Liberty

Is this median or average? Because ar billionaires and going to distort things, like if Bill Gates moved to your neighborhood and suddenly the average net worth on the area is $250m or whatever...

How many other startup car companies went from $2bn sales to $12bn in 4 years while creating multiple new models radically different from other production vehicles without issues? Pretty obvious that the problems they have are because they're trying to go super fast and Musk is giving timelines even shorter than that. If they were taking their time and not promising anything and not under as much scrutiny as Apple, like other factories ramping up much more slowly on more conventional products elsewhere, we'd never heard about it. But they wouldn't be doing 6x in 4 years and making every other car company change their EVs plans either, and when your goal is to make EVs happen as fast as possible, that wouldn't be ideal either. Comparing Musk and Buffett makes little sense. How many rockets has Buffett put into orbit and then landed on drone ships? They're just not trying to do the same thing at all. Musk is a technologist with technology goals. Buffett is a businessman-investor with financial and didactic goals.

I have found "loaning" books is essentially giving them away; they usually don't get returned. So your's is a good policy of accepting that and giving them the book. Someone agrees with you:

Sound slike it's probably billing/integration issues. They mentioned that when you change products and change billing to consolidate things and move the products to the new strategy, there's going to be more transactions/service calls. It'll be interesting to see over time if it's a blip or a trend.

Congrats and the successful investment, Dynamic, and thanks for sharing your post-morterm with us.

I suggest you read this thread, there's a lot of potential answers to your questions.

Haven't look at this in a long time. Glad to see it's been working out for patient shareholders.

10th launch so far this year already:

I certainly can't defend Musk saying things that aren't true, knowingly or unknowingly, and I certainly don't have his risk tolerance and wouldn't run things so close to the metal as he does (but who's to say that's not a rational thing to do if you feel problems are big enough and there's enough urgency... Every extra year you take by slowing down has an opportunity cost in both how much you help and how far you ultimately get in your lifetime, if you don't blow up -- though even the risk of blow up isn't as high as it seems, IMO, because Musk has a niche of one that will almost always find funding somewhere). I also can't defend a lot of what Steve Jobs did on a personal level, especially when he was younger (everybody forgets that he matured because his youth was in the public eye and he became very secretive when older), or how Bill Gates got to where he is in business, etc. Doesn't mean I can't admire how a lot of people that are doing things very differently than I'd do them are accomplishing things. If we're waiting for a perfect person to admire, we'll wait a while. There's tons of criticism of even Buffett out there, and if some of it is correct (a lot of what I see is BS), it won't stop me from admiring the good parts and trying to learn from them.

https://arstechnica.com/gadgets/2018/05/new-speculative-execution-vulnerability-strikes-amd-arm-and-intel/

http://www.businessinsider.com/r-ex-valeant-philidor-executives-found-guilty-of-kickback-scheme-2018-5

So he just has to first build a Google or Amazon. Piece of cake.

Yeah, there are a lot of questions regarding 5G. This "The Power of Millimeter Wave | Verizon" video is pretty cool and it's less than 3 minutes: Nice marketing video. I like when the guy does the non-sequitur: "it's really high frequency so everybody thinks it doesn't go very far but it's a really big pipe and so that's what allows you to gain the superfast speeds". A demo through a window and a plywood wall isn't that impressive, and obviously they only show the tests that worked. In the real world, the problem is when you try to have lots and lots of people on the same cells in very variable conditions (thicker walls, brick walls, stone walls, large growing trees, people in basements, etc). And how are they going to do the backhaul from all these cells on top of lamposts and telephone poles? They're running run fiber to all of them to provide those multi-gigabit pipes? Seems to me like this is basically like doing cable/fiber overbuild, and the economics of that usually aren't very good.

