June 2008
My opinions on investment and the world have changed so dramatically over the past twelve months that I have decided to divide my investment ‘philosophy,’ into two separate sections. I think it’s fitting to start this new manifesto at the apex of the former section.
My investment career up ‘til this point had been full of disappointments and hypocrisy, I read and wrote about the virtue of doing your own work and investing, not speculating; but all this time I borrowed ideas from others and rarely did the amount of work necessary to justify taking a position. This had all started to change after I stopped working as much at KFC and eventually quit and was able to plow all the excess time into investing, to great result (unfortunately the result for my physique was the opposite).
Ironically, the leftovers in my portfolio from my earlier ‘borrowing,’ stage (AXP, SHLD and TLF) were the stocks that were consistently down and out for me and the stocks I did the most work on (OSTK, NFLX, WEST, KSWS, various special situations and SNS at times) were the best performers in my portfolio.
My approach at the time was as dogmatically ‘value,’ as it comes, I did strictly bottom-up analysis, and tried to project the future valuations of individual businesses. This did very well for the first half of 2008:
· Netflix – I found this idea reading Matt Richey’s VIC write-ups, did my research and scuttlebutt and bought it in August of 2007 at about $17 per share, in June 2008 I bought more shares at $31 and it went as high as $32 during the month.
· Overstock.com – This was the first company I really dug down into and went against the crowd in buying. I tried to look at it in a different way from all the other analysts I read who couldn’t seem to get over Patrick Byrne’s past antics. I saw an amazingly efficient business model that could produce huge returns when it made a profit. I originally purchased in August of 2006 and averaged down at $18 in December 2007 and $10 in March 2008. The stock was hugely volatile and went over $28 per share during June – almost becoming my first triple.
· K-Swiss – K-Swiss is easily the biggest disappointment of my investment career, I wrote a 12 page analysis of it as early as July 2005, and bought it five different times from October ’04 to April ’08. My average buy price in it was about $21; it was around $17 in June 2008. Here are my thoughts on K-Swiss: My initial analysis was theoretically correct, but my premises were not, I vastly overrated management’s ability to turn the company around and keep its growth up - I believe this is a result of an attachment I felt to the company, I still only wear K-Swiss shoes and the investment was always my pick, I found it, I analyzed it, I listened to every conference call - I knew it in and out, but I did not know my own psychology, unfortunately.
·
Western
Sizzlin’ & Steak - ‘N- Shake – I had and still have two great passions
with investing learning about amazing investors who find and unlock value on a
regular basis and special situations, I had both of these with Western
Sizzlin’. I bought in June 2007 after reading about Biglari’s former moves in
taking over Western Sizzlin’ and then Friendly’s and about the returns he had
with both. I did some calculations and found WEST was roughly only priced at
the value of the restaurant business at Western Sizzlin’ and the Cash on its
books – nothing was assigned the value creation Biglari had shown in the past.
Steak- ‘N – Shake was Biglari’s newest activist play, the business was great
and the cash flow should have been excellent, but SNS’ management spent way too
much on new locations instead of allowing the good returns to flow, Biglari
would unlock this value. I still believe these two investments would be way up
today had the whole market not exploded. I was up about 20% on my positions
throughout June.
My portfolio was relatively focused; I only had eight total positions, with Netflix only occupying 4% of the portfolio during June after I sold half of it and Overstock routinely rising above a fourth or more of the portfolio. This concentration combined with some actually good picks and a general market rise put my portfolio up 40% for the year, the losses from five frivolous years of investing into more than $10,000, on just over $8,800 of investment. I took the confidence gained from this experience and transformed it into a part-time job with the Motley Fool.
The Motley Fool is where I learned the majority of my investment knowledge at the time. For a period of about three years I read many message boards every day, a couple newsletters every month and posted all my ideas for others to analyze. For the summer in between my senior year of high school and my freshman year of college, I had a job as a ‘Community-Analyst, where I followed 4 of the selections from their ‘Inside Value,’ newsletter on the discussion boards (the companies I followed were: McGraw-Hill, Gap, Rent-a-Center and Corporate Executive Exchange Board). To start I put each company trough my checklist, then posted on the quarterly results during the summer, answered questions on the discussion boards of these companies and generally tried to help with questions on other boards where I was knowledgeable. When my posts were included in the weekly e-mails for each newsletters I made a freelance fee, but I was mostly doing the job because it came with a free subscription to each of TMF’s products which I read with great interest when they came out that summer.
