Jurgis

Donald Bren is in some sense like that Italian guy: I admit he executed great, but he also chose the right place at the right time to start and build. Building on both of these stories, a bunch of Lithuanians made quite OK money in RE because they moved to US/Canada after WW2 and RE was the thing they knew how to do. Not big stuff, but couple houses or apartment buildings. And sure CA was one of the places to do it: huge LA expansion. I even know some post-Soviet immigrants who did it great in CA: if you came in 1990s, the appreciation was still pretty good there, plus buy-renovate-rent/sell. Still I wonder if some of these people would have made better money in stock market (e.g. buying BRK or Wesco ;) ). Oh yeah, Munger also did well in RE because he was in CA.

Great letter. But I think I'll go with Buffett quote on this one: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." The business seems to have been crappy for a while now - looking at ROE and other metrics, they have not done well since 2007. It's possible that business will turn around at some point and stock will run up accordingly, but I'll skip. I wish the CEO was running a business with better characteristics. Though of course then the business would be much more expensive.

I quite enjoyed that. Thanks! I enjoyed it too. But to dissect the lessons: 1. Buy when things are in ruins. 2. It's great if you have money when nobody else does. 3. Location, location, location 4. Price, price, ... not as important as #3, but still. The most recent no brainer was Florida after the 2008 bust. I almost bought. I hate dealing with physical business though, so I did not. OTOH, usually if there is RE no brainer, there is also stocks no brainer. See 2008 bust. I think investing in stocks in 1949 Italy would have worked too. Maybe not as great as the prime RE, since RE gets levered returns, but still. So ... who thinks Athens right now? ;) ( did anyone think I'll say "Detroit"? ;) )

Possibly not very relevant to investing. There were two causes for the debacle: 1. Data structure (flag) reuse for different functionality in new code. The old stuff that was not going to be used in new code was re-purposed for different functionality in new code. This is usually bad engineering as we can see from the results. 2. New code was supposed to be deployed on all machines. Instead it was deployed on 7 out of 8. Old code was still on the 8th machine. This is human error in deployment. In conjunction this blew up, since the 8th machine was interpreting the new stuff the old way, which caused the order deluge. People could not immediately figure out what was happening and made some bad decisions (i.e. roll back new machines to old code) that exacerbated the problem. These decisions cannot be blamed: debugging while your system is losing millions $ per minute is not easy. The right decision was to pull the plug and debug offline, but this looks easier after the fact than in the moment. Item 1. can be improved via better software engineering practices. Hopefully they adopted them. Item 2. can be improved via better deployment practices. Hopefully they adopted them. There are no guarantees, but they probably won't experience similar issue again. The above is simplified summary. For more depth, there are blog posts and post mortem analyses online (my understanding is based on https://dougseven.com/2014/04/17/knightmare-a-devops-cautionary-tale/ among others; there's also official SEC investigation document that is not very readable). Some people made erroneous posts after debacle that were not corrected when facts emerged (zero hedge, for example).

I've read the post mortem of Knight debacle and your summary ("a code that was put into action before it was ready to work") is not correct. However, you are probably right that the repeat of the debacle is highly unlikely and shouldn't affect the investment decision into Knight.

No. There is not enough time to "read anything and everything", even if you wanted to. Even cleonard12's set is about full time job every day.

Emphasis mine. Wait what? Source for this?

HOWEVER, you are most assuredly wrong about it being a nano-cap. If this is not a nano-cap, I don't know what is....It's market cap is under $5mm. Was a joke. ;)

Yeah, pretty much this. And now you can buy back the position again. ;) And it's not a real nano-cap if it's trading couple hundred shares a day. Real ones don't trade for weeks. :P But yeah, happens. Sold most of my positions in two nanocaps recently. One ~100% up in two days. One maybe 25% up. The second one back down (I'm not rebuying since I don't like it that much). Was small positions and even with that it took effort to sell close to ask in reasonable size. I kinda see how oddball likes these. 8)

Sorry to hear about the fire. Hoping for rain and at least safe evacuation until then... :'(

You buy notes and the company issues second lien or secured above you. You buy notes, company goes BK and most of the new equity goes to DIP. Interesting one: you buy notes, company goes BK and the common holders get a better deal than you (see Swift Energy). You are not institutional investor and you can't participate in DIP, conversions to secured, etc.

