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- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 2
Thought exercise...
100k lump sum today, seeking to turn it into 1m in 10 years req 25%pa in a tax free account(BRK would take 27yrs @ 10% to 1m)
Best ideas list here.
No. of Recommendations: 3
"Best ideas list here."
Lottery tickets!
I liked getting rich slowly. It works.
No. of Recommendations: 0
Genuine attempt to find some quality compounders that people are looking at which take us back to original Buffett and Munger partnership type returns.
I get excited by such prospects!
No. of Recommendations: 4
Genuine attempt to find some quality compounders that people are looking at which take us back to original Buffett and Munger partnership type returns.
Fairfax could increase earnings by 15% p.a. for the next 10 years, and perhaps double its P/E ratio, so that would give you a 700% return, although I think a 10% return is more likely (up 400% in 10 years). I can't think of anything that is likely to get you 900%. For that to happen, you have to either be very luck or swing for the fences, but then you're likely to be disappointed.
dtb
No. of Recommendations: 1
He's still got almost 20% of his portfolio in Blackberry. I used to follow him for a bit as this was always touted as the mini Berkshire. Probably not? Markel also often touted has underperformed the S&P.
No. of Recommendations: 23
He's still got almost 20% of his portfolio in Blackberry. I used to follow him for a bit as this was always touted as the mini Berkshire. Probably not?
Blackberry was clearly a mistake, but it's not 20% of his portfolio. This is a common misconception due to the fact that listings like Dataroma only count consider SEC filings, required for holdings in American publicly traded companies. They say that 16% of Fairfax's holdings are in Blackberry (2nd holding after Occidental), but in fact, as Dataroma indicates, Fairfax has 47m shares of Blackberry, now worth about $165m. This is small in relation to Fairfax's total of $59b in investments. Most of Fairfax is invested in bonds ($34.2b), common stocks ($6.6b), associated companies like Poseidon and Eurobank ($6.3b), preferred stocks ($2.4b) and derivative instruments ($1.1b).
So even as a percentage of the relatively small common stock portfolio, BB only accounts for 2.5% of holdings. It is true that BB accoounted for 17% of what they call Fairfax's 'Portfolio value' ($1.5b), when it was trading at $5.53, but is now at $3.50, and so it is more accurate to say that that disappointing investment is now worth $165m and accounts for 11% of the portfolio of publicly traded US companies whose value at the end of Q3 was $1.531b, but only 2.5% of the $6.6b equity portfolio, and only 0.3% of Fairfax's whole $59.1b portfolio of investments.
It is true that Fairfax is not a mini Berkshire - it is much more of an insurance company than Berkshire, and while Berkshire has $348b of its $762b of investments in US equity securities (46%), Fairfax has $1.5b of its $59b portfolio in US stocks (2.6%).
If the question is, who is a better stock picker, I don't think there's any question that it is Buffett, and Blackberry is the poster child for a terrible investment decision. But mediocre stock picking is only a small part of the Fairfax story - the big story, going forward, is Fairfax's huge float leverage, its great fixed income returns, good underwriting by its insurance companies, and the successful investments like Poseidon, Eurobank, Digit Insurance, the Bangalore Airport, etc. It has a history of strong growth comparable to Berkshire's, and it is trading at about 6 times expected earnings in the next few years, at about 1.1x book value. I think it's worth looking beyond Blackerry!
dtb
No. of Recommendations: 2
Very interesting, thank you. Insurance cos are definitely in the too hard pile for me. I'm only invested in Berkshire as I believe in the cult of Buffett (not so convinced after he and AJ have left the building though!) Those 10% returns would easily drop to 5%.
Personally, I try and stick to tech and consumer business models and am looking for compounders in this space. I use them, understand the business models and they have runway if you get them at the right time/ price. They also don't use black boxes or financial engineering in terms of growth or reporting.
No. of Recommendations: 2
To get 25% per year for 10 years will require some work. I doubt identifying a stock today and let it sit for 10 years will have a high probability of success.
