FutureBlind - Latest Comments

Re: Generalists vs. Specialists (And the Specialist’s Dilemma)

Potato — Wed, 06 May 2015 15:08:42 -0000

Terrible

Re: PetroChina: A Look Back

Rob Urban — Wed, 22 Jan 2014 12:23:00 -0000

Doing a perpetual DCF analysis ignores the net assets of the business as well as forces you to forecast into infinity. I would not do more than 20 years, have a definitive cut off like a 20 yr bond for instance. You will need to factor in the assets or your valuation will always be way off. You can just use Graham's liquidation value formula (can be found on the web) and add in the liquidation value on top of the DCF value. Divide by shares outstanding and you have your rough valuation. Looking at the 2001 annual report I've come to roughly $55B valuation with conservative numbers. The other $45B might be reserves not reflected on the balance sheet but i'd need to research it further. Buffett does DCF but no one sees him do it b/c he does a rough estimate in his head probably using some simple formula he's come up with. I don't think Buffett would try to "stretch it" but instead would only invest in no-brainer ideas, thus it seems likely the reserves on the books might be the no-brainer.

Re: Mistakes = information

Giorgio Sironi — Sun, 22 Dec 2013 15:52:01 -0000

I know the Titanic disaster spawned lots of improvements in safety regulations, but the "bigger and bigger" part seems poorly researched. Modern ocean liners have twice the maximum capacity of the Titanic:
http://en.wikipedia.org/wik...

Re: Generalists vs. Specialists (And the Specialist’s Dilemma)

Michael — Tue, 03 Sep 2013 06:32:01 -0000

Thank you this was really helpful

Re: Berkshire Hathaway Letters to Shareholders

Max Olson — Tue, 16 Jul 2013 22:57:46 -0000

Unfortunately I don't have much control over any international versions. Completely new books need to be printed with a new publisher. This may happen in a few places like China and Brazil but don't think it will happen in Canada. So I hope you managed to get the book from the U.S. site with not much problem!

Re: Berkshire Hathaway Letters to Shareholders

James — Tue, 16 Jul 2013 12:58:41 -0000

Thanks for compiling all the letters and make it into a book, it's long overdue. Bought it at Amazon.com and the ebook too yesterday. I enjoyed reading the Buffett Partneship Letters too but the copy from web part of them are unreadable hopefully you able to find the better version from Mr Buffett himself. Can't wait for the next 'book'. Great job! One more question, why I can't buy it on Amazon.ca? (Canada)

Re: Dear Mrs. Graham

Max Olson — Wed, 05 Jun 2013 13:57:02 -0000

Fixed, thanks!

Re: Dear Mrs. Graham

Aaron — Sat, 01 Jun 2013 13:52:09 -0000

Thanks for sharing, Max! By the way, her first name is Katharine.

Re: Berkshire Hathaway Letters to Shareholders

Andy Wang — Sun, 19 May 2013 07:21:05 -0000

Hope you could release the letters to the partners of Buffett Partnership soon, quite interested

Re: Generalists vs. Specialists (And the Specialist’s Dilemma)

Paul J Welsh — Mon, 13 May 2013 00:29:12 -0000

You have identified the biggest risk to being a specialist but in my book, "the St. Bernard Principle. Why Specialists are the Alpha Dogs in Business" you discover that if you worry about what might happen in the future you will likely lag behind in the present.

Re: Generalists vs. Specialists (And the Specialist’s Dilemma)

ramco — Fri, 03 May 2013 10:27:29 -0000

thank u

Re: Retail Numbers

Sivaram Velauthapillai — Thu, 27 Dec 2012 21:24:33 -0000

Interesting data...

Re: Stakeholder Value & The Dynamic Pie

Max Olson — Fri, 30 Nov 2012 11:58:28 -0000

Mark,

I sold our Sears investment many years ago (probably about a year or so after I wrote the article you mentioned). After further thought and investigation, I came to the conclusion that Sears was in a tougher situation than my optimism warranted, and that the "liquidation" thesis would play out longer and more painfully than the market anticipated.

To your second point, I won't go into performance specifics other than to say that I have beaten the market in my personal accounts and (to a much lesser extent) the BHL investment partnership since inception. I think "normal" investors can and do profit from the Buffett/Graham style -- but it is certainly difficult. In the long run the most important elements are staying within your competency and possessing an unusual amount of patience.

Re: Stakeholder Value & The Dynamic Pie

Mark Rogers — Sun, 25 Nov 2012 06:43:17 -0000

Hi Max,

I noticed an article you wrote five years ago on SHLD, where you disclosed an investment position. I was wondering if you still held the same number of shares, if you're still invested in the company? My reason for asking is, you're noted as a long time follower of the Buffett/Graham style. As a student of value investing, I'm keen to explore how followers of this style generally perform as investors themselves, ie can normal investors profit in the long term from following the ideas in The Intelligent Investor and Berkshire shareholder letters.

