Perhaps the better question if we feel the market is not ripe with long opportunties is what the compelling shorts are?
Surprisingly sensible ideas in http://money.msn.com/stock-broker-guided/latest.aspx?post=48ff1b2d-243e-4077-8bf0-cf0920ac151f.
I say surprising because websites like this usually have crap advice. Even amateurs on Motley Fool or Seeking Alpha are better. (Though to be fair, I don’t read Kiplinger’s, I look at post titles for MSN. For all I know Kiplinger’s is the exception.)
AMAT is a good one.
AFL I cannot evaluate, but looks historically cheap…
Is that 9% annualized or 9%?
9% from july 2011 to july 2012…
14% here, what up?
good job…
Do not buy SCOR. Management has no intention of returning money to shareholders and they’re spending too much money trying to be something that they’re not…which is a data gathering company, not consulting.
I rate DJCO a buy <=85
i like djco…i remember doing a quick numbers thing on them…i forgot the price now but i remember it may have been around 85…
didyou end up getting anymore clarity on whats in the portfolio? speculation is BYD is big in that and when i mapped the portfolio to the performance of BYD, i saw something…
No i did not, nor do I have any real way of looking inside it. But as you noted, the valuesphere seems to think it’s BYD and WFC.
2 problems exist:
-
The firm originally was not a serious investment, and more of a hobby/project. That changed in 2009 as Munger started investing the cash in stocks, and BVPS exploded that year after steadily growing in years before.
-
There is no obvious catalyst apart from sheer investment performance.
Klarman seems to be able to do it…I wish I had a quarter of that guy’s knowledge and experience.
that is why he is Klarman and you know his name…he is an aberration…its funny when ppl tell me they think they can get 20%+ consistently they’re basically saying they have Klarman skills…
Frank what did you find mapping DJCO to BYD?
they were somewhat correlated…just get a price series on BYD and you basically have like 3 data points for your DJCO portfolio…the portfolio spiked and fell at around the same way as BYD…the movement was more pronounced than the change in the S&P…
i’m not sure if it actually has BYD but given the fact munger convinced buffet to buy it…wouldn’t be surprised if he ate his own home cooking…
Yeah but even greenblatt’s formula portfolio which is completely mechanical in its implementation puts out numbers like that. This just leads me to believe there are alot of inefficiencies in the market that people just can’t or won’t take advantage of.
A 250mm market cap is a bit small for me though.
Are you talking about http://www.formulainvesting.com/Results/US_Strategy/ ? If so, don’t you think the time period the fund opened has a lot to do with its ability to achieve those returns? He beats the market by a margin, but the impressive returns occur where there appears to be similar swings in S&P. I’m curious, as I’ve never heard of this fund before your post.
Greenblatt’s formula ignores survivorship bias (which he doesn’t talk alot about for obvious reasons). All the back testing he claimed that punches out those 20% return ignores companies that failed and fall out of the screening subsequently.
Are you sure about that? Greenblatt seems awfully smart just to “forget” about that possibility. Furthermore, companies that are going bankrupt are likely to fail the ROIC criterion before they actually go to zero and get cut out on the next rebalancing. CRSP does have data for failed companies, so it’s not as though that analysis wasn’t possible to do.
I think AZZ exhibits a lot of the characteristics that bromion mentioned with AEPI. Commodity business with high fixed costs, but is very stable…