Gregmal

Personally Ive found concentrating in a few solid ideas within sectors you like and understand is the best approach. If you like to read and research it helps too, although at times this also makes it difficult to stay disciplined because you are constantly presenting yourself new ideas. On the other hand I know people who just diversify the heck out of everything and never plan on selling. One person I know will buy 100 shares of anything fundamentally solid, up to about 10k. He's got a portfolio of like 200 companies purchased over the past 30 years plus. Some have gone to zero or been losers; some have turned into 50-100x the initial investment. This is a very long term process and approach but if you hit on a few investments with returns like that, your retirement is taken care of. I guess starting early is big too.

The left made a case out of Russia for their own self-protection. Assured that the spying on Trump & Co. would eventually come to light after HRC lost, it looks to me that Obama's minions created this entire "Russian's hacked the election" narrative to distract from the real target of their spying. Public enemy #1 -- their political opponents. The most amusing aspect of all of this from the libs/MSM is that they had been presented with the idea that Russia is something to be concerned about and completely blew it off. I remember Mitt Romney questioning the fact that Russia could be a major problem during one of the 2012 presidential debates and sly ole Barry made some crack about "the 1980's called and wants the Cold War back". The arrogance was unprecedented. Then the Ukraine stuff started going down, and still, no one wanted to touch it and outside of some half assed sanctions, it was ignored again. Now, after losing the election, and ignoring the issues for an eternity, they get all riled up because "someone"(whom they're claiming is from Russia) leaked emails exposing how corrupt key members of the party were. And it's Trump's fault.

What I think is funny, and probably worth an SNL skit or two, is the paradox between a man's pursuit of a woman(or I guess in today's day and age another man as well(although you never hear about sexual harassment on that front from MSM)) and the application of the same principle(once called resilience) in regards to other areas. Pretty much anything sales related for that matter. Imagine a cars salesman if forced to behave with such little drive? Salesman: hey, this is a wonderful car, perfect for your family, inexpensive yet well rated Customer: No thanks Salesman: OK have a nice day How about T-Mobile which is very aggressive about recruiting customers? "How much are you paying at Verizon?" "I'm not interested" "Ok, bye!" Things were fine up until probably the last decade, when previously there were just natural pursuits and a girl saying No was sometimes just part of the game. A respectable and proper gentleman would not really have a problem deciphering whether he was getting the "NO" that meant get the F away or the "no" that meant keep trying, I like the attention. But now today, a girl is given the message that as long as she says no once, she essentially has a free call option on whatever the heck she wants from a guy provided he didn't make her sign a legal contract. This IMO is a symptom of the larger problem; things that were previously just common sense and common courtesy now need to be governed and regulated/legislated because society has gotten so petty and PC and there are no shortage of lawyers or politicians trying to capitalize on it.

I don't really view spending time on evaluating investments to be a burden or lost cost. I enjoy reading, consider investing a partial hobby as well as a job; it's something I like. Because you derive independent enjoyment from investing, it makes sense that forming a belief about whether you can beat the market is less relevant to you. For people who do not believe they can be the market, this would be either irrelevant or a good thing. By hypothesis, their security selection and portfolio weighting decisions (i.e., deviations from the index) destroy value rather than create it, so gaining knowledge likely won't help them. But if your point is that you cannot avoid some active decision-making because you must pick an index, I would suggest the broadest, most vanilla equity or bond index fund you can find, rather than any exotic index. Funny but I actually hadn't thought of it like that. Essentially, telling somebody you are deficient, and they for better off not trying. The more you try the more you'll just screw up. Knowledge is not power for you. Which again, for the average person probably is somewhat if not entirely true. I've met some very well educated and highly accomplished people who have blown me away with their ignorance when it comes to investing. In my own case, I own one ETF(index/etf to me are basically the same). CIBR. My reasoning is the I am highly confident in my ability to forecast the runway for cyber security. However I am fine acknowledging that I have next to no ability to analyze companies trading at 100x sales with any degree of confidence. Nor do I have any confidence in my ability to learn how to get comfortable with companies that carry such staggering valuations. But I do want exposure so I found two ETF's, CIBR and HACK and did some work running through the various differences in terms of portfolio holdings and weighting of the components. It's probably the only investment I have where I literally have no deeper knowledge or understanding of the vehicle or instrument, and as such despite it doing well, will never be a major component of my portfolio. How some could get comfortable having a major allocation to an index, even say SPY, is crazy to me(someone just dumping money into XZY Global Index fund after a while will have a very high concentration). After all, especially with broader market index funds, you are entirely at the mercy or macro trends. Which is definitely something one can analyze and make efforts to be aware of. And if you're doing that work, then you might as well do it for individual companies.

