple. Link to comment Share on other sites More sharing options...
Guest Qu1nt3ss0n Posted October 5, 2013 Share Posted October 5, 2013 First post here.... Hello everyone! my top picks - Chris Mittleman, Pabrai, Berkowitz, Zeke Ashton, D3 Funds, Tweedy, 3rd Ave and Oakmark some lesser known names - Platinum Asset Management(Kerr Neilson), Roumell Asset Management, Clough Capital, IIFunds (Steve Johnson) Link to comment Share on other sites More sharing options...
no_free_lunch Posted October 5, 2013 Share Posted October 5, 2013 I basically do nothing but copycat investing, in the sense that I try not to source any of my own ideas. I mean really, nobody cares where you got your ideas from it's just a matter of your returns. Not that I follow a particular manager, I include VIC, blogs, this board in my list of sources but that's where I get everything from. So much easier to just scan through other's ideas looking for something that stands out than starting from a screener. Once I find something I definitely do my DD but only if what I see has merit. In the past I would try to build my own thesis from scratch and I find the process flawed. When you invest time learning about a stock you become somewhat attached and it is just harder to walk away from it. When it's not your idea, very easy to walk. Ultimately, I think it is somewhat of a numbers game, in that the more mental models of different equities you can build and rank the more likely you are to build a higher performing portfolio. Link to comment Share on other sites More sharing options...
constructive Posted October 5, 2013 Share Posted October 5, 2013 Some of the mutual fund companies mentioned here have pretty average track records, ie Weitz, Yacktman, Southeastern, Oakmark, Third Avenue, Tweedy Browne, etc. I wouldn't copy them. Link to comment Share on other sites More sharing options...
constructive Posted October 5, 2013 Share Posted October 5, 2013 The amazing thing about Mohnish's record is that it's actually better than almost all the people he copies. He is obviously applying some excellent analysis and judgement, and would be an incredibly successful investor whether he sourced his ideas himself or from other people. Link to comment Share on other sites More sharing options...
racemize Posted October 5, 2013 Share Posted October 5, 2013 Some of the mutual fund companies mentioned here have pretty average track records, ie Weitz, Yacktman, Southeastern, Oakmark, Third Avenue, Tweedy Browne, etc. I wouldn't copy them. One thing to bear in mind is that they probably do pretty well before fees--if we buy at or below their prices, then we should get pre-fee performance (or better if below). Link to comment Share on other sites More sharing options...
Evolveus Posted July 24, 2014 Share Posted July 24, 2014 When I worked for a small-cap-oriented hedge fund, we did tons of research on companies we found ourselves but nearly all of the companies we owned were from leads provided by other investors. It made me wonder why we even put time into developing our own leads. Can anyone provide an update on the "good" VIC users and any recommendation for Sumzero Users? I haven't been on SumZero for many months now, but I pop in on VIC every now and then (maybe once per quarter). I follow: zach721 -> home-runs in tech/telecom Lukai -> same as above andreas947 -> small-cap tech endur -> small-caps (that go up) I don't really do tech/telecom anymore, but those guys usually have interesting write-ups. SumZero, you might look at Ryan Morris and Ephraim Fields. It really depends on what you typically invest in, though. Just look for write-ups on companies you own today and see what else the writer has posted. On VIC when you go to apply, they have several write-ups as examples of what they are looking for. I looked up the VIC records of those authors and found them to be exceptional though most haven't psoted in years. molly747 roark304 kurran363 Kurran for example didn't post for 8 years but then came back with ESI in 2012. That postion is down 52% from the time of the 2012 writeup. Not suggesting anything about ESI (no position). Either way, sometimes I go back and read these successful posters - even if the posts are old - to get more of a sense of their notion of what makes a great business and great investing opportunity. Michael Burrry is Michael99, so its interesting to go back and read his old vic posts as well. Bill Ackman was on there at one time, but seems his username has been removed. Link to comment Share on other sites More sharing options...
TeddyLampert Posted July 25, 2014 Share Posted July 25, 2014 This is a great thread that I just discovered. I hope we can get it to continue. A couple things: 1) Does anyone have an update on who on VIC you would recommend following now? Lot of the old posts suggest VIC members who are no longer active. 2) 'Constructive' made a comment about Pabrai having a record that surpasses even some of the people he copies. That's actually intriguing. I'm not a snob about where I source ideas from and even Buffett has said that he copies from others (Jay Pritzker being a great example with the cocoa bean arbitrage). Funny thing is that Pabrai has said when he comes up with his own ideas, he loses (e.g. Japan net nets), so he just sticks to cloning (in contradiction to what Constructive wrote about Pabrai maybe being a great investor on his own). In any case, Pabrai mentioned in some MBA talks that he uses VIC as well. Anyone know if he has a username? It would be somewhat ironic if he wasn't actually a member and still achieved his record with a 45-day guest delay! He has said that his filter is: 1) circle of competence, 2) 100% upside in 2 years, 3) "can I get to "no"" -- meaning, he tries to kill the thesis through process of elimination. Pretty smart and simple process if you ask me. 3) My own two cents on cloning: -I stick to investors who I know are generally long-only or I know do minimal shorting. This is important since with 13-F's you can't see their short book. Joho is a good example of a concentrated fund that also shorts, so I am not eager to follow what they are doing (also, there's some international exposure that does not get reported which also skews our perception of their levels of concentration) -They are super concentrated with fewer than 20 names, rough ballpark -They have low turnover, so this excludes Tepper and Druckenmiller, folks who are known to have more of a trading mentality and who's 13-F will not reflect the current portfolio -To my point earlier, they are US focused and don't invest in internationally listed equities much -I have direct knowledge about the investment process and how deep it goes. I really need