November 2011
1 post
“What we learn from history is that people don’t learn from history.”
– Warren Buffett
Particularly relevant after a successful IPO of a crap company.
October 2011
1 post
A Horrible Year. 2011 YTD end of Q3. →
Jae Jun of Old School Value Blog gives us a very honest update on his portfolio performance.
The following is a quote by Buffett on measuring performance:
While I much prefer a five year test, I feel three years is an absolute minimum for judging performance. It is a certainty that we will have years when the partnership performance is poorer, perhaps substantially so, than the Dow. If any...
September 2011
1 post
“The health of our economy has been measured based on the wrong statistic:...”
– Fed is Measuring U.S. Economic Health by the Wrong Number
A great piece by one of my favorite authors.
August 2011
3 posts
“Profit margins are probably the most mean-reverting series in finance, and if...”
– Jeremy Grantham
via Margin Shrinkage – It Can Happen to You
This is a must-read article. Seriously.
“What the human being is best at doing is interpreting all new information so...”
– Warren Buffett on Confirmation Bias
June 2011
2 posts
1 tag
Statistical Shocker: S&P 500 Performs Best When... →
For some reason all this negative news about the economy has taken its toll, which isn’t normal for me. To help maintain a level head, I spent some time digging into the data and it appears there is almost no correlation between poor economic data and market returns. I’d like to share what I’ve found.
First, this is particularly interesting:
As you can see, there is very...
4 tags
Should You Sell Your $AAPL Stock?
When the markets are moving on emotion it can be difficult to keep a clear head. The S&P just finished its 6th week of consecutive losses and Apple’s closing price was the lowest its been in over 6 months. Times like these call for a good old-fashioned rational analysis of the situation.
If you’re an AAPL investor, you know how frustrating these past few months have been. The...
May 2011
2 posts
2 tags
“Somewhere in the middle of the bull market the first common-stock flotations...”
– Benjamin Graham in The Intelligent Investor
So LinkedIn went public today and it popped up over 100% reaching around $10B market cap. Forget P/E. Thats over 40x last years revenues.
The thing is that I’d have to consider Linked In one of the better companies that could go public. Just think...
LinkedIn prices IPO at $45 a share →
Few Internet companies have tested the public waters since the dot-com crash. LinkedIn’s lofty valuation — some 20 times its 2010 revenue — already has invited comparisons to the heyday of the last boom.
Um. Ok.
This immediately made me think about something I read in James Montier’s excellent book Value Investing. Montier quotes a BusinessWeek article where Scott...
April 2011
1 post
“Cisco is financially strong and we think statistically cheap. It has a dominant...”
– Tweedy Brown in their 2010 annual letter, [via Why Are Value Gurus Buying Cisco? — GuruFocus.com]
I bought some CSCO a couple months back and its been a painful ride so far. As Tweedy says, it offers a high margin of safety based on conservative valuations (33% is their estimate) and...
March 2011
1 post
“They are not new lessons. Never owe any money you can’t pay tomorrow...”
– - Warren Buffett on key lessons from the financial crisis.
[via Warren Buffett: The U.S. is moving toward plutocracy - Haaretz Daily Newspaper | Israel News]
February 2011
9 posts
4 tags
“Operating earnings, despite having some shortcomings, are in general a...”
– Warren Buffett in his 2010 Letter to Shareholders
“When Charlie and I met Todd Combs, we knew he fit our requirements. Todd, as was...”
– Warren Buffett in his 2010 Letter to Shareholders
My ongoing search for fairness in fees for managing money continues.
Marriott International announces plan to split in... →
An opportunity may be a-brewing here.
3 tags
“The stock market is a no-called-strike game. You don’t have to swing at...”
– Warren Buffett
I got nothin’ worth a swing right now. I think about this quote often.
3 tags
“A public opinion poll is no substitute for thought.”
– Warren Buffett
2 tags
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“In 2006, promises and fees hit new highs. A flood of money went from...”
– Warren Buffett, 2006 Letter to Berkshire Hathaway Shareholders
4 tags
“What we have here, therefore, is an extreme example of the magic of compounding...”
– Risk Without Reward: Buffett versus 2 and 20
I’m doing some research for a new essay to clarify my position on fees charged by investment partnerships.
The implication here is that the 2 and 20 crowd of money managers have to consistently better the market by 33% to earn their keep....
January 2011
16 posts
“We expect our revenue growth rate to decline, and as we continue to invest for...”
– - LinkedIn’s S-1 Filing as quoted on LinkedIn Files For IPO; Revenue $161 Million For The First Nine Months Of 2010
Yucky.
That is all.
“I get so very tired of analysts, pundits and bloggers assigning an arbitrary...”
– “Worth” — The Brooks Review
4 tags
The $AAPL Buying Opportunity is Coming
On Monday I cautioned against gambling on Steve’s tragic news by buying $AAPL come Tuesday morning. I saw too many red flags, which made the situation feel more like a craps shoot than a prudent investment.
So far things have played out mostly as I had expected and I’m still waiting to see more downside before I buy more $AAPL. Mr. Market’s ADHD can sometimes take a few weeks to...
“The stock market is a no-called-strike game. You don’t have to swing at...”
– Warren Buffett
One such pitch that should not be swung at right now is AAPL.
Facebook Shares Hit $28.26 Per Share, That’s a... →
The last auction prior to this one closed December 15 at $22.75/share. Today it hit $28.26 per share. With 2. 5 billion or so shares outstanding, that’s a $70.65 billionish valuation. A month and a half ago shares were trading on SecondMarket at a $50 billion valuation.
Who buys a $70 Billion company with no idea how much its making?
Speechless.
4 tags
Don't Gamble on Steve Jobs' Health
For those of you who live under a rock, Steve Jobs announced today that he is taking a medical leave of absence. This news is shocking and sad and I wish him a swift recovery for whatever it is that ails him.
A side effect of the announcement is that AAPL stock fell as much as 6% in world markets. My Twitter stream has been full of people saying things like:
“I can’t wait for...
2 tags
In investing, like most things in life, timing is... →
An example
If you invested money at the end of 1930 and withdrew it in 1950, the stock market would have returned about 2 percent a year after inflation and taxes. People who invested after the crash in 1929 in hopes of a quick rebound had to wait many years for their investments to pay off.
The market hasn’t moved much for those who bought in 1999 and held on. I think this is why...
3 tags
“You do things when the opportunities come along. I’ve had periods in my life...”
– Warren Buffett
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Berkshire moves step closer to Buffett succession →
Buffett had addressed his succession in May, saying his position would ultimately be split into a CEO role and three or four investment chiefs. There has been speculation since then on who they would be and when they would be hired.
Combs, however, had not figured in that speculation.
At first glance I thought, “I’d kill to be in this position…” But what fun is Berkshire if you’re only...
3 tags
“The business schools reward difficult complex behavior more than simple...”
– Warren Buffett
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“My job is to take advantage of craziness. And that goes back to Ben Graham’s...”
– PDF: A Discussion with Mr. Warren Buffett (via vuru)
2 tags
Where Are We with Market Valuations? →
This has been added to my weekly read list.
Is it complex? Yeah.
Is it interesting? Maybe not.
Is it one of the most valuable spots on the Internet? Definitely.
“I could improve your ultimate financial welfare by giving you a ticket with only...”
– Warren Buffett