This is very much true as well. Beating the index is a very popular topic on CoBF. In real life not so much. People don't really care if their investments beat the index. Mostly they just want their money to be safe and earn a decent/good return. You really find out how much people don't care about beating indexes the moment when you see a client and you tell him that he's down 15% but he should be happy because he's beat the index by 500 basis points. If people's overarching goal in investing is to beat the S&P500 or whatever then no one would buy any bonds. It's also true that investors obsessed with beating indexes will probably fail to do so. Just go out there, do your best, do good work and stop worrying about the index so much. Unless you have no opportunity cost to your time or derive independent enjoyment from the act of investment research, it makes sense to care about whether you are likely to beat an index. If you can't, why bother to do "good work" on investments? Wouldn't it be better to do no work, put your money in an index fund, and spend you're time on something else? I don't really view spending time on evaluating investments to be a burden or lost cost. I enjoy reading, consider investing a partial hobby as well as a job; it's something I like. But regardless, I sift through things all the time. Often trying to find reasons not to make the investment. I will occasionally drive around nearby areas looking at potential properties. May a year goes by where I don't do a deal, I couldn't imagine thinking of that as a waste of time or sunken cost. Last year I did one deal and the current yield is about 13.5%. At the time I couldn't predict what the index would do. I didn't care what it did. Instead I viewed this along with several other factors as a risk adjusted return I would be content with. Whether the S&P does 25%, I just don't care. Which brings me to the next point. I really don't think anybody is capable of fully knowing what they own with an index fund. They are told what it is supposed to be, but it's impossible to really understand every component of it. I remember TVIX was supposed to be a 2-3x correlation to the VIX. And one day(I want to say in 2012), when the VIX was up modestly, this index proxy lost something like 60% in a day for no reason at all. It's definitely possible to beat the index over time, however right now we seem to be at the apex of index mania because we have deviated so far from historical norms in so many different areas of the market/investing and many of the experts have been chasing their tails. Owning an index has been and will continue to be en vogue as long as the bull rages on in a straight line up and monetary policy allows most asset classes to have high correlations. But this IMO is not something that is sustainable in the long run, and the second these conditions should cease to continue, being in an index may not seem like such a no brainer.

Also, perhaps getting a little too much into a philosophical angle here, but who's to say that the entire "its impossible to beat the market" campaign thats been growing the past few years isnt some wonderfully orchestrated marketing campaign promoted by companies like Vangard? Meant to discourage investors from even trying and just toss the money into an index fund? Honestly I don't even know why "beating the market" is even that important to people. To me, I couldn't care less. It is utterly irrelevant how my investments perform compared to the market. As long as I am intimately familiar with what I am invested in and comfortable enough with what I own, I don't care about all the other noise. Its kind of even comparable to the market timing approach. You think Buffett really said "I'm banking on a turnaround at BofA" in 2011? Or do you think he simply found himself a great deal and was comfortable making the investment? I'd compare it to trying to hit a home run in baseball. Typically when you try to hit it out of the park, you grip the bat too tight and swing at bad pitches. Whereas when you just relax and pick your spots, life is a lot easier. I consider trying to beat the market just another unnecessary distraction that complicates one's decision making and adds unneeded stress.

