Jurgis

IDK what's so hard. I have my 401(k) at fixed allocation and I haven't changed the allocation/contribution/etc for X years I have been in current job. And BTW my allocation is OKish, but not great. It includes 20% bonds and 40%/40% US/international funds. And international funds have returned way less than US market index funds. (I should rebalance, but I don't, since I treat this more of an experiment of what the end result will be with fixed allocation). But yeah, there's a lot of people who just don't do it. Even worse, they don't do anything. Like missing 100% gains that they could get by just doing X% contribution into 401(k) and getting X% company match (yeah that's 100% gain immediately). Or missing on guaranteed Y% gains by buying Y%-discounted ESPPs. Anyway, sorry that's kinda OT.

I'll take that bet. But since I take that bet I'll also observe the tendency of value investors to use BRK and Buffett as a crutch. I.e. Buffett is the only example that consistently outperformed and a lot of other investors performance is based on holding large BRK positions. You may not be doing this in your portfolio, but your bet totally falls into that category.

Others may have said so, but definitely not me! Anyway, here are my two reasons why I believe what I said: One is, there are mechanical reasons why (classical/quantitative/mechanical) value investing tends to underperform when interest rates go down in a big way [1]. And interest rates are now starting to go up. Two, broad market indices like the S&P are now priced at a level where it’s pretty unrealistic to expect great future returns over, say, the next 10+ years [2, 3]. I don’t think that’s true at the moment for many individual stocks. Well, we'll see. But I think it is a common fallacy to say that active investing will do better this time or that time or based on this factor or whatever. You may not have said anything like that earlier and maybe you gonna be the person who picks the (passive investing) top this time, but I would not bet on you or anyone doing it consistently. I've seen too much claims that have been made that were total bunk and the same people come over year(s) later and make new claims without acknowledging that they were wrong and that they are just making WAGs. And not only CoBF people. We can pick on professional investors doing the same. It has been shown that a large majority of active investors underperform long term whatever the factors are. And expecting this to change is wishful thinking IMO. Of course, you can always cherry pick data like Spekulatius did and show how index did really poorly from some market top that is known only post-factum. Anyway, we all know that CoBF investors are special and they outperform .

This has been said every year for the last 7 years or so. It also has been claimed that value investors will outperform when market goes down. Which has pretty much shown to be wrong in the years like 2018 when market went down. (Yeah, I know there's a ton of superinvestors on CoBF who outperform every year. More power to them.)

+1. Sad news.

Chocoladefabriken Lindt & Spruengli https://www.marketwatch.com/investing/stock/lisp?countrycode=ch BRK should start selling real chocolate not the American-made crap. 8) Yeah, I know the price reflects the quality of the chocolate. 8)

I think you guys are way underestimating consoles and Microsoft/Sony. First of all, consoles are still way cheaper than gaming PC. They also are multiuse, so you can use them for other things than just gaming. Although I agree that other uses are less attractive but still valuable. Second, Microsoft/Sony both have multiple subscription services for getting various games for free. From the low level casual (Microsoft Games with Gold) to bigger comprehensive subscriptions. Thirdly, especially Sony has a great lineup of Sony/PS4 exclusive games. It sucks for me since I don't have PS4. I have Xbox, but I am thinking of buying PS4 just because of Sony exclusives. There are really top games there. Fourth, consoles are easy-set for gaming. PCs are not. There are issues with installing, setting up, etc. It's all cool for technical users, but not all users are technical. Fifth, consoles are aimed for living room with huge TV and controller. PCs are not so much. Theoretically Nvidia's Geforce-Now is aiming to address points one and four. Practically, this is just another layer of payment. At least now you have to buy the game to play it on Geforce-Now. Then you have to pay for Geforce-Now (free in beta, who knows what it will cost after beta). Also, you have to setup a PC in your living room with your 70" TV. Hey, you can do it... but it brings back the fourth and fifth points. Personally, I'd rather just have console connected in my living room than connecting/disconnecting a PC every time I want to play (or having two PCs). There are drawbacks to consoles, I agree, but I doubt that consoles will be killed by Geforce-Now. Edit: gaming PCs may be more impacted by Geforce-Now - if the quality/frames-per-second/latency in Geforce-Now are good/great.

I was considering moving my BAC position to BRK before current runup. I'm considering it now even more. It is tough to estimate future relative performance though.