Munger quote at 10:30 is something like: "In terms of credible institution that serves the wider world, I think, Berkshire's contribution after Warren is dead will utterly dwarf the contribution made while he was alive". I wish I was as optimistic as Munger. I think I've said it before, but I give about 10 years after Buffett dies for BRK to disintegrate into pieces at best.

Thanks rb and Richard.

Yep.

Not a bad thought. Could even be coupled with MKL's Graham-y variations of 50% to 80% of equity allocation in their equity slice. Or not. Both should be pretty good perhaps.

You can buy it on Fido too. But that might not help Canadian people who may have restrictions on their broker selection (especially if they work in financial industry) or want to buy it in their retirement plans.

Get WSJ for miles. Then you don't have to cancel. ;) I'm getting Barron's, Fortune, previously Economist for leftover miles that I would not have used otherwise. I have accounts of 4 people who don't travel enough for miles to be used elsewhere, so that helps.

Sorry for possible OT. We subscribed to Fortune recently. I think it's mostly crap. IMHO, most of it is Wired level infoporn. There's usually maybe 1 serious article and even that usually referenced on CoBF or other place and available through online. So, IMHO, don't waste time trying to read Fortune. I subscribe to Barron's and IMHO it's worth reading, though I do skip through some of it and I find Tom Donlan's editorials to be crap. I don't read WSJ except for few articles posted/referred here. Not enough time. Love Economist, but not enough time to read it either, so stopped subscribing. Edit: I think the time would be better spent reading ARs, 10Ks, 10Qs and really working numbers and understanding the businesses. However, it is easier to read infoporn (even "informative" infoporn like CoBF - sorry guys ;) , Barron's, Economist) than to DD 10Ks/10Qs. With all the encouragement to read, I think that doing stuff is much more worthwhile than reading stuff. But doing stuff is much higher cognitive load (IMHO), so back to infoporn... :'( I think I'd be a wreck at the end of the day if I tried to spend the time I spend on CoBF/Barron's/BRKvideos/etc. on doing heavy accounting or heavy programming instead. ;)

Make a positive impact on the lives of people on this planet. 8)

I don't directly invest in meat-product related companies either, but as you say, this is difficult to avoid in indexes or BRK, FFH. I would not directly invest in tobacco companies. I have some investments in alcohol companies. I would possibly invest directly in KO/PEP, especially since I think that they are moving to more healthy mix due to public pressure (although I don't know if that's true outside US/Europe where the pressure is less).

Great article and as doughishere said fair assessment. +1.

FYI Yahoo newscaster said that the replay will begin shortly for anyone who missed any parts of the webcast. Not sure if this means that recording will be available at any time or if this is just one-of replay.

Thanks to Buffett for webcasting this. 8)

I think Charlie's was a great answer, perfectly summarizing why they're okay with KO. Everything in life has a trade off and it really is about risks vs benefit, in this case that benefit being the pleasure derived. Why is the air travel comparison stupid? Air travel provides benefits that would be impossible without it. Business benefits as well as efficiency benefits. This is very different from "pleasure derived" benefits. You are pretty much saying that Coke is like cigarettes and drugs. OK, I'm fine with that, but Buffett explicitly said he won't invest in cigarettes and the questioner even mentioned it directly. Second, air travel was not engineered to add to fatalities just to increase "pleasure derived". Coke pretty much did the same thing as the cigarette companies by pumping extra crap into drinks to make them more attractive and addictive. Third, I could argue that Coke could try to find the way to maintain or increase the "pleasure derived" while increasing health benefits. And perhaps they do it somewhat now that the pressure is on. That might have been a good direction to take this question to. So, yes air travel comparison is stupid since it's completely different. Its defense here is completely Munger-hero-worship bias. If someone else rather than Munger did it, people would say "apples to oranges" and other non-complimentary things.

To balance: /support Buffett on renewables