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

To: Jurgis Bekepuris who wrote (56531)	1/2/2016 1:09:20 PM
From: Graham Osborn	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78764

I can't seem to find your post on risk adjusted returns but a hugely important application of this principle is the leveraged returns generated by fund managers (or private companies or makers for that matter). Here we have perhaps the most perfect example of two returns generated by the same "organic" method and which should classically produce the same "risk-adjusted return." Of course, because a levered return offers considerably more absolute downside one could argue whether they are really equivalent.

To: Jurgis Bekepuris who wrote (56531)	1/3/2016 11:17:28 AM
From: Spekulatius	1 Recommendation Recommended By bruwin Read Replies (2) \| Respond to of 78764

We had a discussion on this matter a while back when crude prices were falling. To me, many majors and E&P stocks looked cheap when crude was in the $90-100/brl range, but awfully expensive, when crude went below $60/brl, even though the E&P stocks had declined. In my opinion, they did not have declined enough to reflect the new reality and everything but a quick SnapBack could result in losses. I was not totally consistent with this either, but is realization did help me not to get sucked into the Energy morass too deeply. That's a problem that most value investors have, including myself. We tend to buy into declining stock price trends, but in some cases, the declines are just the beginning where people realize that the fundamentals have shifted.

To: Jurgis Bekepuris who wrote (56531)	1/3/2016 6:22:04 PM
From: Shane M	Read Replies (1) \| Respond to of 78764

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). BRK is one of my largest positions, but it has been up strongly in previous years, so even though it's dropped back some it doesn't feel all that concerning to me. Maybe where BRK started year was a little high - I plan to add to BRK this year (maybe in the upcoming days). We're looking at about 1.3X book right now which gives confidence. The recent Tilson presentation along with another excellent recent post on seeking alpha where an analyst takes all Buffett's positions and tries to arrive a look through earnings both make cases for undervaluation. I'm a little upset at myself for not purchasing PCP prior to the BRK buyout as that would've been a nice bump. Almost pulled the trigger on that one as it looked really nice in the Buffettology framework, but I waited due to deterioration trend in business. (like Graham's post, I try to recognize that I often underestimate downside, and I was seeing more downside to PCP and was waiting as result).