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Author: TMFeatnbybears Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5162  
Subject: Congratulations GG Team - Now get to work! Date: 5/8/2009 5:25 PM
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OK .... Congratulation

Now, I really feel strongly that we should be hunting in South America. It has it's own market and raw materials to serve the world. China gets sparking and they will be shopping south of the border again.

Europe is dead .... Put that away for a while

East Europe and Russia have been starting to move and recover.

http://finance.yahoo.com/echarts?s=CEE#chart1:symbol=cee;ran...

India needs a close look and China needs some solid infrastructure plays.


So, off with the "gee, we are green" party hats and back to work ... there is about another 65% recover needed in the markets overall and I want every bit of mine.

Bears

Note: please avoid all noodle shops and borscht factories
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Author: anuragupta Big gold star, 5000 posts Top Favorite Fools Old School Fool Ticker Guide CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1613 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/9/2009 4:22 PM
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IMO:

Market is fair valued today. There is no need to hurry. The need for hurry was during the periods when market was below DOW 7K. I have to say that I am amazed at how all TMF newsletters sold a disproportionately higher number of stocks at the market bottom. But they stuck to their principle of supplying only 2 recs per month and only at the designated time rather than making exceptions to take advantage of market conditions.

I find MDP and HG as two ludicurous (basket) cases. I am afraid to post this elsewhere for the fear of getting clobbered. MDP started with market 10-20% off its highs and put all the money in SPY. Then they sold a whole bunch of stocks indiscriminately, some of which have now tripled. HG started its portfolio service at the market bottom and decided to keep 95% of its investment in cash! PD was of course closed at the market bottom while its stocks recover at a furious pace. GG sold its auto stocks at the bottom of the global auto market. Even inherently bad auto companies have recovered since then. II sold dozens of stocks at the market bottom causing those subscribers who followed its advice permanent loss of serious amount of capital. I am glad I did not fall into this mess but at the same time did see in practice how never to invest and how other people can serious destroy one's wealth regardless of their credentials.

Overall GG (as well as HG) has done well since the departure of Bill Mann by recommending far better picks. Picks by Nathan and Tim are quite mature and based on business fundamentals rather than some vodoo understanding of esoteric cultural aspects. I am really happy with MPEL's recovery as I am now 15% in green since I chased it right down to its bottom cursing myself all the while. I will be lighting up next week in a big way to bring MPEL in line with my risk adjusted portfolio. I was far comfortable in chasing down PDS than MPEL despite so much dilution in PDS.

One of the things that this downturn has taught be is that most leveraged financials are inherently risky businesses as even the institutions that run them don't understand them well enuf. I losted a serious amount of my invested capital (14%) in TMF recommended financials. I have recouped some of that loss so far by investing in higher quality firms like OXPS, SCHW and USB. Of these USB is again much harder to understand as it is a bank. GG had PRS, FNDT and AIB among its financials that have caused investors serious losses. I hope advisors have learnt their lessons well.

Firms like CGA are rather risky and deserve smaller than usual investment size. I would say this even if it turns out to be a 20 bagger in the next decade. I hope GG adapts itself to do partial buy and partial sells without creating GG into a portfolio service. Partial buys and sells can be nicely accomodated in the current score card.

Most TMF advisors are quite young and do not have the experience of investing in several market cycles. I hope the advisors at various TMF newsletters inculcate a habit of long term (5+ years) buy and hold for all their picks as per the original TMF philosophy of 5 years ago. Stocks should be selected that have to potential to be kept at that level. Others can form a trading or a watch list of stocks. GG like other newsletters will soon reach a level where the score card has too many stocks to be regularly followed by the existing staff on TMF team. GG team should plan ahead and device a plan to delegate picks older than 2 years to a group of board members instead to track on their own. That will allow GG team to concentrate their resources on studying the best opportunities better.

Anurag

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Author: TMFMmbop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1614 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/9/2009 9:39 PM
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GG sold its auto stocks at the bottom of the global auto market.

Are you measuring the bottom by the bottom for the industry or the bottom of the stock price? These are two different things. I don't expect it to be smooth sailing for the auto industry from here on out given what's going on with GM and Chrysler.

I also stand by my opinion that I'd rather not be involved with spaces the government is actively defending. They're just putting their fingers in the dyke, which will make the washout that much more painful.

Tim

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Author: Starrob Big funky green star, 20000 posts Old School Fool Ticker Guide Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1615 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/10/2009 12:35 AM
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Of course improvements to any service can be made here or there but I am satisfied with the way all of the newsletters are currently. I liked the newsletters with both the old advisers and I like them with the new advisers.

Basically, all a analyst adds is a different point of view that I may not have considered. Different points of view or different methods go in and out of style.

Whether a analyst is making good picks or not depends on whether his style is in favor or not. Just for a instance....One of my favorite money managers is Ron Muhlenkamp. For a long while MUHLX absolutely crushed the market Muhlenkamp's style led him to invest in many financials and housing stocks. For awhile this style provided market beating returns until MuhlenKamp's style went out of favor and his mutual fund was absolutely crushed.

I started to learn to think for myself because no one holds the corner on the "truth". People do corner the market in doing what they think is best for them but they do not hold the truth for all. I value diversity in opinion above all else.


Starrob

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Author: anuragupta Big gold star, 5000 posts Top Favorite Fools Old School Fool Ticker Guide CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1616 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/10/2009 4:58 AM
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Tim,

I am measuring by the bottom of industry. The days of GM and Chrysler (and maybe many others) in the earlier forms are over but this is not the case for every company out there.

