Links to Jim's most valuable old threads?

I just found to my surprise that I could still follow links to many years old threads. Apparently TMF killed the boards with their move. Before everybody is gone and it’s too late for that:

Could people who have Links to or copied Jim’s valuable rules post them here?

To mind come “Simple ROE Strategy”, “10:1 market cap to pretax earning ratio”, “Rolling Calls”, “ROE + 5-Year-Sales-Growth”, “BRK and 3 states”, “BRK Price/BV and resulting 1-year-return” or whatever YOU think were his most valuable contributions.

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The old posts are still available at https://discussion.fool.com/berkshire-hathaway-brk-a-101158.aspx

But TMF said they are due for deletion shortly, maybe as soon as November 1. Posting links will be useless then.

Last I read, they were considering whether to retain the old forum posts. Was the decision to delete officially announced somewhere?

Probably not. It will most likely happen without warning.

The safest course of action would be to re-post those here.

I’m expecting the old boards to disappear at the end of the month. Here is the latest info from 4 days ago:

Maybe I’m reading it differently than others, but doesn’t that quote suggest that old posts will be migrated and that links will continue working (old ones will just redirect to the same, migrated post at the new site URL?)

They migrated topics from this year only. There will be no further migration.

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Ah, that’s what I was missing. Wow, what a huge loss of knowledge. And what a shame that they aren’t motivated enough to retain the history. I’m sure it would cost very little.

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Before boards.fool.com turns into a pumpkin 11/1. Use this link. Change the Author to mungofitch, change the Board to Berkshire, change the max limit to 200 or whatever you want, change the sorty by to Recs and hit search.

Any post worth saving, File/Save Page as… go for it. Then set up a new post in the brka “tag” here and paste in whatever content you can tolerate the time for.

http://www.datahelper.com/mi/search.phtml

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Might I suggest tapping on Whole Thread before saving? The discussion around those posts is often enlightening and can add some nuance and extra info, particularly when Jim would post a follow up.

If nothing else, it’s quick and easy to do. And if there happens to be little of additional value, the excess can always be trimmed later when the time pressure to save good data is over.

—Peter

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Wasn’t there a thread where a few people discussed pulling down all posts to BRK and Mechanical Investing? I thought someone had done that. It was just a question of how they would then be posted. I thought there was discussion of linking the downloaded posts to datahelper.

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@johnIII I blindly played with “wget” and seemed to have pulled down lots of BRK posts, at least I have a big directory that looks sort of like that. Somebody more adept than me at sucking down websites might also give it a go. But then how do you search it (it’s a mass of disconnected html files)?
I emailed Mark(?) who wrote datahelper, and he responded that he had an archive and he hoped (or words to that effect) to make it available when TMF blew away our old posts, but he also said he doesn’t use the boards any more. Given that everyone has time constraints, it may not be best to solely rely on this happening.

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A few years ago (close to the end of 2017) I managed to pull a good amount of Mungofitch’s posts from the message board. It’s about 10 years worth of posts in chronological order in a google spreadsheet.

They only contain his posts and not the entire thread, but next to each comment is a link that links back to the fool’s board. (Which unfortunately seems like will be terminated 11/1). But still, they contain some great information.

I probably broke some rules doing this :man_shrugging:

Hopefully if Jim ever sees this, it will not upset him that I’ve pulled all of his posts… “something something…imitation is the sincerest form of flattery…”. Thank you Jim for everything that you’ve shared and given to us all.

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Here is a valuation one you might appreciate, dated 8/30/2019
TMF: Re: Fair value conundrum / Berkshire Hathaway

"It’s great to really understand the math of this kind of calculation.

But personally, I recommend never using a DCF model for any equity investment decision or value calculation.

It’s correct (for the variations without impossible assumptions like perpetual growth), but it’s far too easy to get wildly varying results with tiny changes to inputs which are hard to choose, so the results generally contain less information than you started with.

My conclusion is that valuation rules of thumb work better.

Here’s one that tries to cover all the bases:

A stock is a good buy if you pay less than 10 times the average real annual EPS (measured in today’s dollars) 5-10 years from now.

It’s an OK buy up to 12 times that number.