This job combined with a growing
interest in economics which was catered to while listening to a 600 page book
(Basic Economics 
At the end of August I started school (anticipating an Economics/Finance double major) and at that point Economics had taken over investing as my top interest and had annexed my spare time. In November I got a job at a new KFC, started working 30+ hours per week; this basically spelled the death for keeping track of my portfolio.
Portfolio Restart
My mild
obsession with economics started with my conversion to libertarianism in
February 2008 (after reading a Neal Boortz book
The school of economics that interested me the most was the Austrian School, so called because its founders and first four generations were from Austria. The Austrian school believes Economics is an ‘a priori,’ science, starts with the basic axiom that humans act in pursuance of goals and logically concludes all of economics from this inarguable point.
The school’s foremost members in the 20th century include Ludwig von Mises, F.A. Hayek (who value investors will remember from Eddie Lampert’s most recent letter to shareholders) and Murray Rothbard. The school is as Laissez faire as it gets and today is predominantly anarchist.
My research into the school lead me to Peter Schiff (of the famous YouTube videos where he is repeatedly laughed at for predicting basically exactly what has happened) not only has revolutionized my investment thought, but helped in my understanding of the current crisis.
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ABCT, Current Crisis
Before I move into my story I want to explain the Austrian Theory of the Business Cycle and the excellent explanatory power it has in our current depression.
First, the Austrian Theory of the Business Cycle:
In a dynamic market economy entrepreneurs are constantly adjusting to allocate the scarce resources of the economy. The entrepreneurs have a measuring stick for this – profit/loss if they are allocating the resources correctly, as the market wants, they will show a profit and continue what they are doing, however, if they allocate resources incorrectly they will lose money and will be run out of business or will necessarily adjust how they allocate these resources.
It follows logically from this that in a dynamic market economy there would be no mass error by entrepreneurs (remember the bad ones are weeded out) leading to a boom that creates a bubble and its inevitable bust. For the proper explanation of the boom-and-bust cycle one must then look not at anything inherent in the market system, but instead away from it and at the state.
To start, in a market there is a structure of production, capital is not just one big blob (as Keynesians and monetarists would like to assume), but is instead divided in a structure of production from lower order goods to higher order goods (think from seeds to a happy meal and so on).
Next, people naturally have a ‘time-preference,’ that is they prefer something now over later. This is why interest is charged on loans (be it loans to businesses for investment, or loans from entrepreneurs to employees in equipment and current paychecks, the interest here being paid in the profit that goes to the entrepreneurs). The interest in a market illustrates the current time preference in that economy and coordinates savings with investment.
This coordination is a must, because when people save they are necessarily forgoing consumption, so as their excess savings pushed down the interest rate entrepreneurs will have easier money to borrow and invest in lower order goods to provide supply not now, when consumers don’t want it, but in the future when the demand will come.
This is where the state comes in. When the money supply is artificially increased through fiat money and fractional reserve banking the increased amount of loans available for entrepreneurs pushes the interest rate below its natural level, and changes the structure of production.
So the result is mass investment in lower order goods to create supply in the future, when the demand is for now. This creates tons of malinvestments (think houses…) which need to be liquidated for the market to return to its natural level.
According to the Austrian School, the bust part of the cycle is not the bad part, the bad part happened when the fake money was pushed into the wrong areas of the economy creating a bubble, the bust is the necessary, though hard, part that returns the market back to where it should be.
The Current Crisis
There are three parts to the current crisis: 1. The Fed creating credit, 2. The government forcing it into the housing industry and 3. The government not allowing the market to re-adjust following the bursting of the bubble.
First, the Fed creating the credit.
Most conservative commentators will get the story part, right, but they all ignore the fact that the credit had to come from somewhere, in a country where the savings rate has been negative this decade all the credit to create a bubble did not appear naturally.
The economy was in a recession following September 11, after the last boom and bust cycle had ended with the dotcom bubble’s bursting and the aftermath of 9/11, but Alan Greenspan did not want this to tarnish his reputation, so he lowered the interest rate to 1% for a year from June of ’03 to ’04 (the real rate was negative), and in the process increased the money supply from 2000 to 2007 more than it had been increased in the total of American History to that point.
