Travis Johnson

Accuray's Cancer Blaster vs. Intuitive's Surgical Robot

Hi folks -- when you added the charts you mistakenly put in ARRY for Accuray, not the correct ARAY. Thanks!

Reduce Your Chinese Holdings Before the National Party Congress Begins

Interesting perspective, I'm glad to hear it -- but I also don't see much that's similar between the Chinese stock market in 1997 and 2002 and the situation in 2007. In 2002 and 2003, the overall market performance was generally quite weak, the shares ran up nicely in 2000-2001, but fell off for the next couple years.

Though there may be an impact from the party Congress, either positive or negative, I would hesitate from this small sample to say that those changes were caused by the Congress, especially since I have no idea what the news flow was around that time. And I would definitely be careful about comparing the impact on a stagnant and tiny market in 1997 and 2002 to the impact on a much larger, wildly booming market in 2007. Compared to the period from January 2006 to the present, as I read the chart, the entire previous history of the Chinese stock market might as well be a flat line. This Congress might have a short term impact, as you're implying is possible, but probably the announcements made at the Congress, whether positive or negative, will have a far larger impact on this much more news-focused, momentum-driven market ... all just a guess on my part, of course.

China Rebalancing ETF Pair Trade

This all depends somewhat on Chinese investor philosophy, which I don't personally understand particularly well -- but I do think it's important to consider that there is also a flip side here. How often do individual investors seek to leave hot markets? If you were an individual investor in the Shanghai market, holding A shares that you see climbing better than 100% a year, would you want to sell them to buy shares that have recently gone up much less?

If you're a careful and seasoned investor, that's probably "yes" -- but are average Chinese retail investors careful and seasoned? Or are they similar to the Nasdaq day traders of 1999? Remember, US investors had all the freedom in the world to invest overseas as the nasdaq bubble was inflating ... but did they? Not really -- the real foreign investing boom for US investors came many years after the crash.

This is not to say that there isn't demand to diversify internationally among Chinese investors -- I'm sure there is, particularly to get into Hong Kong shares of companies they know, and for companies with dual listings I expect there will be, eventually, a significant arbitrage opportunity as you're noting. I just don't know that it will be as dramatic as many people are predicting -- there's unlikely to be a mass exodus from the A shares, in my opinion, until after (if) that market corrects dramatically.

Is There an Online Financial Services Ad Slowdown?

Excellent analysis, thanks. As someone who hosts primarily financial services ads on my sites (though almost never mortgage-related ads), I can say that though the overall trend is still for fairly steady growth, the rates and performance of ads on my site did spike in July of this year before dipping and returning to a steadier growth trend.

Google Continues to Gain Search Traffic Share

Incredible -- and the strategy of advertising heavily offline (especially TV) to drive new searchers to your site, as is being tried by Microsoft and Ask (and Yahoo in the past, though I don't know that they do it now), continues to seem like an expensive exercise in self-aggrandizement. I can't believe how many Ask.com ads I see on TV now, I'm very curious to see if that helps them at all to take share -- or at least keep up with the growth in the market -- in the months ahead. To think, Google built this dominance without spending a dime to advertise (OK, that's an exaggeration, but a small one).

Finding an Opening into Naspers

I'm still holding, though they do have a bit of a pink sheets discount now. I expect them to still have enough volume to be a viable investment for me, and I think they should still do well (though I continue to be worried about TV competition in S. Africa ... hopefully some of their emerging markets investments will do as well as Tencent and make that less of an issue in the years ahead).

Baby Boomer Investment Tip - Buy Berkshire

Sorry, forgot to note that I still do own Intuitive Surgical. I don't own any of the other companies mentioned, aside from Berkshire Hathaway.
Travis

Naspers: A Nice, Global Business Mix

Apologies to you and Ton.

Climate Exchange: Trading in Carbon Emissions

It's only a pink sheet because it's primarily traded in London -- I assume Goldman Sachs holds their shares in London. You can check out the ticker CLE on the LSE for more info -- thanks to all the chatter about carbon trading from California and the potential for federal movement on this, the shares have tripled since November. I've looked at this one before, too, and I regret not buying shares a few months ago, but haven't felt confident enough in their moneymaking ability to join in as a long term holder -- it's an odd business, partially run by true believers and owned by voluntary participants who operate more or less as nonprofits, and partially trying to become a modern, for profit exchange. If we get to the point that there is a globally accepted commodity in "carbon credits" I can't help but believe that there will be many competitors to facilitate the trading thereof.

