Jurgis

I agree with Nate's assessment. I hold some shares in FRMO.

I don't think we disagree much. :) I might be more skeptical about security for even a high price - I think even for high price it's very tough to avoid holes - but overall I think we are on similar page. Edit/add: I think that a lot of high price security is through obscurity. There are very few bad guys who know z/OS, DB2, etc. to punch holes in them compared to LAMP or haha Windows.

Data security is important, but it seems that both companies and individuals are not willing to pay for it a lot. Of course, part of the issue is that paying a lot does not guarantee impregnability. Part of the issue is that security is really really hard. You can be super smart and think about everything and still if there's a hole in one of 10M software routines, bad guys can get in. Sure, I might be exaggerating a bit, but it's true. Or you have everything nice tight and secure, but then another part of the company sets a server that is naked on the internetz, it gets hosed in a minute and they get to your secure stuff from the inside. Yeah, sure, partition, don't reuse credentials, etc., but... I've tried to play this theme time and again with Symantec, Checkpoint, but without much success. IBM is trying to be security company for enterprises - this might be OK business for them if companies pay top bucks for their security consulting and IT buildout. It's not a pure play though.

http://bits.blogs.nytimes.com/2015/03/17/ibm-introduces-twitter-fueled-data-services-for-business/?ref=technology&_r=1 No comment. <snicker> Oh, OK, what the heck: IBM is now run by twits.

Your thoughts look fine. Financials are imperfect hedge for rate rise. I say "imperfect" because I think (unlike most people) that economies can deal with higher rates financially just fine. But it's unclear if they can deal with them psychologically. And if the stocks drop because of psychological bond rout due to rising rates, financials won't perform well during such event. They might recover fine, but other stocks might recover fine too. In other words, you might not lessen volatility by being in financials.

Are Vivendi holders on this board holding it as a sum of the parts investment? It seems that earnings are pretty much from sales of pieces, so not really repeatable. What is your future bull case? Bolore forcing more sales and monetization of assets? Or turning this into well operating business and extracting meaningful and higher FCF from assets?

Right, I was using a shorthand word "immortal" for "you won't die for very long unless your physical container and your backups get destroyed or subsequent upgrades make you not-really-you anymore and let's account for the thermal death of the universe somewhere too" 8)

Of course, take that away and no compromise is possible! ;) Gio It is still a compromise even if you take that away: Mr. Big stays in the company and is not kicked out. Also, I'd be fine if the cap was raised to $20M let's say. But I also said that the compromise in toto is better than nothing. ;)

I agree with the compromise suggested by Farnam Street Investments except the part of allowing uncapped 0%/25% fees for Mr. Big. A compromise in toto would be better than current situation though.

It is a good question. However, I think that a lot of "expensive high availability mainframes" are not easily replaceable by commodity server farms or cloud solutions. You are talking about places that need 99.99%+ availability and to get that with server farm or cloud solution requires quite high redundancy and specially engineered software or might not be possible at all. Of course, the "somewhat high availability" HW possibly can be replaced by server farm/cloud solutions, but even there it depends what you are running on top of it. If you have a huge enterprise DB/etc. solution, ripping it out and replacing by new one is very expensive and can disrupt your business. There might be some gradual loss of this business at IBM, but it's not big IMHO. I think some other IBMs businesses are more likely to lose customers, e.g. expensive consulting when not directly tied to IBM HW/SW.

Berkshire Annuals from 1955-1973 would be great... I guess I'll also ask for PM about the DB. :)

IBM still has large chunk high availability servers / HW that goes into big enterprises (banks/etc.). They also do big size high availability storage. They also have a chunk of enterprise software including databases, etc. They are now stressing security and analytics solutions. I don't know the percentage of that in their sales. Their Watson sub is pretty small now, but they are trying to grow it into some kind of analytics/intelligent solutions. IBM is not present very much in small companies, especially not in tech companies that run Linux/etc. Most of their stuff is in big enterprises, so we'd need IT people from banks, insurance companies, etc. to get a picture of IBM products. I think that's where Buffett got his info about IBM. In tech companies that I am aware of, I've only seen: - Lotus Notes/etc. - not used much or liked. - Rational - mixed opinions - IBM storage solutions - high availability big size storage. I've heard about issues, but I can't say how the uptime or cost/etc. compares to others. But this is very small part of IBMs solutions.

Sorry guys, but I pretty much can't do anything during workdays, so lunch/dinner/meeting would have to be on a weekend. I'm fine if someone else organizes something during the workdays; it's very unlikely that I'll be able to attend though. I am still looking for weekend lunch spot (or dinner spot) ideas in Boston/Cambridge. Our stock discussion group is still on a "break", so stock discussion meeting is not planned until later in April or perhaps May.