Next, the forcing the credit into Real Estate
In Tom
Woods’ magnificent Meltdown
Here’s an outline of each
1. Fannie Mae/Freddie Mac – Fannie and Freddie basically bought mortgages from banks and either kept them or repackaged them and sold them off. They also started easing the requirements for the mortgages they bought as early as 1999 in an effort to allow more ‘disadvantaged,’ people to buy homes. These two were ‘Government Sponsored Enterprises,’ who everyone knew would be propped up by the government if they failed. These operations interfered with the market’s process and took away the profit/loss measuring stick from banks allowing them to issue mortgages to people who never should have received them.
2. The Community Re-Investment Act – The Community Re-Investment Act is Jimmy Carter-Era legislation that was brought back to life by Clinton’s administration, the Act together with other affirmative action measures forced banks to lend to people who they otherwise would not have. It is important to see here that regardless of bank’s reasoning for not lending as much to minorities as the government felt they should the government forced them to lend more than they would have under natural market conditions and this led to people who should not have had huge mortgages having huge mortgages.
3. Artificial Stimulus to Speculate – Not only were lending standards lowered for sub-prime candidates, but as they started buying houses with their new found easy credit the prices were pushed upwards and the lending standards for higher worth individuals were slacked allowing speculators to enter the market and push the housing price still higher as they acted on the greater-fool theory and created a bubble.
4. Pro-Ownership Tax Code – As if the government had not already interfered too much in the market City, County, State and Federal tax codes were all adjusted in many areas to give people incentives to own homes, this only to up the demand even more to an artificially high level.
Finally, the government not allowing the market to readjust:
As the Fed was creating excess credit and the government in general was pushing it into the housing sector to create a bubble in housing prices, entrepreneurs were also going into the housing industry and creating lower order goods (house being built) and the debt that went to people who couldn’t pay it back was rated as investment grade and sold in huge masses to investors the whole world was leveraged up to the point that when the bubble finally burst it looked as if it was the end of the world’s financial system.
However, the world’s whole financial system was already out of whack and trillions of dollars of resources had been allocated away from where the market would have allocated them, the bust was what needed to happen for the resources to be filtered back into their correct places. But, as is predictable the government came into the crisis with supposed good intentions and attempted to fix it.
As before mentioned in a dynamic economy entrepreneurs are guided by profits and losses. The bad entrepreneurs and the bad capital allocations are ferreted out through losses. But, when the government steps into ‘bailout,’ the losers, not only is a huge moral hazard created (if you don’t need to worry about a loss you will naturally invest in the riskiest thing with the highest potential returns, this is what happened with the S&L’s in the early 90’s) but the capital is allocated doubly bad, as its first allocated away from an efficient use and second to a use that the market believes is bad.
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Back to Peter Schiff
Not only did Peter Schiff (and the rest of the Austrian School for that matter) predict our current crisis as the bubble was created, but he is a stock broker and showed how to invest as to not get caught in it. His thesis, which we’ll talk about later, is based on the devaluation of the dollar and he used it to invest in gold starting in 1999 when it was at $250 an ounce and oil when it was ay $20 per barrel, not to mention numerous foreign companies which pay huge dividends and have huge currency gains.
After I found Schiff I read his two books, and all the info on his site and listened to all his podcasts, this huge downpour of investing combined with economic info pushed me to take a look at my portfolio, in February of 2002, which I had not done since the summer before school started.
It was not pretty! The portfolio which I had before bragged about, where I had a 40% gain in six months and where I made almost two thousand dollars had fallen 50% and was sitting below $5,500.
Netflix was the only position that made it out alive, it had actually risen. But, American Express was down 70%, Overstock was back to where I had averaged down at $10, Western Sizzlin’ was down to $8 where I once bought it at a 50% discount in a rights offering, Tandy Leather had basically fallen off the map and was trading for less than $2 per share, Sears Holding was almost literally $100 off of my investment price at $35 per share and K-Swiss was at half of my average purchases prices (though it had paid a big one-time dividend) some four years after my first investment.
So I sold all of it and started over.
~
Part 2
Now, I did not just sell without reason or cause, I had been developing a whole new philosophy towards investing, one which I will explain here, I will start with my new influences, move onto the investment themes I’ve drawn from them and finally into my current investments.
