Money and Finance
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- Market Cap / Gnp Chart
A great chart from Wes Gray showing that "Warren Buffett's Favorite Valuation Metric" has reached the 95th percentile of valuation. Link At the end of his blog post, Gray writes:"But what are the alternatives? 2.5% 10-year treasuries?"To which...
- Cash Gives The Private Investor An Edge – By Merryn Somerset Webb
Fund managers don’t like holding cash, but individual investors can and should I wrote last week about the many ways in which traditional long only fund managers are institutionally prevented from performing as well as they should – given their above-average...
- Mohnish Pabrai On Position Sizing
In the UC Davis class discussion, Mohnish Pabrai mentioned how he switched from a 10x10 model of position sizing (10 positions of about 10% each) to a more diversified model after the 2008-2009 crisis. He then went on to discuss how he has switched back...
- Seth Klarman On The Painful Decision To Hold Cash
Excerpt from Seth Klarman’s 2004 letter, but words that I think ring very true today as well. It wouldn’t be overstating the case to say that investors face a crisis of low returns: less than they want or expect, and less than many of them need. Investors...
- Selling Cash-secured Put Options
[This article is also posted on Seeking Alpha HERE.] Selling puts on stocks can be a good way to either gain some yield and/or try and buy a stock you'd like to own at a lower price. I prefer cash-secured puts so that if the stock gets put to you,...
Money and Finance
Oilprice.com’s interview with Mike “Mish” Shedlock
Link to: Oilprice.com’s interview with Mike “Mish” Shedlock
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I don’t necessarily agree with everything he says, but this is an interesting interview. If you substitute ‘undervalued stocks’ in place of ‘gold’ in his recommendation of being about 70-80% in cash and 20-30% in gold, then you’d get about the allocation we currently have for separate accounts within Chanticleer Investment Partners (for more information, go HEREand HERE), an entity I’m involved with that launched a few months ago. Although I like holding some cash in case a great opportunity arises, I don’t particularly liking holding as much cash as we do today, but I feel it is the proper course of action in today’s environment. My feelings today largely reflect the two quotes below:
“Some argue that holding significant cash is gambling, that being less than fully invested is akin to market timing. But isn’t a yes or no decision the crucial one in investing? Where does it say that investing means always buying something, even the best of a bad lot? An investor who can’t or won’t say no forgoes perhaps the most valuable tool available to investors.” –Seth Klarman (excerpt from 2004 letter)
“Another important point I try to teach my students is that you have to consider not only what your opportunity set is right now, but also what opportunities you may be forgoing later by investing now. If your opportunity set is not that great right now, maybe you should wait another 6 to 12 months before becoming fully invested.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)
- Market Cap / Gnp Chart
A great chart from Wes Gray showing that "Warren Buffett's Favorite Valuation Metric" has reached the 95th percentile of valuation. Link At the end of his blog post, Gray writes:"But what are the alternatives? 2.5% 10-year treasuries?"To which...
- Cash Gives The Private Investor An Edge – By Merryn Somerset Webb
Fund managers don’t like holding cash, but individual investors can and should I wrote last week about the many ways in which traditional long only fund managers are institutionally prevented from performing as well as they should – given their above-average...
- Mohnish Pabrai On Position Sizing
In the UC Davis class discussion, Mohnish Pabrai mentioned how he switched from a 10x10 model of position sizing (10 positions of about 10% each) to a more diversified model after the 2008-2009 crisis. He then went on to discuss how he has switched back...
- Seth Klarman On The Painful Decision To Hold Cash
Excerpt from Seth Klarman’s 2004 letter, but words that I think ring very true today as well. It wouldn’t be overstating the case to say that investors face a crisis of low returns: less than they want or expect, and less than many of them need. Investors...
- Selling Cash-secured Put Options
[This article is also posted on Seeking Alpha HERE.] Selling puts on stocks can be a good way to either gain some yield and/or try and buy a stock you'd like to own at a lower price. I prefer cash-secured puts so that if the stock gets put to you,...