Of course, it might still be an opportunity to get in on the ground floor of a tremendous business ... the risk just makes me nervous, especially because it's so news-driven and has climbed so quickly. I'd love to read more analysis of these guys.

Cheers,
Travis
Oneguysinvestments.com

Markel More Berkshire-like Than Ever

My argument that the similarities have gotten "just a little bit stronger" refers to the fact (as I noted above) that Gayner, like Buffett before him, recently joined the Washington Post board. As I said in the note, it's just a small thing that I found interesting ... but I suppose the headline by itself is a bit of hyperbole. That's not why I bought shares most recently. I like Markel's specialty focus, their commitment to only selling profitable policies, and their use of long term growth in book value as a measure of success (and the fact that bonuses for management are based on 5-year book value growth, not on share price appreciation or reported earnings). The relationship between the book value and the share price has fluctuated significantly over the years, from priced under book to priced well above the current roughly 2X book, but as long as their underwriting performance and investment strategy continue to add to the book value I'm reasonably confident this investment will work out for me over the next ten to twenty years.

Markel More Berkshire-like Than Ever

And that's how a market is made ... thanks for the comments.

Markel doesn't techically have private equity investments, perhaps, I'm not the judge for what to call them, but has acquired interest in non-publicly-traded companies, both of which are local to their VA offices. It may end there, or it may not (my guess is that they will continue to explore this area, but I have no inside knowledge).

It is of course partly tongue in cheek that I refer to any company as "the next Berkshire" -- there is unlikely to be another one of those, nor another Warren Buffett, but I think Markel has enough of the right traits to make it an excellent investment for the long term. Whether today's price is too high is a matter for judgement and personal interpretation, but for my time horizon and outlook for the company, I consider it a fair price (I don't think it's hugely undervalued). Though they have exhibited spectacular performance in the past, I don't believe they've reached their maximum density -- they remain a fairly small company with, I believe, plenty of growth potential both in the US and overseas.

Goodbye India Fund, Hello India Note

Sorry, that's an embarassing mistake -- you're right, of course, it's Blackstone, not Black Rock. Apologies.

Travis

Sears Holdings: Due for Underperformance?

Bill,

I agree with you -- it worries me the extent to which Sears is cannibalizing its future for near term cash flow. It might work out great if Eddie Lampert is indeed able to reinvest that cash effectively (as he has in the past), but I'd be worried that if he's trying to build the next Berkshire Hathaway he's doing it on a fairly weak foundation and will soon have to have some great performance from other investments if they're not able to grow the Sears business (not unlike the way Buffett had to shed the weak textile business that got him started). It's admirable that he's focusing more on profitability than on sales growth, but that can only work for so long. Great turnaround so far, shaky future in my opinion.

Goodbye India Fund, Hello India Note

Thanks Mahesh. And FYI, I had a typo in the share price -- my buy point was $51.32, not $53.02 ... sorry (hasn't yet crested above $53 this week, though the index had a nice bump today).

Cheers,
Travis

Bad Year for Chico's, but Worth Holding On to the Stock

Stephen, sorry I wasn't more precise in my characterization of Chico's year -- it's true, they did have a nice blip up in the year following their IPO, followed by a significant decline that may have outpaced this year's 50% decline (it's hard to tell from the historical charts, since the price has gone up so much that the early years are a flat line that doesn't emphasize the dip from a split-adjusted 60 cents or so to 20+ cents.

In some ways, I think this year is worse than those early years for Chico's, but largely because the company has grown so much larger and expectations are much higher, so that a mathematically smaller decline and "less bad" performance makes for a worse year, but that's all in your perspective -- when it comes to earnings and stock price, it's true that this was Chico's worst year in ten, and their worst year as a mature company, but not quite their worst year ever.

Thanks for catching that.

Cheers,
Travis