to know how much diligence they do and how deep they go. I cannot just assume that because someone is concentrated, that they have done their homework to a degree that I would be comfortable with -The investor/fund is not run by committee, i.e. there's a single person at the helm who's calling the shots. While this is draconian, I assume that even with big multi-billion dollar funds, if a position is large as a % of AUM I assume that the head of the firm has approved the investment and is actively involved in its oversight. The above criteria results in a very small list of funds that I track. Just to give one example, Lou Simpson would fit this well. Another example would be Buffett, Ted and Todd. I know it's popular to list Klarman as well but some of this equity investments have turned out to be real dogs, which is made up for by some multi-bagger winners. Someone please enlighten us if you have better insight into Klarman. The other thing I find ironic is that all the stuff he writes about in Margin of Safety hardly shows up in his portfolio. Instead you get a lot of biotech and pharma royalties. --- I've really enjoyed listening to all of Meryl Witmer's discussions about the stocks she owns and why she owns them. Granted, the stocks she pitches have already gone up a fair amount and the remaining upside seems to be dregs of 20-40% from the examples I can recall. Nonetheless, she's clear about the story and provides earnings numbers. The general valuation framework seems to be 14x free cash flow per share. It gets interesting to me when she discusses spinoffs and post-bankruptcy reorg equities. --- My biggest winners thus far have involved the following combo: 1) Superinvestor ownership 2) VIC write up (a high quality write up, not just any) 3) Clear and straightforward industry tailwind (such as better pricing environment due to industry consolidation) and benign competition 4) A clear thesis why the company in question will benefit, quantified through FCF per share estimates that show low future valuation Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted July 25, 2014 Share Posted July 25, 2014 Take a look at Bestinver in Europe. Great track record. You will see their website references Buffett and Graham and they see themselves as Value Investors. They publish their main holdings on the website. Link to comment Share on other sites More sharing options...
Myth465 Posted July 25, 2014 Share Posted July 25, 2014 I copy everyone. Basically check every VIC idea and have about 6 value investors blogs I follow, plus read most ideas on the board. Also read seeking alpha. Difference is I give no importance to who post the idea. Half the time I dont know much about the author. I read the thesis and it basically chooses me. I am drawn to some ideas. I usually need cash flow or assets with a catalyst for the turn. I seem to like oil and gas / cyclical plays. Lately I have copied the hell out of IA Michael at ABC Funds. So much so that if I hung things up I would put a big chunk in his fund. His results arent the greatest, but I love the way he thinks about ideas. http://valueinvestigator.com/ I think he has had a few bad runs, but is well positioned for upside. I just bought Bri Chem.... Link to comment Share on other sites More sharing options...
peter1234 Posted July 25, 2014 Share Posted July 25, 2014 Pabrai posted under nish697. I do not know whether he has a new handle or is not posting anymore. :) Link to comment Share on other sites More sharing options...
peter1234 Posted July 25, 2014 Share Posted July 25, 2014 Someone on this board posted a list of VIC ideas, posters and returns. From that you can find posters with good returns. :) Link to comment Share on other sites More sharing options...
learner Posted July 25, 2014 Share Posted July 25, 2014 Speaking of Klarman, has anyone ever backtested the performance of his US-equity portfolio - the 13F reported positions? Most sources seem to mention the overall performance of Baupost, which includes the investments in distressed debt, real estate, etc. The article (http://www.forbes.com/2010/02/24/enzon-facet-nws-markets-intelligent-investing-seth-klarman.html) mentions that a portfolio of equally weighted top 20 positions returned 14.23% during 2000-2010; however, I wanted to know returns for the portfolio which weights the holdings just as Baupost does. Link to comment Share on other sites More sharing options...
yadayada Posted July 25, 2014 Share Posted July 25, 2014 I think there were 700 idea's posted on VIC last year. Could have made a mistake though. I like to be concentrated, so if I find 10 idea's im more then happy. Probably 100 idea's were shorts though. And maybe another 300 were crap. So that leaves like 300 idea's. And this website, and various funds and blogs. So probably about 350-400 idea's that could have potential? So if you can literally afford to discard 97% of those idea's, not being very picky is a big mistake. Just jumping in something where they state 100% upside that looks decent can be costly. Another big mistake iv made a few times is not to do your own due dilligence. Treat it like a idea generator, not something you read and blindly copy. Sometimes their idea of fair value is 15 or 20x earnings when it is trading at 10, and they don't really have good reasons why. Another thing, pay extra attention to idea's that are not rated, they can be the best ones if your small. Ones I like a lot that were not rated are Globus maritime, enterprise and Emeco. Often these things are illiquid and small, and in unpopular industries so they get little attention and receive no rating. I generally find that low rated ideas are crap though and mostly glance over them. Seems like they are sent in to keep the membership going. Finally I would add all good ones to your watch list. Especially volatile stocks in volatile markets, or stocks that might be surrounded by too much emotion and fear. If you build up a effective watch list over the years, this could pay dividends. Now you not only profit from reading about new idea's, but you could potentially pounce on old idea's that might have fallen out of favor for non fundamental reasons. Link to comment Share on other sites More sharing options...
Guest notorious546 Posted February 3, 2015 Share Posted February 3, 2015 Irwin at ABC funds seems to have a fairly poor record and i have heard that redemptions at his fund have been very high over the past few years. nish697 hasn't posted for many years but i read on another forum that it is pabrai as well. This is a great thread thought it was worthy of a bump. Link to comment Share on other sites More sharing options...
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