Jurgis

So IMHO bull case is not about IBM's current business, it's about a potential for IBM to grow in the future, which makes it a speculative investment. If you are right and IBM grows, then you get good returns. If you are wrong and they continue to lose 5%+ revenues per year, well... Yes, IBM has a huge moat in some of their businesses. It is just not clear to me that this moat applies to more than around 40% of their business. (Yeah, 40% is rather out of the hat, we can try to narrow it down, but I really doubt it's more than 60% :) . It might be less than 30% too :) ). So it can keep losing business for a while until the moat parts are hit. Another argument for bulls is the cheap (?) price. Yes, this could give some margin of safety. The cheapness depends a lot on how investor views the GF debt and pension obligations though. If you assume that either or both of these are real EV contributors, then the price is not so cheap anymore.

Well, for me "shrink to grow" strategy does not make sense. Sure, if you are bleeding cash in commodity servers or chips, you might want to sell. Although even that is not given if you are in the business of providing complete solutions where one part of the business feeds another one. (It's like KOs maneuvers with bottlers - it's pushing things back and forth and alternatively arguing that you need the bottlers inside company or you need them outside company...) But it's not even that. IBM is not growing even without the bleeding parts. So now the bulls say: "shrink to grow". This is IMHO highly flawed reasoning. The fact that you just sold underperforming divisions does not make other divisions magically grow more. Yeah, maybe they will get more management attention. But really if these were "good" divisions, they should have gotten tons of management attention already. It's again like KO - will KO sales just magically start growing because they divested bottlers? Why? So you look at slide 6 of http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=10635431-821-232461&type=sect&TabIndex=2&dcn=0001104659-15-028716&nav=1&src=Yahoo and you say 30% hardware growth is wonderful. But part of this is also temporary - there was a generation shift and buyers delayed their purchases to buy new generation of HW. And everything else is negative. Software - which should be the growing area. And this is all after removing the effects of divestitures... And margins are shrinking too. Anyway on high level, I'd love companies that would divest bad divisions when they are growing and doing well elsewhere. That would be great business acumen. Unfortunately, almost no one does this. While the company is growing and doing fine, the bad divisions are carried around. Only when the main "good" businesses get into trouble, they start thinking about "shrink to grow". So sorry that I am jaded about this concept. ::)

I should buy a house in Japan... Never mind, I think they don't sell to foreigners. Maybe a Greek island... 8)

I am not Canadian, so my thoughts are based on USA IRAs/401(k)s. Forgive me if they are not applicable due to differences. That being said, majority of my money is in tax deferred accounts. I pretty much put everything there. After some time and if you outperform market, the account is so big that the mix of gains/losses is similar to non-taxable accounts and is skewed towards gains. So you win on taxes. That being said 8), I tend to put more "trading" stocks into tax deferred accounts and super-long-hold-forever stocks into taxable accounts. Bonds/preferreds all go into tax deferred. Cash theoretically goes into taxable. I.e. if you keep cash, don't keep a lot of it in tax deferred - no point. Other than that, I can't guess if a position is going to be a winner or loser. If I could, I wouldn't buy losers. So I don't try to guess that when deciding where to buy. Edit: short term lottery tickets all go into tax deferred. E.g. Fannie/Freddie zero-or-10x would go into tax deferred. Edit2: US investors also have to decide if to buy something in Roth or in traditional tax deferred. This is another tough question. I don't have a good answer for that yet. Hope this helps. :)

I'll partially +1 to what writser said.

Hi. I am north of Boston in 93/95 intersection area. I might try to organize a meeting in the future. There were some people interested in the past, but this attempt received no interest. :)

Maybe people are just greedy hoarders? :D http://a248.e.akamai.net/origin-cdn.volusion.com/u47ok.bmqn6/v/vspfiles/photos/LP-413-2.jpg ;)

So my latest answer is: lock capital exits via electronic route, lock cash withdrawals to small amounts and then announce drachma in a week or two it takes to print. This could work though you still have huge lockup in businesses who can't pay anyone outside the country and vice versa. And there's still potential for major social unrest. But I believe similar things have been done though not exactly in this context. See Cyprus - apples-and-oranges, but somewhat similar oranges. :) There are still questions of what exactly happens with Euros in Greek banks. They don't just disappear when depositors get their drachmas. Who owns them on conversion? Greek central bank? I guess. This might affect your investment into Greek banks. Pretty clearly any loans from foreign parties are either defaulted or have to be paid back in Euros. Nobody will take drachmas 1:1. Some loans might be renegotiated, but overall if person/business has euro deposits turned into drachmas while loans are outside of Greece, they are screwed. If loans are inside Greece, government may turn them into drachma loans. There might be questions of legality of all of this, but that's potentially where Greek sovereignty trumps legalese. Sure, this might force Greece out of EU (which is different from Euro, but some people confuse the two...), so that's another risk.

That's not true for some people (especially all the INTJ's here??? 8) ). They might be much better in making money - like Buffett - than in running foundations, digging wells in Vietnam or teaching kids in Africa. They might not look for having their name on the building, but rather feeling good for paying for the malaria medication or eye surgeries. This is valid approach. And they might not live a monkish lifestyle if their portfolio is way bigger than getting some upper middle class yearly income ($100K let's say).

