roughlyright Posted August 10, 2013 Share Posted August 10, 2013 I have read this comments from Seth to some private business owners. I found the commentary very thought provoking, given how rational he is. Please note that these are his very recent comments. Seth_Klarman_Views_24_pgs_June_2013.pdf Link to comment Share on other sites More sharing options...
WarrenWatsa Posted August 10, 2013 Share Posted August 10, 2013 Thanks for sharing this. Great read. But, but... I would never look to Klarman for anything macro-related. It's simply not his forte, nor the forte of most value investors, for that matter. Few, very few investors can do both macro and micro investing well. The latter is much easier while the former requires much different knowledge and methods, IMHO. Link to comment Share on other sites More sharing options...
beerbaron Posted August 11, 2013 Share Posted August 11, 2013 I was intrigued by his statement about the 20 straight tuesdays up since May. I wondered if it there was a statiscal anomaly in the number of up days VS down days VS equal days. I took straight days, not something like every tuesdays since if one searhces hard enough he can find anomalies in almost anything. Since 1950 the S&P had: Number of up days Number of occurance since 1950 1 1557.00 2 945.00 3 565.00 4 297.00 5 156.00 6 92.00 7 47.00 8 25.00 9 11.00 10 7.00 11 3.00 12 5.00 13 0.00 14 1.00 Number of down days Number of occurance sin 1950 1 1790.00 2 954.00 3 503.00 4 223.00 5 117.00 6 63.00 7 23.00 8 10.00 9 6.00 10 2.00 11 2.00 12 1.00 All in all it seems like a perfect bell curve in both cases. No 30 days up and same thing for down days. If you consider there has been 16 000 days since 1950 and that 14 days straight up days only occured (50/50 chance) once it seems like there are no statistical problems with have 14 days straight up. In conclusion I need a life, as I'm coding VBA in Excel on a saturday night! BeerBaron Link to comment Share on other sites More sharing options...
texual Posted August 11, 2013 Share Posted August 11, 2013 That was so awesome! Link to comment Share on other sites More sharing options...
ERICOPOLY Posted August 11, 2013 Share Posted August 11, 2013 I was intrigued by his statement about the 20 straight tuesdays up since May. I wondered if it there was a statiscal anomaly in the number of up days VS down days VS equal days. I took straight days, not something like every tuesdays since if one searhces hard enough he can find anomalies in almost anything. Since 1950 the S&P had: Number of up days Number of occurance since 1950 1 1557.00 2 945.00 3 565.00 4 297.00 5 156.00 6 92.00 7 47.00 8 25.00 9 11.00 10 7.00 11 3.00 12 5.00 13 0.00 14 1.00 Number of down days Number of occurance sin 1950 1 1790.00 2 954.00 3 503.00 4 223.00 5 117.00 6 63.00 7 23.00 8 10.00 9 6.00 10 2.00 11 2.00 12 1.00 All in all it seems like a perfect bell curve in both cases. No 30 days up and same thing for down days. If you consider there has been 16 000 days since 1950 and that 14 days straight up days only occured (50/50 chance) once it seems like there are no statistical problems with have 14 days straight up. In conclusion I need a life, as I'm coding VBA in Excel on a saturday night! BeerBaron Thank you for making it rational. I too read Klarman's letter and I found it bizarre when he fixated on this. I wonder if it would be interesting to him to check on whether the market has been up on 20 consecutive full moons? Failing that, we could look for crescent moons, etc... Link to comment Share on other sites More sharing options...
kiwing100 Posted August 11, 2013 Share Posted August 11, 2013 A friend of mine who works at an investment management firm (which offers a lot of different open ended mutual funds) told me that mutual funds buy in the market on Tuesdays after their week of inflows from investors. Maybe this is why Klarman looked at Tuesdays ... Link to comment Share on other sites More sharing options...
