New chapters - Page 3

i totally missed that blog entry

but that taleb book imo is just some random life theories by some random guy. people just respect it more cuz he's rich.

and warren buffet failed during these few years

BRK profits are trending downwards

gonna go negative soon

is he too old to adapt? only time will tell

On March 01 2009 16:56 JYang wrote: and warren buffet failed during these few years BRK profits are trending downwards gonna go negative soon is he too old to adapt? only time will tell

wat? how do you link the words buffett and fail in the same sentence? buffett's track record is truly one of the most phenomenal achievements in investment history. good luck shorting berkshire.

On March 01 2009 16:56 JYang wrote: and warren buffet failed during these few years

I'm curious, what few years you are referring to? Was it 2008 when he outperformed the benchmark S+P 500 by 27.4%? Or are you referring to the past 4 years, in which he outperformed the S+P each year. Or is it the past 63 years? 59 of which he outperformed the S+P.

Of course BRKA profits are trending downward, this economy has spared almost no sector and the profits of virtually every corporation is trending downward. Consider that over the past 63 years, the year over year book value of BRKA shares have gone down only twice, once in 2001 when 9/11 ravaged the markets and last year.

I really don't need to defend the performance of BRKA because it is common knowledge and that is a fight that cannot be lost. Rather, I wanted to highlight the process with which Buffett makes his money and that is a style defined by a lack of hubris, a self critical eye, and an unrelenting attitude towards staying on top of one's game. These are traits that I highly value and aspire to attain. Fooled by Randomness certainly has its faults, but I appreciated the fact that it has helped me keep a level head and avoid the hubris that plagues so many.

why is having a negative year such a positive thing these days...

my parents outperformed the S&P by staying in cash and FDIC insured CDs by 40%, time for them to start a hedge fund?

getting into the derivatives market and buying conoco philips at the top of the market is pretty bad. not saying he sucks, i'm just saying he might be too old.

On February 27 2009 19:24 byrnesam wrote:

yeah, i must second this

On March 01 2009 19:08 JYang wrote: why is having a negative year such a positive thing these days...

same reason why a score of 65% can get you an A on an extremely difficult university exam. staying in cash and outperforming the S&P in 08 is not comparable to getting a 100% on the exam. it is comparable to having the foresight or being just plain lucky to have not taken the difficult course in the first place.

On March 01 2009 19:08 JYang wrote: getting into the derivatives market and buying conoco philips at the top of the market is pretty bad. not saying he sucks, i'm just saying he might be too old.

this is one of the reasons why I like to read his annual letter. he explained his position in derivatives in depth and there were a lot of interesting things in there. I highly suggest you read it. First off, Berkshire incurs little to no counterparty risk which is one of the biggest issues in derivatives. Berkshire's core business and the area in which they have consistently outperformed the industry is in insurance. The derivatives contracts that Berkshire is involved in is fundamentally similar to their insurance and reinsurance businesses. They receive a premium and they payout if certain conditions or events occur. Since they are the ones receiving the premium and since they refuse to post collateral, this effectively works to a free float as long as they don't suffer an underwriting loss.

BRKA uses mark to market accounting and they use black scholes to value their contracts and as such they have written down the value of these contracts and took a loss on their balance sheet. However, this loss is in paper only as they haven't actually paid out on these contracts yet, only that it is more likely that they may do so in the future. In fact, after reading through his letter, I'm convinced that this type of market gives berkshire an even bigger edge in insurance/derivatives/credit default swaps since there is so much fear in the marketplace and BRKA can charge a hefty premium based on their credit rating and rock solid balance sheet.

Buffett himself admits the ConocoPhillips investment was a terrible move and he makes no excuses for it.

thanks for the informative post, Giyom.

went to the library today and picked up a lot of these. thanks a lot for the suggestion guys. nice thread. keep it going if u guys can

I just started outliers on a few days ago and love it. amazing book.

great thread, I am making a nice list of books now!

i just started reading freakonomics. i like it a lot so far

I read Outliers and Blink in one sitting each and was not impressed. I see why everyone likes Gladwell but he kind of strikes me as the Stephen King of nonfiction. Plus the not-so-subtle endorsement of his social views was irritating.

I am trying to get back into hardcore reading though so anyone with suggestions please speak up!

well, the opposite of fooled by randomness must be atlas shrugged by ayn rand, pretty much changed my life in first year uni
the road less travelled by M scott peck is also quite good

On March 05 2009 19:27 seatown12 wrote: I read Outliers and Blink in one sitting each and was not impressed. I see why everyone likes Gladwell but he kind of strikes me as the Stephen King of nonfiction. Plus the not-so-subtle endorsement of his social views was irritating. I am trying to get back into hardcore reading though so anyone with suggestions please speak up!

I don't know what you were expecting when you bought those books. They aren't for "hardcore" readers. If they were, they wouldn't among be the top selling books on amazon. Books that are easy to read sell more.

If you want books at the lvl of Moby-Dick and The Art of War, you're asking for suggestions in the forum.. on your wrong website ;P


On that note, I started reading a new book, "The next 100 years". Some dude is saying that within the next 100 years there will be a global war and there's nothing we can do to stop it. We're all gonna die!!!

lol sorry to dig this thread up

but i just read Outliers and immediately thought about starting a thread on lp.net

i just happened to remember GiYoM's old thread about some books and thought i could just bump that instead and whaddaya know... he was thinking exactly the same thing in the original post

lolol u poker players should go read the book, especially the part about "10,000 hours"

I might pick up the book sometime since it is supposedly so interesting ;D!

Go TenBagger. Buffet is THE man.