My favorite bits from "The power of NO" by James Altucher

-By year three you;ve put in 5000-7000 hours of work. That's good enough to be in the top 200-300 people in the world in anything. By year three you will know how to make money.

-What is "it" ? How do I know what I should do ? Whatever area you feel like reading 500 books about. Go to the bookstore or library and find it.

- how to recognize an Abusive person : they try to make you feel guilty, angry, afraid, wrong. They try to make themselves the victim, they turn others against you.
How do I feel about myself when Iam around this person? Do I feel good about myself?
If the answer is no, you know you need to move away from the person. The key is not to engage.

-Letting our thoughts go and being present without naming what is happening all the time gives us a rest and the opportunity to let something else in.

-Be aware that you are making a shift from panic (lots of thoughts) to abundance (fewer thoughts)

-With each thought that comes up, label it as useful or not useful. If I worry about how much money I will have in five years or did at a party last night, this is not useful. What is useful then? Functional things - I need to pack a lunch for the kids right now.

-Sometimes we need rest and proper boundaries. Sometimes we need to do less. When we forget that we have rhythms and cycles just like nature does, we force things, overwork, burn the candle at both ends, and make poor choices as a consequence of exhaustion.

Keeping your stress level down is very important, so here are five things we can think of to say no to so that you can have centered and relaxed days:
 1 Say no to anything that gets in the way of your daily practices, no matter how IMPORTANT it pretends to be.
2 Say no to anything that prevents you from sitting in silence for some time, every day.
4 Do not talk to people who you know do not respect you or who put you down.

- I slide into depression if I forget my daily practice
I started to exercise everyday. I started to eat better. One item for breakfast. A healthy lunch. Tiny dinner. No snacks.
I started to sleep nine hours a night.
I broke off all ties with anyone it felt bad to be around.
I wrote down ideas very day for articles I should write and businesses I could start.
I had to surrender to the fact that I couldn't control everything. But I could be prepared.

-Try this today:
 Write down ten ideas for your job that you think will add above and beyond value.
 Write down the ten next steps for those ideas.

-In the Bhagavad Gita, Krishna tells Arjun that he needs to fight. He is saying that to reach your own divinity, you have to learn to say no and stand up for what is right for you in this moment.You need to learn who you are.

-Rule #1 : Do not do anything you don't want to do.
When you agree to do something you don't want to do, you will resent the person who asked you to do it. You will grow to hate the activity. it will drip like a burning candle into your heart until you're burning with hate for yourself.

-Say no to extra, unnecessary words. Don't say "yeah" in the middle of someone talking. Count to two before responding.
-Complaining is a no!
-If someone is trying to steal our energy, then of course we speak up and do what we can to stop it. We stand up for ourselves.

Decision making under uncertainty

From Seth Klarman's Margin of Safety:

Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there is to know about them. They study the industry and the competition, contact former employees, industry consultants and analysts and become personally acquainted with top management. They analyze financial statements for the past decade and stock price trends for even longer. This diligence is admirable, but it has two shortcomings. First, no matter how much research is performed some information always remains elusive; investors have to learn to live with less than complete information. Second, even if an investor could know all the facts about an investment, he or she would not necessarily profit.

"Moreover, business information is highly perishable. Economic conditions change, industries are transformed, and business results are volatile. The effort to acquire current, let alone complete, information is never ending. Meanwhile, other market participants are also gathering and updating information, thereby diminishing any investor's informational advantage.

"Most investors strive fruitlessly for certainty and precision, avoiding situations in which information is difficult to obtain. Yet by the time high uncertainty is resolved, prices are likely to have risen. Investors frequently benefit from making investment decisions with less-than-perfect knowledge and are well rewarded for bearing the risk of uncertainty. The time other investors spend delving into the last unanswered detail may cost them the chance to buy in at prices so low that they offer a margin of safety despite the incomplete information. (Low prices compensate for uncertainty.)"

“Yet it would be your duty to bear it, if you could not avoid it: it is weak and silly to say you cannot bear what it is your fate to be required to bear.”  Jane Eyre (charlotte bronte)

“What's meant to be will always find a way”  Trisha Yearwood

Great WB Quotes

It must be noted that your chair man, always a quick study, required only 20 years to recognize how important it was to buy good businesses. In the interim, I searched for bargains and had the misfortune to find some. My punishment was an education in the economics of short-line farm equipment, third place department stores, and New England textile manufacturers.

Experience, however indicates that the best business returns are usually achieved by companies that are doing something quite similar today to what they were doing 5 or 10 years ago.But a business that constantly encounters major change also encounters many chances for major error.

To the extent we have been successful, it is because we concentrated on identifying one foot hurdles that we could step over rather than because we acquired any ability to clear seven footers. The finding may seem unfair, but in both business and investments it is usually far more profitable to simply stick with the easy and obvious than it is to resolve the difficult.

What counts for most people in investing is not how much they know,  but rather how realistically they define what they don't know. An investor needs to do very few things right as long as he or she avoids big mistakes.

Every day, in countless ways, the competitive position of each of our businesses grows  either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and  improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis effects of our actions are imperceptible; cumulatively though there are consequences that are enormous.

If the choice is between a questionable business at a comfortable price or a comfortable business at questionable price, we much prefer the latter.  What really gets our attention, however, is a comfortable business at a comfortable price.

