Monday, August 26, 2013

What Time is It?

Down on the Corner of Berkshire & Fairfax, someone was reflecting that

"[T]hings are getting pretty expensive when I have to buy crap like DGIT [Digital Generation] to try and make a buck."
It made me think of looking at the value investment ideas on the Value Investors Club that were on offer at this time in 2007. There was a Georgia Gulf long idea, for example. You might remember that the company had to all but wipe out shareholders in 2009 in order to deleverage.

It makes me realize that it would be useful to read research from the last business cycle (if a company is that old) to get perspective. I don't think many people do that.

Anyway, when the market gets really expensive, the VIC/value investors don't say "it's too hard, there's nothing good, I'm going to cash" (which I happen to be saying right now). Instead, they say, "look what I found digging by DEEP into the trash pile", with the implication that they are geniuses for knowing just where to dig in the trash pile.

I looked at a number of 2007 research reports of dogs on the VIC, and what I notice is the breathless enthusiasm combined with a casual dismissal of potential problems.


Anonymous said...

What an idiotic post considering that DGIT has doubled since May on several key catalysts. But not surprising coming from a pretend investor like you who has consistently been wrong and lives in a world where they keep seeing bubbles everywhere. Also not surprising that you keep quoting another clown - Hussman, who also can't stop destroying his investors' capital because he too is a boy that keeps crying wolf and keeps seeing bubbles.

Please give me more of the 'crap' as you say and less anything you and Hussman have to offer....quite sure we'll all be better off.

Taylor Conant said...

Sounds like you struck a nerve with a bull with low self-esteem. After all, if you're such a dumb asshole why bother to write a comment? Better to let you live your fantasy life unimpeded.

Behavioral Investors said...

Intrexon was recommended as a long on VIC this month.

"Guys, Go long Inrexon (XON) on the $125mm IPO this week", the thesis read. "Idea : Long Intrexon, the current 800 lb gorilla in the emerging field of Synthetic Biology. Symbol XON. Pricing Wendesday 8/7 for Thursday 8/8. U/W: J.P. Morgan (JPM), Barclay's. Co-Manager : Griffin. I'm not going to have much to say in Q&A, as I am a layman in life science technology, but I am smart enough to follow people a lot smarter than myself."

As it happens, I myself have a PhD in genetics, and the remainder of the writeup (and the company's remarkably vague IPO prospectus) was largely meaningless to me.

The fact that this is being posted on VIC, however, was incredibly meaningful.

Taylor Conant said...

I wonder what Joel Greenblatt or his associates (who control VIC) get from contributors like this?

Anonymous said...

Ha. Taylor - are you another Hussman fan that just keeps losing money too? Or keeps missing opportunities to make money in a bull market? Don't get mad cause you suck at investing.

I responded for the same reason you did - douchebag. Because I had something to say!

CP said...

Thanks for that XON story, a perfect example.

The post wasn't about DGIT, rather the comment on CB&F made me think about how investment idea quality varies across a market cycle.

Taylor Conant said...

I don't read Hussman unless someone sends me one of his articles and asks me to read it.

I hope that information is sufficient to satisfy your inquiry.

I'm glad you're not my money manager-- even if you made me bundles of cash in bull markets I am not sure I'd be able to stand your obnoxious personality, nor your tendency to assault and berate me for questioning your decisions.

Anonymous said...

The only guy who sounds upset is anonymous. He must be pissed because the market is down 1% and his high beta value trash is down 5%.

CP said...

"how investment idea quality varies across a market cycle"

For example, we know that the number of net net opportunities varies.

Right now there are basically none, comping out of the crash there were tons.

In 1932, Ben Graham says that "over 40% of all the industrial companies listed on the New York Stock Exchange were quoted at some time in 1932 at less than their net current assets."

Josh said...

Wow that first comment might just mark the top in the market.

Anonymous said...

4 am before the market opened.

CP said...

Request for Mr. Anonymous:

Would you please humor us and tell us some of the attractive values you hold right now?

Since we are too dumb to find them ourselves, maybe your portfolio of gems would help us find religion.

Anonymous said...

that is amazing that guy was so pissed off

it's almost like the slide since 8/2 caused him to blow a fuse

bulls chasing junk need a constant rate of appreciation, like a junky who needs a bigger and bigger high

Anonymous said...

"I know what you're thinking. Did I do four quantitative easings or only three?

To tell you the truth, with all the printing, I kind of lost track myself."

Do you feel lucky punk?

Anonymous said...

If oil goes up any more, they won't be able to print any more money to prop up the junk you own.

Anonymous said...

no word on anonymous long ideas?

CP said...

I would indeed be curious to hear the long ideas that make Anonymous think we are not late in the credit cycle.