Influences
Peter Schiff
As I mentioned before Schiff was
the catalyst in my renewed interest in investing, especially as economics
applies to it, I read Crash Proof
Schiff sees America’s shift from production to consumerism combined with the Fed’s control of the currency to be a possibly killing blow to the dollar and recommends investing elsewhere to avoid the coming (and actually current) inflation.
Schiff starts the book by showing how America’s shift from producing things to outsourcing the production then borrowing money to buy the produced goods has created a mass of debt in the country, this debt is, for the most part, held by China. The consequence of this shift into consumerism over production has created a huge trade deficit.
The trade deficit can be a good thing because it shows the division of labor is high, but in America’s case we are not importing things using saved money, but rather from borrowed money, which is the root of the problem.
Schiff then moves on to inflation and the fall in value of the dollar. Historically, fiat currencies have never worked - the dollar has fallen 95% since the creation of the Federal Reserve in 1913 (that is one dollar of purchasing power in 1913 is worth 5 cents today, or to flip it around if you bought a candy bar for 5 cents in 1913 it would cost one dollar today, and these stats are probably off as we’ve had a lot of inflation since the book was written I 2006).
Schiff follows the declining currency chapter to show how inflation screws up the market by creating artificial demand and changing the structure of production, then he shows why government’s need inflation (for their pet policies) and how they keep it ‘silent,’ that is fudge the numbers to make it look smaller than the reality.
Schiff then dedicates a chapter to refuting popular Wall St. notions (bonds are safe investments or using mutual funds is a good idea) and going ‘back to basics,’ to show how to value companies in which to invest. I’d like to point out that Schiff is a value investor, though he may not focus on it often. I listened to a podcast that was hosted by the lead analyst for his Brokerage Firm, and the analyst talked about how they evaluate individual companies by forecasting their cash flows out and buying them for only less than their true value.
After predicting the bursting of the housing bubble (which is where he gained fame) and once again touching on the consumer debt problem Schiff starts the second part of his book on how to invest in an inflationary depression.
Schiff has three parts to it: Buying Foreign Stocks, Buying Gold (and Silver) and Staying liquid. Recently there was a lot of hoopla over people claiming he had not been right all along because a couple of his clients were way down in 2008, it seems those who criticized him had not read his book. The third part, staying liquid, mentions the fact that price of his recommended investments may fall even lower than they already are and one should keep some cash to average down, this is in fact what did happen.
So first, investing in foreign stocks: Schiff’s thesis here is that the US stock market will probably rise in the future, but the gains will most likely come from inflation, not from actual rises in production. He says that by investing in foreign stocks not only do you miss the loss in purchasing power in the US, but when you convert your shares back to the dollar you will profit from the fall in the dollar relative to the currency of the country where your company is. As an added bonus foreign stocks usually have a lot higher dividends than US stocks and Schiff speculates that investors should be able to find a conservative foreign portfolio with an 8% dividend yield.
Second, Gold investment: Gold has already moved up to $930 per ounce from $250 in 2000, further increases in demand, combined with inflation will push the price even further. Currently, gold is not used as money in any country in the world, Schiff believes this will change as seven decades of Keynesianism all over the world has produced solely economic destruction is noticed. He believes that even if most countries stall in changing to a gold standard, individuals will start doing it on their own and smaller more fragile economics will switch (Schiff mentions Russia here, which has, in fact, mentioned going back on the gold standard) as well. Add this to the protection investors will seek in gold, from inflation, and you get a huge surge in gold demand. This compared to the historic yearly increase in supply of only 2% per year will cause huge increases in the price of gold.
Schiff also shows how historically the Dow to Gold ratio moves in cycles and is currently in the middle of a down cycle for the Dow, but up cycle for Gold and the usual Gold:Silver ratio is way off implying big returns in silver as well.
In the end Schiff has contributed strongly to the outline of how I will invest, looking first at the impact of inflation and then allowing my other themes to follow that.
Jim Rogers
I’ve known about Rogers for a number of years, but never took the time to read any of his books because they all deviated from the 100% ‘buy value stocks,’ philosophy I held. This was until I read an interview that Peter Schiff did with him on the EuroPac site.
After
that I read Hot Commodities
The two main things I’ve learned the most from Rogers are:
1. Rogers puts a huge influence on doing your own work and think differently from others. He also repeatedly talks about learning History and how to think, this is how he made so much money in commodities in the 70’s and how he’s done so well investing internationally in the past.
