Wednesday, August 22, 2012

2 Important Posts You May Want to Check Out Today

Has it been a while since I've posted here?

It has. It has.

But I've been busy and as you can see not with this site.

What I've been working on is a site that's focused in large part on collecting quotes from or writing reviews of books by great writers such as Nevil Shute and Joseph Mitchell.

Fear not, however.

I came back to share a couple of links that I know readers of this site will be interested in.

For example, there's a post on what counted as money before even gold and why that may matter to your financial security today. And there's an earlier post, which you should actually read first, that is a review of a book called Paper Money Collapse on the coming monetary breakdown.

Will you like them?

I don't know.

Love them?

I also don't know.

But if you're interested in this site because you're concerned about gaining more wealth and all the freedom it provides, you'll definitely find something of value over there, particularly in the two posts linked to above.

Check 'em out then and I'll be back here at some point with more links to the news you're looking for (most likely, judging by the traffic, on David Einhorn).

Wednesday, July 18, 2012

Third Avenue Hires David Resnick

So, according to this report from Morningstar, David Resnick will be joining Morningstar in September 2012.

Who is David Resnick?

Resnick "made his name as an advisor on bankruptcies and restructurings for many years and who in fact had worked with fund-family founder Marty Whitman on Public Service of New Hampshire's restructuring in the late 1980s."

What does his hire mean for fundholders?

Again according to the report, "In the tight-knit network of bankruptcies and reorganizations, Resnick's rolodex and expertise...should come in handy for many years to come. Overall, it's a positive development for a firm that has succeeded with distressed investing in the past."

Tuesday, July 17, 2012

3 Short Quotes from Ken Heebner

So, Ken Heebner hasn't been getting the best of returns of late. In fact, as this article points out, he's been getting rather bad returns--and for a while.

Nevertheless, as these three quotes show, Heebner hasn't changed his general strategy:

1. "“Most people think this is the worst time in the world to be optimistic, but my portfolio is positioned for strength in the U.S. . . I am functioning in a contrarian mode.”

2. "[Negative sentiment] historically has been associated with maximum points of opportunity for investing."

3.  "I am completely outside the mainstream. I see the mainstream in the distance."

Will Heebner's fund come back yet again? Or is an investment in the banks ultimately a doomed strategy?

My own view is that if anyone can pull off a successful investment in them from here that man is Heebner--but even so I wouldn't want to join him in the bet.

Saturday, July 14, 2012

How to Play Poker (or Invest) Like David Einhorn

In some circles, David Einhorn is admired as much (or even more) for his poker abilities than his investing skills. But as Einhorn himself points out in this article his strategy with both is similar. 
Einhorn has said his approach to poker resembles his approach to investing: He doesn’t play a lot of hands. When “the situation feels right, I put in a big, aggressive raise with a marginal holding,” he said in a 2006 speech. “It is very hard to describe how I know the ‘feel,’ and sometimes I get it completely wrong. But to do well in a poker tournament, you have to recognize a few non-traditional opportunities and you need to get people to sometimes fold the better hand. I think we invest similarly. By this, I mean that most of our investing lines up nicely in the disciplined, traditional value camp—very low multiples of book value, revenues, earnings, etc., but occasionally we are opportunistic and invest in situations that are difficult to justify under traditional criteria."
The article contains some inaccuracies--for example, Einhorn wasn't bluffing and thus couldn't have been out-bluffed--but in addition to the above it contains how many millions Einhorn won playing poker this time and how Einhorn felt doing so.

Saturday, May 19, 2012

How Warren Buffett Earned His Billions

At one of my new blogs, which both focuses on how to read a book the 80/20 way and helps you to do so, I share a quote from The Dhandho Investor on how Buffett achieved his billions:
...Minimizing downside risk while maximizing the upside is a powerful concept. It is the reason Mr. Buffett has a net worth of over $40 billion. He got there by taking minimal risk while always maximizing returns. Most of the time, assets trade hands at or above their intrinsic value. The key, however, is to wait patiently for that super-fast pitch down the center.
While I have qualms about recommending the book wholeheartedly, as I say at the end of that post, the above point is dead on, and the book itself is definitely a worthwhile read. 

To see for that yourself, however--or at least to screen the book much better--check out the 8 quotes on achieving high returns with low risk that I share from it.

Sunday, May 13, 2012

This year, for Mother's Day, David Einhorn gave his mom "naches" like you wouldn't believe

So let's review. This week, David Einhorn:
  • made a lot of money when Herbalife and Green Mountain crashed
  • took down the Fed in an article that used the Simpsons as examples, and...
  • won a poker tournament for Hillel.
I don't know if any Jewish mom can top that for naches this year, but I doubt it.

8 Tips on Investing The Third Avenue Way

In a recent report by Third Avenue Value, Ian Lapey discussed the philosophy which has led to Third Avenue's investing success. Here are eight tips from that report, that you might find helpful:
  1. "Focus on the balance sheet and readily ascertainable net asset value."
  2. "Only invest in common stocks issued by companies with strong financial positions."
  3. "Focus on the long term."
  4. "Worry about investment risk, not market risk."
  5. "Do not try to pick the bottom."
  6. "Avoid industries in secular decline."
  7. "Own the fulcrum security [in a company's capital structure]."
  8. "Pay close attention to a management team's long-term track record and incentives."
For more on each, click over to read a paragraph going into more detail on each. And then, having done that, I wish you the best in applying them for profit!

Ian Lapey Seems Very Happy with Third Avenue's Investments in Hong Kong

Morninstar recently interviewed Ian Lapey about a trip he made to Asia investigating the strength or weakness of Third Avenue's (real estate) investments.

In general, Lapey expressed being pleased with what he saw. In particular, however, he repeatedly noted the discount to NAV that the fund's Hong Kong investments are selling at, the speed at which they're compounding NAV, and the strength of store traffic at particular locations in HK.

Check out the interview for more. There's video and a full transcript, with highlights, at the fund's web site.

I have just one question, however: If Lapey is so pleased, why did the fund recently decrease its position in Cheung Kong Holdings (by 3.4 million shares), and Henderson Land Development Company (by 14.3 million shares), and Wharf Holdings (by 1.2 million shares)?

Perhaps it's just portfolio rebalancing. Holders of the fund should be on the lookout, however, to see if the trend continues.