Miscellaneous Thoughts

if you want to see what an investment you're leaving would have done if you stayed in it, you can set up an investopedia account where you get in the trade and follow its return over time.

re: catalysts
Burry on catalysts:

I do not consciously seek out catalysts, but rather find that simple, intelligent search and discovery often leads me to stocks that have unexpected catalysts on the near-term horizon. This is why I will often note that sheer, unconscionable value IS in fact enough, and that the most potent catalysts are almost never expected. My philosophy is a variation on the idea that, as in life, sometimes things can look so down that any news will be interpreted as good news.

Here's my current guess at the best way to simply explain the current global credit crisis: Basically, we're not currently paying a realistic amount of our time for the stuff we're consuming. Things you want to consume take a certain amount of time to make; you trade your time working at a job in exchange for certain things that take time to make. It seems like we've been operating in an environment in which we've been able to consume stuff in exchange for a less-than-realistic amount of time, because of various financial tricks. It looks like this situation is going to end soon, though, which means that people will begin to need to trade more of their time for the things they consume. I could be WAY off the mark here, but this bad first version will give me something to work off.

Investing ideas:
- Go after volatility - Michael Burry and others have mentioned that Wall St tends to mistakenly treat volatility as being a sure signal of risk; you may be able to make money by exploiting any inefficient behavior as a result of this view.
- Go after long-term trades - Joel Greenblatt has mentioned that many hedge fund managers and institutional investors are judged quarter-to-quarter, which makes them unable to engage in certain trades that might cause losses in the short term but big gains over the long term. I think Greenblatt called this "time arbitrage" or something like that.

Learn about this:
http://en.wikipedia.org/wiki/2010_Flash_Crash

Be Wary of Stock Selection Methods
Selling stock to other people seems analogous to how food companies sell food to people. The food companies need to understand exactly how their target customers are making purchasing decisions, and then they need to manipulate their products to best cater to that method of making decisions.

For example, food companies have learned that people care about the amount of fat in the food, and those customers will look at the amount of fat on the nutritional contents and/or favor products that say "low fat" or "fat free" on the front.

Similarly, people who sell stock to others need to understand how their target customers will evaluate the purchase, and should select their "products" to cater to those methods of evaluation. For example, the customers frequently look at the price to earnings ratio, free cash flow, price to book value, and future prospects for the company (via news releases, gossip, macro factors).

This is the important part: a food company can get rich selling food products to people even if those food products are not really great for those people to be consuming. The customers' method of evaluating food products could be partially flawed or misinformed. So just because you're successful doesn't mean that those methods of evaluating food are the "correct" ones and will never change. Similarly, you can get rich selling stock of various companies to people, and correctly predict the future values of all these statistics (PE, FCF, etc), but that doesn't mean that those methods of evaluating companies are "correct" and will never change. The customers' method of evaluating investment opportunities could be partially flawed or misinformed.

Simple Analogies for Owning Stock
Here I'll try to come up with simple analogies to better understand the value of owning stock.