There’s some trickiness here. For example if you take the S&P’s annual returns over the last 5 years and just multiply them by 2, you have the returns of a hypothetical portfolio with alpha=0 and beta=2. And that portfolio nicely outperformed the S&P despite the fact that it has no alpha. That being said, you’re right that high beta is not always better than low beta. Obviously you only want high beta when the market is going up. 8) Ah, yes, nevermind you are right, I did not think about what you call "trickiness". 8)

yaya, that's what I meant.... btw why is the above statement ridiculous Great. :) As to why I don't see high beta portfolios as worthless: Well, for one thing, if the S&P does 10% per year on average over a few decades and in the meantime I do 20% per year on average by running a high beta portfolio, I’m inclined to think that I’ve done pretty well for myself. Yes I may have experienced greater volatility in the interim but so what? This is my portfolio and I don’t see volatility as a problem, in fact I actually like it because it creates nice opportunities to add more funds to the portfolio from time to time. Also, another way of looking at this is, let’s say I want to construct a portfolio with beta=2 from scratch. Can I do it for free? Of course not. Sure, I could buy the SPY with leverage but leverage costs money — especially if I want to make it non-recourse. Not to mention the huge blow up risk I’d be taking by doing so. But beta by itself is worthless, yes? You want high alpha. You are fine with tolerating high beta perhaps, but saying that high beta is somehow better than low beta is also not true. You could have high beta and zero or negative alpha. And you don't want that.

BTW, as I have mentioned before, Walmart.com now has large number of 3rd party merchants/sales too. So anyone complaining about 3rd party pricing/selection/quality/issues on Amazon should add Walmart to their complaints too. 8)

Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. So he intentionally fucked the shareholders for his own benefit? Qualitatively, this is reason enough not to own this. It's so much cheaper now, though... Yes, although I think he would probably say that he was maximizing the value for CWC shareholders, the side that he was on, which I think is normal in any M&A transaction. Regardless, it has long been John Malone's MO to try screw the other side of the table for his own benefit. Every deal is fraught with complexity, which is meant to stack the odds in his favor (e.g. look at a case study of the original Liberty spin). If you have issues with this you should not own any liberty entities. However, history has shown that if you are on HIS side of the table, you benefit enormously and compound at very high rates. So I think following the money, often through complexity, is very important. And, in this situation (as opposed to CWC, but similar to many other Liberty home runs), you are on his side of the table. And just to clarify, he screwed LILAK shareholders, of which he owned 2%, for the benefit of CWC shareholders, of which he owned 25%. This was all disclosed in filings and it was clear where his interests lay. That being said, he did it for all equity because he believed in the LILAK equity. And, he has since bought more on the open market, at prices meaningfully higher than today's. Malone took LILA shares for his CWC holdings during the merger. And then LILA dropped a lot after the merger. So you could say that he screwed himself... ::)

5xEBITDA, OK, I understand what you are saying. Thanks for posting. Let's see how it all works out. 8)

If someone put a gun to my head and made me choose F2P vs purchasable games @ full price, I would choose purchasable games @ full price. If I had to list ten best games, it would all be purchasable games. But that's just me. I'm very likely contrarian indicator. 8)

I don't think so. I haven't seen any ads on Netflix (apart from Netflix'es own banners/shows/movies in UI) and Amazon only has its own ads at the beginning of movie/show. It might be that Roku gets some money from Netflix/Amazon for the UI for their channel, but IDK. Overall, is the channel UI done by Roku? By Netflix/Amazon/every-channel-owner? It does seem that some of the UIs are flakey. Possibly with memory leaks. Have to reboot Roku box periodically. This might not be an issue on TV which gets turned off all the time lol.

Lifco might be interesting although does not seem to be cheap on the first glance: https://lifco.se/investors/ https://www.marketwatch.com/investing/stock/lifcob?countrycode=se (Probably should open Lifco thread if anyone wants to discuss more). In general though, I have gotten somewhat skeptical about family conglomerates. People look at these as mini-Berkshires, but it's not so simple to create a conglomerate with great returns. Yeah, just buy a bunch of good businesses at fair price, decentralize, and you're golden. In reality, there's probably more "mini-Berkshires" that failed than that succeeded. Or maybe not failed, but delivered so-so returns. And so-so returns are likely not considered a failure for the controlling family.