He was definitely right about KO and has also been right about quite a bit during his current spat with Consolidated Tomoka. His problem is that he comes off as all or nothing and sometimes over the top/too extreme in his negativity. This turns a lot of people off. Probably more so than the performance issues. Frankly if you are investing in a fund like Wintergreen, you shouldn't expect to be beating the S&P. But neither should someone whom buys a CD. One look at his portfolio will tell you he's not chasing the indexes.

This is something I'd want to like. As long as it is not filled with stuff about "the next marijuana millionaire" etc. If anyone here recommends it I'll probably grab a copy.

This is probably the most overlooked yet relevant thing. Further if you look at guys whom supposedly beat the indexes regularly, ie a Klarman, they definitely have a "dgaf" approach as to what others think and their portfolios are rather unconventional. Second, they already have their financial future's taken care of.

Politically correct, ignorant, whatever, all are the labelled cost of having an opinion these days. Opinions are not fact, they can be right or wrong, nonetheless its just an outside observation the I have found to have some merit, IMO. There's an attitude prevalent amongst many Americans in today's day(not just relating to investments btw) and age which I best describe as "do it for me". I have found, again solely from my own experience, the Canadian mentality is different. I guess if we call it "Canadian conservatism" its more acceptable. Hedge fund I guess can be defined differently, although I suppose my reference was more in relation to broader investment management. From my little perch here in America, I have no problem saying that I've found Canadians to be savvier and more financially cognizant than my fellow Americans. If I offend anyone north of the boarder with this sweeping generalization, I apologize.

I remember hearing him say something along the lines of "if I could snap up 500,000 single family homes in one order I would; it just doesn't work like that though". Granted when you have money its not as much of a challenge, but between the time and the fees necessary to make a large enough investment he probably would have just been better off buying stocks. Which is what he did.

I don't know if you'd call it timing the market or not, but simply exercising discipline in terms of valuation monitoring is something that can absolutely be done consistently. There's definitely an overlap with timing the market so to speak. For instance, I believe it was August 25, 2015 when there was that major China induced draw-down at the open. You had GM(I think at about $25 a share) and AAL both trading at sub 5 PE with sustainable forward earnings. It didnt take a rocket scientist to add, so I did. One could say I timed the market effectively. All I did is see a bargain though. Last January/February a company called Consolidated-Tomoka traded below half of its NAV despite being a fundamental rock. All I did is add. It just made sense. That happened to be the market bottom. Maybe it's oversimplified, but its worked for me in the limited dozen years or so I've been investing.

Well, this definitely isnt politically correct to say. It is definitely a broad scale, sweeping generalization, but from my own experience I've found the average Canadian to be far more intelligent and fiscally responsible than the average American. Americans love to have everyone else do everything for them. And paying someone else to do it makes a lot of people feel special.

So what's the bias or fake news here? The article points out the fact that he was practicing in back of the car. I'd relate to your sentiment if they knocked him for it, but they didn't. Newsworthy? no. Fake? no. You read this, or any of the other pieces on the same thing and don't see it as rife with negative connotation? The random Twitter quotes? Presenting him as "weird" or some sort of buffoon for practicing a speech? Why is this is even a headline. Surprisingly, I have noticed a different tone in a lot of the stuff put out today after last nights speech. That doesn't negate the fact that for the past year the media has gone so far out of their way to undermine and make him look bad. The Nazi Germany comparisons? Seriously? In fact this, more than anything else in my opinion is what put Trump over the top with the election. There were many people who were just so sick and tired of the media doing everything it could to will Clinton into office. The same media the had Kyrie Irving's "the world is flat" quote as front page news recently. These guys are a bunch of clowns and its amusing that they continue to be perplexed as to why they are hated and no longer allowed to do big boy jobs; like access the president.

We want to talk about fake news/media bias? http://www.cnbc.com/2017/02/28/president-donald-trump-practice-congress-speech-in-back-of-car.html How exactly is this newsworthy, or necessarily something to present as "weird".

