LC

Congrats indeed. Much kudos to Patrick Bryne.

nike philip morris FICO

huh, can you elaborate? OK so this is a totally half-baked futuristic scenario, but what happens to the economy when the marginal cost of production approaches zero? Let's take Nike, in say 100 years (or however long). The world has fully transitioned to solar power and the price of oil has plummeted to practically nothing. The COGS of a Nike shoe is freakin' miniscule. They've got robots handling 99% of production at lightning fast speeds at mini-factories to minimize shipping costs. If the total cost of Nike shoe is $10 today, let's say its $0.25 in this futuristic world. And it's not just Nike with minuscule costs of production, it's across the whole developed world. Self-driving cars has ensured auto insurance doesn't exist. Insurance brokers? There's an app for that. Manufacturing is about as hands-off as it gets. Planes fly themselves. Improved satellites mean the cost for a cell phone carrier is practically nothing for incredible bandwidth. The advancement of technology has made the cost of resources and production super low. So a lot of people are not working in these areas, not making a salary, but on whole their quality of life is greater than it is today. But perhaps their wages are much lower. Does this mean the market price of a Nike shoe is going to drop from $150 to $20? Monetarily this reduces the discounted present value of Nike. But economically they are still just as valuable. On a whole what does that world look like on a monetary vs. economic level (price vs. value)? /super rambly post

"Value" functions in a world of classic macroeconomics: the distribution of limited resources. What happens when technology and society advances to the point where "limited" resourced become much less limited?

Buddy was a programmer for Rentech. Cited Simons as a total pr!ck based on a party he held for the firm on his yacht.

How well the private businesses function post-Warren.

Good businesses fail from the emergence of better businesses. Bad businesses fail for all the other reasons.

i think what he misses is what buffett missed when he bought berkshire. as a commodity producer, if you have a special technology that brings the marginal cost of production down, eventually all the other plays will figure a way to match your cost of production. the buffett analogy is "everyone in the stadium standing on their tippy-toes - no one sees any better". all of berkshires competitors bought the special mills to reduce their cost. the takeaway is this: commodity production necessitates large capital investment. you need to build factories, hire union workers, etc. this large initial capital outlay is technically a sunk cost, but owners don't see it that way. so they spend the capital to "stand on their tippy-toes" with everyone else. so, try to compete against people with small "sunk costs". once you gain an advantage, they will usually back off and eat the small initial outlay, rather than continue competing with u.

Posters in this thread have been criticizing management for a long time. The issue as I see it is as follows: Horsehead has this decent technology and group of contracts to recycle EAF dust into zinc. It works, it helps steel producers, it's easier than mining for zinc, etc. Economically, it all sounds groovy. Management comes along and sucks. Absolutely sucks. 700MM of market cap down the drain trying to ramp up a plant. So you have this dichotomy between a good business and shitty management who managed to royally fuck it all up.

I think Buffett realized that and stopped buying crappy companies. Decent companies you don't lose 95%. Buy a business even an idiot could run (because eventually one will). Ever think Buffett was referring to himself as the "idiot"?

Looks like he needs to take Mungers advice about figuring out where he will die and not going there.

Now we're talkin'

I don't trust insider buys anymore unless they are large relative to the insider's salary (or cumulative salary over however long we have history for). SCHERICH ROBERT D: 2014 - 776,676 2013 - 817,904 2012 - 765,595 Now, about 40% of those #s are equity compensation. But even backing that out, $20K of purchases in the light of $1.2MM cumulative comp over those years isn't super-high conviction IMHO. Also, the logic falls apart if management are poor at capital allocation. In general, management authorizes buybacks at (usually) the worst times. In the case of ZINC, management totally botched building this factory and communicating with shareholders. So why do we assume they are brilliant or inspired in their personal account? "there are many reasons for insiders to sell but only one reason for them to buy" Here's a few more reasons: insiders are irrational, fraudulent, or plain dumb.

very true. they do serve slightly different purposes (1st person vs. 3rd person view) but drones will definitely take some share. GoPro needs their own drone TBH. as a skier/surfer, if i had to choose one, i would choose a drone. that said, most people in these sports have the disposable income to use both (and do).

