ni-co

My point was not to make an ad hominem argument but to make you think about why he did it. If you follow the Liberty threads in this forum you know that it's about broadband – and not video. It's all about data capacity. Capacity for internet over satellite is so limited that I'd argue that we aren't even talking about the same business/industry. So, of all of the arguments you could make why not to invest into LILA "satellites" is not a good one.

Yeah, right, that Malone guy has no idea what he's talking about! Why own cable networks when you can own satellites?! Oh, wait, actually, he once controlled DirecTV, and then… —he sold it. I wonder why. I think you still don't know anything about LILA. I always get question marks when i see so much stuff to defend an investment, shouldn`t a compelling investment be easy to describe? While i don`t think that LILA is expensive here, i really wonder why Malone hasn`t bought one share in the open market until now when this is such a compelling opportunity? When i see how much he is selling of his other holdings, he should have plenty of cash. Maybe it isn`t the opportunity of the year at an EV/EBITDA of 8 or 9. At a very cheap multiple of 5x2017 EBITDA it would trade down to 7$, at 6x it trades down to 14$. (And yes even LBTYA traded down to that level once in the past decade). He just bought a lot of it in a roundabout way — by agreeing to the CWC deal.

I liked Confessions of a Real Estate Entrepreneur by James Randel. http://www.amazon.com/gp/aw/d/0071467939/

The most efficient way to hedge market risk without selling your stocks is the futures market. With options, you're always taking a stance on future volatility (expectations) and timeframe for a potential decline — which can be just what you want, just be aware of it.

There shouldn't be a difference between owning a call + cash vs. owning equities + put. It's the same trade (unlimited upside + downside limited at the strike price).

…and, tadaa, you're long again! ::)

Ok, sorry for watering down this thread. My mistakes worth mentioning: JCP: This was largely a sizing issue and also being seduced by a great thinker (Ron Johnson) and large asset values into a shitty declining business like department stores (the old Buffett saying, you know…). I also bought into SHLD but don't regard it as a mistake because after the JCP debacle the high risk of failure was obvious from the start to me and I sized it accordingly. In both cases, large names brought me to the ideas but I don't regard this as a mistake either since I didn't follow them blindly. Value investing + options is a mixed bag for me but since this thread is about mistakes, I certainly made a lot in this area. The most important ones in order of importance to me: - Underestimating liquidity constraints. You can be right but a 50% bid/ask-spread doesn't let you exit a position while time decay is eating you alive. - Oversizing has been mentioned several times here. Rightly so! I oversized option positions many times. That said, there is one non-obvious thing that hasn't been mentioned. Apart from total loss — which is the obvious risk — there is also the risk of success! With options, there are opportunities with 5:1, 10:1 or even larger payouts and mathematics tell you to apply something like the Kelly criterion to them. Of course, I don't know my odds exactly so I have to adjust my position size downwards anyway and I also have size limits for my initial positions (depending on how much I'm prepared to lose). That said, there is a problem I incurred a few times: If your position goes into the right direction it suddenly becomes a large part of your portfolio and this, as a result, becomes very volatile in total. Usually this is also the time when the expiration date is near, so that your portfolio returns become more and more dependent on pure chance (i.e. weekly or even daily price fluctuations). In the end, I always ended up cutting my position at least once, sometimes several times. This is all fine and dandy but since I calculated with, say, 5:1 odds at the beginning, I was now cutting my odds, too! So your seeming 5:1 odds may really be only 2:1 if you want to do it in size. I underestimated this problem several times when initiating positions and I'm really struggling find the right balance. - In general, it's very easy to overpay for options on single volatile stocks. What I learned from those mistakes is: Volatility is your biggest enemy. When buying into options it seduces you to overpay and even if volatility is increasing only after you bought, while theoretically good for your options, bid ask spreads often widen immensely, thereby reducing your gains if you want to exit your position before expiration. So be prepared to hold those LEAPs until expiration (and to encounter the chance problem mentioned in the paragraph above).

http://www.wsj.com/articles/googles-computing-service-lures-high-profile-clients-1458681118 My best guess is that Google is going to quit cloud services in a few years as it will turn out not to be profitable enough. They can't use it to sell more ads and it would be the first time that they keep losing money for a prolonged time in a business that doesn't add to their core. Might be me but I don't really see their strategic angle here.