This handles everything from slowly fading cash cows to moon shot growth companies.

But you have to be 90% sure that the real EPS will be as high as you’ve estimated.

Examples of 10 and 12 multiples:

A firm with real EPS falling at 2%/year (flattish in nominal terms) might be worth a current P/E of 7.8 to 9.4

A firm with real EPS flat might be worth a current P/E of 10 to 12

A firm with real EPS rising 5%/year might be worth a current P/E of 14.8 to 17.8

A firm with real EPS rising 10%/year might be worth a current P/E of 21.6 to 26.0

Figures above that become moot, as it’s pretty much impossible to be 90% sure that any firm’s real EPS will grow at something like 15%/year for that long.

Incidentally, this rule of thumb contains a lot of hidden subtleties that I think are useful.

For example, using the average in a five year time range emphasizes that it’s pretty likely there will be one bad year in the average.

I think the distance in the future is about optimal, especially in terms of cancelling out the “high growth is worth a premium” factor.

(high growth is indeed worth a premium, but one should never assume above-average growth rates further into the future than this model does)

There is no temptation to think about whether market multiples will be high or low at any particular time in future, nor whether the stock price is rising or falling right now.

It eliminates from consideration any firm whose earnings trajectory isn’t (for you) reasonably predictable for that time frame.

Inflation matters, sometimes a lot.

Ignore current year earnings, except to the extent it helps you estimate the future. Earnings might be unusually good or unusually bad at the moment.

It doesn’t have a varying quantity like current bond interest rates as an input.

There is also no terminal multiple explicitly assumed…though it implicitly assumes above average growth beyond the 10 year mark is so uncertain that it is given no value.

The same calculation can be done for things you own. If you need to sell stock to raise cash, sell the one with the highest multiple calculated this way.

Exercise for the alert readers:

What multiple of average real EPS 5-10 years from now does today’s price ($304800 or $203.20 per B) represent for Berkshire? Is it under 10-12?

What multiple of average real EPS 5-10 years from now does today’s price ($1193) represent for Alphabet? Is it under 10-12?

For a high growth firm it’s very tough to come up with a number you’re 90% sure of, but an interesting exercise nonetheless.

You can do it backwards.

With Alphabet’s price around $1200, the average real EPS 5-10 years out has to be around $100 for the multiple to stay under 12.

To hit that figure from today’s earning rate of around $55/year, real EPS would have to grow at a

rate of 7.6%/year or better to make an “OK buy” today according to the 12x rule of thumb.

They’d have to manage earnings growth of inflation + 10.1%/year to meet the “good buy” threshold of 10x."

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A while ago Mungofitch posted about BRK’s share appreciation on different trading days of the month, like the 5th last trading day to the 3rd trading day had the best performance etc.
Anybody has a link to the post? I can’t find it.

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Now versus now
When Jim posted that, BRK was about 203 and inflation about 2%.
Today, BRK is about 300 and inflation about 8% or 9%.
What do I do to estimate real EPS five to ten years from now?

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Thank you, sesameball, for reminding us of that insight from Jim.

As it happens, an item in Financial Times yesterday notes research by Verdad Capital (updating Chan et al., 2002) that concludes:

"When building a DCF model, it seems analysts might as well plug in the same long-term growth assumption for a SaaS software company as when valuing a coal miner. This striking conclusion is consistent with Chan et al.’s original paper as they wrote:

Our median estimate of the growth rate of operating performance corresponds closely to the growth rate of gross domestic product over the sample period. Although there are instances where firms achieve spectacular growth, they are fairly rare … It is difficult to see how the profitability of the business sector over the long term can grow much faster than overall gross domestic product."

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Is it up and running? When I do a search on datahelper.com it gives results. When I click on the results displays the results on datahelper.com, it does not leave the website. So I assume he’s already linked to a database of posts he downloaded. Am I interpreting that correctly?

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Can you provide the search link? I thought I had it saved but can’t find it, and I’m not seeing a direct link to it from the datahelper.com homepage.

Here you go:
http://www.datahelper.com/mi/search.phtml

There is a pull-down menu that allows you to select the board you want to search.

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