giofranchi

Is Divorcing An Abusive Spouse Ever Too Expensive? giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes Daily+3.28.13.pdf

twacowfca, whenever you write something, I always reply “I couldn’t agree more!” … I know, I am extremely boring!! … Maybe, someone on the board is even beginning to think that we have stricken some sort of economic deal… Well, it wouldn’t be illegal, would it?! ;D ;D ;D Jokes aside, if the southern European countries are not able to actually have that adult conversation and actually take the bad tasting medicine, it doesn’t mean we could go on enduring the damages a way overvalued currency is imposing on us! Prices in economics are as important as fundamental values, and MUST make sense. When prices do not make sense for too long a time, depression is the most common result. Keynes understood this very well, and we should learn from experience and from history. So, please, first give us “southerner spoiled kids” a currency that makes sense. Then, maybe, we will shock the whole world and start behaving as grown-ups! Until our currency doesn’t make any economic sense at all, we will keep whining and complaining… giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Thank you, twacowfca! Very good news. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Well, that’s exactly why we require a margin of safety! Because our calculation of NAV could be wrong! To sell below NAV means to be worthy more dead than alive… To sell 42% below NAV means to be 42% worthier dead than alive… It would be a HUGE margin of safety for a company that can boast a compounded annual return of 19% for the last 20 years… Even considering those valuation errors you have mentioned, I guess we are left with a good bargain anyway! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Valuation Model For Brookfield Asset Management giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes valuation-model-for-brookfield-asset-management.pdf

It takes a good deal of managerial magic for FFH to grow tangible book at 15%. I know a lot about FFH and I think about this a lot. However every time I wind up reaching the conclusion that I'd rather be invested in the company that can generate 13% to 15% returns from operational earnings... provided it too is priced such that I'm getting in at tangible book value. The market more reliably puts an earnings multiple on operational earnings. So it's not just about the returns on tangible equity, but the more likely path to an eventual multiple on the earnings themselves (a bonus tailwind of upwards valuation adjustment). And so basically that's why I still keep my oversized BAC position rather than move some to FFH. Not yet! Not yet! In due time... First the easy money. Later, I hope FFH can keep the magic going when it's time to buy back into it. Eric, As I have written in this thread, going forward FFH must achieve an average return of 6.6% on its portfolio of investments to grow BV per share at a 15% CAGR. Historically FFH has achieved an average total return on portfolio of 9.6%. Sincerely, I don’t understand the required “managerial magic” you are talking about… giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

