Wednesday, October 31, 2012

Berkshire Hathaway's Texas CEOs say Buffett manages by not managing

Thanks to Matt for passing this along.

New debt forecasts dash Greece hopes

Howard Marks Interview

Charlie Rose Talks to Jeremy Grantham

Tuesday, October 30, 2012

The Yield Hunt - By Michael Lewitt

Charles Ferguson on Glenn Hubbard

Found via Chris Martenson. I haven't gone through all of Hubbard's CV, but as an example, it looks like he received total compensation from KKR of $301,125 last year, another $289,124 from Metlife, and another $205,000 from ADP. 


Related video clip from Inside Job:


Monday, October 29, 2012

Steven Romick’s Q3 Letter


Sheila Bair: 5 Steps Obama or Romney Must Take to Fix Wall Street

Found via The Big Picture.


The five steps mentioned in the article, without the elaboration:
1. Break up the “too big to fail” banks
2. Publicly commit to end bailouts
3. Cap leverage at large financial institutions
4. End speculation in the credit derivatives market
5. End the revolving door between regulators and banks

Peter Cundill Protégé Tim McElvaine Discusses His Favorite Investments in Japan

Peter Cundill Protégé Tim McElvaine, President of McElvaine Investment Management, is one of twenty expert instructors at the fully online Japan Investing Summit 2012 (more information is available HERE).


Japan Investing Summit

Economist touts radical idea for U.S. election rivals


Related book: The New Depression

Related previous posts:

Expert Enough Show Ep. 6 - 10,000 Hours of Golf with Dan McLaughlin

In this episode of The Expert Enough Show, Corbett Barr sits down with Dan McLaughlin of to find out. Dan is testing the 10,000 hour rule by trying to become a professional golfer through 10,000 hours of deliberate practice. His goal is to make the PGA Tour. He’s already 3,300 hours of the way there and now has a 6 handicap (better than 93% of golfers), despite never playing a full 18 holes before he started the experiment.



Related previous posts:

Related books:

Hussman Weekly Market Comment: Distinction Without a Difference

John Mauldin: The Quest for Certainty

John Mauldin's Outside the Box: Memo to Central Banks: You’re debasing more than our currency – By Dylan Grice

Seth Klarman Goes Nuts On The Fed In His Latest Investor Letter

Update: There are more excerpts HERE.


Thanks to Will for passing this along. I haven’t seen a copy of the whole letter, but there is a very short excerpt in this article.

Friday, October 26, 2012

Alliance Bernstein whitepaper (April 2010): Deflating Inflation - Redefining the Inflation-Resistant Portfolio

Billions in Hidden Riches for Family of Chinese Leader - By David Barboza

Thursday, October 25, 2012

Hugh Hendry and David Einhorn at The Buttonwood Gathering 2012

Hugh Hendry is the first segment. The David Einhorn segment begins at the 55:48 mark.

Richard Oldfield on Japan

This excerpt is presented by and The Manual of Ideas as part of the Japan Investing Summit (more information is available HERE).

Leading British value investor Richard Oldfield, chairman of the investment committee of Oxford University, sat down with us in a wide-ranging exclusive interview. Here are his views on Japanese equities.


Wednesday, October 24, 2012

James Montier on 2008/2009...

James Montier’s answer to a follow-up question at the European Investing Summit 2012 (for those interested, the next Investing Summit is on Japan and will take place November 7-8....more information can be found HERE).

Question: Going back to the lowest point of the markets in late 2008/2009, what was going through your mind? How did you retain the courage and confidence to carry on?

James Montier: In late 2008 and early 2009 I was getting very excited because I was seeing a large number of stocks appearing on my value screens, and seeing cheap valuation at the market level. So whilst a lot of people were focusing on the things that could go wrong (and there was no shortage of them back then), because I was focused on valuations I was getting buy signals. The key point is to have a good process and to stick to it. This cuts down on the amount of decision making under duress that you are forced to conduct. Sir John Templeton used to talk about doing his analysis on quiet days in the market and placing limit orders with brokers, he knew when the stock was down 50% he wouldn’t want to buy it (emotionally) but his pre-commitment strategy forced him to do so.

