U.S. Freight Car Loads Ending November 19th

[Parsad]

Still looking good!  Cheers!

 

http://www.bloomberg.com/news/2011-11-23/u-s-rail-freight-carloads-for-week-ended-nov-19-table-.html?cmpid=yhoo

[Santayana]

Which number are you looking at Sanjeev?  I see 1.8% growth YTD vs. 2010 in total carloads and think that's pretty anemic.  Yes it's not negative, but nothing that screams growth either.

[Parsad]

Which number are you looking at Sanjeev?  I see 1.8% growth YTD vs. 2010 in total carloads and think that's pretty anemic.  Yes it's not negative, but nothing that screams growth either.

 

I look at all, but I pay more attention to the transport of "finished goods" or Intermodal, whereas commodities can be seasonal or due to specific demand.  Cheers!

[libor.plus1]

I'd like to say that I think that these anecdotal pieces of evidence you put here are perhaps only confirming your bias that things are "still looking good". I also think unconsciously you might be trying to seek out these positives and perhaps ignoring the obvious negatives. It's a much more tame and non-insane version of Ben Graham(?) posting things that affirm his investments in LVLT.

 

For every arbitrary article that you post showing a (I would say positive, but I don't think 1.8% growth really qualifies)... I can find an equally disturbing piece of news.. such as the most recent German bond auction results and the widening CDS spreads on all the banks...

 

I'm only stating this because usually there is a lot of tugging and pulling on the board here which makes this my #1 source for commentary, but over the last few months, its started to move towards groupthink (or maybe I'm just jaded by the BAC thread)... and the ones that generally do hold countering views ... umm... perhaps don't state their opinions in the most....reasonable/sane/logical/nonabrasive way.

[Parsad]

I'd like to say that I think that these anecdotal pieces of evidence you put here are perhaps only confirming your bias that things are "still looking good". I also think unconsciously you might be trying to seek out these positives and perhaps ignoring the obvious negatives. It's a much more tame and non-insane version of Ben Graham(?) posting things that affirm his investments in LVLT.

 

For every arbitrary article that you post showing a (I would say positive, but I don't think 1.8% growth really qualifies)... I can find an equally disturbing piece of news.. such as the most recent German bond auction results and the widening CDS spreads on all the banks...

 

I'm only stating this because usually there is a lot of tugging and pulling on the board here which makes this my #1 source for commentary, but over the last few months, its started to move towards groupthink (or maybe I'm just jaded by the BAC thread)... and the ones that generally do hold countering views ... umm... perhaps don't state their opinions in the most....reasonable/sane/logical/nonabrasive way.

 

Libor, wouldn't that be true of the same biases you may hold...such as the widening CDS spreads on all of the banks or the recent German bond auction results.  I would guess that almost everyone with any investment idea is biased to their idea to some degree.  Wasn't Buffett biased on Coke when it went to $80 in 1999? 

 

The only important factor is whether you can differentiate and make the hard choice to admit when you are wrong at the end of the day, or even better, make the decision to vacate the investment when your thesis is wrong.  That's all I care about and what I base my decisions on.  Cheers!

[moore_capital54]

I'd like to say that I think that these anecdotal pieces of evidence you put here are perhaps only confirming your bias that things are "still looking good". I also think unconsciously you might be trying to seek out these positives and perhaps ignoring the obvious negatives. It's a much more tame and non-insane version of Ben Graham(?) posting things that affirm his investments in LVLT.

 

For every arbitrary article that you post showing a (I would say positive, but I don't think 1.8% growth really qualifies)... I can find an equally disturbing piece of news.. such as the most recent German bond auction results and the widening CDS spreads on all the banks...

 

I'm only stating this because usually there is a lot of tugging and pulling on the board here which makes this my #1 source for commentary, but over the last few months, its started to move towards groupthink (or maybe I'm just jaded by the BAC thread)... and the ones that generally do hold countering views ... umm... perhaps don't state their opinions in the most....reasonable/sane/logical/nonabrasive way.

 

I am actually of the view that Sanjeev and others that post positive economic data points are merely providing a balanced view compared to the overwhelming amount of negative data we see from the moment we rise and until the moment we go to sleep.

 

Relating to BAC, if you don't see BAC is an obvious value play, you are either new to the game, or are part of the group of investors that feel post lehman it is impossible to value a financial stock. Some well respected members belong to that group such as Yachtman and a few intelligent posters on this board, such as Munger.

 

But to think that this board is exhibiting herd mentality by being long BAC is ridiculous, because using the same valuation metrics, and intuition you would have done extremely well as a value investor over the last 20 years, the circumstances that have led us to be long BAC are similar circumstances that in the past have produced fantastic results. Having Buffet confirm the thesis even in a preferred format, only validates that this is the right position or at the least the right set of circumstances...