This is funny… because I think I know personally some of the most renowned Italian university professors in engineering… and, believe me, they have really great minds! They are extremely clever under a myriad of different points of view! Many times, when I hear them talk, I don’t even understand what their topic of conversation actually is! … and yet … I wouldn’t entrust a single dime of my firm’s equity to anyone of them! They just don’t get how business works! Probably, because they just don’t really care… txitxo is very brilliant, no doubt about it, and he is very interested in making money, and is a wonderful trader, not a single doubt about it either. But, imo, to run a business is something completely different. (txitxo, please, don’t get upset with me! :) ) giofranchi Don't worry, Gio, I won't get upset, but I think you are wrong there, I don't know about Italian University Engineering professors, but I have met quite a few scientists who could be excellent business managers, and the best example is probably your compatriot and Nobel Prize Winner, Riccardo Giaconni. Have a look at his bio, among other things he led the effort to put "glasses" on the Hubble Space Telescope, what probably saved NASA from very big budget cuts or even a worse fate. The person who came up with the "glasses" idea told me that, if he hadn't been an Astrophysicist, Riccardo would probably have ended up running a big US firm. Some scientists do actually own and run companies in their spare time, I know personally of three cases, an software engineering company, a food import business and a translation agency. And they make much more money from them that they do with their academic jobs. A significant fraction of the Russians who have made the Forbes list at some point have Science degrees, for instance in Physics (Deripaska), Chemistry (Khodorkovsky) or used to have one in Math (Berezovsky; he did publish many math papers and books before he turned oligarch). The thing is that once you get to a certain level in science, you don't get to sit in an office and speculate about how many angels fit in a pinhead. You have to compete to get grants (selling), you have to hire people with them, make sure that they do their work, you have to get papers out (products), you have to make sure that the largest possible amount of people read these papers and then reference them in their own work (selling again), and then the cycle starts anew, applying for grants based on the prestige these papers brought you, etc. In the experimental sciences, any successful scientist has to be at least a part time entrepreneur. That's why Sheldon and Leonard are theorists; they would not last 5 minutes in a lab. And this does not happen in a vacuum, you are competing with extremely smart people, who will resort to all kind of dirty tricks, steal your results or your people, try to stop you from publishing, etc. You have to maximize the return you get from your resources, allocate physical and human capital to your best ideas, etc. Probably not so different from running an engineering firm...:) And if you fail, you are screwed. You won't get any more grants, you will lose your tenure, you will only be offered academic jobs at places like Bumblef*ck College, and once all hope is lost, you will be forced to get a quant job in Wall Street to feed your children... Well, of course I can tell you only what my experience is. Mark Twain was used to saying: “All generalizations are false, this one included!” So, no doubt there might be very entrepreneur-like university professors out there… the simple truth, though, is I have still to meet one! Take for instance Professor Antonio Migliacci: he is among the best known living professor in civil engineering in Italy today. Three generations of professional engineers have studied on his books. And he has founded “MSC Associati”, which in the ’80 and ’90 was among the largest engineering firms in Italy. My experience with him could be summarized as follows: “First I had the greatest of fortunes to be his pupil, later I had the greatest of misfortunes to be his partner!” Believe me, he was extremely more successful as an entrepreneur that the great majority of his ex-colleagues inside the Politecnico of Milan, yet I think he will behave like a child, when it comes to capital allocation, until the very end… by now I have given up all hopes! ::) My father is another good example! He is very brilliant. He was among the first ones to write software for reinforced concrete structures design in the late ’70, early ’80, at the University of Waterloo with Professor Cohn, Professor Grierson, and Professor Gladwell (yes, Malcom Gladwell’s father). He became Full Professor at the age of 32. He has published a lot. Etc. Though, when it comes to capital allocation, he is just like his friend Professor Migliacci… a spoiled kid!! ;D ;D Then, of course my experience is limited, so it is never wise to generalize. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

I think this is a bit misleading: trust is at the heart of every business dealings. Whenever I decide to start something new, a new project or a new service, my first thought is always the same: who am I dealing with? Can I rely on them, or not? If I cannot answer, I won’t even begin working on anything new. I would just quit! I am not saying it is easy, but it surely is what entrepreneurs do: shifting resources from the undeserving to the deserving. And I personally know a lot of people with a long track-record of doing it successfully. If trust were impossible, there would be no enterprise. Without enterprise there would be neither investing nor trading. It is that simple. And don’t tell me I know much better some people, because I have met them personally and I have shaken their hands… Vice versa, I think I know Mr. Watsa much better then many of them! This is funny… because I think I know personally some of the most renowned Italian university professors in engineering… and, believe me, they have really great minds! They are extremely clever under a myriad of different points of view! Many times, when I hear them talk, I don’t even understand what their topic of conversation actually is! … and yet … I wouldn’t entrust a single dime of my firm’s equity to anyone of them! They just don’t get how business works! Probably, because they just don’t really care… txitxo is very brilliant, no doubt about it, and he is very interested in making money, and is a wonderful trader, not a single doubt about it either. But, imo, to run a business is something completely different. (txitxo, please, don’t get upset with me! :) ) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