Seth Klarman puts it this way “One of our strategies for maintaining rational thinking at all times is to attempt to avoid the extreme stresses that lead to poor decision making. We have often described our techniques for accomplishing this: willingness to hold cash in the absence of compelling investment opportunity, a strong sell discipline, significant hedging activity and avoidance of recourse leverage, among others.”

Japan Investing Summit

Meredith Whitney on CNBC


Warren Buffett on buying a house in today’s environment

From one of the segments from earlier today (HERE, starting at the 2:50 mark):

Warren Buffett: …so I think that anybody that knows where they're going to want to live, has a reasonably assured income…I think they're making a terrible mistake if they don't buy a single family home now and get mortgages at these rates, and they should get a 30-year mortgage. It’s really a golden opportunity. It was a little bit better six months ago, but it’s still wonderful now. You’re not going to see a chance like this five years from now. I’ll guarantee you that.

Becky Quick: Five years from now, it's going to be a different picture?

Warren Buffett: Rates will be higher and all kinds of things. This is the time to buy, if you know where you want to live. You've got to want to live there. A home's a wonderful thing, but I wouldn't buy one if I was going to move in six months or something of the sort. And I wouldn't buy one if I was terribly nervous about my job.

Baupost Co-Portfolio Manager Wagner to Start His Own Firm

East Coast Asset Management's Q3 Letter

Found via Market Folly.

Greenlight Capital Q3 2012 Letter

Via ValueWalk.

The thin cow…

I mentioned Gene Hoots’ book Pay Attention to the Thin Cow a few weeks ago. Below is excerpt from the book, explaining the title.

“My grandfather once asked my uncle Ken, “Why do you pay so little attention to the advice of others?” Kenneth answered, “Because I am the only one that I’m certain is working for me ALL the time.” He was skeptical about advice, experts of every ilk, and especially politicians. No one was more widely liked than my uncle.

He made a living for over sixty years as a farmer and cattle trader. He was a true contrarian. He told me that at cattle auctions, most people buy the fat, slick cattle – they look healthy and prosperous, and they are priced accordingly. He always bought sickly looking, thin cows. He said there was nothing he could do to improve the fat ones, but he had a fair chance of improving the prospects of the thin ones and selling them for a profit. Investors would be well advised to use his approach in searching for stocks.” –Gene Hoots, Pay Attention to the Thin Cow


Related previous posts:

Japan Investing Summit 2012

John Mihaljevic and company have once again put together a great lineup for this online conference (click on the link below for more details). I attended the European Investing Summit earlier this month and was very glad I did. Mohnish Pabrai and Guy Spier will doing a joint keynote Q&A session on November 7th at 11:30am EST, though attendees that can't attend the live session will have access to the replay and transcript as well.

Japan Investing Summit

Warren Buffett on CNBC

Link to videos:

Tuesday, October 23, 2012

Nigel Farage's latest rant


Incredibly Small: Best Microscope Photos of the Year

Doom Heralded at Hayman by Widening Trade Deficit: Japan Credit

Thanks to Will for passing this along.

Going back and reviewing an investor letter from Kyle Bass dated November 30, 2011, Bass wrote “We believe that Japan would have a bond crisis of its own within the next two years without the current European debt crisis. The European debt crisis will simply act as an accelerant to the Japanese situation as it will most likely change the qualitative thoughts of JGB investors. We believe that this sequence of events is set to begin in the next few months (beginning with defaults in Europe).”

So maybe central bank intervention delayed the “next few months” part, but it appears their thesis (of which there is more detail HERE) remains intact. 

Jeff Bezos on the value of changing one's mind

Found via World Beta.

