Author Topic: What are you buying today?  (Read 2206439 times)

vinod1

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Re: What are you buying today?
« Reply #960 on: January 18, 2015, 09:36:07 AM »
Most of the concentrated investors had portfolios consisting of nearly iron clad moats or hard asset values. FFH should be fine, but I have no idea of the moatiness of the rest of your portfolio. Do you think the rest have solid moats?

Vinod

You can look up all my holdings in the Investment Idea section. NRW.AX and the japanese stocks are mainly asset plays (thats the reason that these stocks are all smaller holdings), the rest have something in place that protects the cashflows for the next years. PKX is the lowest cost steel producer (though i am not sure if the currency wars deteriorate that one).

When Buffett is doing concentrated investing he is finding deep values with a very large margin of safety:

1. Western Insurance - it earned $22 and $29 the previous two years and he is buying at something like $3 to $13 per share.

2. National American Fire Insurance - Good capital allocator at the helm, with book value of $135 and earning $29 and he is buying in the stock in the $30s.

That is margin of safety.

Or he is buying Coke and Amex with near impregnable moats.

In either case margin of safety is pretty high. That is when he concentrates his portfolio.

This kind of concentrated portfolio does not work if applied to marginal businesses. Being recession resistant is not really the key, as there are many ways to lose, it is not just to economic cycle.

Again, just a note of friendly caution to a fellow board member.

Vinod

The fundamental algorithm of life: repeat what works. –Charlie Munger


randomep

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Re: What are you buying today?
« Reply #961 on: January 18, 2015, 09:49:13 AM »

What about Soros and the Quantum fund, doesn't that one have hundreds of holdings and an extraordinary record?

Liberty

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Re: What are you buying today?
« Reply #962 on: January 18, 2015, 09:53:19 AM »

What about Soros and the Quantum fund, doesn't that one have hundreds of holdings and an extraordinary record?

Isn't that a macro fund, though? Kind of like Dalio's fund. Different approach. He mostly buys asset classes rather than businesses, afaik.

frommi

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Re: What are you buying today?
« Reply #963 on: January 18, 2015, 10:47:39 AM »
A 2008 style crisis can erase 25% from ANY portfolio. Charlie Munger once said you should expect a 50% drawdown at some point in your career (and he experienced it too if I'm not mistaken).

Just to give some bad scenarios: Senvest (which I hold too) is basically a leveraged bet on the stockmarket. In a downturn both its portfolio will decline quickly and clients withdraw assets. Their fund holds quite a few speculative positions. In 2013 Senvest was up 100%, I think it could easily go down 50% or more in a bad year.

In such a year your OUTR options would expire worthlessly as well. I own a couple of your Japan holdings too. I think they are good bets but let's be honest, we invest in these companies from our couch in Europe and we don't know anything about them. Fujimak etc could easily decline 50% for some reason we don't know yet. If they are cooking the books, how could we ever know?

Most of your holdings are smallcaps and I don't know enough about them but you can't rule out anything bad happening in these - they are no Berkshires or Exxons.  And god forbid something terrible happens at Fairfax. Or suppose the euro crisis is over and the euro appreciates by 40% in a year - you'll underperform by roughly that percentage.

Also, the point of diversification is not only to be protected from the risks you "know" but also that your portfolio can withstand the risks you "don't know". If something "unknown" happens with Fairfax you are down 25% instantly.

Ok i agree with you, i have a risky portfolio. Please don`t copy me, looks like i will probably blow up next year because at the same time we get earthquakes all over the country wiping out Toronto and New York, the stock market will decline by 50% and the euro will appreciate by 40%. Steel is now worthless because everything is build of aluminium and japan will get nuked by china erasing the country from the map. Oh and there is a wonder drug against cancer, nobody watches rental DVDs anymore and online gaming/lotteries are prohibited worldwide. All in one year! ( Just kidding :) )

writser

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Re: What are you buying today?
« Reply #964 on: January 20, 2015, 01:50:34 PM »
Ok i agree with you, i have a risky portfolio. Please don`t copy me, looks like i will probably blow up next year because at the same time we get earthquakes all over the country wiping out Toronto and New York, the stock market will decline by 50% and the euro will appreciate by 40%. Steel is now worthless because everything is build of aluminium and japan will get nuked by china erasing the country from the map. Oh and there is a wonder drug against cancer, nobody watches rental DVDs anymore and online gaming/lotteries are prohibited worldwide. All in one year! ( Just kidding :) )

Mr. Market does not like your jokes apparently.
I'm sorry if I have offended you. Please contact this forum's safe space coordinator to work things out.

@thewritser

frommi

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Re: What are you buying today?
« Reply #965 on: January 21, 2015, 05:48:04 AM »
Ok i agree with you, i have a risky portfolio. Please don`t copy me, looks like i will probably blow up next year because at the same time we get earthquakes all over the country wiping out Toronto and New York, the stock market will decline by 50% and the euro will appreciate by 40%. Steel is now worthless because everything is build of aluminium and japan will get nuked by china erasing the country from the map. Oh and there is a wonder drug against cancer, nobody watches rental DVDs anymore and online gaming/lotteries are prohibited worldwide. All in one year! ( Just kidding :) )

Mr. Market does not like your jokes apparently.

Yes it has this brutal way of telling me that i am a fool. :)
But aside from that i still don`t know if nobody watches rental DVDs anymore is now true or not.

50centdollars

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Re: What are you buying today?
« Reply #966 on: January 21, 2015, 06:04:42 AM »
Ok i agree with you, i have a risky portfolio. Please don`t copy me, looks like i will probably blow up next year because at the same time we get earthquakes all over the country wiping out Toronto and New York, the stock market will decline by 50% and the euro will appreciate by 40%. Steel is now worthless because everything is build of aluminium and japan will get nuked by china erasing the country from the map. Oh and there is a wonder drug against cancer, nobody watches rental DVDs anymore and online gaming/lotteries are prohibited worldwide. All in one year! ( Just kidding :) )

Mr. Market does not like your jokes apparently.

Yes it has this brutal way of telling me that i am a fool. :)
But aside from that i still don`t know if nobody watches rental DVDs anymore is now true or not.

You can still rent DVDs? lol

tede02

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Re: What are you buying today?
« Reply #967 on: January 21, 2015, 06:33:49 AM »
Bought some IBM.

frommi

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Re: What are you buying today?
« Reply #968 on: January 27, 2015, 08:04:52 AM »
Bought some more NWH.AX.

Ross812

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Re: What are you buying today?
« Reply #969 on: January 27, 2015, 08:07:13 AM »
More GILD
96% Fixed Income CDs, Muni, Corporate Debt - 4% SPX Options