Not a "fad" product IMHO. Amongst "extreme" athletes (i.e. surfers, skiiers, mountain bikers, adventurers, etc.) there exists a real market for the product. You can't strap an iPhone onto a surf board or ski pole to take video. The problem is this market is very niche, IMHO too small to really be a public company.

Haha, sorry it came off like that, I wrote that last post after about 4 old fashioneds last night on an empty stomach! Much love, Nate!

I'm torn on Netflix. On one hand I think they create good internal content. The flipside is that they create good internal content now. Successful content creation can be a difficult task to replicate over time and I don't see anything special about Netflix which causes me to believe they will be able to replicate this feat. I agree they should be able to grow the subscriber base. On the other hand I believe their acquired content will fall in quality as more and more content creators wise up. IMHO their library is not as impressive as it was a few years ago. They have had to make choices based on rising content prices from studios. I'd rather own a quality content producer (Disney for example) than the company distributing the content, especially when I'm not convinced on the staying power of that distributor.

Or perhaps he simply prefers to have a few cash sales because there's no traceable documentation which could trip him up when he fails to report the revenue from that job to the IRS. It's a nice little boon to his financial situation to charge you $5k to do your roof, not report the revenue and then apply the $3k of costs (for which he will certainly have documentation) against the revenue that he must declare from the clients who do pay him by cheque. But at least the explanation that he provided to you is less sleazy than the simpler alternative. Seriously, this is the correct reason. Supplier credit? Give me a break, that's being naive. He's worked with that same truck driver for months/years. He says listen, I'll pay you when I get paid. Either do the job and get paid after I get paid, or don't do the job and don't get paid at all. The truck driver knows that. And he's buying materials out of pocket from Home Depot, whether you pay him by cash or check. He's giving you a break on cash because it causes him less of a headache with taxes and dealing with cash flow. This guy is a contractor who would rather be on his couch than your roof. He looks you over once, and figures really quickly how much of a break he needs to give u to cough up in cash. I'm guessing on a 5K job it's about $200 bucks. $300 if you endeared yourself to him and asked about his family and shared a cigarette and beer with him. Supplier credit? C'mon now.

Let's be real, cash is less efficient in 99.9% of scenarios. Yes if civilization combusts MAYBE cash will be more useful, but really only for a week or two tops. In reality, the gov't will step in and stabilize things. Unless you think the Oregon militia is going to step into that vacuum of power. LOL.

Airlines, auto manufacturing, groceries, brick and mortar retail, consumer electronics, All probably worse businesses than bond trading or meat packing

Never use a debit card at a strip club. I had my Amex double-charged and had to send the Amex mafia after them. The only people I trust to go toe-to-toe with strip club operators are those responsible for managing large retail credit portfolios.

I use cash only for paying at restaurants because charge-backs kill the tip rate when using plastic. Bartenders/baristas tend to take better care of you due to this.

if they're up on the quality scale (GARPy), i'd be interested.

browse bizbuysell and see what u can find in terms of the private marketplace. i remember about a year ago seeing a concrete flooring company doing 1MM profits selling for 5MM. the owner was moving out of state and was willing to stay on a month to teach buyer. maybe 5x earnings is not a great price but at the least it tells the entrepreneur who wants to hire a few flooring guys, rent some equipment, etc. where opportunity exists. also if you know real estate but don't have the capital for a down payment, there are coffee shops/delis/etc for sale at decent prices. if you think the neighborhood is growing in population or income you can make a good deal, again with the work. then again a lot of people want to just get rich sitting in their armchairs.

Thx for adding, str8shot. "the company has more options than the market gives it credit for" Your guess is as good as mine about what that means, and I too share your bias about saving the equity. Perhaps they go to Mohnish/Guy for a loan with warrants as a kicker. An optimist can make up any number of scenarios.