Monday, October 22, 2012

Be the Disruptor

Found via Farnam Street. There is also an interview with the co-authors HERE

The myth of the money multiplier - by Steve Keen

Hussman Weekly Market Comment: The Data-Generating Process

Weschler Rise From Grace Leads to Role Advising Buffett

Levy, Harkins Q3 Letter

In the middle of last month in response to desultory growth, Federal Reserve Chairman Benjamin Bernanke announced Quantitative Easing III, a program most notable for its claims to “unlimited” size.  By the calculation of Martin Feldstein in the Financial Times last week, “unlimited” might come to $1.5 trillion of new money created in three years.  To put such a sum in perspective, the Fed’s assets totaled all of $825 billion at the beginning of the financial crisis in late 2007.  America’s leading economic light, Professor Paul Krugman of Princeton, says that not only is there nothing alarming about this, but that those of us who express concern are like bullies who would scare small children around a campfire for our own amusement.  Inflation is dead, now and forever, says the twice a week New York Times Columnist.  His assertion will look odd to you if you have been in a grocery store lately, but it grows positively loopy if you’re currently paying for a Princeton undergraduate.  Nothing on that campus is going up at a 2% annual rate, least of all tuition.  Which might remind all of us how often in politics things look different if you are signing the front of the check or the back.

Sunday, October 21, 2012

Steven Romick on WealthTrack


Garrett Hardin quote

This quote can probably apply to the economic world as well.

"The natural world is organized into a web of life more complex than we know. We have only a limited ability to predict what will happen in time as the result of any intervention, however well meant, in the natural order of things. Caution and humility are the hallmarks of the ecolate attitude toward the world." -Garrett Hardin, Filters Against Folly

Saturday, October 20, 2012

Human Accomplishment By Charles Murray and Black Swan by Nassim Taleb (2007)

Found via Farnam Street. This took place in July of 2007.


Believe the hype in hyperinflation - By Tim Harford

Coelacanth: The Fish That Time Forgot


Friday, October 19, 2012

Beautiful Minds: Richard Dawkins

Link to video: Beautiful Minds: Richard Dawkins


Related link: Growing Up in the Universe

Related books: 

The Greatest Show on Earth

The Selfish Gene

The Blind Watchmaker

Chanticleer Q3 2012 Letter

Below are a couple of sections (slightly edited for public viewing) from a letter just sent to the investors of the fund I help manage. 

Disclosure: I am a portfolio manager at Chanticleer Advisors ("CA") and Chanticleer Investment Partners ("CIP") and the fund managed by Chanticleer Advisors owns shares in High Arctic Energy Services Inc. (TSX: HWO), which is mentioned in the letter below.  We may in the future buy or sell shares in the fund or other accounts managed by either CA or CIP and are under no obligation to update our activities. This is not a recommendation to buy or sell a security. Please do your own research before making an investment decision.

Thursday, October 18, 2012

Hoisington Q3 2012 Letter

Don't Enlist In the 7th Cavalry - by Gene Hoots


Related previous post: Pay Attention to the Thin Cow – By Gene A. Hoots

Related article (and a really great story): Barbarians at MY Gate

Nigel Farage on the UK's Tax Probe Into Starbucks (CNBC)


CornerCap Special Report: THE AFTERMATH OF 2008 - A Look at the Lasting Impact of the Credit Crisis

Beating inflation…

Via notes from Berkshire Hathaway’s 2010 Annual Meeting:

Question: What are key metrics you look for on inflation, and catalysts for a future rise?

Warren Buffett: You give me credit for more brainpower than I actually bring to the question. You can’t look at any metric. If it gets going, it creates own dynamic and is very hard to stop. We saw it in 1970s until Volcker came in with a sledge hammer. Prime rate was at 21% and governments up to 15%. We had a demonstration project 30 yrs ago. If we continue today’s policies, something like that could be possible. Trend is not destiny. We have power to control our future. We do it through elected representatives. I will go back, with what I see, currencies are [a] poorer bet and [I’m] not sure what it means for inflation. If inflation gets into saddle, faith in institutions could break down.

Charlie Munger: Contribute the most to civilization and counter the effects of inflation. To outsmart others isn’t the best way to do it. If you are best painter or best brain surgeon, you will always command your share of the economy around you. Talent is terrific asset to deal with it.

The strange new world of Nanoscience