Thats true, and quite fine. What is trite is that there is a huge double standard with the media, and with a lot of folks out there. A lot of people didn't vote for Obama yet you didn't see riots and widescale protests either time he was elected. Now the shoe is on the other foot and there is no shortage and people whining and crying about the injustices of "they didn't get their way". Trump comes in and you already have people licking their chops to call him a phony and a fraud for not doing what he said he was going to do. Then, unlike the modern day politician, he starts doing, exactly what he said he was going to do, and people are flabbergasted at the audacity of what he's doing. And no, I'm not even talking about the moronic, non educated silver spoon Hollywood types like Katy Perry, Scarlet Johanssen and Madonna. You can see examples of this here.

Outside the fact that the investments have been successful to date, I really do question the purity of the recent bullishness on AAPL and the airlines. Not because they aren't good investment(I've owned both myself) but simply the timing. I really feel like the guy just has so much cash he doesn't know what to do with that maybe he's stretching his parameters to justify new investments. I mean the airline consolidation story has been going on for nearly half a decade; why now? AAPL has been cheap and on the radar forever as well. He refuses to pay a dividend and is on record regarding what his take is on buybacks(although even this seems to be getting slowly walked back of late). Must be a nice problem to have.

Welcome, and great post. I wouldn't say I disagree entirely although I'm still moderately invested. What I have seen, especially since the election, is that complete and utter dog shit is going bananas. For no reason whatsoever. Pure mania (cough TSLA) I'm a believer that one should always have a smaller core of decent large cap companies that present "relative value" solely because no one really knows where the market will end up and being entirely in cash or net short is basically a gamble(IMO). Companies like GM, AGN, CSCO, T, etc. The truth is this environment can go on longer than anyone expects. There were plenty in 2011-12 who were full blown bears. 5 years later and look where things are. But all in all, I'd concur with most of your sentiment. Looking for an undervalued compounder in this environment; yea right, good luck. Maybe in the oil/material names, but thats it.

It would seem that if nothing else this is/was a good opportunity to put on a some sort of arb/pair trade.

Anyone still follow this?

What an awesome and honest answer. This was one of my best performing positions last year. Was actually a little disappointed exiting the position because everything was saying "this time its different" although history says this is a dud at these levels. Hearing this guy talk like that really reinforces what an open minded, shareholder friendly management can do. Kudos to him for that.

I'd agree. That's actually why I got into this. Right around the time Juicer got the boot at PICO. And while now PICO seems to be on the same page in terms of its designated purpose, UCP seems, at least on the surface to be somewhat standoffish. Just my opinion but at a discount to book, this is pretty easy money. Once near book, you're pretty much betting on an outright sale; as outside of that this just isnt a very well run company in a cut throat business.

Was in this up until about a month ago. The reality here is that with this at BV, there are better companies to be involved with. I've seen the "changes to employment contracts" thing done plenty of times when a Board or senior management feels threatened by a future sale/shakeup. IMO it's not really reflective of something being on the brink of happening. Rather just something that gets done so people sleep better at night.

Wow. Great thought provoking stuff. I think a separate tangent can take us to the debate of emotion vs the collection psychological efforts of mass emotions. By this I am referring to the aggregate emotions of crowds that ultimately create market dislocations. You have investments that people feel good about. Investments people buy because others are buying. Investments because people are convinced they will only go up. Think about VRX and the roller coaster. Guys like Chanos were tooting the short horn in the $60s. The stock chugged along for years to a high north of $250. Now, the pendulum has swung so far back the other way, people are having a hard time ponying up anything more than a fire sale liquidation number. Without getting into the fundamental calamity of the VRX story, the psychology behind what drove the stock was incredible. Kind of like a current AMZN or TSLA.

The coffee is gross and overpriced but this is and always has been a lifestyle company. They have the whole cafe/hangout place thing going for them which is huge in cities. Additionally the have introduced food and deli items. The employees almost resemble a Holister/Abercrombie type place. They are typically very well put together and friendly. Far different than a DD or gas station. From a managerial standpoint the company is incredibly innovative and well managed. As for the stock, it just isn't attractive to me as the multiple is still a premium one which IMO is too much for a coffee company with a lot of positive "intangibles".