giofranchi

On profit margins: --John Hussman giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Efficient Frontier and where the highest risks really are today: --Charles Gave giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes EVA+3.22.2013+NA.pdf

The Market Is On Shaky Grouind - Comstock Partners, Inc. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes The_Market_Is_On_Shaky_Grouind.pdf

Why Liberty Media Will Sell Its Sirius XM Shares giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes why-liberty-media-will-sell-its-sirius-xm-shares.pdf

I agree 100%. And I like your posts very much! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Myth465, what about BAM answers to Mr. Boyd’s questions? I thought they were timely and clear enough. Do you have a different view? Thank you, giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

alwaysinvert, I understand your point. But, please consider: FFH: I don’t understand BB, I don’t understand CPI-linked contracts, etc., yet I invest in FFH. LRE: to say that I don’t understand the contracts Mr. Brindle & his team write would be an euphemism… yet I invest in LRE. BAM: as I said in the BAM thread, not only I am not able to value an hydroelectric plant, I am not even able to ascertain its market price… yet I invest in BAM. OAK: I invested in Oaktree… because I don’t understand the distressed and high yield bond market! And the list goes on and on… My point is that you almost never can invest based only on the numbers. Truly effective due diligence goes too much beyond the numbers you find on 10-ks and 10-qs. Imo, you should invest because 1) you like management, 2) you like the business, 3) you think you are not overpaying for what you like. Trading, on the other hand, is a completely different beast: to buy into a bunch of statistically cheap stocks, and to sell them when they get to be fairly priced, is a very rewarding endeavour, and one to which numbers are extremely important and meaningful. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Great! :) Thank you very much! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

twacowfca, any comment about the appointment of Darren Readhead as Head of LCM? Thank you very much! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes LCM_Appointment.pdf

That is basically (no, better say exactly !) how I see it. ;) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Thank you very much for posting! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

ItsAValueTrap, I know what you mean. But, when I try to understand a business, I almost never fixate on the “minutiae”. I mean, there is not a single business in the world that I could really claim to understand every small details of. You won’t believe it, but even some aspects of the businesses I manage personally everyday are still a bit evanescent to me! They are subject to so many external forces, that I have come to the conclusion it is not really possible to have a reliable business plan… I have long ago given up on any type of fixed scheduling of activities… Most of the time I just react to what happens around my businesses, and, paraphrasing Mr. Singleton, I just try to stir the boat in the right direction. Therefore, I would never deceive myself into thinking that I understand all the moving parts of a business, just by reading its 10-ks and 10-qs… Instead, I concentrate on more basic things: the nature of the business, and its management. Is the business subject to obsolescence very fast? Does the management put great emphasis on capital allocation, and did they create much value in the past? If the answer to the first question is NO, and the answer to the second question is YES, then I try to understand if the share price is under, fairly, or over-valued. Provided it not be over-valued, I invest. LMCA might invest in technology, but its true business is the oldest in the world (no, wait, the second oldest business… ;D ;D ;D): to buy $1 bills for 50 cents. Mr. Malone has clearly proved to be an outlier, and will be able to go on compounding capital for the next 10 years. Many times we get lost into so many details, that we forget what really is key: 1) is the nature of the business subject to change? 2) am I partnering with someone really worth of trust? Just my 2 cents! giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Surely you all know and understand Sirius much better than I do! Thank you for the very useful insights. I like Liberty Media as one of the greatest platform for doing business and creating value out there. Just like Berkshire. With the difference that Mr. Malone is 10 years younger than Mr. Buffett, LMCA is a $13 billion company while BRK is a $230 billion company, and LMCA is selling below its NAV per share while BRK is selling at 1.3 x BV per share. You might argue that, if the asset values of LMCA are inflated (Sirius stock price is too high), the fact LMCA is selling below NAV is pointless… and you might be right! But I tend to believe that is “Mr. Malone’s game”… and nobody understand that game better than he does… certainly, I wouldn’t bet against his judgment! And to me his judgment is very clear: not only he goes on repurchasing LMCA shares, he has also increased the money spent on buybacks since LMCA was spun off Starz. I don’t think this is the behavior of a great capital allocator, who reckons the stock price of his company to be overvalued. And, as long as it is not overvalued, I am happy to keep company with Mr. Malone and increase my wealth at the rate LMCA increases NAV. With businesses like BRK and LMCA I don’t think you really need deep (statistical or quantitative) under-valuation to do very well in time. Besides, I always leave room to average down, in case the bear thesis is right and a lower price can be taken advantage of in the future. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

I think the article in attachment was good enough. Just give it a try! Of course, I am much more confident in Mr. Malone's ability to go on creating value, than in my grasping of the true worth of Sirius. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes sirius-xm-what-s-the-value-of-the-largest-radio-giant-on-earth.pdf

Nope! It seems you always have the “bad” habit of writing everything, so that there’s nothing left to say!! ;D ;D giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

As it should be very clear reading their answer to question n.4, one must completely trust management in their assessment of the market value of many assets owned by BAM. And I was getting a bit nervous, when it seemed they were putting back a very important, at least imo, answer to Mr. Boyd… Now that I have read their answer, I know they have done the right thing, and I am much more comfortable. :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Liberty Media invests in Charter Comunications. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes LMCA_News_2013_3_19_General_Releases.pdf

Thank you all for the insightful posts about Liberty Media! Anytime I think I know something about a company, I just have to come to this board to be humbled at once! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Thank you berkshiremystery and Christopher1! You both have been very useful to me and to all BAM shareholders on the board! Very much appreciated! :) giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

WhoIsWarren, what bothers me about BAM is that I do not understand why it takes so much time to answer SIRF… I mean, BAM should understand how difficult it really is to know the true market value of the great majority of their assets, right? The market values of an office tower in Texas, a railroad or a port in Australia, an highway in Brazil, or an hydroelectric power plant in Canada, are not simply quoted on a stock exchange, right? So, their market values, estimated and reported by BAM, cannot easily be checked. Com’n! I have a hell of an hard time estimating the market value of a flat in downtown Milan… because it depends on a lot of different variables (the quality of the building, the development of its neighborhood, etc.). BAM should know that, if there is one thing which could attract criticism, it is how they estimate and report the market value of their assets. Therefore, if some doubts are raised, BAM should hasten to quell them! So, why are they so slow in answering SIRF publicly? giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Part 5 in attachment. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes On_Insurance_Investing_Part5.pdf

I would like to remember that from page 149 to page 153 of “There’s Always Something to Do – The Peter Cundill Investment Approach” Mr. Risso-Gill describes Mr. Cundill’s large investment in Brascan, the former Brookfield Asset Management. It seems that in 2000 and 2001 Mr. Cundill had great confidence in Brascan management. Of course, I cannot say if in the 10 years since then things have significantly changed for the worse… giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Is It Fair To Attack Brookfield giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes Is_It_Fair_To_Attack_Brookfield.pdf

I agree 100%. Especially on Italy… ;D ;D ;D giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Then (2007) and now. giofranchi “As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes NA+EVA+3.15.2013.pdf