Around 14:20 he says that all boring machines are electric. Doesn't look like he's saying that others aren't. You know what's easier to predict than the future? The past. I'm a patient guy. I'll just wait and see if when they come out with their internally designed boring machine, if it does better than what has come before, and if so, by how much. I might not know much about tunnel digging, but I can do a bit of pattern recognition, and this is exactly what people said about Tesla and SpaceX just a few short years ago. So excuse me if the argument "others have done it and it's as good as it gets" doesn't resonate completely. No new automotive startups in decades, impossible for a small company to make a car that people will buy at what it'll cost, the competition has decades of engineering and design experience, any new car will look and drive like crap, electric cars are golf carts and will have worse performance, where will you charge them on long trips? You'll never get enough range! We've been making rockets since the V2s and thousands of top engineers - literally rocket scientists - at NASA and ESA and private contractors have spent billions working on this, not to mention all the military funding for ICBMs, they have looked at reusable rockets and low cost rockets already and studied them from all angles, what's Musk going to do that they can't with fewer resources and no background in rockets and no government backers and look his rockets are blowing up one after the other.. He's just some internet guy, what does he know about any of this? And the existing experts in all those fields weren't even doing anything in bad faith. They really thought that everybody was doing their best and that it was impossible to do much better or make things change faster than they were. Sometimes it does take someone with some rare traits to break the logjam and put all the pieces together in a new way. This shows how much you know. I've been following EVs on an almost daily basis for close to 20 years, and Tesla was the iPhone moment for the industry. Its influence is way outsized to its market share (mindshare, if you will). You can look at smartphones before and after the iPhone, and sure, with enough time maybe we'd have gotten to something pretty similar to the modern smartphone without it, but there's something that happened that changed everyone's perception, that catalyzed everybody else to throw away their previous plans and start building from that template, and it made things happen much faster than they otherwise would have (even Bob Lutz said that he could never have gotten GM to start developing PHEVs and EVs without Tesla). Basically all the EV that you're going to see come out from everybody in the industry are happening now and are specced the way they are because of Tesla. Personally, I don't give a crap about their market cap or profits or whatever, and it's definitely down on the list of priorities for Musk. If he cared about that, he'd go much slower and just slowly expand out of the high-end luxury-performance-EV niche and be nicely profitable (well, if he cared about money, he'd have gone into any other industry than these). But he cares about the tech and changing the status quo, so he has to build the biggest battery factory in the world, and then build more of those, and them try to make a model of EV that can be made by the hundreds of thousands, and build semis and crossover SUVs, etc, as fast as possible within a few years. That's kind of hard to do, so yeah, the road's pretty bumpy, and there's a good chance he'll fail. Here again, time will tell if he pulls it off. I don't have a horse in this race financially, but I want to see EVs replace ICEs as fast as possible, not over decades as the legacy automakers would've liked to see to avoid cannibalizing their existing sales and obsoleting their existing investments in ICE production. No. I'm not that interested in it, frankly. It's a bit boring (har har). Just like it doesn't look like you've looked much into EVs or rockets. But we don't have to know about everything, and I don't have to try to predict things when I don't have a horse in the race. I'll just wait and see what happens, and we'll see if it's all just BS and they can't improve on tunnel digging, or if they can actually make it faster and cheaper and more useful for society, and if their vision influences others to try new cool things. Personally, I don't really believe in all the glossy CGI presentations about everybody zooming around for a dollar and all that. But I like people with ambitious vision who actually work on improving things, and whether they succeed entirely or just a little, at least they moved things forward and didn't just care about building another social media app or going into finance and making billions by shuffling money around to very little societal use. I'll take 10 more Elon Musk over all the CEOs of nicely stable and profitable aerospace or automotive companies, or tunnel boring companies, that we have now.

