ValuePlays

It’s easy to get angry at the markets. And the consequences of doing so can be just as painful. At present, the markets are down horribly on the year. I say “horribly” because the year has just started.

Mohnish Pabrai, an increasingly well-known investment advisor in the mold of Warren Buffett, got hit hard in the fourth quarter of 2007 as the subprime mortgage crisis wrecked one investment and weighed heavily on another.

On Monday and Tuesday Berkshire added shares of the railraod

“There is a school of thought that says that the value of a business is entirely in its future cash flows and that all assets are tools that provide that cash flow. In essence, many people believe that assets and equity should be ignored entirely. Let’s look at it from a private owner perspective and follow it up later in the week with an examination of Buffett’s early partnership letters:”

“If you’ve read Mohnish Pabrai’s The Dhandho Investor, you”ll likely recall a chapter entitled “Use Arbitrage!” If you”ve been following F Wall Street for a while, you”ll remember (and possibly have made money on) Use Arbitrage! The Tribune Company Example. Why do we say you should use arbitrage? In fact, what is arbitrage and is it a strategy for the faint of heart?”

A nice discussion of “economic moats” and four ways they are created. However, I don’t agree that there are only four types of moats. The article missed at least one other type, toll bridges. I’m surprised Sellers didn’t mention that one in his article. Are there any others types missing?

Why Eddie Lampert’s failing Sears-Kmart experiment could mean trouble for dealmakers everywhere.

Ackman discusses why he continues to be short MBIA on Bloomberg TV.

Few things make more of a difference in investing than thought process. Unlike most competitions, the primary battleground for investing is the mind. Investors must deal with an obstacle course of emotions, psychology, temperament, and other forces acting to overwhelm rational thought.

Does Goldman Sachs really have a higher intelligence that kept it from falling into to the same subprime trap everyone else on Wall Street fell into? I found this to be a very interesting and well thought out article.

Appears that Leucadia National is acquiring about 10% of AmeriCredit, an automotive financing provider. Does this signal that the credit concerns in automotive credit sector are overblown?

Now the Japanese have $10 billion to invest in US banks..

DON’T LET THESE MOSTLY SMILING FACES fool you. We just as easily could have called the opening installment of the 2008 Roundtable “Before the Deluge”-that is, before the great unwinding of a quarter-century of excesses that our panelists, to a one, predict will set the investment tone for much of this year. Their forecasts for the U.S.

John Neff told the world, “It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.”

Why do we still have the Fed? It has failed us in its mandated goal to stop inflation. Why should a private corporation continue to control our interest rates and money supply? What is the Fed doing to our Dollar?

Ackman discusses why he is still long Target on Bloomberg TV.

Conventional studies of uncertainty, whether in statistics, economics, finance or social science, have largely stayed close to the so-called “bell curve”, a symmetrical graph that represents a probability distribution.

Bill Ackman sticks to his guns….

Discussion on Ackman’s use of swaps in building his position in Borders.