I was talking about this Solar system. I would give at most 70 years for organic bodies. (And I believe immortality will be here in ~50 8) ). So there's no rush to travel fast when you are non-organic and immortal. We don't really know what will be modus operandi of these beings anyway. (For sceptics, I am not 100% optimist. I see a binary future: there will be huge societal changes because of the above which may lead to pretty complete annihilation. But if we don't annihilate, then the "future's so bright we gotta wear shades". And don't forget: if you have kids, they are likely to be immortal. Or dead. Wish them luck. ;) )

Relevant link: http://www.sec.gov/Archives/edgar/data/93859/000080724915000067/bh_10.pdf IMHO, Mr. Maxim should have responded to GAMCO one way or the other. But then what do I know about shareholder relations... 8)

I read through a section of Expectations Investing on Amazon and it does not jive with me and my approach to investing. It is possibly very good for others. I knew a guy who successfully used similar approach to investing I think. Anyway, this means that I won't read the whole book anytime soon. It's gonna go to a big pile of stuff that I'll read when I have the 48 hour days and can go over 1000 pages per day. ;) Thanks for the pointer anyway. 8)

I did not listen to the whole interview yet. I think I have listened to "Arithmetic, Population and Energy" some years ago. Is his point that a steady X% growth results in exponential (oh no, never use this word! 8) ) cumulative numbers? Like compounded interest for investor-types 8) on this forum? Sure, this is known. And people remember this once in a while. Use it. Or misuse it. :) E.g. Apple (oh no, never give Apple as example 8) ) can't grow at 20% growth for X amount of years, since it would exceed GP (global product). I think he says that economies can't grow forever at even 3% flat (after inflation), since at some point you run out of resources, etc. He's right in abstract. However, the growth is not flat; it will slow down. The population growth will stop at some time. It is possible - though not guaranteed - that economic growth will stop around that time. This would require a very different economic system perhaps to deal with perpetual "recession". Some comments though: - This won't come soon. Depending on existing GP growth, it could take another 20-50 years to get there (and I am taking the range out of my backside, so feel free to improve it via actual numbers). - This has the same fallacy as with Apple - Apple might not be able to grow 20% absolute for X years, but for shareholder what matters is that it returns 20% per share in those years. Similarly if economy stops growing in absolute, but GP-per-person keeps increasing (in some way of measuring), this still could be a happy society. :) Possibly even happier than current one. :) - We could find techno solutions to the "outgrowing the planet" and start outgrowing the Solar system. :) Anyway just some random thoughts. The future's so bright we gotta wear shades! 8)

Still not sure if Rometty is the person for the job.

http://en.wikipedia.org/wiki/Confirmation_bias 8)

I'll take a look. If I remember, I'll post here what I thought. :) Thanks.

Not only that. I find some stuff that he writes not interesting or useful to me. For example, the first article linked. My approach to my holding stock dropping 10+% would be quite different from what he talks about. In this particular case - unlike the second article - I don't see value in historical data and the way he presents it. It's good to hear that his writing is useful to you. I am not trying to dissuade you or anyone else from reading him. :) He presents historical data and models well sometimes. I just expressed my general attitude towards Mauboussin as a context to comments about the articles netnet linked to. Take care

Yes, I guess it's a bit unclear which denominator he used. :)

I don't particularly like Mauboussin. :) I found the first article not interesting or useful. I thought the second article was pretty interesting, since it puts quantitative foundation for the common active managers' complaint about 2014 being a tough year to beat the market. I still don't think this excuses underperformance, but it shows that indeed there were reasons it was tougher to outperform. The article also gives some numbers for other common views: that it's tougher to outperform in bull market compared to flat/bear. So overall I like this article. 8) However, it is also a good example why "I don't particularly like Mauboussin": it gives numeric insight, but it does not give actionable insight (for me ;) ). E.g. you can't really predict when market is going to rally and your opportunities for outperformance will be few, so you can't really pick your fight based on info he gives. I guess one could try to shift from indexing to picking stocks in market tops and after crashes and move back to indexing one year after crash or so when most of the 'easy opportunity' money is made. The timing is probably quite hard though.

Yes, that's what globalfinancepartners said: "He's talking about realized loss". This is somewhat less surprising with hold-forever good quality companies: they might underperform, but they hopefully don't lead to loss. It might be still surprising that he did not suffer realized losses during Graham cigar butt years, but I guess the valuations then were really attractive.

I've seen him say this more than once, but is this really true? Looking at http://www.berkshirehathaway.com/letters/2014ltr.pdf , 2008 shows 9.6% book value drop, 2001 shows 6.2% book value drop. Are these not related to portfolio drops? (I guess they might be operating business goodwill writedowns - 2001 could be GenRe, I'd have to look up...). Also didn't he have Washington Post drop over 50% as he was buying it and wasn't that a large part of his portfolio? It is still very surprising that he never suffered higher than 2% loss per year in his portfolio - if that's what he means. I don't think there's anyone else who has this kind of record... Ah. Gotcha. Makes sense. Thanks. :)