 

I am more worried about the younger generation of value investors I have seen on this board, that think they can genuinely time the market and subscribe to the ZerhoHedge and Cullen Roche school of thought that the world is going to shit. I suggest you all look at the track records of those leaning often on the short-side, once you look at the world glass half empty it will affect you in every way, and you will lose the most important skill as an investor, and that is the skill of identifying scenarios where being right will reward you with a lollapalooza result, and you can only get there by maintaing the stamina during times like these to imagine how the world will look if just a sliver of the market participants begin to weigh the "half full" scenario.

 

[biaggio]

good post moore.

 

Up until recent years I have been negative + a skeptic for ~20 years--prefering to read negative things that reaffirm my beliefs. As a result I missed out on a lot of opportunities. I learned (hopefully) the hard way. Luckily I did not have a lot of cash to invest. i.e. I was reading in 1987 that the "world was going to shit"

 

I remember looking at BRK at $8500 in ~ 1988, just starting out and really knowing nothing + thinking I could wait for a cheaper price that never came.

 

Its more profitable to be a buyer + optimist when everyone else is a pessimist and selling, provided you know what you are doing.

 

 

[bmichaud]

I am more worried about the younger generation of value investors I have seen on this board, that think they can genuinely time the market and subscribe to the ZerhoHedge and Cullen Roche school of thought that the world is going to shit. I suggest you all look at the track records of those leaning often on the short-side, once you look at the world glass half empty it will affect you in every way, and you will lose the most important skill as an investor, and that is the skill of identifying scenarios where being right will reward you with a lollapalooza result, and you can only get there by maintaing the stamina during times like these to imagine how the world will look if just a sliver of the market participants begin to weigh the "half full" scenario.

 

 

It's very easy to have a "glass half full" approach when one does not fully understand and appreciate how the monetary system works and how dangerous forced austerity measures are in a deleveraging environment. We're in unprecedented times, and it is merely being prudent to take into account the current environment when constructing a portfolio.

 

The following is a quote from WEB when he hired Todd Combs (see: http://moneymorning.com/2010/10/28/warren-buffet-investment-todd-combs/):

 

"Buffett wasn't looking for an exciting star," Vidak Radonjic, managing partner at Beryl Consulting Group LLC, told Bloomberg. "He's chosen someone with a low profile who has the skills to help preserve capital by managing downside risk. Combs was able to navigate a difficult 2008 when other hedge fund managers didn't."

 

Buffett has been emphasizing the need for risk management since he announced a search for an additional investment manager in 2007. In a letter to shareholders Buffett wrote that any replacement candidate would have to be "genetically programmed to recognize and avoid risk, including those never before encountered."

 

This business is all about managing risk. One can manage risk while at the same time being optimistic about individual securities. I am becoming increasingly worried about the macro environment, yet I am buying the crap out of individual securities right now.

[Parsad]

This business is all about managing risk. One can manage risk while at the same time being optimistic about individual securities. I am becoming increasingly worried about the macro environment, yet I am buying the crap out of individual securities right now.

 

I agree fully with that sentiment.  I think Libor amongst others, shouldn't misconstrue my optimism for the United States to be void and ignorant of the macro environment around me.  Anyone who attended our AGM in Toronto this year back in April, heard me say clearly that we were very concerned about Europe and do not expect the European Union to look the same five years from now.  We also said that we were concerned about a slowdown in China.  You're more than welcome to view our powerpoint presentation on our site.

 

But that macro view does not prevent me from buying securities.  We were around 40% cash towards the end of June, and since then we've been maneuvering, buying and selling securities that we think are undervalued to try and get the largest discount to intrinsic value within our portfolio.  We cannot predict, nor time what the markets will do, and neither can anyone else.  The portfolio's value will fluctuate with volatility, as it always has, and our job is to select the securities we can find with the largest upside and the lowest downside by buying with a margin of safety.  The more risky the balance sheet of the business, the greater the discount has to be. 

 

We cannot worry about a one in fifty year storm or a possible 17-year bull market.  All we can do is buy securities that look cheap to us, and if we can't find anything, then we sit on cash until we can.  Other than that, I cannot worry about what anyone says, does, or predicts, because the only thing within my control is my temperament and execution. 

 

The word "unprecedented" is bantered around for almost every event the world goes through.  Remember "Y2K"...it was unprecedented.  Remember the "credit crisis of 2008"...unprecedented.  Remember the "Great Depression", "Oil Embargo of the 70's", World Wars I & II, or The Cold War...all unprecedented!  What we are going through today is just another crisis...and this too shall pass.  Cheers! 

[stahleyp]

really good posts by moore and sanj. It's always good to get your guys' insights. :)