Rod

I don’t disagree, but why do you think Munger has chosen to be friends with him?

Same for me. I can only get 8(!) posts on my laptop screen even in condensed mode. Why can't there be one line for a post anymore? I much prefer the old site even though it was more primitive. Being able to see what's new at a glance on one screen beats all the slick improvements unfortunately.

We should also consider that position sizing isn’t just about how much you put in at the start but how you adjust the position size over time. Many people like to trim winners because they feel it’s too risky to allow their portfolio to become more concentrated. I think this is the wrong way to look at it. I’d be interested to know what others think.

yep. One is Brookfield (actually Partners Value Fund), the others are Dream Unlimited (DRM.TO) and Brookfield Office Properties Preferred (BPO.PR.N). I could be accused of being Real Estate heavy.

Concentrated bets are not for beginners because you need to ensure your bets are all low risk and learning to do that takes experience. I like to own 3 to 5 stocks which puts me at the extreme concentration end of the spectrum. But I’ve been at this a long time and experience has shown me that I have good enough judgement of risk to do it. You have to be able to judge the durability of the business. Factors that increase risk are leverage, financial and operational and a short history. Factors that reduce risk are being in a business that is more at the core of the economy and serve basic unchanging needs. Some companies are low risk because they are more like holding companies and are highly diversified (think Berkshire). I currently own three stocks, two are highly diversified and involved in real estate and infrastructure. The third is a preferred stock in a similarly stable business.

I like the Brookfield Office Properties prefs, BPO.PR.N and BPO.PR.P specifically. They are priced about $14 up from $10 but still very cheap.

I wouldn't worry about Munger. He is a personal friend of Mohnish and would seem not to feel he is being used as a prop.

I suspect the only reason any of us have heard of Mohnish Pabrai is because he got lucky gambling on dot coms in the late 90s as a beginner and parlayed that into a successful money management career. During which time he has had a long sub-par record. I see nothing to indicate that Mohnish is a superior investor. But I would guess that 99% of the people who watch his talks believes he is a highly superior investor.

This is key. You want clients who act like passengers in an airplane. They don't go running to question the pilot if they encounter turbulence. They operate on complete trust. I have two immediate family members who's money I've managed for 20 years. And it's going extremely well for everyone involved because they are hands-off and trust me implicitly.

Nowhere in his talks does Mohnish admit that his performance has been lacklustre for a very long time. I would guess that his audience believes incorrectly that he has made enormous gains all along. I would prefer if he admitted that he's gone a long time underperforming. Talking about WHY that might be and what mistakes he may have made and how hard it is to outperform indexes would be more useful to his audience I think than repeating Buffett and Munger all day.

A very average, non-growing business might be worth 15x earnings. I think BAM's asset management business is far above average and has plenty of growth.

So some 6 month accountability here. Since I posted this, BPY has returned 105% British Land as a proxy for London office is up 16% (other british RE REITs are down) Vornado and SL Green as a proxy for NYC office have returned 6% and 23% SPG and MAC as a proxy for malls/GGP hav returned 45-60%. BPY has substantially outperformed all of them on a stock return basis. And that's not just because it fell more. BPY is down 16% YTD whereas SPG is down 53% MAC is down 70% and the NYC office reits are down 50%, london office REITs are down 30-40%. BPY has managed to fall less and rebound more while carrying more leverage, losing more assets, etc. Brookfield magic at work. Credit where it is due. Do you have any idea why BPY has done so much better?

Ok. In your example the optimal annual return is 20%. This is 100% divided by 5 years. No other distribution of returns will exceed what you will get with 20% per year.

Maybe you are saying if you have 400 percentage points of return to allocate over a given number of years, what allocation would provide the highest total return. If you are asking that then the answer is to earn equal returns each year. Anytime you have a given amount of something and want to divide it into a fixed number of pieces and multiply those pieces together to get the highest total product, you should divide into equal sized pieces. Example: a 5x5 square has a larger area than a 6x4 rectangle or any other rectangle with adjacent sides totaling 10 units. The mathematical principle is called the “arithmetic mean/geometric mean inequality”.

I don’t understand what you mean by “the best output”. You provided number of years and total return as givens. So, what are you trying to optimize?