2. Hot Commodities is a little dated now, five years after it was first published, but one can still learn valuable lessons in how to analyze situations from how Rogers does with each commodity in the book.
Rogers also shares Schiff’s view about dreariness of the future of the US economy and stock market, he moved his family to Singapore and advocates only investing in Chinese companies or commodities.
Chris Mayer
Last
summer I developed a fascination with Private Equity vulture type investors and
bought Mayer’s book Invest Like a Dealmaker
Mayer’s book focuses on two markets for stocks the public stock market and the private values for each stock. After reading parts of his book I subscribed to his newsletter, Capital & Crisis.
I only read a few issues, but was not very interested in it, Mayer focuses on different Macro Economic trends (like shortages of water or increasing demand from China) and then turns on his value discipline to find undervalued, but great companies where he can invest. At the time this did not interest me a whole lot I was strictly a ‘bottom-up,’ investor and preferred DCF to the more asset based valuations Mayer does.
However, in January I noticed the newest newsletter Mayer had written was a ‘Depression Guide,’ which fit right in with my new developing investment philosophy. So I read that issues and later in the year I believe I may have run the computer lab at my school out of paper as I printed every special report he’s written and the issues where he recommended each of the stocks currently in the portfolio. I also recently re-read ‘Invest Like a Dealmaker.’
Like Rogers, Mayer reads widely, a typical newsletter from him will include two or three macro trends and either they work for his current investments or a new investment that is or will profit from them, Mayer also includes nuggets of investment wisdom from every sort of investor and says that he has a weakness for old investing books.
With the current Depression forecasting cash flows is becoming harder and harder so I’ve drawn a lot from Mayer’s focus on assets for valuation (He’s talked about all three of Marty Whitman’s books, I had before thought they may be literally impossible to read).
Themes
Top-Down – Inflation in the US Dollar
I’ve mentioned this in passing a few times, but I’ll go over it more here. I believe the future for the US is not bright, not only has the Fed killed the economy, but the same measures which have literally never worked are again trotted out and proclaimed as what the economy ‘needs.’ The economy didn’t need the New Deal to prolong the Depression by 16 years, it didn’t need the Great Society to create the stagflation of the 70’s and it sure as hell doesn’t need any artificial stimulus to give us a forgotten decade akin to the Japanese.
I cannot logically invest in any US retail companies because of this, which is why I sold out of everything previously in my portfolio. The only company I owned which I believe may do well is Netflix, but they traded for 35x earnings, at a time when the best companies and brands in the world trade for less than 10.
So my new approach will be to take a more top-down approach in attempting to find sectors that will do very well in the future (as a result of certain macro trends like US inflation, Chinese Growth etc.) and then searching these sectors for good investments.
Foreign Investments
The next thing I’m doing is actively searching for foreign companies, right before finals I did a screen looking for foreign companies with huge dividends, but unfortunately finals took over my time and by the time I started looking again many of the companies had doubled or tripled.
My dad’s portfolio has been moved to EuroPac and the majority of his portfolio is currently invested in foreign companies. I own some currently through Leucadia, but have yet to pull the trigger on any pure foreign companies.
Commodities
Like my three influences above I believe commodities will fair very well in the coming decade, not only because of inflation, but also because of the rise of China and India and the successive rise in demand for many commodities.
I don’t have an account where I can buy futures so my main option here will be to look for companies that focus on commodities, mainly oil, gold and silver, but also those used in farming.
Other Jockeys
I’ve found that one of my favorite things to do is work; this means that I will work the max hours at work – that I am scheduled. Even during finals I worked between 35-45 hours each week, this does not allow much time keep track of a lot of different companies.
So far all the factors I’ve discussed lean towards long-term trends in which I should be able to invest and basically forget about. I keep track of the news enough to know if something big is changed and if something that I’m counting on is changing.
My next theme follows this, I will look for great managers that will allow me to check-up just once a quarter if that’s what’s necessary.
Investments
Gold, Gold Miners and Silver
The investment prospects for these three were laid out in the Schiff section: basically inflation is the future for the US and not only will gold and silver naturally rise in response to the inflation, but the demand will also skyrocket as people and countries attempt to take refuge in real money.
Also, Gold Miners are leveraged to the price of gold, so if gold rises, gold miners will correspondingly rise more (If their cost is $400 per ounce they make $500 on $900 gold, if gold rises to $1,400 per ounce their profit doubles, as the gold price rose only 55%), but there are also more factors with gold miners (like the price of oil and other things they need for production) so I currently have less invested in Gold Miners than gold.