JBird Posted August 11, 2013 Share Posted August 11, 2013 Great post beerbaron Link to comment Share on other sites More sharing options...
twacowfca Posted August 11, 2013 Share Posted August 11, 2013 A friend of mine who works at an investment management firm (which offers a lot of different open ended mutual funds) told me that mutual funds buy in the market on Tuesdays after their week of inflows from investors. Maybe this is why Klarman looked at Tuesdays ... There is often a signal within the noise. That's a very helpful observation. Even things such as association of up vs down days with sunspots may involve conditional causality. Sunspots are associated with weather phenomenae, a known influence on the direction of market prices. Also. There is strong autocorrelation in the series posted by Beer Barron. This appears to be greater in the up series than the down series. As each series becomes extended, there is an increasing tendency for the trend to lessen and then reverse. This is more apparent in the down series than the up. In summary, It's a classic fractal pattern. :) Link to comment Share on other sites More sharing options...
ASTA Posted August 11, 2013 Share Posted August 11, 2013 Its so hard like Mark's say we are in the upper middle. And Warren 80% positive then Seth negative all different arguments. But if we can be 66% right is to invest but hedge which both Seth and Perm is advocating. Almost bought March 139 puts at 1.44 was at 1.45 :D would have made a bit its 1.77 now. At least I have 20% cash. And with reversion to the mean I am better then the market. On average my portfolio of stocks is up 5% this year but total my portfolio is up 23%. Its dam hard but I cant complain about performance but maybe I am becoming complaisant about my skill/luck. That's my rant and non expertise about today's market. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted August 11, 2013 Share Posted August 11, 2013 Hey all: A very interesting piece. The thing I found most interesting was the part when he spoke about inter-generational debt. For example, he states (correctly I think) that tremendous debt incurred for building freeways, WINNING wars, universities, or other items that benefit most people and last for a long time will be easily shouldered. That people do not mind paying for a bridge built 15 years ago... Where there is a problem is money borrowed to bail out bankers, or keep government continually expanding, or spent on consumption where there is no long term benefit. That the next generation will say, "what benefit did I get, and why should I have to pay for it?". One of the figures bandied about was that the debt of the USA has expanded from $6T to $16T in the last 6 years or so. What did we get for it? What is the legacy being passed from one generation to the next? Link to comment Share on other sites More sharing options...
Guest ajc Posted August 11, 2013 Share Posted August 11, 2013 He's talking about the "POMO Tuesday" effect. I don't know enough about the correlation/causation aspect of it to comment, but I'm sure that's what he's referring to. Thanks for posting, roughlyright. Link to comment Share on other sites More sharing options...
cogitator99 Posted August 12, 2013 Share Posted August 12, 2013 Thanks for posting roughly. Read the excerpts a while back but good to read the whole thing. Link to comment Share on other sites More sharing options...
CorpRaider Posted August 12, 2013 Share Posted August 12, 2013 Thanks. I enjoyed it. While I agreed with much of it, I also found myself thinking, "this sounds like a man who is getting 'pantsed' by the S&P and does not like it one bit." Link to comment Share on other sites More sharing options...
kiwing100 Posted August 13, 2013 Share Posted August 13, 2013 He's talking about the "POMO Tuesday" effect. I don't know enough about the correlation/causation aspect of it to comment, but I'm sure that's what he's referring to. Thanks for posting, roughlyright. Excuse my ignorance but what does the acronym "POMO" stand for? Thank you in advance Link to comment Share on other sites More sharing options...
Liberty Posted August 13, 2013 Share Posted August 13, 2013 He's talking about the "POMO Tuesday" effect. I don't know enough about the correlation/causation aspect of it to comment, but I'm sure that's what he's referring to. Thanks for posting, roughlyright. Excuse my ignorance but what does the acronym "POMO" stand for? Thank you in advance I had to look it up too: http://www.investopedia.com/terms/p/permanent-open-market-operations.asp Link to comment Share on other sites More sharing options...
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