txitxo, this should be obvious, but I want to underline it anyway: I am not talking about doing less work to enjoy life more… I am talking about using my time the most rational way that I know of, to achieve my financial goals as easily as possible. Improving the operations of my companies and investing in good businesses that I understand is imo much easier than trading in cheap stocks and out of expensive stocks. That’s all. The number of hours I work would be exactly the same in both cases. One difference, though, which has nothing to do with financial goals, is clear to me: I surely enjoy life much more, being productive and doing something really useful for society. Both my firm’s engineering operations and the professional master degrees we offer inside the Politecnico of Milan are sought out by many people who really need and appreciate our services. And that is something I am grateful for. Even among long-term investing and trading, I would chose investing anytime… provided financial results stay the same. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Gio, I think that from what Kraven describes as his process, which puts no limit on company size, and his obvious knowledge of the subject, in principle he should be able to beat FFH's 15% target long term performance by 2-5% per year, and with probably lower volatility. Of course I don't know if he could do the same if he had to manage several B$, as Prem does. Maybe… Sincerely, I think that to achieve a 17% to 20% annual return with great consistency is very tough for anyone! But Kraven is obviously very good at what he is doing. The problem, as always, is that we tend to extrapolate and generalize: just because Kraven could achieve a 20% annual return going forward, so also should we… Imo, that is a very dangerous thing to do… Moreover, a 20% annual return, starting with $378, leaves you with $2,340.5 after 10 years. Vice versa, a 15% annual return, leaves you with $1,529.2. If, concentrating on my operating businesses, I am able to extract free cash equal to just 10% of equity in year 1 for each of the next 10 years ($37.80), and I keep investing that free cash in FFH at book value, at the end of the 10 year period I will be left with $767.5 more. My total equity at the end of year 10 will be: $1,529.2 + $767.5 = $2,296.7. Not much different from Kraven’s, who should be a Master at what he does to achieve a 20% CAGR for 10 years! - If Kraven’s average return is lowered to just 19%, he will lag my returns. - If I succeed in increasing the free cash my firm produces, instead of considering it always the same each year, my returns will surpass Kraven’s, even if he actually manages a 20% CAGR for 10 years. And, please, remember how difficult it really should be to obtain a 20% unlevered CAGR for 10 years: if FFH increases BV per share at 15% CAGR, using a 3.4x leverage, it means that their annual unlevered return from investments will average just 6.6%. So, Kraven unlevered outperformance on Mr. Watsa’s returns should be circa 13.4% each year! ??? I am sure Kraven will accomplish such an outstanding feat! But, guys, to tell the truth, I feel way too dumb… sorry, not my game! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes buffetts-career-in-less-than-1000-words.pdf

giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Kraven, although my approach is clearly different from yours, I am enjoying this thread very much! Thank you! :) It is difficult for me to understand why I should make the effort to when I can invest in FFH at book, which washes, rinses, and repeats for me, and which enjoys the great advantage of having float. In other words, why should I spend a lot of time washing, rinsing, and repeating with $378, when I could hand those same $378 to Mr. Watsa and let him wash, rinse, and repeat for me with $1,289? Freeing up time for me to concentrate on extracting ever more free cash from my businesses? Cash that I would go on handing to Mr. Watsa, and that would go on translating into 3.4x worth of investments ("wash, rinse, and repeat" stuff), as soon as it gets to Toronto. And so on and on and on… I don’t know… Anyhow, let’s put it this way: if you were running an insurance company, I would be extremely glad to invest alongside you and your team (your wonderful and very gifted sons!) :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

That’s why I am always in the game. I just try and let the prudence with which I do business grow, as the prudence with which others do business shrinks. And vice versa. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Mr. Hussman’s reply to Mr. Marks: sorry to say this, but I am with Mr. Hussman! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes wmc130325.pdf

I agree with Giofranchi having lived through an almost exact scenario in the 2008-2009 crisis. I went into the 2008-2009 crisis with about 70% cash and I had been able to take advantage of the market behaviour in that period nearly perfectly buy a lot in Oct/Nov 2008, trim a bit in Dec, load up in Feb/March 2009. The one thing I have not been able to do however is sell BRK at the lows in 2009 to buy other more attractive stocks. I was able to do it with cash I had, but for the life of me I cannot pull the trigger to sell BRK when you know with a near certanity it is less than 50% of IV and buy other stocks that are at 20-25% of IV. This is my one regret from that period but even going forward I doubt if I would be able to pull this off. Vinod Vinod, I really couldn’t have said it better! Thank you very much for your crystal clear thoughts! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

