Monday, February 28, 2011
Sunday, February 27, 2011
Article about Shelby Davis
Track record: 23% compounded annual growth for 47 years.
"Although he deviated somewhat from insurance companies over his lifetime 11/12 most successful investments were still in that industry. These included AIG, the four Japanese companies above, Berkshire Hathaway, AON, Torchmark, Chubb, Capital Holdings, and Progressive. The odd man out was Fannie Mae. He had some other minor successes but the bulk of his portfolio was due to these 12. If anything can be learned from his investing it’s that holding a few big winners for a long time can go a long way."
http://www.fwallstreet.com/article/1583-shelby-davis-a-spectacular-unknown-value-investor#more-1583
"Although he deviated somewhat from insurance companies over his lifetime 11/12 most successful investments were still in that industry. These included AIG, the four Japanese companies above, Berkshire Hathaway, AON, Torchmark, Chubb, Capital Holdings, and Progressive. The odd man out was Fannie Mae. He had some other minor successes but the bulk of his portfolio was due to these 12. If anything can be learned from his investing it’s that holding a few big winners for a long time can go a long way."
http://www.fwallstreet.com/article/1583-shelby-davis-a-spectacular-unknown-value-investor#more-1583
A day with Warren Buffett
WSJ Article: Warren Buffett, Unplugged
Excerpts:
He chatted briefly with his assistant, then hurried into his modest-size office and shut the door. There is no computer in there, nor is there a stock-quote machine or stock-data terminal. He keeps a muted television set tuned to CNBC, the financial-news network. Although he occasionally carries a cellphone on the road, he does not use one in Omaha. He keeps no calculator on his desk, preferring to do most calculations in his head. "I deplore false precision in math," he says, explaining that he does not need exact numbers for most investment decisions. On the cabinet behind his desk are two black phones with direct lines to his brokers on Wall Street.
http://www.cb.wsu.edu/~nwalcott/finance325/template/readings/WSJ.com%20-%20Warren%20Buffett,%20Unplugged.pdf
Excerpts:
He chatted briefly with his assistant, then hurried into his modest-size office and shut the door. There is no computer in there, nor is there a stock-quote machine or stock-data terminal. He keeps a muted television set tuned to CNBC, the financial-news network. Although he occasionally carries a cellphone on the road, he does not use one in Omaha. He keeps no calculator on his desk, preferring to do most calculations in his head. "I deplore false precision in math," he says, explaining that he does not need exact numbers for most investment decisions. On the cabinet behind his desk are two black phones with direct lines to his brokers on Wall Street.
Mr. Buffett has relied on gut instinct for decades to run Berkshire Hathaway Inc. Watch him at work inside his $136 billion investment behemoth, and what you see resembles no other modern financial titan. He spends most of his day alone in an office with no computer. He makes swift investment decisions, steers clear of meetings and advisers, eschews set procedures and doesn't require frequent reports from managers. Occasionally he picks up the phone, calls his broker and trades $100 million or more of stock.
Mr. Buffett deliberately keeps the outside world at bay, believing it is the best way for him to remain "rational" as an investor. If he is interested in investing in a company, he studies the financials himself. "I've created a good environment," he says. "All I have to do is think and not be influenced by others."
http://www.cb.wsu.edu/~nwalcott/finance325/template/readings/WSJ.com%20-%20Warren%20Buffett,%20Unplugged.pdf
Saturday, February 26, 2011
Friday, February 25, 2011
Netflix uses Amazon cloud services
Contrary to statement made by folks like Jim Cramer, Netflix does not have a lock on streaming video. To early in the game to call a winner. Especially when it relies on Amazon services for hosting streaming media. Amazon is a good choice given that they have built out data centers around the world and are arguably the low cost data center provider.
http://blogs.wsj.com/deals/2011/02/22/evening-reading-why-netflix-is-worried-about-amazon/
http://blogs.wsj.com/deals/2011/02/22/evening-reading-why-netflix-is-worried-about-amazon/
John Paulson Portfolio
Company | Shares Held-09/30/2010 | Shares Held-12/31/2010 | % Change in Shares Held | % of Portfolio |
|---|---|---|---|---|
SPDR Gold Shares | 31,500,000 | 31,500,000 | 0.00% | 15.41% |
AngloGold Ashanti (NYSE: AU) | 41,000,000 | 40,949,437 | -0.12% | 7.11% |
Citigroup | 424,000,000 | 413,525,641 | -2.47% | 6.9% |
Bank of America | 137,794,296 | 123,860,951 | -10.11% | 5.83% |
Anadarko Petroleum (NYSE: APC) | 13,400,000 | 21,277,761 | 58.79% | 5.72% |
Hartford Financial Services Group (NYSE: HIG) | 44,000,000 | 43,950,701 | -0.11% | 4.11% |
SunTrust Banks (NYSE: STI) | 29,380,700 | 34,358,412 | 16.94% | 3.58% |
Comcast (Nasdaq: CMCSA) | 40,000,000 | 40,000,000 | 0.00% | 3.1% |
Capital One Financial (NYSE: COF) | 15,000,000 | 18,000,000 | 20.00% | 2.7% |
MGM Resorts International (NYSE: MGM) | 43,800,000 | 43,800,000 | 0.00% | 2.29% |
http://www.fool.com/investing/general/2011/02/24/loading-up-on-gold-john-paulsons-top-portfolio-hol.aspx
Rare earth elements - new capacity coming online - expect excess supply
1) the total production of rare earth elements is 130k tons. of this, japan uses 30k, the US uses 8k, and china uses 90k. these are round numbers, to be sure.
2) the mine that molycorp will bring on-line in the next year will be between 25k and 40k tons. note that this is versus 8k that the US imports...
For more see:
http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/42459
WSJ: Why companies are hoarding cash
"it isn't just management that is making companies sit on too much cash. It is tax policy, too. Congress and the White House are discussing whether the U.S. should follow the rest of the world and stop taxing repatriated offshore earnings from companies that already have paid taxes to foreign governments. Some gnarly technical details will have to be worked out if the repatriation tax is to be reduced or eliminated."
http://online.wsj.com/article/SB10001424052748703803904576152492475125636.html?mod=WSJ_article_MoreIn_Investing
http://online.wsj.com/article/SB10001424052748703803904576152492475125636.html?mod=WSJ_article_MoreIn_Investing
WSJ: Truth about Salesforce.com
Article fails to mention increasing competition from Microsoft Dynamics CRM.
http://online.wsj.com/article/SB10001424052748704150604576166280156761902.html?mod=WSJ_hpp_sections_personalfinance
http://online.wsj.com/article/SB10001424052748704150604576166280156761902.html?mod=WSJ_hpp_sections_personalfinance
Fundamentals
Momentum can carry a hot stock a long way. But at some point, investing fundamentals will surely reassert themselves. They always do.
Sunday, February 20, 2011
The courage to invest differently
Be different
“The hardest thing over the years has been having the courage to go against the dominant wisdom of the time, to have a view that is at variance with the present consensus and bet that view.”
--- Ledgary Hedge Fund Manager Michael Steinhardt
Be a critical thinker
“You can’t be a good value investor without being an independent thinker—you’re seeing valuations that the market is not appreciating. But it’s critical that you understand why the market isn’t seeing the value.”
--- Joel Greenblatt
“The hardest thing over the years has been having the courage to go against the dominant wisdom of the time, to have a view that is at variance with the present consensus and bet that view.”
--- Ledgary Hedge Fund Manager Michael Steinhardt
Be a critical thinker
“You can’t be a good value investor without being an independent thinker—you’re seeing valuations that the market is not appreciating. But it’s critical that you understand why the market isn’t seeing the value.”
--- Joel Greenblatt
Sunday, February 13, 2011
Steve Forbes Interview with Gary Schilling
Gary Schilling on Deleveraging
Basic thesis of most recent book is that Americans are going through a deleveraging phase. This is a healthy development, but it will result in slower economic growth.
Basic thesis of most recent book is that Americans are going through a deleveraging phase. This is a healthy development, but it will result in slower economic growth.
Saturday, February 12, 2011
Gary Kaminksy - Smarter than the street
Seeking Alpha article
Book on Amazon
According to Mr. Kaminsky, individual investors have an edge because they aren't locked in to any specific investing style the way that most mutual fund managers are, so you don't have to be just investing in large caps, or small caps or a particular theme or sector. You can also be more flexible in buying or selling a position than an institution investor because you don't have to wait for a few weeks to purchase or liquidate a large block of shares. He suggests 3-5 hours a week of doing your homework on the Internet of not only the stocks you own, but the overall condition of the economy. He also talks a lot about portfolio structure and utilizes the concentrated portfolio approach where you own no more than 20-30 securities. Anything less and you increase the risk in your holdings, anything more and you become a closet indexer, which doesn't bode well for beating the market.
Book on Amazon
According to Mr. Kaminsky, individual investors have an edge because they aren't locked in to any specific investing style the way that most mutual fund managers are, so you don't have to be just investing in large caps, or small caps or a particular theme or sector. You can also be more flexible in buying or selling a position than an institution investor because you don't have to wait for a few weeks to purchase or liquidate a large block of shares. He suggests 3-5 hours a week of doing your homework on the Internet of not only the stocks you own, but the overall condition of the economy. He also talks a lot about portfolio structure and utilizes the concentrated portfolio approach where you own no more than 20-30 securities. Anything less and you increase the risk in your holdings, anything more and you become a closet indexer, which doesn't bode well for beating the market.
Interview with Bruce Berkowitz - 1/22/2010
Cash - typically 10-20% of holdings. Cash is valuable when market in downturn and nobody has cash. Rule number 1 - don't lose money. Operate a bit on the conservative side because of rule 1.
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