+1. Though this analogy has many (poker-specific) problems I can relate to that. Selling a position at a loss doesn't mean you made a mistake; selling it at a profit doesn't mean that you're a genius. When your chance is 50:50 to make 10x your money or to lose it all, having lost it all doesn't mean that you are stupid. However, you're an idiot if you put 100% of your portfolio into it.

If he really believes that I have the feeling that this is going to be a very painful trade for Hall. I don't know how he's positioned exactly but I think he's overestimating the strength of the global economy. Of course, I might be wrong, but it won't be nearly as painful for me.

This should get interesting. If Google becomes more pragmatic, they could make this a real race with AWS. Source: http://www.bloomberg.com/news/articles/2016-03-22/google-s-greene-hastens-cloud-expansion-in-race-with-amazon Yes, I agree. From Stone's The Everything Store: Ironically, that's just what happened.

1) I think it's both. First and foremost, they do it to optimize their own offerings and cost structure. In this way, they can build up scale over the years. This is a classic disruption story playing out. I'd bet that, at first, they take the lowest margin part of the logistics out of the logistics companies' hands. Then they roll-up the market from the lower-margin towards higher-margin business while building out their infrastructure and shifting more and more of their own business away from the incumbents. 2) Amazon and WMT use completely different ways of distribution. I may be wrong on this but what I've gathered from reading The Everything Store is that Amazon's distribution is a technological problem. I don't think that WMT had or has the necessary technical resources, especially the right people, to tackle this. Even UPS's network has grown organically and not been built from the ground up with online retailing in mind. This is a problem made in heaven for a tech company. 3) Are they? UPS's profit margins are somewhere between WMT's and COST's. Who is paying for those margins? Someone like their largest customer maybe? What does Amazon stand to gain from entering their business? Most people are overlooking that this is a double-bang shot for Amazon: Not only do they gain an additional business (third party logistics), they simultaneously reduce their own costs by cutting out UPS's profit margin. Integration along your value chain is a classic disruption move and because Amazon is UPS's largest customer they can't do much about it. I concede that logistics is a very difficult market to enter for anybody but for Amazon with their growing scale it's becoming a no-brainer.

I only have half a position on because I hope to get it 30-50% cheaper within the next few months. At double the price from today I would have a hard time buying it because, of course, there remain a lot of risks for Amazon's growth (especially around AWS). On the other hand, as I said, at half the price from today I'd buy it hand over fist because it would be far too cheap. So, regarding the risk/reward balance I'd say it's fully priced at the moment—but not overvalued. I think the best way to think about it is as SOP with a sales multiple for the retailer under the assumption of continuing strong growth for years. A lot of Amazon's value depends how they push and develop their strategy. When they introduced the Amazon Fire phone I thought that Bezos had lost his mind and become megalomaniac. I was right on the product/strategy but completely wrong on Bezos. I'm very impressed how fast he did a 180 and axed not only the phone but the whole platform strategy around Amazon Fire. Amazon's focus is now on logistics and this is something I much more agree with. It plays to their strengths.

And after that, Amazon's growth (outlook) equals GDP growth? I largely agree with your calculation but I think the extremely long runway is the reason why you don't need such rosy assumptions. Amazon is going to outgrow GDP for a very long time and that's what makes it so attractive to me. Yes, it doesn't look cheap based on a five year outlook. But what I like about it is that its outlook is so much better than the GDP outlook—which is awful. I don't think that people are valuing sustainable growth highly enough in this environment. My hypothesis is that this kind of sustainably growing company will become much more valuable as soon as people realize that the slow-growth environment that we have since the financial crisis is here to stay. For me, Amazon is a relative value bet. Yes, you may get it for 50% off in the next few months but when this is the case WMT will at least have halved in price, too. Amazon will hardly, if ever, be cheap on a comparative basis.

It's kind of funny that we are still having this discussion after 20 years of crazy growth for Amazon in the face of hugely profitable competitors. It's pretty obvious that the logistics industry is the next one being disrupted by the same model. I get why people have a hard time valuing Amazon but it's irrational to say you can't value it and therefore it's overvalued.