Monday, February 27, 2006

The Letter

Due March 4th, standard 9am EST, per Buffett's newest company news release, here. I assume Carol Loomis is editing now. He'll have to do it earlier in the future, due to new SEC rule about big companies reporting in 60 days, not 75. Thank god for Elliot -- those two weeks were absolutely excruciating. Set your outlook calendars now. See you in Omaha in May.

Sunday, February 26, 2006

Random musings

I came across a great quote from Phil Fisher which reminds me to read "Common Stocks and Uncommon Profits" again:

Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others about which they know nothing at all. It never seems to occur to them that buying a company without having sufficient knowledge of it may be even more dangerous than having inadequate diversification.

Monday, February 13, 2006

Weekly letters and BRKA buys another company

For those that haven't yet followed our links (to the right), here's an excellent excerpt from John Hussman's weekly letter, on how to take a long-term approach to investing:

One of the most difficult requirements of long-term investing is to keep an eye on a reliable “fixed point.” It's fairly easy to get caught up in the day-to-day earnings news and political developments, in a way that makes investors ignore reliable benchmarks of value and probable long-term returns. I've noted before that while valuations have relatively little to do with short-term investment returns, they are a very strong and reliable determinant of long-term returns. So valuations are that “fixed point” at the other end of the wire. Now, you can't ignore the short-term pressures that sway the wire one way or the other, but you'll lose balance if you focus only on those. In the end, the objective is to take account of both the “fixed point” – valuations – and the short-term sway of the wire – market action – and then align each step in a way that's consistent with the condition of those factors at each moment.
And Berkshire Hathaway buys another company - Applied Underwriters.

Sunday, February 05, 2006

GMO Letter

Check out the latest GMO update letter from Jeremy Grantham, one of the best at mean regression, here (login required). Great comments on historical economic context for last 25 year, probable impending volatility, presidential cycles, emerging markets, staying with winners, rebalancing, alternative asset classes, recent endowment outperformance, timber, and Minsky who said "stability is unstable," the anti-tautology.