During its 47-year lifetime, Walter J. Schloss Associates generated in excess of 20% gross annualized returns and netted to its partners more than 15% per year, while the S&P 500 gained slightly more than 10%. An investor with $100,000 in the S&P 500 from January 1, 1956, to December 31, 2002, would have made $9.3 million. That same $100,000 invested in the Schloss partnership would have generated over $78 million.
Wednesday, May 30, 2007
Most people like to be successful in their jobs. But few organizations are able to articulate the tangible and intangible attributes an employee needs to add value. This makes even more remarkable Warren Buffett’s plan to hire one or more chief investment officers to replace him at Berkshire Hathaway. As part of a succession strategy, Buffett clearly articulates the behavioral traits he believes are vital to long-term investment success.
While Icahn's name is now synonymous with titanic corporate battles, the Queens, N.Y., native seemed at first to be heading for a peaceful career as a teacher or doctor, earning a degree in philosophy at Princeton and attending medical school before dropping out to pursue arbitrage on Wall Street. During the 1980s he made a fortune for himself in his forays against companies ranging from American Can to Uniroyal (and profits for shareholders too in the case of Texaco and, later, RJR Nabisco), despite a few high-profile misses. But it wasn't until recent years that Icahn began assembling the infrastructure he has now, with three main investment vehicles.
For almost three decades Lou Simpson has managed insurer Geico's $4 billion-plus equity portfolio largely out of the limelight, amassing a nearly unrivaled record in the process. The Geico portfolio has topped the S&P 500 Index by an estimated 7% per annum during his tenure. It's not much of a stretch to call the 70-year-old Simpson one of the greatest investors of all time.
Source: Michael Candan
The one thing that all expertise theorists agree on is that it takes enormous effort to build these structures in the mind. Simon coined a psychological law of his own, the 10-year rule, which states that it takes approximately a decade of heavy labor to master any field. Even child prodigies, such as Gauss in mathematics, Mozart in music and Bobby Fischer in chess, must have made an equivalent effort, perhaps by starting earlier and working harder than others.
I would like first to share some of these key life events with you, in the hope that these may help you understand my struggles and how chance events and unplanned encounters with influential persons shaped my life and career. Later, I will share the deeper life lessons that I have learned. My sincere hope is that this sharing will help you see your own trials and tribulations for the hidden blessings they can be.
The first event occurred when I was a graduate student in Control Theory at IIT, Kanpur in India. At breakfast on a bright Sunday morning in 1968, I had a chance encounter with a famous computer scientist on sabbatical from a well-known US university. He was discussing exciting new developments in the field of computer science with a large group of students and how such developments would alter our future. He was articulate, passionate and quite convincing. I was hooked. I went straight from breakfast to the library, read four or five papers he had suggested, and left the library determined to study computer science. Friends, when I look back today at that pivotal meeting, I marvel at how one role model can alter, for the better, the future of a young student. This experience taught me that valuable advice can sometimes come from an unexpected source, and chance events can sometimes open new doors.
Thursday, May 24, 2007
Charlie Munger said at Berkshire Hathaway's annual meeting that "when trying to determine intrinsic value, margin of safety, etc. there is no one easy method. By definition, you will need multiple models." Although the value of any business is the discounted value of the cash that can be taken out of it over its life, it is certainly prudent and necessary not to get anchored on one value. I will admit, that I did not properly handicap the odds in my initial valuation for the years 2007 and 2008. I knew they would be very uncertain but made them normal anyway because it made the model look nice and neat. However, my thoughts about CRYP being a great investment haven't changed. As I type, a share in this business is trading for $23.25 and although it is now even more clear that the next 12-18 will be a little uncertain, CRYP has signed 2 very important new clients since my last post (Holland Casino and World Poker Tour) and I'm as bullish as ever.
Disclaimer: I do own Crytologic.
Tuesday, May 22, 2007
My recent column detailing the 10 investment traps I’ve identified prompted several readers to ask if I have a comparable list of the opposite – types of opportunities that are likely to lead to good investment outcomes.
I do, and happily it’s a bit longer than the list of traps. Given that the first step to successful investing is knowing which ponds to fish in, here are the 15 most common types of value opportunities I have been able to capitalise on in my investing career
Sunday, May 20, 2007
Saturday, May 19, 2007
EARNING 22 percent on your investments while holding half of your portfolio in cash is no easy trick, but last year Seth A. Klarman pulled it off, and it was not the first time.
Mr. Klarman’s record has generated intense loyalty from investors. Since he began Baupost in 1983, it has posted an average annual total return of 19.55 percent, according to data provided by the hedge fund group. Declines have been posted in only 11 of the total 97 quarters since Baupost’s debut.
In the developed world, we like to think of slavery as a bad memory. But slavery persists to this day, particularly in some parts of Africa, most notably the Sudan. Raiding parties steal children from their home villages and transport them for sale in slave markets many miles away. In the 1990s, when news of this ongoing tragedy came to the developed world, well-intentioned people formed charitable foundations that raised money for slave redemption—that is, buying people out of slavery.
Did these charitable efforts do any good? Certainly, some people are free now who might otherwise of have lived their whole lives in slavery. But there is strong evidence to suggest that slave redemption made the overall situation worse. As journalist Richard Miniter reported in a 1999 article in the Atlantic Monthly, the high prices offered by relatively rich Americans increased the demand for slaves, turned the slave trade into an even more lucrative business, and thereby gave raiders an incentive to conduct even more slave raids. If not for the activities of Western charitable organizations, many of the redeemed slaves might never have been enslaved in the first place!
Thursday, May 17, 2007
Thank you Shai for the link.
Please visit: CNBC.com.
Wednesday, May 16, 2007
Sunday, May 13, 2007
Thursday, May 10, 2007
Wednesday, May 09, 2007
Please visit: Le Figaro.fr
For translated version:
Please visit: Fools board