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Everything posted by Jurgis
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What are your average yearly household living expenses?
Jurgis replied to Liberty's topic in General Discussion
Man, I feel your pain. I'd love to live in SoCal, but Silly Valley is just crazy... I have a job in hi tech in Boston area. Not cheap, but you can get house for 400K'ish in OK neighborhood with <30 min drive to city/tech-corridor/etc. Every time I look at considering SoCal the RE prices just kill any wish to move... Have a friend Google millionaire - spent all his money to buy under-average house for something like $1.5M in Los Altos. People can retire on that kind of money elsewhere... Crazy. -
Good stocks to own without having to pay attention to
Jurgis replied to Mephistopheles's topic in General Discussion
BTW, with jockey stocks, you pretty much have to believe in the jockey, and possibly not pay attention to the company's financials. How about the following thought experiment. Read "Snowball" (pages 406-425 or so in hardcover edition) and go back in time. The year is 1975. Berkshire stock price has dropped 50%, its largest holding Washington Post is on the edge of going down due to the labor strike (with no recovery if it goes down), Buffett and Munger are being charged by SEC (with possibility of being barred from investing). On the outside inflation is rampant, NYC is close to bankrutpcy (well maybe you don't care about that). Do you think that following Berkshire's business and financials attentively would have made you make the right decision to hold or buy more? :) On the other hand, this thought experiment perhaps shows why it is so hard to outperform with a single stock without survivorship bias. BRK could have died in 1975 in two different ways and Buffett would have never become the super sensation he is now. -
What percentage of your income do you save?
Jurgis replied to cobafdek's topic in General Discussion
This is a bit tough to calculate... pretax/aftertax? And since some savings are pretax (401(k), IRA) and some aftertax it's not really the same. I voted ballpark range. :) -
Good stocks to own without having to pay attention to
Jurgis replied to Mephistopheles's topic in General Discussion
Daniel, meet BRK, FFH, etc. -
What are your average yearly household living expenses?
Jurgis replied to Liberty's topic in General Discussion
Is that a goddess level hot personal trainer? :o (I guess I never paid much if anything for fitness ::) ) Indeed. /bow :) I settle for Xbox Dance Central :-X (+ TaiChi, Yoga, but all that in total is less than 2K per year. I am value - I mean "cheap" - investor) -
What are your average yearly household living expenses?
Jurgis replied to Liberty's topic in General Discussion
Is that a goddess level hot personal trainer? :o (I guess I never paid much if anything for fitness ::) ) -
Best shareholder meetings and investor conferences
Jurgis replied to tede02's topic in General Discussion
BH? Biglari Holdings? Definitely. 8) Just kidding. I think you meant Berkshire. Personally, every year I think whether I should go to Buffettfest and I never go. I think I'd be bored by talking heads and I hate crowds. Shoulda/coulda gone to DJCO/WSC when it was easier/closer by. I looked at the http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/10th-annual-cmc-fairfax-financial-shareholder%27s-dinner/ Looks somewhat attractive, but the same thing: I wonder if I'll be totally bored there :) I tried asking people I know from SiliconInvestor if they would be interested to go together. No replies. So probably I won't go. :) -
Good stocks to own without having to pay attention to
Jurgis replied to Mephistopheles's topic in General Discussion
I've heard this before, but this suggestion is a fallacy for market weighted indexes. If the worst five stocks are - let's say - 0.1% of the index, your outperformance will be at best 0.1%, but your cost to have index minus five stocks will be possibly higher than that. You probably would have to find "five percent of stocks that are worst and drop them", which might be quite harder. -
Good stocks to own without having to pay attention to
Jurgis replied to Mephistopheles's topic in General Discussion
I wonder how many people expressing this opinion have outperformed BRK (or FFH) in the last 10-15 years. In reality, if someone chooses jockey well, they can go away and do nothing for 10+ years and still outperform the index. And possibly more than people putting in 20 hours a day into stock analysis. -
Anecdotal personal experience: Bought Xbox One this weekend. BestBuy was about $90 cheaper than Amazon. Walmart.com was about $40 cheaper. I did not even have BestBuy account... but for $90 I was willing to open one. ;) Amazon is still the first "go to" place, but I wonder if competitors are as far behind as people think.
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I think HJ hits the nail on the head with questions about DFS 4th position in the market. I think a lot of investors are drawn to the company because it is cheaper than the other three. However, if there was a stock market drop, a lot would also flee to MA/V. I have Discover card for ~20 years now. However, I only use it for their 5%-cash-back quarterly categories. At least they finally got onto a 1% cash back with Discover It. It was not competitive with sliding scale 0.25% to 1% cash back before. Another issue with Discover is that it does not have international presence. MA/V/AXP are accepted everywhere (AXP maybe fewer places, but still). Discover does not have any international presence. So yet another business lost ... and a business where MA/V are growing a lot. They might do OK, but comparable to them would probably be something like COF and not MA/V/AXP. Sure they have some advantages over COF - their own network. But they also lose to COF all the international business: COF zero-foreign-currency-charge makes them very attractive to use abroad.
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Just read the thread. Yes, I have done sensory deprivation tank. Nothing special. 8) Caveat: I've been practicing meditation for over 10 years when I did sensory deprivation.
