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Bruce7b

Bruce7b
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  • Buffett's Passive Can Of Worms [View article]
    It seems like you want to ignore what Buffett is saying in recent years (invest in index funds) and focus on what Buffett said in 1984 or what Munger said in a undated quote. People change, markets change. Give us a current quote from Buffett that makes your point.
    Sep 24, 2014. 08:20 AM | 1 Like Like |Link to Comment
  • Circle Of Competence, Fat Pitches, And How To Become The Best Plumber In Bemidji [View article]
    John: Thanks for your response. Here is a quote from the latest Berkshire annual report, page 20 "the goal of the non-professional should not be to pick winners". No qualifications about not wanting to evaluate businesses. Seems pretty basic--my take is that he no longer thinks investors should wait for the fat pitch. Maybe the change is a result of his age, maybe it is a result of what he sees as a more efficient market over the last 30 years, or maybe he has just changed his mind. Personally, I think he is right for the vast majority of non professionals and many professionals also. But like many readers of this site, I still want to be the exception. But I'm hedging my bets by moving a growing percentage of my portfolio into smart beta ETFs and focusing my fat pitch funds into just a handful of stocks.
    Sep 21, 2014. 11:32 AM | Likes Like |Link to Comment
  • McDonald's: What To Do About A Stagnating Long Position [View article]
    One of the many things I don't understand about DGI. You have no problem paying the double taxation on dividends of a C Corp. You want those dividends to grow which will increase those taxes. Yet you don't want to pay exactly the same tax rate on capital gains? Why do capital gain taxes "hurt significantly" and dividend taxes don't?
    Sep 21, 2014. 08:32 AM | 4 Likes Like |Link to Comment
  • Circle Of Competence, Fat Pitches, And How To Become The Best Plumber In Bemidji [View article]
    John: I have been reading Buffett, in his annual reports and later with the TV interviews for some 35 years. He has a lot of what sounds like wise old sayings, almost proverbs. He has used the "waiting for the fat pitch" for many years and the "know your area of competence" just as long. The problem is he has made many statements that are in direct conflict with those proverbs. Lately he has been telling us investors that most of us should be in index funds. What do we make of that--wait for the fat pitch and invest in an index fund? He tells his family, recently as a codicil to his will (I think) that they should invest in an S&P 500 index fund after his death--not a broad based index, no foreign stuff, just the one index fund. Now his family includes his son, Howard, who will be (apparently) the next CEO of Berkshire, and I guess he his telling his son he doesn't have an area of competence--just buy an index fund.

    My guess is we are paying way too much attention to the words of Buffett. He is speaking to different groups and we are assuming he is talking to us. We each, including you John, are cherry picking his proverbs--I guess you could call it confirmation bias.
    Sep 20, 2014. 02:06 PM | Likes Like |Link to Comment
  • The Fed: There Is No Bubble, There Is No Timeline, There Is No Exit Strategy [View article]
    Kevin: Excellent article but let me get your response on your favorite chart/bubble measure. Market Cap to GDP. I have asked this question many times and never received a response so maybe you will be the first. GDP, I assume is a U.S. number. Market cap, I assume, is the value of all U.S. corporations (excluding ADRs). In an era of globalization, many US corps do much of their business overseas. The market cap shows up in the graph but much of the GDP does not. Take McDonalds--if you include all of their market cap in your chart but exclude all of the GDP for their foreign operations why is the comparison meaningful?
    Sep 18, 2014. 06:29 PM | 2 Likes Like |Link to Comment
  • Combining Momentum, Value And Profitability [View article]
    Smurti: Thanks for that but with thousands of ETFs you would think there would be a few that combined all factors into one ETF. ( assuming the combo makes sense) I think Wesley Grey has something coming out in about a month--an actively managed factor ETF--I will wait for that but would be good to have others to compare it with.
    Sep 17, 2014. 12:47 PM | Likes Like |Link to Comment
  • Combining Momentum, Value And Profitability [View article]
    The graphic doesn't "say it all". Just like the Asness article your article doesn't provide any specific ETFs or open end funds that use the three factors. Seems like Asness only has open end mutual funds and I can't tell if any of those use this approach. Any ideas on an ETF?
