May 6, 2010

On Getting Splattered…


There are good days, there are bad days and there are awful days. Today was a debacle. Almost everything our fund owns was down. Some positions were down more than ten percent. Even worse, we stopped out on a number of trading positions. It was a mess. Our portfolio looks like a crime scene—all red. My dad tells me that some days you’re the ... Read More
Categories: General
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April 28, 2010

Designed To Fail…


I’m sitting here watching CNBC fill airtime with stories of how Goldman Sachs created securities that were designed to fail. We are supposed to feel sorry for the wealthy and financially savvy institutional investors who bought these things without doing their due diligence. This was a closed game that only a few very large investors were even invited to participate in. If you don’t ... Read More
Categories: Investments
Positions Mentioned:
April 24, 2010

The Curse Of Technology


For most of the last two decades, investors have been enamored with technology. I am baffled to understand why. Why do these companies trade at such hefty multiples? Why is there so much excitement? For the most part, technology is an awful business to be in. What’s good about the business? When things are good, there are strong margins, rapid growth phases and a ... Read More
Categories: General
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April 21, 2010

US Global (Gearing In Practice)


I recently wrote about gearing. Some industries really lend themselves to gearing. Let’s see how that works in practice. One of my best investments of all time was US Global Investors (GROW: Nasdaq). US Global is the manager of various mutual funds with a particular focus on Eastern Europe and natural resources—both sectors that I am optimistic about. In the asset management business, as assets ... Read More
Categories: Investments
Positions Mentioned:
April 19, 2010

Gearing


Let’s talk operating leverage—or as I like to call it, gearing. Think of your car, you start in neutral, shift up to first, then second. The real speed is when you hit fifth. It takes time and momentum to get there. Gearing is where the real money is made. When you are investing in little companies, you want to look at rapidly growing businesses. ... Read More
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