;D ;D ;D ;D giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Imo, what you have written makes a lot of sense, and I think anyone who follows your example, including having an effective mean to constantly replenish his cash, is on his way to beat the market handsomely. My perspective, though, is a little bit different. And it stems from my deeply ingrained skepticism about being truly able to understand a business and to forecast its future results. Let me make this very simplified example: suppose for a moment that the whole market is composed by only two companies: Berkshire Hathaway and Wells Fargo, equally weighted. Now, the market plunges -40%. And it plunges this way: -30% for BRK stock price, -50% for WFC stock price. Before the plunge you were fully invested in BRK, and now you are saying: “Ok, my currency depreciated by -30%, but now I have the opportunity to purchase WFC, which is down -50%! Very good bargain!!” That’s exactly when my skepticism comes in, playing the role of the joy killer… What do I really know about WFC, that other people don’t?! …Well, nothing…!! And that is it for me… I cannot invest… Beware: this is just me… It is just how I am done… Probably, it is a deep flaw of mine! And it shouldn’t apply to anybody else! You see? My “fat pitch” is different from yours: my fat pitch is BRK that has come down -30%. After all, by now I must have spent thousands of hours studying BRK, and almost nothing studying WFC… So, how could I swing to that perfect pitch, without any dry powder left? giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

--http://apod.nasa.gov/apod/ap130306.html ;D ;D ;D ;D giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Well, a business is always risky. Mr. Watsa and his team start investing in overvalued stocks, and FFH will suffer much. The insurance companies overseen by Mr. Barnard start writing contracts which make no sense, and FFH will suffer much. I see much more operating risks, than strategic ones. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