Perhaps something with a higher probability of success, but by no means a high probability of success, is to use a timing system on QQQ and leverage. Not easy, but then making 25% per year is not easy!
Using a system of QQQ being above 0.92 of it's trailing 180 returns provides about 15% per year and 36% drawdown. Add to that non callable leverage such as futures would give 25% per year. Of course, it could also give you much less, but would it be less than a one stock pick?
https://gtr1.net/2013/?h1::ratio%28sma%281,2%29,sm...Craig
No. of Recommendations: 3
I read a book in 2018 about finding 100 baggers:
100 Baggers: Stocks That Return 100-to-1 and How To Find Them Paperback – May 22, 2018
by Christopher W Mayer (Author)
You only want a 10X so it shouldn't be that hard. :)
No. of Recommendations: 0
Thought exercise...</>
Bitcoin.
I'm reading Lyn Alden's book "Broken Money" -I have not yet reached the Crypto/Bitcoin chapters.
I'm also reminded every time I see the current price, that I would have made gobs of money at almost any point, had I bought at least some Bitcoin.
No. of Recommendations: 2
Useful ideas are wherever you find them, but I thought the delivered performance of Mr. Mayer's firm, Woodlock House Family Capital, might be interesting. <13% for 2019, can't easily find performance figures on their website for later years but there are a number of 2023 blog postings commenting on the poor performance of some of their investments. He also mentions frequently that 1-, 3-, or 5-year performance is unimportant so I guess by that metric, they cannot be evaluated until 2029 :-)
No. of Recommendations: 0
Yes exactly, I've read 100 baggers and 100 to 1. Inspiring, however thinking about the ideas through my own framework I've started thinking about 10 baggers rather than 100.
Identifying relative mid cap companies with tech and consumer business models, already successful with significant runway but trading at attractive / depressed valuations, buy and hold for 10 years.
No. of Recommendations: 1
I also don't think buy and hold forever applies anymore (to most). I'm considering mini runways of 5 to 10 years. Unlike Munger if the valuation is stratospheric I probably would sell and recycle into others, I'd have valuation wiggle room so is hopefully only miss out on the last 10% for example before share prices prices plateau or have peaked. I work this out on the basis of projected forward returns, when they start to fall below 10% I start looking elsewhere.
No. of Recommendations: 1
How do you value Bitcoin?
No. of Recommendations: 5
John Authers, Bloomberg and formerly FT columnist writes an annual column about Hindsight Capital :
“The fund that always calls it right just had another great run. If only you’d seen it coming.”
https://www.bloomberg.com/opinion/articles/2022-12...If you can get a copy of the column a year in advance, meeting your targeted return would be easy and guaranteed.
No. of Recommendations: 1
How do you value Bitcoin?
I don't know, but I am trying to gain some understanding. The value, seems to be that it represents a new digital money/gold that you can self custody and the fact that no one to date has broken its code.
No. of Recommendations: 6
I don't know, but I am trying to gain some understanding. The value, seems to be that it represents a new digital money/gold that you can self custody and the fact that no one to date has broken its code.
I got interested in Bitcoin for all the usual reasons. After taking a good look, I am now an extreme Bitcoin skeptic. I don't believe Bitcoin usage will change in any meaningful way over the next five or ten years. I should mention I don't know what the price will do, but there's no reason to believe actual usage will increase.
This is probably the wrong board for a deep dive, but if you have specific questions I'll try to answer them.
No. of Recommendations: 1
I don't know, but I am trying to gain some understanding. The value, seems to be that it represents a new digital money/gold that you can self custody and the fact that no one to date has broken its code.I previously wrote about this on the old MF boards and they are lost to time. I was chatting with a company doing blockchain related (non-cryptocurrency, more distributed ledger) financial activities. I did a deep dive for my own reasons, and they were a bit engineering focused. This was before
https://www.bloomberg.com/features/2022-the-crypto... which great if you don't have to understand the guts of how it works at a technical level.
I still have no idea why it is worth anything or keeps going up in value, honestly, even though I could tell you a bit about how it works.