Currently, I’m investing in Gold through the ETF GLD; I have 14% of my portfolio in it and am down 2%. In Silver I’m using the ETF SLV; I have 8% of the portfolio in it and it’s down 1%. Finally, I’m using the Index GDX for the Gold Miners, have 6% in it and it’s back at the purchase price.
In the future I may look into different Gold Mining companies in which to invest, either in addition to or instead of the index.
Oil
Jim Rogers allocates 21% to crude oil and 14% to brent oil in his commodity index. Oil’s price will rise in the future not only because of the supply/demand imbalance, but also because of inflation.
Also, I see no real risk from any alternative energies, if only because government aren’t letting the market work in its natural way and are probably stalling how investment in alternative energies would naturally work.
I’m using the ETF USO to invest, and currently have 11% of the portfolio in it after a 34% rise since I bought it on March 9th.
Leucadia
I’d
heard of these guys before, but had never really looked into them until
recently when I read about them in Mayer’s book, and then saw Mohnish Pabrai, Prem
Watsa, Marty Whitman, Bruce Berkowitz, Jean-Marie
Eveillard and, incredibly, others all hold
it.
Not
only are the managers, Ian Cumming and Joseph Steinberg, amazing capital
allocators, as evidenced by the 28% stock price, but they also have made some
investment lately which will profit from the general inflation and rise in
commodities, plus they’re not afraid to invest internationally.
Atlas Pipelines
My
dad owned this company in his IRA for about a year-and-a-half from 2006-08, his
returns were negligible for the unit price, but he made 10-12% in dividends.
He
sold to make room for other investments a while ago and I stopped paying
attention to it. Until I saw it had a 50% dividend yield (they’re actually
called distributions, but I’ll call them dividends to keep it simple) and
decided to look into it further.
The
company is essentially a natural gas pipeline operator, it is a MLP which means
if it pays out enough of its income in distributions to unit holders it does
not pay taxes on them. It had fallen on hard times due to a huge debt load and the
falling natural gas price. It had fallen to less than $3 per unit, even though
it still had over a dollar and a half per share of distributable cash flow. I
picked up about $430 at $3.43 per share (at the time a little less than 5% of
the portfolio), it’s currently at $7.36 and has been as high as $9.30 in the
past few weeks – the current allocation is 14%.
Management
is slashing the debt, by selling the rights on some pipelines and suspending
the dividend , they should be able to make it more manageable. When the price
of natural gas sky rockets in the future this company will be comparable to a
stub stock after a recapitalization.
Cash
I’m
in the process of filling out my portfolio and currently have 37% of the
portfolio still in cash, here are some of my ideas:
China
Due
to Jim Rogers I have a strong interest in China for potential investments; I
remember reading about Tweedy Browne investing in Japanese companies all at 2x
earnings a couple years ago, I may try something like that, but I’m also
looking for an index of companies in China.
Commodities,
Farming
I
want to own some companies that will strongly benefit from the rise in
commodity prices, I believe Capital & Crisis (Mayer’s newsletter) will be
the best starting point for this.
Special
Situations
I’ve
always liked Special Situations and believe right now is one of the best times
to use them. I’m re-reading Greenblatt’s book and have created Google Alerts
for all the keywords. I also hope to start using options and have Option as a
Strategic Investment, which seems to be the best known book on the subject.
Other Thoughts
Reading/History
Pretty
much all the smart people I’ve read about recommend two things to learn: 1.
Read nonstop and 2. Read History. I am currently applying this and am reading
an Entrepreneurial History of the US and am doing a comprehensive Austrian
Economics Course. I am going to continue
focusing on history and economics (among other subjects) as opposed to only
reading investment books as I had before.
Summer Job
I’m
doing an internship this summer with a corrugated sheet supplier, this may seem
strange for a finance major, but I will be able to learn manufacturing, as I
will spend time in the factory and with executives learning the business while
I’m working.
I still do the Micro Things
I sent this to a group of people before posting it and the main reply I got, was that I can't abandon the bottoms-up part of stock picking, I agree with this and here are my thoughts:
"I actually agree with you that looking at Macro can be useless, however it is my opinion that either top-down or bottom-up is basically useless, you need both to prosper the most.
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