Forum seems so quiet...maybe it is a good sign

Gary Teh
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15 years 2 months ago #1083 by Gary Teh

Replied by Gary Teh on topic Re:Forum seems so quiet...maybe it is a good sign

Hi Musicwhiz, That\'s ok then. I really don\'t think he needs to disclosed his methodology in a way that we want it presented but he has many times in history been pretty candid and straight forward about how he select businesses to buy. It\'s not only him but Charlie Munger as well. Sometimes he buys companies within a week of knowing them. How much due diligence can he make within that week...very little. Sometimes it is about gut feel and there is nothing scientific about that. Take sports for example; Do you think Tiger Woods can train or create another \"Tiger Woods\"?? I think as much as he tries he will not succeed even cloning would not help...why? Sometimes it is an inert skill that cannot be replicated no matter what one does and even the owner may not be able to explain.. The best you and I can do is to learn as much as we can from his books, annual reports, etc but we can never be him and definitely do not try and buy his investee companies. Again he has said over and over again, if he could revert back in history and fast forward it to today...he would be buying small companies without being noticed and that is where outsize returns could be achieve. He cannot possible repeat his feat of 35% CAGR as even a whisper of his interest would send a stock soaring before he can own a significant stake to make a dent in the Berkshire portfolio. I believe that your portfolio would easily beat WB over the long term as you have the advantage that he does not( he used to 20 years ago ) which is stealth. Even his rock solid portfolio have been pounded in recent weeks; Wells Fargo, Amex, GS, GE etc.

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musicwhiz
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15 years 2 months ago #1112 by musicwhiz

Replied by musicwhiz on topic Re:Forum seems so quiet...maybe it is a good sign

Thanks Gary Teh but I think you think too highly of my portfolio ! Seriously, I am not even trying to compare myself to WB and my aim is just to preserve my capital and earn a decent return on my investment (5-8% is sufficient). WB did a lot of homework and had spent many nights poring through Annual Reports to get the returns he did, I won\'t like to have his type of \"life\" (more like \"no life\" haha). So far, my aim of capital preservation is only present in one or two companies - the rest are still in the midst of floundering for direction. So the verdict is still not in yet on whether my portfolio is able to survive this harsh recession. To be more on the cautious side, I am willing to write-off about 33.3% (1/3) of my portfolio as a permanent loss, but hope to make it back through time (dividends included). Regards.

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Morpheus
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15 years 2 months ago #1115 by Morpheus

Replied by Morpheus on topic Re:Forum seems so quiet...maybe it is a good sign

As long as the companies don\'t fall, they are always around to benefit from the next cycle. Cheers :laugh: :laugh: :laugh:

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Gary Teh
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15 years 2 months ago #1119 by Gary Teh

Replied by Gary Teh on topic Re:Forum seems so quiet...maybe it is a good sign

Hi Musicwhiz, I think highly of your approach and not necessarily of your portfolio. My portfolio is similar to yours as far as the bottom line is concern but with different names. I\'m taking permannent loss on some companies and reinvesting those into new companies which has fallen more thus the potential upside is much higher. Paper loss is real loss no matter how one cuts it and if another company with strong fundamentals falls further as a percentage then I may consider switching. Anyway, it is always painful in a bear market.

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musicwhiz
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15 years 2 months ago #1135 by musicwhiz

Replied by musicwhiz on topic Re:Forum seems so quiet...maybe it is a good sign

Thanks for clarifying Gary. My approach is not to realize a loss unless there is a permanent and irreversible impairment of a Company in terms of either prospects, fundamentals or financials. Thus far, I do not see a major degradation of the above aspects in the companies I own to warrant me to realize a permanent loss. Suffice to say such conditions may arise in the near future, of which I am mentally prepared to accept. Paper loss is as real as one would imagine it to be. I personally feel that one should not necessarily feel poorer during a bear market nor richer in a bull market unless one has every intention to sell his shareholdings in the companies he owns. Otherwise, he is free to ignore Mr. Market\'s daily quotations which have a potent psychological effect on one\'s mental well-being. And yes, it\'s difficult to endure a bear market because of the pervasive bad news and pessimism on the ground and in the news; but only in this kind of environment can one find decent prices and worthy bargains.

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sean.ng
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15 years 2 months ago #1139 by sean.ng

Replied by sean.ng on topic Re:Forum seems so quiet...maybe it is a good sign

Hi all, im new to this investing game. So, how do you gauge as permanent losses or to which extent would you then realize these losses to sell & switch to other co? S-chips have been really taking a free fall this week, some like Li Heng & Celestial have fallen 30-40% from 3 months ago. The gloomy feeling has been worse than few months ago. Would it be a wise choice to have already invested all available cash into the market? Should we continue to pump in whatever incoming wages in the following months to come or just sit tight & conserve cash ourselves? :unsure:

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