    Sep 17, 2014. 09:19 AM | Likes Like |Link to Comment
  • The Cheapest And Most Expensive S&P 500 Stocks Utilizing CAPE And PEG Ratios [View article]
    Paul: I think just about every reader of SA will tell you that PE, and thus PEG ratios, are meaningless for REITs. The huge amounts of depreciation make the numbers unusable. So suggest you remove American Tower and Equity Residential off your list. You show no PEG for Celgene (MSN shows a 5 year annual earnings growth of 26%) so not sure why you even show it on your list. Three of your cheapest stocks show no PEG so again, not sure what your point is? This looks like a computer generated article that hasn't been thought through.
    Sep 16, 2014. 07:56 PM | 4 Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    Jssss: I will have to give you an old fashioned link. Hard copy of WSJ, page B2 for Sept 16. They make two statements so I am making an assumption. "In the U.S, a 12 week supply costs $84,000". "In india requires that patients take Sovaldi for 24 weeks, meaning that they would need six bottles for a total cost of $1,800...". Maybe Doctorx will tell me that the reason for the 24 weeks has to do with something other than half strength. But I like my assumption that it is half strength to limit black marketing in the developed markets.
    Sep 16, 2014. 07:42 PM | Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    Steve: I'm not suggesting that the patient would be the buyer. Probably wouldn't know anything about it. I'm talking about the medical community buying and then charging full price to the patient. But after reading today's WSJ, Gilead might have that covered. It sounds like the generic version is only half strength so takes twice as many pills, twice as long to be effective. Guess that would make it obvious to the patient that they weren't receiving the developed market version. Pretty smart of Gilead, I would say.
    Sep 16, 2014. 08:16 AM | Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    Jsss: It seems the big risk for Gilead is the cheap version of Solvadi coming from India to the U.S. and other developed countries. If a U.S. medical practice can buy a black market version for $20,000 for full treatment and turn around and charge $84,000 how many will do it? Will it even be illegal to do it? Seems very tempting for the generic makers to make a quick $15,000 and the U.S. medical to make $60K. Now we are told that Gilead has had to do this with other drugs but have those other drugs had a cost anywhere near $84,000? If someone wants to tell us that Doctors would never even think about it check out the Medicare fraud numbers.
    Sep 15, 2014. 01:37 PM | 1 Like Like |Link to Comment
  • Learning To Dislike MLPs [View article]
    I wonder how important correlation with the S&P 500 is to the average MLP investor (I place zero importance on it)? I wonder how important accuracy of analyst quarterly DCF estimates are to the MLP investor? I can imagine that a trader of MLPs might be interested but as a buy and hold investor of MLPs they mean close to nothing--and because of the tax advantages of holding forever I am guessing most MLP investors fit into that category. Maybe I am missing something important but I am looking at current DCF growth and longer term project pipeline, along with analyst overall ratings
    Sep 14, 2014. 06:46 PM | 8 Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    There seem to be multiple GILD articles every day on SA and just about all the comments are from supporters---many putting the stock in the no-brainer buy category. It is my largest position also but I would really appreciate hearing from some of the shorts. What are you seeing that we don't? Of all the stocks out there that are overpriced and ripe for a correction why would you take the risk of buying a stock that could double in the next year?
    Sep 12, 2014. 08:33 AM | 2 Likes Like |Link to Comment
  • Green Vs. Greed: The Difference Between Speculating And Investing [View article]
    Seems like your quote from Buffett is totally forward looking (five, ten and twenty years from now) and somehow you have turned that around to support your argument about past earnings and current PEs. I guess selection bias applies to quotes as well as investments.
    Sep 11, 2014. 01:52 PM | Likes Like |Link to Comment
  • Performance Nonsense: Why Past Performance Is A Poor Indicator And How To Do Better [View article]
    Margie: I think you are totally correct. I can't imagine buying an actively managed mutual fund without looking at past performance. One or three year's performance numbers can be based on some luck for sure but looking at 5 and 10 year performance should tell us quite a lot about the skills of the managers (and the medal ratings provided by Morningstar are forward looking and in combination with the past performance ratings are a valuable guess at future performance). Of course, all managers get old just like investors and not too many are wise enough to pull the plug like Peter Lynch did. Author--look at the past performance of two of my funds --Dodge and Cox International (DODFX) and Prime Cap Odyssey (POAGX) and tell me the past performance is not a good indicator of future performance. Active share might help us eliminate the closet indexers but looking at the number of holdings does that. If a large cap fund has 450 holdings it is an indexer if it contains 75 it should indicate that the manager is using his best ideas but without past performance how do we know her best ideas are any good?
    Sep 7, 2014. 12:22 PM | 1 Like Like |Link to Comment
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