Did anyone understand/figure out the name of the company at 27:10 "Akkermans hundred year old company in Belgium"? I did not find anything called "Akkermans", so that's probably wrong spelling/name.

It's a food item. They shipped it to me before. It appears Amazon is not the only one with shipping problems. Follow up on this: Ordered the same product on Jet.com Great integration of Jet and Walmart. Not.

We have accounts that allow multiple simultaneous streaming locations - I forget how many but enough that it doesn't cause a problem with the teenager, us at home, and a few AirBnB renters simultaneously. I think even my Mother uses the account. It's a couple bucks a month extra. Short answer - we keep the roku logged in and people watch the streaming services under the "Guest" name. There is a way to do it with Amazon on Roku that keeps them from being able to buy stuff. Not registering your roku to amazon or something like that. Almost all our guests use Netflix exclusively- for whatever reason- but some people watch live sports on the networks (you can tell because they change the channel from my default nbc). Haven't seen many people use Amazon or HBO Go, which I thought would be more popular OK, got it. Thanks. This makes sense. IMO good setup for your guests. Maybe I should friend your properties on AirBnB. 8) (J/K the last ;))

OT. Sorry to say, but they still do have lame streaming content. And I still get DVDs mailed to my house for good movies. To make this quantifiable: how many last year Oscar nominees are streamed on Netflix? https://oscar.go.com/nominees

What do you mean no one is watching the ads / The Roku Channel? How do you know? I think I have a related question: what do you think your AirBnB renters are watching on that TV? Do you expect that they are logging into their Netflix/Amazon accounts on it (I wouldn't)? What else is there to watch based on your setup? I'm sorry I have Roku, but I only watch my Netflix/Amazon on it. I have no clue what else it has that can be watched without accounts/logins.

Thanks for a detailed reply. I agree with you regarding I also understand what you are saying about game pricing, DLC pricing, and MTXes. I somewhat agree with you, but I would not be so certain as you are about what the future holds. I've heard a narrative similar to yours multiple times in the past. Maybe this time is different, but I would not be certain about it. Yes, there are free-to-play games that are good/great. I don't really know if they gonna take over a large percentage of marketplace. It's not so easy to come out with a new Fortnite as it might seem. There are a lot of games even from known developers that bomb or just do not make a dent. ( I am currently playing a f2p game and I have played f2p MMOs in the past. ). The narrative that f2p will kill purchased games market is not new. f2p mostly killed single game subscriptions. But now there are per-company game catalog subscriptions that you did not touch upon and that are possibly doing well (? not sure ?). I think your narrative regarding MTX is a bit self contradictory. If you expect MTX restrictions and regulation, then big publishers will do better than f2p companies, since this will hit f2p more than the purchased games and DLC sales. IMHO there won't be any measurable regulation, but that's just MHO. ( Overall, I bet against there being a regulation in a number of areas in US... not just in MTX ). Regarding retail game pricing. Personally, I am cheap, so I don't buy anything for full price. There are already sales, bundles, etc. where you can get premier games with DLCs (after some time) at 20-50-70% off. And yet, if your friends are playing new game(s), you're likely not gonna wait (1-2 years?) for that sale. Yes, it's possible that ATVI/EA/etc. may drop the ball and lower new game prices. I think they won't, but we'll see. I agree though that it is easier to sell something that is a part of huge franchise. And ATVI has issues with aging franchises and losing new(er) Destiny. I wonder if they can manage to make Overwatch into a large franchise. Still, thanks a lot for your post and I'd be interested to read any further thoughts you have. Best

Would you care to elaborate on this? Thanks.

Yeah, I read this in Barron's: His logic made very little sense to me. ::) Edit: BTW, this is the guy who said something like this in the proxy or annual: "If you're not customer of IB, you should sell your shares to people who appreciate this company ...". Pot kettle? ::)

I am looking at ATVI and cannot decide whether it's attractive as investment or not. Just gonna post random thoughts: - Lost CFO to Netflix - Activision and Blizzard division CEOs both resigned in 2018 - Separated from Bungie/Destiny franchise - this was lauded (on Morningstar, for example) as the big upcoming franchise. Now it's gone. - Close to zero organic sales growth for the last 10+ years - It's not clear whether King Digital purchase was worthwhile - WoW continues to decline (as expected) - FCF is nice, but even with current stock decline the ratios are not that cheap I'd think it's going into "too hard" pile.