Rational Advisor

I recently received this from my sister - she’s always telling me about things like this. Apparently this does make sense

Here it is

Beware of Garbage Trucks
by David J. Pollay

How often do you let other people’s nonsense change your mood?
Do you let a bad driver, rude waiter, curt boss, or an insensitive employee ruin your day?
Unless you’re the Terminator, for an instant you’re probably set back on your heels.
However, the mark of a successful person is how quickly he/she can get back her focus on what’s important.

Sixteen years ago I learned this lesson. I learned it in the back of a New York City taxi cab.
Here’s what happened.

I hopped in a taxi, and we took off for Grand Central Station.
We were driving in the right lane when, all of a sudden, a black car jumped out of a parking space right in front of us. My taxi driver slammed on his breaks, skidded, and missed the other car’s back end by just inches!

The driver of the other car, the guy who almost caused a big accident, whipped his head around and he started yelling bad words at us.

My taxi driver just smiled and waved at the guy. And I mean, he was friendly. So, I said, ‘Why did you just do that? This guy almost ruined your car and sent us to the hospital!’

And this is when my taxi driver told me what I now call, ‘The Law of the Garbage Truck.’

Many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they need a place to dump it.
And if you let them, they’ll dump it on you.
When someone wants to dump on you, don’t take it personally.

You just smile, wave, wish them well, and move on. You’ll be happy you did.

So this was it: The ‘Law of the Garbage Truck.’

I started thinking, how often do I let Garbage Trucks run right over me?
And how often do I take their garbage and spread it to other people: at work, at home, on the streets?
It was that day I said, ‘I’m not going to do it anymore.’
I began to see garbage trucks.
I see the load they’re carrying. I see them coming to drop it off.
And like my Taxi Driver, I don’t make it a personal thing; I just smile,
wave, wish them well, and I move on.

One of my favorite football players of all time, Walter Payton, did this every day on the football field.
He would jump up as quickly as he hit the ground after being tackled.
He never dwelled on a hit. Payton was ready to make the next play his best.

Good parents know that they have to welcome their children home from school with hugs and kisses.
Teachers and parents know that they have to be fully present, and at their best for the people they care about.

The bottom line is that successful people do not let Garbage Trucks take over their day.
What about you?
What would happen in your life, starting today, if you let more garbage trucks pass you by?

You’ll be happier. Here’s my bet.

So.. Love the people who treat you right.
Forget about the ones who don’t.
Believe that everything happens for a reason.
If you get a chance , TAKE IT!
If it changes your life , LET IT!
Nobody said it would be easy…
They just promised it would be worth it!

Best of Luck.

Rational

When it comes to International value investing,few can take the crown fromCharles BRandes and his group in San Diego. I will be visiting with Charles on Nov 25th to Nov 28th.

Brandes follows the discipline of Benjamin Graham, in being strict value managers, and do not get caught in the economics of events. They actually do not see much worth in understanding economics, and maintain that the purchasing of good companies at a discounted price is the best approach.

Here’s some notes from my recent conversation with them.

- It’s interesting that over the summer, the lower P/E and value stocks were not popular, and higher P/E growth stocks were, even though we had so much volatility, people still wanted to chase growth. We find that strange.

- A high C$ means that foreign investments are cheaper and may be worht adding to.
- We are not hedged against any currencies, never have been and the reason for this is that we do not know of anyone that has a long term consistent record of outperfroming on currency.

- The toughest region for us has been Japan.
- In this last quarter, we have been adding to positions we are findig value in - these are in the financials sector inparticular Japanese financials. They were great drivers of perfromance for us in 2003-2004, we sold them in 2005 as they reached their intrinsic value, and we are adding back to them now. In Japan, we have 3 or 4 financial companies that are down 15% to 30% over the year, it is these that we are adding to.
- The public forgets , and Benjamin Grham reminds us that, you’ve got to have periods of underperformance to build strong periods of outperfromance - otherwise how would you be bale to have value purchases. Look at our historical returns, in every one of our mandates, where we have underperformed for 6 months, we have followed that up with outperformance - we are not concerned about our recent under performance. - we are fully invested and taking advantage of fallen names.
- In regards to Canada, we have a zero weightign in Energy, zero in Materials and Minerals (Gold), our two largest sectors are Forestry (11%) and Autoparts (10%), in fact about 50% of our Canadian portfolio has been negatively affected by a rising C$. So we look like turkeys, but we continue to like what we are holding, and they continue to show good value. We believe in sticking to our discipline, we will have our day in the sun. We cannot find value in Energy, Materials, and Gold. Similarly in 2000, we could not find value in technology.
- The reason we are not in Energy, is becasue the Return on Capital INvested has over the last 15 years been about 6% to 12%, all of a sudden in the last two years the REtun on Invested Capital has risen to 30%. This is a dramatic change over history, and abnormal.
- We are not industry specific, we think it is very difficult to invest solely in one industry, call it Energy, Financials or Gold.