Vito Maida

[Guest 50centdollars]

Vito Maida published his quaterly letter today. He is bearish on markets.

 

Cheers

Patient_Capital.pdf

[frog03]

I don't like the chart gross of all fees.  Arlington Value has also used a similar chart earlier this year.

Why do successful investors fees like they have to show gross of all fees?  Net of all fees in these two cases is certainly good enough...

[NormR]

Personally, I like to see both gross and net numbers.  One goes to manager skill and the other shows how much is left for investors. 

[frog03]

yes, I'd prefer both as well Norm.  This being said putting only the gross number does not seem very ethical to me.

[Parsad]

I don't think Vito would try and do anything unethical.  Probably putting both numbers would be better, but I think he's just trying to show the value they are adding on top of the respective index.  Cheers! 

[Kraven]

Thanks for posting.  It's a good letter but seems to make the same fundamental mistake that others do.  He discusses how he expects low to negative returns from "virtually all assets classes".  However, unless he is investing in an index I am unclear how that directly impacts individual securities.  If he said "I can't find any undervalued securities so I'm in cash" that would be fine.  But that's not what he says.  He says indices are overvalued.  There is no discussion of any individual opportunities.  So while a market downturn may (or may not) affect in some way all or most securities, to the extent one believes that the underlying valuation is unaffected it's a flawed sentiment. 

[Parsad]

Thanks for posting.  It's a good letter but seems to make the same fundamental mistake that others do.  He discusses how he expects low to negative returns from "virtually all assets classes".  However, unless he is investing in an index I am unclear how that directly impacts individual securities.  If he said "I can't find any undervalued securities so I'm in cash" that would be fine.  But that's not what he says.  He says indices are overvalued.  There is no discussion of any individual opportunities.  So while a market downturn may (or may not) affect in some way all or most securities, to the extent one believes that the underlying valuation is unaffected it's a flawed sentiment.

 

While the long-term annualized results may not be quite as impressive as some other hedge fund managers, you have to be quite amazed by someone who has not had a single down year.  If you are a widow or orphan, investing with Vito may be a much better alternative to anything out there.  Cheers!

[Kraven]

Thanks for posting.  It's a good letter but seems to make the same fundamental mistake that others do.  He discusses how he expects low to negative returns from "virtually all assets classes".  However, unless he is investing in an index I am unclear how that directly impacts individual securities.  If he said "I can't find any undervalued securities so I'm in cash" that would be fine.  But that's not what he says.  He says indices are overvalued.  There is no discussion of any individual opportunities.  So while a market downturn may (or may not) affect in some way all or most securities, to the extent one believes that the underlying valuation is unaffected it's a flawed sentiment.

 

While the long-term annualized results may not be quite as impressive as some other hedge fund managers, you have to be quite amazed by someone who has not had a single down year.  If you are a widow or orphan, investing with Vito may be a much better alternative to anything out there.  Cheers!

 

I had no comment on his returns.  I don't even recall what they are.  I was simply commenting on the words in his letter.  I am sure you are right about how he's done. 

[constructive]

He needs a couple of hours with a graphic designer. That font/layout makes my eyes unhappy.

 

I agree that only showing gross returns is problematic. Maybe he has multiple fee structures and thinks showing net returns would be difficult.

[petey2720]

Who cares about the font.  The gross vs net numbers are between him and his investors.  Can we talk about the bigger issue:  He has been investing other peoples money for 13 years and has taken only one permanent loss of capital on Nokia.  How is that possible???  Congrats to him and his investors!!!!

[Ham Hockers]

I wish he had given more detail on why he thinks most markets are overvalued based on historical valuations. The S&P 500 is around 17x earnings, that neither screams cheap nor expensive to me.

[Ham Hockers]

Who cares about the font.  The gross vs net numbers are between him and his investors.  Can we talk about the bigger issue:  He has been investing other peoples money for 13 years and has taken only one permanent loss of capital on Nokia.  How is that possible???  Congrats to him and his investors!!!!

 

Maybe he never sells? Anyone know the details?

 

Regardless, you'd expect someone, somewhere, to achieve this. You get enough people flipping coins, someone's bound to come up heads 100 times in a row.

[Parsad]

Who cares about the font.  The gross vs net numbers are between him and his investors.  Can we talk about the bigger issue:  He has been investing other peoples money for 13 years and has taken only one permanent loss of capital on Nokia.  How is that possible???  Congrats to him and his investors!!!!

 

Maybe he never sells? Anyone know the details?

 

Regardless, you'd expect someone, somewhere, to achieve this. You get enough people flipping coins, someone's bound to come up heads 100 times in a row.

 

Vito is no luck of the draw type.  In the last 13 years, he's only been fully invested at one time...the bottom of February 2009!  Those results you see were done with significant amounts of cash.  His fund isn't for the person looking for the highest absolute results.  It's for the senior who has lost a bundle in mutual funds, index funds and underperforming hedge funds...the guy who doesn't need 15% annualized, but needs 7-10% annualized year in, year out, with no permanent loss of capital.  Vito understands Buffett's rule probably better than almost any other investment manager out there...don't lose money! 

 

Everyone is out there to make the big, quick score...highest absolute results with little in the way of managing permanent capital loss risk.  You look at a guy like Chad Wasenlikoff at Fortress.  Smart guy, swung big, had huge success...then you see what that permanent loss of capital does when risk isn't managed properly and you overleverage or swing maybe too big on the wrong pitch.  You've seen these things over and over, yet people only cheer for the guy getting 18-20% annualized...until they burn...think Bill Miller...or possibly it looks like Sprott might be next.  In those terms, Vito offers something very few do...steady gains with near zero loss of capital on any idea.  In his own way, that's extraordinary!  Cheers!

[Ham Hockers]

You look at a guy like Chad Wasenlikoff at Fortress.  Smart guy, swung big, had huge success...then you see what that permanent loss of capital does when risk isn't managed properly and you overleverage or swing maybe too big on the wrong pitch.

 

Thanks for the color on Vito, Parsad.

 

Coincidentally I just read the entire thread on Fortress today. Some really fascinating stuff ...