If you are referring to the CPI-linked securities, FFH has invested a total of $454 million and sees a cumulative loss of $335 million to date: -74%. Not much damage left for inflation to cause! This is how I see it: - Best case scenario: a lot of people will lose a lot of money, meanwhile FFH will earn a fortune. - Worst case scenario: 2012: a lot of people will earn 16%, meanwhile FFH will earn 6.5%. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes I am referring to both the S&P hedge and the CPI-linked securities. Lets take a more plausible scenario. What happens to Fairfax's portfolio if say: 1, The market returns say 12% over the next 4 years 2, And inflation spikes up to 5% in 2014 and stays there for the next 5 years? What happens if both those numbers are higher? Well, I guess somewhere in between my best and worst scenarios…? Of course, inflation can cause damage to an insurance company that goes well beyond its portfolio of investments. But it could also be the trigger that finally puts an end to the present soft market, and starts a new hard market in which FFH could expand significantly. Anyway, valueInv, I sincerely hope the S&P500 won’t return 12% for the next 4 years… because by then we will be living a stock market bubble that rivals 1999… and it will be almost a certainty that my generation ends up spending its entire productive life without any meaningful stock market appreciation… I don’t know if I can call it a tragedy, but surely it won’t be pleasant! Here is what I wrote a few days ago to my partners: Yesterday I finished reading "Lords of Finance - The Bankers who Broke the World" by Liaquat Ahamed, winner of the Pulitzer Prize in 2010 and business book of the year for The Financial Times and Goldman Sachs. It is the mirror image of "The Forgotten Man" by Amity Shlaes, and among the two you have the most complete and enjoyable compendium of Keynesian economics the modern reader might find. "Lords of Finance" shows the many strengths of Keynes's thoughts and ideas. "The Forgotten Man", on the other hand, shows its shortcomings. In essence, Mr. Keynes was right: in economics prices are as important as fundamental values. Mr. George Soros would later postulate his "Reflexivity Theory" on this same assumption in his book "The Alchemy of Finance". When prices reach unsustainable high levels, they not only tend to mean-revert, but they also shoot on the downside. That's why policy tools, like money printing (a monetary policy) and deficit spending (a fiscal policy), must be used to prop them up again. That's what happened in 2003, after the dot-com bubble burst, and in 2009, after the subprime and world financial crisis. The great blunder of central bankers in 1929 was precisely to delay policies aimed at sustaining prices for too long. 3 years had to pass, before Mr. Roosevelt initiated his "New Deal", 36 long months during which the vicious cycle of deflation reinforced itself ever more. On the other hand, when interest rates are kept very low for a protracted period of time and money printing goes on apparently without an end, prices might revert to unsustainably high levels once more. That's what happened in 1937, precipitating the world in another depression (the so-called depression inside a depression), and that's what we risk repeating now. So, Mr. Keynes was surely right, but to engineer the right balance between too high and too low prices is no small feat at all! Prices must make economic sense… anytime they are too low or too high, trouble is on our way. You can bet on it! And, please, look at the image in attachment: in 2009 we barely reverted to the mean growth trend… we came from 20 years of stock market returns above average growth trend, and now we are again well above it. 4 years from now, if the market really manages to achieve a 12% CAGR, we would be flirting with disaster… No, really, the further the market advances, the higher the percentage of my firm’s portfolio I will allocate to FFH… there will be almost nowhere else to hide… giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Well, of course you can! But I would argue that the currency you use to take advantage of the fat pitch matters. And a currency that has depreciated by 30% is not a very good one… Anyway, I don’t believe in fixed schemes and rigid business plans… I just try to think strategically and act opportunistically. If you believe you won’t miss great opportunities, even though you are 100% invested all the times, and you are fine with that… well, then, very good for you!! ;) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Great book! Absolutely a must read! Ed is Ed Cooke, the eleventh best memorizer in the world. The fact the in school you never learn, or even hear of, “Rhetorica ad Herennium” remains a mystery to me! ::) Please, find it in attachment, and… start remembering everything! :) Enjoy! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes Ad_Herennium_Passages_on_Memory.pdf

If you are referring to the CPI-linked securities, FFH has invested a total of $454 million and sees a cumulative loss of $335 million to date: -74%. Not much damage left for inflation to cause! This is how I see it: - Best case scenario: a lot of people will lose a lot of money, meanwhile FFH will earn a fortune. - Worst case scenario: 2012: a lot of people will earn 16%, meanwhile FFH will earn 6.5%. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

What are these guys long term track records? Also, I looked at their first page and pretty much everything they show is negative. If one is honest, we have to look at both sides and not just the negative ones. How about they show valuations, balance sheet healht, or earnings growth? I also didn't care for about he was right about everything...just a bit early. How about he fesses up to his mistakes? stahleyp, I don’t know their long term track-record. Sincerely, I don’t care much… I just look out for information. Then I think and I decide which is the best course of action. I never rely on anybody else. So, I don’t really care about anybody else’s long term track-record… I don’t even care about the timing. I know many of you repeatedly talk about market timing… And how market timing is a fool’s game… But I don’t care about it at all! All I care about is to be opportunistic and to always have the means to act opportunistically. Great opportunities don’t come often, so you cannot run the risk to be forced to let them go by, without taking advantage of them. Maybe, if you are a great statistician and trader, you have figured out a way to take advantage of the few really outstanding opportunities that will come along, and to be always fully invested. The same might be true for a great investor. Anyway, I seriously doubt it, both from a trader’s and from an investor’s perspective… Maybe, only the magician’s perspective would convince me!! ;D And, if you aren’t a star, you better always keep a decent amount of cash with you! To let it grow, when others are greedy, and to let it shrink, when others are fearful. Mr. Buffett and Mr. Watsa always have lots of cash ready at hand. Who cares about market timing?! Instead, I agree with you about the quality of information: the sources of information must be of the highest quality possible. Anytime a piece of information is only partial, not complete, it is a pity and a shame! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes