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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (31176)	6/14/2008 4:06:23 PM
From: Jurgis Bekepuris	Respond to of 78659

Paul, I mostly agree with what you wrote about Klarman. I also wanted to note that he sounds a bit hypocritical dissing hedge fund fees first and then telling that "Baupost charges a 1 percent management fee plus 20 percent of profits." O.o But OK, if he gets over 20% returns per year after fees, then maybe he's justified to charge that. Now, can we learn something from him. One thing that I may need to learn from him and from Buffett is that one needs to continuously learn new things. I am not sure if it is possible to just stay in the familiar "Buffettology" or P/Book investing areas and earn great returns. On one hand, Buffett advises to know your circle of expertise and just wait for fat pitch in that quadrant. On the other hand, he himself does not practice what he preaches. He learns and changes all the time. His PTR buy is very different from generic Buffettology or value investing, his currency and derivatives bets are even farther away. So should we (I) learn how to invest in financials now that they are dropping into potentially great bargains? Should we learn how to invest in real estate with the current bust? It could be that the greatest gains in the next five years will be made in these two areas. Should we spend week or a month or even half year concentrating on how to value financials or real estate, picking the best and then invest into them? I know this question is mostly rhetorical to you - you will probably never switch from your 200+ stocks investing, so any suggestion to focus or spend disproportionate amount of time on some area or investing technique probably seems anathema to you. Of course, you are somewhat right about the amount of time: we will never have 10 different full-time analysts that Baupost does. So we cannot look at every opportunity in 10 areas. On the other hand, some of these areas are too exotic for small investors: we will not be able to get into bankruptcy proceedings even if we knew what and how to buy. So maybe it would be enough if we (I) figured out how to evaluate mergers or spinoffs (Greenblatt)? Even this seems to be quite arcane and almost no one from SI investors does even a passable job at spinoffs. I tried but it is tough IMO and feels very foreign to me compared to Buffettology stuff. Another thing to learn from Buffett and Klarman: holding cash. Hmm, that's a toughy for me. Most of the time, I see too many "goodish" ideas to hold cash. Although I remember times when the pool of "goodish" ideas almost disappeared and it was usually a good time to hold cash. But I am not sure I would recognize these times if/when they came again. Maybe that's the time now in energy stocks - lower positions, hold cash. Maybe.

To: Paul Senior who wrote (31176)	6/14/2008 5:21:51 PM
From: jrhana	Respond to of 78659

Thank you. I learned as much from your comments as I did from the article.

To: Paul Senior who wrote (31176)	6/16/2008 11:27:46 AM
From: Madharry	Read Replies (2) \| Respond to of 78659

I certainly do believe those numbers, Paul. My own numbers have been pretty good and I am a one man shop! Since I have been trying to follow rule number #1 better my results have improved. Now I am working on having more patience and sticking with situations. Individual investors can buy spin-offs and rights offerings. distressed debt I think is a lot harder. Im still holding almost all of the MFCAF I bought and am waiting for PLG.to to split itself into two companies. Unfotunately I never held on to ME or that would have worked out really well too. A good friend of mine worked for pfeizer. He received shares of Monsanto as a spinoff that initially sold for $5-$6 a share. Now several years later he sold these shares off for over $100 a share. with plays like this its not hard to achieve a return of 20% a year. A friend of mine went all over the country opening up savings account and for a year or two did quite well. not so well recently that maybe why baupost has so much cash. Thankfully despite being a one man shop its fairly easy to piggy back on the efforts of others because of the internet. I still think buying something like PME and KYCN will work out over time but I may need to hold for several years. The main part I think most investors who lack the steel trap mind that you have paul will have to sacrifice is diversification.

To: Paul Senior who wrote (31176)	6/19/2008 9:25:46 AM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 78659

It seems that "Value Investing" congress organizers are now touting the opposite of Seth Klarman: Short! Short till you drop! (Pun intended). From their most recent email: "Seven months ago, at the 2007 New York Value Investing Congress, Bill Ackman announced that he expected the holding companies of MBIA and Ambac Financial to fail as soon as next year and David Einhorn laid out his deep concerns about Lehman Brothers. Since then, MBI is down about 80% and LEH is down more than 50%. Many attendees at the New York Congress who acted on this information have already made enviable returns. Now it is your turn to benefit from truly valuable investing wisdom!" Apparently these are the (only?) outstanding ideas people got at the congress...

To: Paul Senior who wrote (31176)	5/24/2009 4:59:47 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78659

I am reading the Seth Klarman interview here: oid.com ---- I reiterate: I remain confused as to how he actually selects his picks--- they make little sense to me based on what I understand what he says his methodology is. (There's a margin of safety with something like his THRX?) And worse, based on what I see as I have followed him over the years, his results from the picks he shows don't seem to me to justify his alleged good record. Of course, like most pros he keeps hidden what he holds right now, what he's now buying, now selling, and of any dollar gain/loss on an individual stock- what proportion of the overall portfolio that would be. Also, several of his picks are so obscure as to be hard to find where/how or what they trade at. Anyway, I've followed him into the lp's of Atlas, and that has been a disaster for him and me. I'm trying now again with a buy this week of a few shares of [t]FACT[/t] (<span style='font-size:11px'>LAST</span>: 9.31<span style='font-size:11px'> 5/22/2009 4:33:30 PM</span>) . Another company with no earnings but with cash exceeding stock price. I am holding several like that, and mostly these stocks are declining as the companies burn through cash with no or little revenues or profits. ==== Ever since I read Thomas Phelps' "100to1 in the Stock Market", I've always wondered if I'd ever get a 100 bagger in my lifetime. I suppose I could say, yes, and Mr. Klarman is responsible for that. Somewhere in the 1980's I guess, for about $2-$3 at a used bookstore, I bought and am still holding a copy of his book "Margin of Safety". Unfortunately, as I do with all my investing books, I highlighted the passages I believe relevant, so I'm guessing the book is "only" worth 1/2 of the $700 it might still be selling for in pristine condition. businessweek.com Possibly not worth anywhere near $700 nowadays with declines in most things, but at least I can say I sorta had my chance at cashing in a hundred bagger. lol.