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  • Praveen Chawla commented on Bram de Haas's article 07-23 16:32
    Herbalife: FTC Settlement Spells Trouble
    The market judged the Herbalife (HLF) FTC settlement as an extremely favorable one and the stock surged. Over the weekend many market participants...
    View all 1 comment
    Praveen Chawla 07-23 17:32
    • Agree.  Good short.  Thanks to Ackman in setting this up. 
  • Grahamites commented on Grahamites's article 07-23 15:28
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 17 comments
    Grahamites 07-23 16:28
    • Batbeer - Nicelyl done! Dead on.
  • batbeer2 commented on Grahamites's article 07-23 15:21
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 16 comments
    batbeer2 07-23 16:21
    • >> Finally the fact that burry and paulson could be looking and waiting years for the next big short is not necessary wrong neither bad ... Munger has Made really big money in 1973 buying Washington post and in 2009 buying wfc (profiting from the fear spread by the housing crisis) at the bottom .... He could have done his career with this 2 investments alone.

      Ah, but the point here is not that it will take a long time between opportunities.

      The point here is that you risk spending the rest of your life looking for (legal and highly leveraged) ways of benefitting from government bailouts. Let's say you spend a decade looking for stuff like that and then you find an opportunity. You're managing other peoples money and the trade is hugely profitable and certainly legal but the morality of the trade is at best questionable? What do you do?

      The risk is not in the infrequency of the opportunities, the risk is in corrupting yourself.

      Let's say Li Lu's talent could be focussed on all sorts of asset classes. Would he be a better man after anlysing this kind of stuff for a decade or two or would he be a better man after hunting for the next Geico for a decade ot two?
  • Pavel Gorobets commented on Ben Strubel's article 07-23 13:04
    Warren Buffett Is Wrong; Macro Is Important
    Warren Buffett (Trades, Portfolio) is famous for telling investors that he and Charlie Munger (Trades, Portfolio) don’t pay any attention to...
    View all 4 comments
    Pavel Gorobets 07-23 14:04
  • Soid Ahmad commented on Ben Strubel's article 07-23 12:37
    Netflix's Latest Quarter Shows Days as Disruptor May Be Done
    Netflix (NFLX)’s latest results appear to point to its days as a disrupter in the media landscape being numbered and its place in the value chain...
    View all 1 comment
    Soid Ahmad 07-23 13:37
    • A well-written piece capturing the essence of Netflix. Thank you!

       
  • Grahamites commented on Grahamites's article 07-23 11:16
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 15 comments
    Grahamites 07-23 12:16
    • Snow - Thanks for the comments. 99% of the people would have done the same thing had they come to the same conclusion that Paulson and Burry did and 1% would not. Buffett, Munger, Li Lu and a few other people I know that are associated closely with them, belong to the 1% group. And they don't expect the 99% to understand how they are the 1%.

      If you read my comments above, I didn't say shorting in general, and shorting the housing market was wrong. I pointed out specifically one way, that was shorting the housing market using super leveraged derivatives such as CDS.  There's a huge difference between what Munger's investment of Wash Post and WFC versus shorting the housing market using leveraged derivatives.I also like what David Einhorn (Trades, Portfolio) did when he shorted the hell out of Lehman or what Ackman did when he shorted MBIA. If you actually can explain how CDS works, you might be able to see the difference. Again, think about the second level and third level consequences you will see how taxpayes paid short sellers and if you can't, I encourage you to learn more about derivatives and think more.
  • Grahamites commented on Grahamites's article 07-23 11:01
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 14 comments
    Grahamites 07-23 12:01
    • Jtdaniel - Thanks for your insightful and nice comments, as always. Somehow I think I get the wrong message delivered in this article. There were a lot of awefu wrong doings from so many parties involved in the years leading up to the crisis - like you and other readers rightfully pointed out, the government, the bankers, the mortgage brokers. Burry and Paulson just saw this coming and profited enormously from it. They are not villains, I agree. But I respect Li Lu much more for what he did not choose to do. It's a different level. 
  • Grahamites commented on Grahamites's article 07-23 10:55
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 13 comments
    Grahamites 07-23 11:55
    • Matt.marcary - I didn't say it's morally incorrect to profit from the crisis and I agree that the bankers and mortgage brokers who sold those shaddy mortages are the real villains and that Burry and Paulson are not.
  • batbeer2 commented on Ben Reynolds's article 07-23 09:31
    How Much Do Interest Rates Affect the Market’s P/E Ratio?
    The 10-Year T-Bonds hit all time yield lows in July 2016. Interest rates are not just low, they are near all time lows. Average 10 year T-Bond...
    View all 2 comments
    batbeer2 07-23 10:31
    • Hi ben, you say:

      >> Before going further, it is important to note that interest rates are not dictated by the free market ... Instead, interest rates are controlled by the Federal Reserve. The Fed’s primary tool in setting interest rates is controlling the Federal Funds Rate .... The Federal Funds rates indirectly determines borrowing rates for the entire U.S. economy.

      Wow, that is wonderful magic. Is this universal or is it a result of the U.S. having a much more advanced monetary system and the rest of us are in the dark ages?

      For roughly a century, people in the U.S. have "known" the fed simply sets the rate and the market follows. But just because you have never seen a black swan does not mean they do not exist. Anyone denying their existence just hasn't been around. I think it is fair to say many people in the U.S haven't been around. 

      At some point (perhaps not in my lifetime) the good people of the U.S. will learn that the fed's control of interest rates has limits and market forces do apply. Don't bet too heavily that the world is flat, black swans don't exist and the fed sets rates with no regared to market forces. 

      For now though I absolutely agree with your analysis.
  • snowballbuilder commented on Grahamites's article 07-23 09:21
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 12 comments
    snowballbuilder 07-23 10:21
    • in wich sense taxpaier have paied the short seller ? 

      Directly or indirectly ?

      havent instead the taxpaier paid for the euphoria that have caused the crisis ? The bad subprime mortage and a lot of greed and euphoria ? 

      Finally the fact that burry and paulson could be looking and waiting years for the next big short is not necessary wrong neither bad ... Munger has Made really big money in 1973 buying Washington post and in 2009 buying wfc (profiting from the fear spread by the housing crisis) at the bottom .... He could have done his career with  this 2 investments alone.

      I see nothing wrong with short selling and i see nothing wrong in shorting the housing market and i really see nothing wrong in looking and waiting for year for the next big (long or short) opportunity. 

      Just some thoughts best snow.
  • jtdaniel commented on Grahamites's article 07-23 05:37
    The Other Side of the Big Short
    There have been a lot of discussions since the book “The Big Short” was published and the subsequent production of the eponymous movie. I...
    View all 11 comments
    jtdaniel 07-23 06:37
    • Hi Grahamites,

      I really enjoyed your article. The Big Short is a great read and obviously more in-depth and less dramatic than the movie. The government was encouraging financial institutions to extend mortgages to high-risk buyers in order to promote equal opportunity in home ownership. This "ownership" often took the form of interest-only or short-term, adjustable rate mortgages. Easy credit terms and lack of due diligence by lenders led to a bubble in housing prices. Many people saw this, but Burry figured out a very complex way to profit from it. He would have failed his investors by walking away from the opportunity. I am long Berkshire and admire Munger and Buffett. Even so, from my perspective it is not good second-level thinking to grant them the last word on every aspect of life. Best, dj   
  • jschmitz47 commented on Ben Reynolds's article 07-23 05:33
    How Much Do Interest Rates Affect the Market’s P/E Ratio?
    The 10-Year T-Bonds hit all time yield lows in July 2016. Interest rates are not just low, they are near all time lows. Average 10 year T-Bond...
    View all 1 comment
    jschmitz47 07-23 06:33
    • Pretty interesting and insightful analysis.

2016-07-23

2016-07-22

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