Do you have a framework for life? For Investing? For love or at least getting some lovin’. While the guy who posed the first part of that question may have been more interested in how I answered than what I said, all I could think was, great question, I must have an answer for that.

Excellent post here at Data Diary on the importance of capital, especially point 4, “Always assume the worst”.
As I’ve said many times, focus on the downside and let the upside take care of itself. Bruce Berkowitz always tries to figure out what could break his investments, from memory he even hires outsiders to try and disprove his investment ideas. Of course with St Joe’s Berkowitz had David Einhorn to do that for free! Another of my favourite saying that fits with this meme  is, capital is scare while opportunities are plentiful.
While Data Diary’s number one tip, …

I found Warren Buffett’s letter on the resignation of his lieutenant David Sokol interesting in what it didn’t say. Buffett didn’t ascribe to Sokol any of the qualities that he and his partner Charlie Munger value so much. There was no mention of integrity, honesty or morals. The letter addressed the letter of law, “Neither Dave nor I feel his Lubrizol purchases were in any way unlawful.”
I find whether Sokol acted lawfully or not of little interest and if Buffett and Munger are men of their word, which they most surely are, then I …

If the US market appears cheap when viewed through your moment in time P/E filter, then perhaps it’s time to change your filter.

“Because fund managers have certain funds which are designed to track the indicies.So once the stocks that comprise the indicies change (18th), they are forced to rebalance their holdings of securities.”
I often see this incorrect view put forward, so am posting this here as a to be expanded work in progress.
If you think about it then simply buying any companies that have been included in an index would result in market out-performance, because they the stock has to go up because indexers have to buy them. People’s next thought is …

What if Jeremy Grantham is right and this time is different? What if this secular bull commodities run doesn’t bring enough new resources online to meet the growing demand?
While there are certain to periods of weakness in demand for resources and in the very long run a revolutionary technology or fundamental change in the way we live will bring balance, over the next 20-50 years there seems to be a good chance that Grantham is right and this time is indeed different. We appear to be running out of what …

2011 will be transformational for Telstra. I’m writing up my analysis now, but prior to publishing want to get a rough view of what people see happening with the share price this year. Is the 10% yield (14.4% grossed up) a value trap?

The lowest likely (-2SD) price for Telstra in 2011?
$2.60 (66%, 19 Votes)
$2.00 (17%, 5 Votes)
$2.40 (10%, 3 Votes)
$2.20 (7%, 2 Votes)
Total Voters: 29

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The turning customers into clerks wave continues to swell. I wonder how much that adds to productivity.
Moving on…
Arnaud Mares hit the nail on the head “Governments will impose a loss on some of their stakeholders, … The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over”. Bloomberg
My vote is the baby boomers should suck it up. They made and need to own …

I attended the M2 Telecommunications AGM yesterday afternoon. I had a couple questions to ask, but before I could Vaughan Bowen addressed them all in his CEO presentation.  M2 well positioned for the NBN roll-out, with an organisation built around the low margins of a re-seller. Speaking of margins Bowen reaffirmed guidance and made it clear they would enjoy margin expansion this year. While that was obvious from their guidance of earnings expanding faster than revenue, it was good to hear that their focus is on profitability. I think that is a distinction that many CEOs …

When I returned to Australia in 2004 I decided to invest some of our funds in an Australian small cap fund. I chose Opis Funds which has subsequently been renamed OC Funds. I chose a fund rather than direct investing as after five years overseas I had little knowledge of the Australian market and my focus was on investing in the US. After a year or three I started to once again focus on Australia and invest directly here, though have retained our investment in OC Funds. I enjoy their …