Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Shane M who wrote (56529)	1/2/2016 12:06:21 AM
From: Jurgis Bekepuris	Read Replies (3) \| Respond to of 78763

Re: energy. I still think that oil price will recover, so I did not capitulate. (Which might be a bad sign :)). Although in Q1 2015 it seemed to me that USA companies were cutting production, but then I saw pretty much all my position companies reporting Y2Y similar sales in barrels (just 0.5x in dollars). So there was not much cut at all. This was time when I started questioning my positions, but it was rather late. I did not buy much oil in 2014, but I still committed too much too early. Also at the time I bought overlevered - not the worst overlevered, but still overlevered companies that cratered another 50-90% from my buy points. The smart thing was probably to wait, perhaps it still is. However, stock prices jump up as fast as they drop, so by the time you're sure oil is going above 60, most of these co's will be 2-4x from here... Anyway, oil was one of my big performance detractors in 2015. Second big performance detractor: BRK & FRFHF. Did not expect this. Huge underperformance for both compared to SP500. (It was very surprising that MKL otoh performed great. There are some explanations, but not very convincing ones). Third performance detractor: ROIQW. It was ~1-2% loss overall, but that still pushed return lower. There were others (DISCA for example, FRMO - this was a valuation mistake simple and clear), but nothing hugely bad.

To: Shane M who wrote (56529)	1/2/2016 12:56:12 PM
From: Graham Osborn	1 Recommendation Recommended By Shane M Read Replies (1) \| Respond to of 78763

Re: back testing methods IMO these often seem to ensure one buys atop bubbles. Re: oil prices in 2015 I think the mistake some made (myself included) was thinking we knew more fundamentally than we did, or thinking our fundamental knowledge was more tradable than it was. I had a view (based on non-marginal production cost) that 45 was a floor "over the 1-3 year" time frame. Not only do I no longer believe that is true (the marginal costs are much lower) but I realized in the Great Death Slide #2 this year that I wasn't willing to sit there and keep buying as my stocks (TGA and BNKJF) eroded support. I reversed course/ put my faith in technicals/ sold everything at 8-10% loss and bought back lower with a plan to repeat as needed. I have searched in the meantime for a new and more actionable fundamental view, which I have yet to find. It seemed to me based on Burry's letters in the early 2000s that he had formed a strong view for a rebound in prices at the macro level. While I have yet to think I understand his thinking, the best I can do is think he believed that a continued flight from financial assets would produce a rally in physical ones. This is my current view and also while I am waiting for a true bear market in stocks before I start looking for a bottom in commodities (preferably a mature bear market). I continue to trade in energy, but like Soros I will trade out of it based on technicals and not wed myself to a fundamental view for ABSOLUTE oil prices.