ERICOPOLY

There was at least a household name you could put on the pullback in 2011. Grexit, or whatever the household word for it was. A clearly identifiable "event" that was going to lead to systemic failure of European banks who are counter party to BAC. So that was when BAC hit $5 -- it was when Bass was saying that Greece would go down within a week or two. Soon after, the ECB acted and BAC lifted off. The funny thing about this current pullback is that there is a separate thread to speculate on what is causing the European banks to go down. There is no leading theory yet for the front page. I think that's why I find it unsettling. The leading theory could easily put the stock at $10. There isn't much reason for it to be at $12 unless you believe in the risk of systemic banking failure in Europe and possible counter party failure, or large loan losses from recession. This thing is, the stock has already entered the silly season. What's $10 when you've already gone down to $12? Another year of higher capital requirements and a somewhat deeper recession? Oh well. Market goes up, market goes down.

Returning a lot of cash to shareholders might not be a market-calming moment if these banks are increasingly getting priced for disaster.

Sure, over the next two days. But how about after that?

An exception would be the building of the Panama Canal. Good book: A Path Between the Seas.

Jesse Jackson -- can you guess what his comment would be on that one? Something about enslaving those from low-performing inner city schools -- disproportionately targeting a particular minority.

People invest a lot of private money to go to university. Often they go into debt. In theory this capital expenditure will produce a higher future income, but it may not. Regardless, there is much future personal revenue to be earned just to recover the sunk costs. Now, if people were corporations, (the reverse of corporations are people argument) they would be able to amortize the cost of their education -- enabling them to pay it off with future pre-tax income. Presently, the tax law allows for a relatively meager deduction for interest payments on student debt. My thoughts: The entire cost of the education (whether debt financed or not) should be recouped with pre-tax dollars. Progressive taxation -- it's really only a fair system if education had no cost. Some people might not really be making all that much money if you think about how much expenditure (cost of education) is associated with that higher income stream. Under this system, everyone paying for an education would get tax relief... presently, only those who have established 529 plans get partial tax relief (the contributions to those plans are done with after-tax dollars, which is why it's only partial relief).

Anyone is welcome to take advantage of me in this manner -- please come and offer me 0 money down non-recourse loans.

I have a sinking feeling that we'll look back on this wishing we'd all sold everything (except our puts). I have no mood to buy anything and usually I do after a pullback.

The search for new leadership in this country is about on this level:

Should have loaded up at $0.79. It's now bid at $2.37. 200% gain!

Also, go buy more leaps. They aren't cheep enough for me yet. I believe so. Not yet predicting though... merely discounting (with an increasing probability) at this point. Were it to be predicting, then the general market would be much lower already.

George Soros recently said (this year) that QE worked.

Can we send Matt Damon? http://money.cnn.com/2016/01/30/news/companies/spacex-elon-musk-mars-2025/index.html?iid=hp-stack-dom

I'd say that portfolio is night and day with the portfolio Pabrai has while he takes naps on the beach. Just pointing out that the third largest holding there is a doughnut 25 years later, though of course Buffet changed his mind and sold it way earlier. 25 years of dividends from that doughnut. Probably returned all the initial capital outlay.

Once you've been doing it for a long time (16+ years Pabrai has been at it), you should be able to look back at the stocks you've bought in the past and confirm how closely their business performance corroborates your initial assessment of their intrinsic value. Then adjust your approach based on reality teaching you a lesson as to whether you need a new approach or not. Let's say the study confirms that you are truly buying things at 50% of intrinsic value -- well then, you don't need to adjust anything at all. And if it delivers some bad news, then you have more to adjust in your methodology than just positions sizing. It can lead to a real "aha" moment.

I am being nit picky on your nit picky, but doesn't every dollar deposited with Pabrai's fund have its own high water mark? I mean someone could come in at the bottom in 2009 and double or triple whatever his money from that point to now. He will have to pay Pabrai fees no? This isn't a lot as I suppose very few invested with Pabrai after the crash, but I guestimate it is on the order of single digit millions. BTW, I admit I totally missed the high water mark until you brought it up, thanks. No, the high water mark is not on personal performance based on the timing you invest. It is based on the fund's high water mark. So, in fact, if you got in 2009, you would have gotten the outperformance yet paid nothing, because the fund has not its high water mark despite the outperformance post 2009 (due to the blowup on the years before). So, if the fund were open, and you put in your money today, thanks to the poor performance in 2015, its going to be a long time before you pay a dime (obviously if you believe that Mr. Pabrai can outperform going forward). I think he has a very fair compensation plan set up. I fact, if there were another fund that had first few years of poor performance, they would have shutdown due to lack of revenue. Since Mr. Pabrai is wealthy, he can afford to go on without pay. His compensation structure being fair isn't something that people are going to generally disagree with. The general problem I have is with his attitude. He appears a bit aloof to the hard work required to consistent perform well. A quick side note when buffett and gates were asked the key to success they both replied focus. Pabrai seems to tell students the key to success is vacationing on the beach most of the time. I think the going to the beach attitude was also pushed by Buffett in the 1990 chairman's letter: " Lethargy bordering on sloth remains the cornerstone of our investment style"

I don't really care who the CEO is as much as you. I'd rather them get rid of the ATMs and bring in the hot latte girls to dole out the cash -- tell you how rich you are and be all flirty. Now that would drive deposits!

It's really weird that two days have passed and the stock isn't down another 5%.

Think or know? I'd be curious if that was specifically in the disclosure documents. I was wrong -- deleted.

It doesn't look like runoff to me.

How is this different from investing in a startup? Management promises they know how to get things up and running... doesn't every startup say something like that?

The bank is in runoff: http://realmoney.thestreet.com/articles/01/26/2016/bank-america-life-support?puc=yahoo&cm_ven=YAHOO

At $15 strike.

Well, neither can Mr. Market but that doesn't stop him.

Getting Cosby'd here. Thought I was perhaps safe as a man given his track record. Perhaps it's those short skirts I've been wearing... I hear it's practically an invitation. Let's blame the guy who was recently posting about what a great deal those $13 strike BAC puts were. A post like that practically invites Mr. Market to have his way with you.