Ricard

10/15/09

I am an individual investor 'seeking alpha' with over 10 years of experience. I've made several mistakes and also have plenty of extraordinary successes, many of which I attribute to a near-religious application of prior lessons learned, and a fundamental outlook on this business called 'investing'.

I manage funds for myself and immediate family - combined returns (given a minimum 65% of assets in cash) have exceeded 35% since September of last year, including cash. I am now most fearful while others are only now turning greedy, and have positioned myself accordingly. I have not experienced a 'lost decade' over these past 10 years, a fortunate outcome I directly attribute to spending 4+ months ...More reading 'Security Analysis' in year #2.

I am an avid disciple of Benjamin Graham, and by extension Warren Buffett. Principles I adhere to (these may be very familiar to some readers):

1) Investing is most discernible and successful when it is the most *businesslike*.

2) Investing involves a) protection of principle and b) adequate return. Anything else is speculation by definition, and should be approached with more than the usual amount of caution.

3) Quote from 'Security Analysis': The bond buyer [and by extension the stock buyer] should expect to obtain a higher than standard yield* on [his investment], in repayment not for the assumption of special risk, but for the effort required to satisfy himself of the soundness of the issue.” (pg 103 of Security Analysis)

*Standard yield in this sense is the yield from risk-less treasuries or bank CDs.

4) It thus follows that 'Risk comes from not knowing what you are doing.' (Warren Buffett)

5) NEVER ignore the fundamentals (this is something I have learned and re-learned many, many times)

6) Invest in businesses you understand, or if not, then invest in fundamentals that are absolutely rock-solid (the 'cigar-butt' stock).

7) I view investing as an introspective character study of the investor. Investing is much less of a science than economics, which itself is not the most natural of sciences. Thus, it follows that regardless of setting aside emotional responses, the business of investing is ultimately subjective, where the perspectives of the individuals engaging in it come to light in a big way. Then, the key becomes gathering and understanding as many successful perspectives as possible.

In this sense, the Art of War most certainly applies - Know yourself, and know your enemy (or in this case, your neighbor, Mr. Market), and you will emerge victorious in nearly every battle. The good news is, all you need to know about Mr. Market is that he's a basket-case (right? an amalgam of buyers and sellers) with no plan and no strategy - your own analysis done properly should be able to handily 'beat the market' over time.

8) Thus, I believe that some market participants may be incredibly rational, but the market overall is a product of both the rationalities and irrationalities of its participants. Cooler heads tend to prevail here.

I challenge anyone reading my profile to read and digest Benjamin Graham's 'Security Analysis' if you have not already done so - I consider this one book to be that important. After the events of this past year, I have concluded that anyone that has not taken the time to read this one book should either 1) immediately read it, or 2) immediately read 'The Intelligent Investor' and take great pains to understand what it means to be a 'defensive investor', and reallocate and plan your portfolio accordingly. Yes, this is a game, and at times a very fun and very challenging game, but this is one game where losing overall may impact you and your family's well-being, sometimes in disastrous ways. Most people simply do not have the time or the inclination to make 'enterprise investing' work for them, and realizing this fact for themselves may be one of the best decisions they can make for their portfolio.

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I will outline how I intend to organize information I present on Seeking Alpha, for those who choose to follow my profile:

1) Articles - I will tend to write articles whenever I happen upon an interesting point, or reach critical mass on previous articles that I may have written. Upon allowing a week for active discussion, I then plan to use each article as a 'diary' or sorts to log in any further observations regarding the focal topic of the article - my articles on "Citigroup: Priced to Succeed", and "Staying Ahead of the Curve - Look to October" are excellent examples of this 'diary' log entry style. Once I gather enough material to add another interesting point to the discussion, I plan on writing an updated article.

After some discussion with Tom Armistead, and after viewing many pieces of quality analysis here on SA (some much better than what is made available from my brokerage firm), I am compelled to write articles explaining my holdings as well. This will force a certain amount of discipline upon me, and I will do it whenever time allows.

2) Instablogs - Seeking Alpha has made Instablog entries a prerequisite for articles to be published, so the unedited version will appear here (SA does some minor editing, and has at times attempted to make titles conform more to their website sub-categories). I will also add anything of interest here that requires more explanation than 'stocktalks'.

3) Stocktalks - This I will use to document two things - 1) Articles of interest I find online, and 2) Transactions. Anyone following my profile will be able to generally discern my positions and idea framework by looking at my archive of stocktalks, hopefully in five minutes or less.

4) Comments - I read SA articles extensively - I find them to be a refreshing source of information, and have noticed that many times, prominent bloggers like Peter Schiff, Felix Salmon, Bespoke, and etc will first post on SA, and several days later, may make the same point once 'discovered' by the mainstream media. I use comments to gauge my position on various topics against the rest of SA's audience, and at times to add place markers for articles that I may want to reference later.

To everyone: Good luck on your investments!

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Iran utilizing gold to bypass sanctions: http://bit.ly/X91lou Nov 30, 2012