Thanks,

Mark

Re: PetroChina: A Look Back

DicksonP — Sat, 29 Sep 2012 14:36:58 -0000

HI Bill, i wonder why u said PTR's EPS in 2001 was $2, according to the annual report in 2003, the EPS of PTR in 2001 was 0.26RMB, which means it was around 0.03 US dollar instead?

Re: Fumbling the Future at Xerox PARC

Max Olson — Thu, 20 Sep 2012 13:26:04 -0000

Ah, missed it. Thanks.

Re: Fumbling the Future at Xerox PARC

oldorange — Wed, 19 Sep 2012 18:21:32 -0000

"...'one' way or another, everywhere." ;-)

Re: On Biglari Holdings and Type X Behavior

Max Olson — Fri, 17 Aug 2012 21:51:56 -0000

My thoughts exactly.

Re: On Biglari Holdings and Type X Behavior

Greg — Fri, 17 Aug 2012 21:09:06 -0000

Max, A major issue that I see here is that when the incentive compensation agreement was approved the stated book value of the company was about $250 million, I think that the economic value exceeded $650 million. The difference was appreciation of assets over decades, a lot of it because of inflation, not real appreciation.
25% of the $400+ million difference is $100+ million. Easy for
Biglari to take even though he may have had nothing to do with that appreciation.

Re: On Biglari Holdings and Type X Behavior

Max Olson — Fri, 17 Aug 2012 20:39:58 -0000

Greg: I would like him much more if he practiced what he preached.

Re: On Biglari Holdings and Type X Behavior

Greg — Fri, 17 Aug 2012 20:29:59 -0000

Don't you like Biglari? He has said that he wants to treat his shareholders well. For example:
"We are here to make money with you, not off you"-Warren Buffett, 1996 letter to shareholders.
"Not only will I refuse extra remuneration for the time I intend to commit, but I also will not accept any stock options. The reason is simple:We are one of the largest shareholders; thus, we plan to make money with you, not off you."-Sardar Biglari, 2008 letter to Steak N Shake shareholders.

Re: Tech trends shaping the future

Max Olson — Sun, 05 Aug 2012 17:21:14 -0000

Brent:
I agree that the trends I listed lean toward the software side.

I think that some of the software trends will end up affecting some of those you listed -- primarily healthcare, energy, manufacturing, etc.

A lot of this follows Marc Andreessen's "Software is eating the world" theory. In other words, software (primarily internet/cloud-based) has disrupted the older tech/digital industries but is now moving onto jobs that are traditionally more physical, service-based, or procedural.

More obvious replacement is occurring in retail, hardware, and manufacturing. But I think big disruptions are in store for healthcare, education, and energy.

Re: Tech trends shaping the future

Brent Johnson — Thu, 02 Aug 2012 08:29:21 -0000

2010 U.S. % GDP by Industry
--------------------------------------------------
Computer and Electronic Product - 1.8% (trending up)
Electronic Equipment, Appliances and Components - 0.3% (flat)
Publishing Industries (incl. software) - 1.0% (trending down)
Information and Data Processing Services - 0.5% (flat)
Computer System Design and Related Services 1.3% (trending up)
-------------------------------------------------------
Total 4.9% (trending up)

Source: Bureau of Economic Analysis

Re: Tech trends shaping the future

Brent Johnson — Thu, 02 Aug 2012 07:58:57 -0000

You list a lot of software and computer related changes. I'm not saying you're wrong, but what is the value-added of software versus the whole economy? It would be an interesting number to know. I think there is lots of room for transformation in other industries. The 2% growth in GDP every year is probably 20% out-with-the-old and 22% in-with-the-new, and this would not be possible without expansion in other areas.

Some that come to mind for me:
1) Healthcare
a) Fee-for-service model (vs. Insurance)
2) Manufacturing
a) Rapid prototyping (Additive manufacturing) - Still a ways out but I agree very, very promising
3) Energy
a) Battery Storage Technology
b) Data Center heat processing (along the lines of 1b)
4) Software
a) Data Analytics, "Business Intelligence"

While they are all incremental changes, I think all these areas have the potential to change the business landscape considerably. My two cents.

P.S. I enjoy the blog, please keep up the good work!

Re: PetroChina: A Look Back

Dicksonpau — Thu, 14 Jun 2012 10:10:33 -0000

Dear Bill,

I am a new fan of Ben Graham, as a beginner and a dreamer who wishes to manages money in ben's way, after reading "the intelligent investor", how much do you recommend "Rule #1"?

Thanks!