Home ownership is a wonderful thing. My family and I have enjoyed my present home for 50 years, with more to come. But enjoyment and utility should be the primary motivation for purchase, not profit or refi possibilities. And the home purchased ought to fit the income of the purchaser.

http://www.quora.com/Is-2015-a-good-time-to-buy-a-house-in-the-Bay-Area

...Someone I used to work for once told me that the trick to Bay Area real estate is just to buy and then be prepared to hold -- eventually you won't be wrong. But if you wait, you run real risk of the market running away from you.

http://wrongtool.kostadis.com/will-happen-again/#comments

My fave bits from Guy Spier's book "The Education of a Value Investor" :

GLIDE recognises that "everyone has a potential no matter what their circumstances. This is a proven process that a combination of love and time and energy and resources can produce a different human being."

Warren had structured his environment to enhance his ability to make rational decisions. It contained very little that could clutter his mind. He had only two chairs and no space for large meetings.

Warren's desk was so small that there was no room for piles, An inbox and outbox Lay on top of his desk, along with the box labeled "too hard" – a visual reminder that he should wait patiently until the perfect opportunity arrives.

There was no Bloomberg terminal in Buffets office.

Warren told us that he has a place in his office when he can nap too.


Virtually all my investments are in companies where the long term outcome is all about inexorable: the company is heading in that positive direction, and it's really just a question of how long it takes. Buffets holdings clearly possess the same precious characteristic. Indeed, he uses the word inevitable to describe the positive outcome that he ultimately expects.

Gather investment research in the right order. The first idea to and to the human brain tends to be the one that sticks.  Look for disconfirming evidence.

I need to be extremely careful about the order in which I gather research and explore investment ideas.this might not seem important to many investors, but the order in which I read the materials matters greatly since whatever I take in first affects me unduly.
My routine is to start with the least biased I'm most objective sources. These are typically the companies public filings, including the annual report 10K, 10Q and proxy statement.

The Tupperware misadventure taught me an invaluable lesson: I want to invest only in companies that are a win-win for the entire ecosystem. What's important is the idea that a great company makes tons of money while Adding real value for its customers.

Greeces national lottery firm has a license to print money. But it preys on people's weaknesses. I prefer to invest in businesses that benefit society.

Burry notes and quotes

-Michael Burry would screen the market looking specifically at the enterprise value/EBITDA ratio (investing based on the EV/EBITDA ratio has been shown to outperform other valuation metrics over time).



-“I’ll then look harder to determine a more specific price and value for the company. When I do this I take into account off-balance sheet items and true free cash flow. I tend to ignore price-earnings ratios. Return on equity is deceptive and dangerous. I prefer minimal debt, and am careful to adjust book value to a realistic number.”

-Minimal debt, a low P/B ratio (adjusted to reflect realistic asset values), strong free cash flow and low EV/EBITDA ratio were the four traits Michael Burry looked for in an investment.

-Secondly, Michael Burry looked for what he called ‘rare birds’, or asset plays in other words.

-Thirdly, Burry looked for value in the type of company favored by Buffett. (Those with a sustainable competitive advantage as demonstrated by longstanding and stable high returns on invested capital, although only at a reasonable price.)


Avant! had $100 million in cash in the bank, was still generating $100 million year of free cash flow — and had a market value of only $250 million!

Michael Burry started digging; He was able to see that even if the executives went to jail (as they did) and the fines were paid (as they were), Avant would be worth a lot more than the market assumed…Burry bought his first shares of Avant! in June 2001 at $12 per share…Mike Burry kept on buying it — all the way down to $2 a share…Four months later Avant! got taken over for $22 a share. ‘That was a classic Mike Burry trades,’ says one of his investors. ‘It goes up by ten times but first it goes down by half.'”


“As for when to buy, I mix some barebones technical analysis into my strategy…Nothing fancy. But I prefer to buy within 10% to 15% of a 52-week low that has shown itself to offer some price support. That’s the contrarian part of me. And if a stock — other than the rare birds discussed above — breaks to a new low, in most cases I cut the loss…”

Michael Burry’s portfolio management was developed through trial and error:


“I like to hold 12 to 18 stocks diversified among various depressed industries, and tend to be fully invested. This number seems to provide enough room for my best ideas while smoothing out volatility, not that I feel volatility in any way is related to risk. But you see, I have this heartburn problem and don’t need the extra stress…I know my portfolio turnover will generally exceed 50% annually… I am not afraid to sell when a stock has a quick 40% to 50% a pop.”

Source: http://csinvesting.org/wp-content/uploads/2013/07/Michael-Burry-Case-Studies.pdf

The future is always coming up with surprises for us, and the best way to insulate yourself from these surprises is to diversify," Shiller said.

 My fave ones from Seth Klarman's CNBC article on Buffett 

1. Value investing works. Buy bargains.

2. Quality matters, in businesses and in people. Better quality businesses are more likely to grow and compound cash flow; low quality businesses often erode and even superior managers, who are difficult to identify, attract, and retain, may not be enough to save them. Always partner with highly capable managers whose interests are aligned with yours.

4. Consistency and patience are crucial. Most investors are their own worst enemies. Endurance enables compounding.

5. Risk is not the same as volatility; risk results from overpaying or overestimating a company's prospects. Prices fluctuate more than value; price volatility can drive opportunity. Sacrifice some upside as necessary to protect on the downside.

6. Unprecedented events occur with some regularity, so be prepared.

7. You can make some investment mistakes and still thrive.

8. Holding cash in the absence of opportunity makes sense.

10. Candour is essential. It's important to acknowledge mistakes, act decisively, and learn from them. Good writing clarifies your own thinking and that of your fellow shareholders.

12. Do what you love, and you'll never work a day in your life.

“The worst sort of business,” wrote Warren Buffett, billionaire investor and Berkshire Hathaway chairman, to shareholders in 2008, “is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.” He then came straight to the point: “Think airlines.”