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Preliminary 2014 results: Results are preliminary, since Quicken has not updated some of the 12/31 trades and distributions. These should not be large enough to affect much. Also Fidelity does not have their calculation of yearly results yet and won't have them for couple weeks at least. Other caveats: rates are from Quicken/IRR which I still believe is buggy/not reliable. Couple positions are wide spread micro caps that trade on appointment, so their prices are sometimes misprinted and therefore misaccounted. Couple positions are foreign stocks that may have incorrect final prices. Some results include 401(k) accounts where I cannot invest into my selection of stocks and ESPP accounts where return accounting by Quicken is suspect. So reader beware. Executive summary: 8.7% return which underperformed market. I am selling my investment portfolios and winding down active investing. Longer version: Total IRR across all accounts is 8.05%. After removing ESPP and 401(k) accounts, the return is 8.7%. Both of these undeperformed market a lot (benchmarking against SP500 13.7% return). These returns are even worse considering that BRK stock return was 28% and Fairfax return was 31%. Both of these were positions in my portfolios. Even considering ~16% cash position and ~16% fixed income position, the results are bad. The fact that other active managers did not do well this year is of little solace. As an aside 401(k) portfolios underperformed SP500 because of: 30%+ bond fund allocation, 30%+ international allocation (VTIAX and FDIKX are both negative for year) and some small cap allocation. So my plan is to liquidate my investing portfolios in orderly fashion and convert to mostly passive investing. I have some concern that funds that I passively allocated performed worse than my active investments last year. However, there are two solutions to this: 1. Passively invest in BRK/FRFHF/etc. mix. 2. Longer term the non-ideal allocation might even out. Have fun
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IMHO, MHR common and pref definitely have risk of losses. I might be interested in bonds if they were cheaper. I'd not buy prefs/common. But then again I don't trust Gary Evans since the auditor debacle, so I might be prejudiced. :)
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OT. Isn't that what auto mechanics do all the time? :-\
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Has anyone done a valuation on this? Or should I dig for Murray Stahl's 2005 (?) writeup? At current price the earnings/FCF yield is very low. And the earnings/FCF are at fracking bubble levels that will drop with the current oil crisis. So based on earnings/FCF it seems overpriced against the top cycle numbers - double whammy. That leaves us with asset based valuations. The land can be valued at some price, but like Buffett explicitly said about TPL - it's not liquid, so most valuations are overoptimistic. You can only sell few better parcels at reasonable prices. My guess would be to wait until this crashes again to cheap baseline valuation. But perhaps someone has done conservative valuation that this is cheap even now?
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Off topic: +1 Mr. Picasso. The market currently offers few bargains. And the ones it offers usually come with a Big (pardon the reference) set of warts.
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You guys might be surprised, but N. Korea not only has Internet, it also has outsourced/offshored businesses. US companies do not directly outsource/offshore there, but more neutral country companies do and there's no guarantee that US-outsourced work does not get re-outsourced to N. Korea. Some info at http://spectrum.ieee.org/podcast/at-work/tech-careers/for-outsourcing-it-have-you-considered-north-korea
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None of the stocks above have a chance in heck to compound sales/earnings at 10-15% for 10-20 years. GOOGL might have the highest growth rate in next few years, but they also have the highest risk of growth falloff. And their market cap with such growth would cross 1T really fast. This is the biggest issue with wide moat high growth investing. Unless you get in early, no trees grow to the sky and the 25 -40 PE is not really undervalued. In case people doubt this, please look at KO and the financial shenanigans it had to resort to to maintain the illusion of wide moat high growth. Buffett has realized this long time ago. That's why cash flow from See's is not invested in See's. Unfortunately, for most companies the money is either invested in diworsefication or in overpriced share buybacks. So, yes, buy wide moats when they are cheap. But don't expect great returns by buying them at inflated multiples.
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Yes, it is because Sardar wants to keep voting the stock. Lion Fund BH stock position effectively kills any chances by activist investors to replace Mr. Big. "Live and let die" ;)
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Company may be listed in US, but not be an US company. I believe PHYS is Canadian. They claim that they are a PFIC partially intentionally for tax efficiency reasons: they seem to claim that if you file QEF, you can get 20% long term capital gains tax rate, while otherwise holding physical commodity makes you pay 28% collectible rate. I might be simplifying here. I did not try to fully understand the implications, since I don't plan to buy and hold this. You can read more at http://sprottphysicalbullion.com/sprott-physical-gold-trust/tax-information/
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I believe you are wrong about IRAs/401(k)s, because the gains/losses are not taxable. PFICs are not MLPs or K-1 corporations that actually require tax gymnastics while in IRA. I believe this guy is correct: http://www.costbasis.com/stocks/pficstock.html I've seen some other tax professionals suggesting the same. However, I am not a CPA, caveat emptor and all that. I believe that IRS has/had a way to ask such questions to the IRS personnel directly. You might want to look into it if this important to you.
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@yadayada - It is possible that we will enter a crappy multidecade period. However, 2000s were not that great for US either. And high inflation in 1970s was not great either. So perhaps you are making a mistake of being too pessimistic? ;) Buffett's optimism is interesting because he is negative about things: he has been concerned about dollar debasing, national debt and possible inflation for decades now. This has never stopped him from investing though. If he had followed his negativity, he would have been wrong so far and much poorer. I am not saying that everyone should be permabull. It's just that so far bears have been right occasionally, but wrong ultimately. You might be right that this time it's different. But are you really certain to bet on it?
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Very good discussion about Buffett's optimism. :) I think that another thing related to the topic that is not mentioned often enough is Buffett's managerial abilities. He discounts this in his interviews, but "Snowball" offers an insight into the kitchen. He was directly involved in replacing 2 (3?) of KO's CEOs. Despite not liking it, he had to do similar cleanups in GenRe, NetJets, etc. In couple cases at least he had to replace the management more than once until he hit the right person who made the business flourish. So part of his success is that he manages to get outstanding people into the place either immediately when buying the business or after cockroaches are found.