There is no need to be defensive. I speak my opinion as a consumer of several TMF products. I brought the auto issue as a part of general observation of TMF products across the board. Every advisor in every newsletter is defending his sell decisions to the max. To me this goes against the grain of long term investing by picking quality firms and adding at better values. I understand sell decisions when something dramatic changes in the investment thesis such as frauds like SAY or massive jump in share price like MELI or CHL as compared to the rest of the fundamentals but any other micromanagement is something that I am unable to appreciate.

As a suggestion, do think about partial sells/buys in the scorecard without making it into a portfolio service. In such case, the scorecard adds only partial weights. I also don't think the advisors must be under pressure to produce 2 new picks every month in a certain time frame. Earlier I did not think this way but now my opinion has changed. Advisors should have the flexibility of not choosing a new stock for several months and recommending more than 2 stocks at any given time of a month. Similarly adding multiple re-recs onto the scorecard is hardly a no no. If the advisors feel that 10 re-recs a particular month in a particular week could be beneficial to the subscribers, I would say go for it and add all of it to the scorecard. Scorecard is a marketable aspect of any newsletter and it show the results of your calls. Why stay in the current bounds?

Such approaches would serve the multiple purposes of removing the restrictions on advisors to micromanage the picks and at the same time provide far better service to the subscribers as well as improve GG's marketability.

So it is not really about taking potshots at your calls on auto stocks. It is more about micromanaging the scorecard with the result of loosing focus from long term investing and adding at better value points. The best buy now list is a brilliant idea (Bill Mann's ?) that helps a great degree towards this end but you can go a lot further.

Anurag

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Author: TMFeatnbybears Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1619 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/10/2009 8:18 AM
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The "Now get to work!" is referring to the fact that getting to the green has been the painful but easy part. The market was bound to have turned.

Now, each stock must again be looked at for its value and potential. The economy has changed, product markets have changed, tech direction has changed, politics have changed, credit has changed ... which picks have been effected +/-, which have the greatest potential, which are the most "disposable"

In reality, I see that action as more difficult that the original picking.

Bears

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Author: STLFoolery Two stars, 250 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1627 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/10/2009 11:40 PM
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I find MDP and HG as two ludicurous (basket) cases. I am afraid to post this elsewhere for the fear of getting clobbered. MDP started with market 10-20% off its highs and put all the money in SPY. Then they sold a whole bunch of stocks indiscriminately, some of which have now tripled.


MDP has sold 4 stocks, with an intent to sell 3 more (trades not yet executed). Of the 4 already sold, since the sale they are up 52%, 17%, 88%, and 1%. Keep in mind the market as a whole is up around 30% the last several weeks. Now I'm not an apologist or defending all the sales, I still hold the stock up 88% :), but this is a far cry from selling indiscriminately, and no sold stocks have doubled, much less tripled.

STL

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Author: anuragupta Big gold star, 5000 posts Top Favorite Fools Old School Fool Ticker Guide CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1628 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/11/2009 12:10 AM
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"no sold stocks have doubled, much less tripled."

I was told DWSN was sold near $10. Now it is at $30. My info could be wrong. As far as indiscriminate selling, well, the less said the better where long term investing philosophy is worshipped. None of these sold stocks underwent any drastic change that usually lead to sale in stocks. Within a year or two of starting MDP, 7 stocks of good companies being sold (including 3 intensts) out of a total of 20-30 in a near bottom to me looks steep. Anyway my criticism is not focused on any particular newsletter but overall. Tim picked up my criticism on GG, you picked it on MDP, I am waiting for someone to defend HG. :)

Anurag

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Author: TMFDoraemon Big red star, 1000 posts Old School Fool CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1632 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/11/2009 12:01 PM
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I was told DWSN was sold near $10. Now it is at $30. My info could be wrong. As far as indiscriminate selling, well, the less said the better where long term investing philosophy is worshipped.

Just a quick point here regarding any form of worship and investing. The long-term investing philosophy can, and I think does, differ among services/advisors. For example, when GG started Bill and I tried to make it painfully clear that while we favor long-term gains (for tax purposes primarily), we make buy and sell decisions based on our valuation estimates. When stocks move quickly one way or another or we feel we made a mistake in the thesis and the valuation no longer holds water, we'll sell. Tim's sales so far hold true to this philosophy too, I think.

I realize this take is a bit more nuanced than what buy-and-hold and long-term investing mean to some, but personally speaking it's how I invest my own funds, so it's the way I'm most comfortable with operating. Due to some of the unique aspects of international investing I think it's the best model for the service too.

Best,

Nathan

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Author: anuragupta Big gold star, 5000 posts Top Favorite Fools Old School Fool Ticker Guide CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1634 of 5162
Subject: Re: Congratulations GG Team - Now get to work! Date: 5/11/2009 12:52 PM
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Nathan,

It is ok to sell when the valuation model fails on a particular stock. I simply consider it poor selection of stocks that leads to this kind of situation quickly and often (my personal opinion. No need to get offended). If an average GG investor did not invest in each and every GG pick since Nov last year, that investor could still be loosing to the market.

To achieve better than the GG performance, why not just use a 50-50 mix of index funds like VWO and DODFX and make sure to invest in these in a dollar averaged manner regularly?

I have done this with BRKB-VWO-DODFX for the last 3+ years and have achieved very good returns. This triplet covers the globe quite well. I invest in this triplet regularly , which now occupies more than 15% of my portfolio, along with individual stocks. I like to use the triplet as my personal benchmark for all comparison purposes. I find it hard to beat this benchmark of mine. This benchmark is uneven as I bolster this benchmark during market crashes along with individual stock purchases. I am trying hard to beat this benchmark. It would be interesting to see how things change, if they do, over the next 5 years.

Anurag

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