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper. Whether it's worth paying 1.4X is something people have to decide for themselves. :) I think he means the share repurchase program, but that is at 1.2x BVPS, not 1.3. So the hard floor, if it exists, would be 1.2. OK, let's go with 1.2 as easier shortcut. 8)

I am interested. 8) One comment for you think about: it is rather easy to do some of what you are doing for US non-OTC stocks. For me, the interest is in US OTC and international stocks. I understand if your system can't handle because of the feed you use, but this is really an area where you (or someone else) could make people happier. :) Or looking from another angle: I spend most of time trying to get and input data for stocks that Google/Yahoo/MSN does not handle automatically. I use SMF add in in Excel and it's easy/trivial if I put in the ticker and all the data is there. If I put in the ticker and get a bunch of ERROR/empty cells, then I know I have to spend time manually putting data into the sheet. :( Anyway, thanks and good luck :)

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper. Whether it's worth paying 1.4X is something people have to decide for themselves. :)

It's a good question, but you ruined it by saying "on average". 8) It's exactly the sort of question where the experiences are likely to be on both sides of the coin and average is likely to be meaningless. JMO.

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

I was answering the exact question about Grexit. I was not talking about whether Grexit is likely or not and whether Greece will default and whether that will lead to Grexit. 8) These are quite different questions from what the original poster asked. Have fun.

She was very impressive in that interview. She definitely looks like a strong leader that knows where she wants to go with the company. My opinion is completely opposite. IMHO, she is not a good leader. She tries to talk the talk, but even talk is not impressive. And the execution is even worse. I am back in the bear camp. I sold my IBM position today. Of course, I have a fractional ownership through BRK and FFH. The only positive thing I can say is their reporting is good. You can immediately see the sales going down the drain. :) And, no, I disagree with people who say that sales growth does not matter. Yes, sales growth that leads to declining earnings is not good. But sales going down is not good either. You can milk the margin cow only so much. At some point you have to grow to deliver returns.

We are all related. ;)

Theoretically there are German bund ETFs (ETNs actually). Whether you can profitably short them is another question. I'm not interested enough to dig deeper, sorry. 8)

You can't print a country-size amount of money over a weekend. Once you start printing, you have bank runs since this is impossible to hold in a secret. Edit: I guess one possibility is to lock the capital exits via electronic route, lock withdrawals to small amounts and then announce drachma in a week or two it takes to print. This might work somewhat like Cyprus.

I rather violently disagree. Frank(lira/deutchmark/etc.) conversion to euros was orderly conversion where nobody expected the converted value to drop through the floor. This is completely not applicable to grexit. That may be so..... but I'd still like to know, I just asked anyone who was around with money at that time to describe the financial mechanics. if comparing them is like comparing apples to oranges then I wont compare the two, just want to how the historical context..... If you want to compare apples to oranges... OK, so I know about 2.5mln people who just converted from Litas to Euro in Lithuania. What exactly you want to know??? ;D Edit: note that litas was pegged to Euro before the conversion. If you want unpegged conversion, hmm, I don't know if any country did unpegged conversion to Euro. I think they all pegged before converting.

What if German 10-year goes to -0.5%? ;)

Yeah, but that's afterwards. I believe investor-man is asking how the heck they do it all. And it's not clear. I think is one reason some people talk about DeutcheMark exit - this is easy: Germans print DMs, they exit at 1:1, DMs immediately go up, voila. They could even freeze euro inflows so that speculators won't flood their banks with expectation of higher DM. Still much easier than Grexit. :)

I rather violently disagree. Frank(lira/deutchmark/etc.) conversion to euros was orderly conversion where nobody expected the converted value to drop through the floor. This is completely not applicable to grexit. If they grexit, of course there will be bank runs. So they have to prepare beforehand without everyone knowing and without tipping their hand. This is almost impossible... On any rumor they'd have a bank run anyway. If you had deposits in euros as a person or a business, would you agree to get your money back in worthless drachmas? The better example would be some LatAm countries that had a peg to dollar (Ecuador? Peru? I can't remember offhand) and then broke it. But even that is not a real comparison, since you had money in local currency and you kinda knew the risk that it would unpeg. E.g. Lithuanian litas was pegged to Euro and you could get very high yields in 2009 in banks since there was a rumor/risk of unpegging - so banks had to pay high yields on litas so that people would not convert to euros (which was the strong currency in this example). In Greek case, people/businesses have money in euros and if they only move it to German bank NOW, they have it in euros forever. So how can government turn this into drachmas without huge blowup?

Couple things that other people did not mention: - You might consider keeping a cash and/or fixed income percentage if you are concerned about big decline in your stock holdings. Yes, this might mean underperformance, but it's still a valid way to deal with stress/anxiety/etc. - You have to find your own comfort level with position sizes, diversification, etc. For some people, 3 25% size positions are fine. For others, 100 0.5% positions are fine. There is no single answer. Somewhat an aside, but perhaps connected to what benhacker said: Stan Druckenmiller (and maybe Howard Marks?) have mentioned the well known saying that you send 18 year olds into the war because old guys don't charge into enemy lines. This somewhat applies to investing too. In certain situations it might be best to get new blood to charge into stock positions while old and jaded people find all kind of reasons not to invest. So old and jaded underperform... but young'uns blow up sometimes... These are two extremes, but it's something worth thinking about for everyone. Even if you're 45 years old, you might still want some big belief positions while you still have salary and can recover from losses. The guys who did the research suggesting that young people should have leveraged portfolios (was posted on CoBF recently) have a point somewhat.

OK, meta suggestion that I mentioned in passing above: Economist has pretty good book reviews/suggestions for history, finance, biography books. A bit of European slant both in authors and topics (and release dates), but overall good source of books in the areas people here like.