I don't know much about tunnels. It's really not my area. It's possible I've been duped about everything. Personally, the way I see it is that a lot of the things they talk about that people hold against them in the presentation are them just describing stuff to a public that, like me, isn't used to this stuff. You might not go to a tunnel boring trade show and talk about how your digger is all electric because everybody in the room knows, but if you make a presentation to an audience that will be 99.9999% people outside the field, you mention these things. Not to brag or pretend you're the only one who has it, but because it's interesting and educative. Other things might be actual mistakes, but people said all the same things in the early days of Tesla and SpaceX and yet here we are, so it's not like any wrong thing disqualifies the whole thing (it's called confirmation bias: You disregard everything that doesn't conform to your view and magnify anything that seems to prove your point). That's how I interpret most of these things, anyway. As for the rest, I think there's a high chance - as usual with Musk - that things will change, shift, transform, be delayed, be more expensive, etc - but I don't really care much about that. The interesting thing about it to me is that someone's doing it at all with this kind of ambition and vision and is actually making stuff happen pretty quickly (seems like yesterday that Musk was talking about the traffic problems in LA and how it was soul killing and he wished he could do something about it). I'm not seeing anyone else talking about orders of magnitude improvements and digging tons of tunnels under cities to try to solve the traffic problems that most of us never even conceived of improving by anything more than incrementalism and probably thought of as evergreen problems like taxes. I also find it pretty ridiculous to try to downplay Musk's other achievements. Like, oh, he only revolutionized and catalyzed massive progress in two incredibly difficult and entrenched capital-and-technology intensive industries within a decade, starting from almost zero, and going through all kinds of stuff that would've made anyone else quit and/or go bankrupt (2008-2009 alone...). Why should he be able to make any contribution to this other field, right? I'm sure it's true that other companies have some diggers able to do X or Y or it's been demonstrated that whatever, but from a higher vantage point, I'm seeing that digging tunnels seems to be ridiculously long and expensive and costs are only going up and that nobody's even proposing doing anything ambitious with the huge amounts of technical and financial capital that our civilization has at its disposal. We're spending more on all kinds of useless crap than trying to solve big problems that, so kudos to the people who throw their hats into the ring and stick their necks out rather than play it safe and follow the well worn path... It could all blow up, and Musk's the first one to say that on most of his endeavours he originally thought that the most likely outcome was failure. But that's not a reason not to try.

That's a lower multiple than ROP, so I'm guessing you're not in this thread because you like the parent business... Why are you valuing it like a bond? It's a business. Say you get a 5.4% FCF yield, and it grows like they claim, so mid to high single digits. So that's say 5.4 + 5-9% But that's revenues. This is a software business, so incremental margins are probably ˜70-80%, so you get a nice bit of operating leverage. Roper runs with a few turns of leverage (they keep it investment grade, usually maybe 2.5x EBITDA), so you get a bit of lift from there too. And since this business has basically no capex, high ROIC, all cashflow basically turns to FCF and in fact deferred revs mean that it throws off cash as it grows, it tends to command higher valuations than a business with a different profile. As a standalone business it's actually less valuable because the cash can't all be re-invested and it piles up, dragging down performance over time, but inside ROP the cash is sent up to HQ for redeployment via M&A, and they have a good track record of that, so you can actually justify paying more for it inside ROP than as a standalone PE deal, IMO. So with all that taken into account, I can easily see paths to 15-25% CAGR for an asset like this. Who knows what will happen, but it certainly makes no sense to me to value it like a bond, and if you're waiting to get a growing business of this apparent quality, of this scale, with a FCF yield of 15% or whatever, you'll either wait forever, or what you buy will have a huge fatal flaw that makes the run-off price justified. As for the recurring vs. non recurring, if the blended FCF margins are 40% and the non-recurring is low-margin, then you can imagine the margins on the recurring stuff. But historically, this business started as a service business and later transitioned to software. So I'm guessing that part of the non-recurring is service stuff, but it's probably going down over time (another tailwind). Or maybe part of it just more transactional software stuff on top of the recurring stuff (a lot of licenses are like: $X/month + $Y per type Z action in the system).

18.3x FCF for an asset-light business that dominates its niche, with 40% FCF margins, 70% recurring revenue and 98-99% retention rates, growing mid to high single digits is "very rich"? Guess you're a deeper value investor than I am. If it performs as expected and there are no huge bad surprises, I think it was a pretty damn good deal at that price.

You're misunderstanding what he's saying. The way I understand it, his wife his claiming that he told her he'd retire and take care of the kids, but in fact didn't and couldn't have because he made lots of money investing. He's saying that he made lots of money, but that it didn't take much time because he didn't do it by working full time at it (doing lots of trades, following lots of companies, generating lots of original ideas through research, etc) and had plenty of time to take care of the kids. So showing to a court that he was actually retired and taking care of the kids back then and that investing was a hobby, rather than working full time and neglecting to do what he said he'd do, would indeed help.

$1.1bn acquisition: http://investors.ropertech.com/file/Index?KeyFile=393578639

See this here: http://www.yetanothervalueblog.com/2017/10/still-bullish-on-charter-chtr.html

https://www.barrons.com/articles/bill-gates-discloses-5-stake-in-liberty-global-1526678779

Eyeballing it, it looks like Advanced Newhouse tendered 1.86% of its take back into the buyback. https://www.sec.gov/Archives/edgar/data/914545/000089924318013385/xslF345X03/doc4.xml

Good read: https://qz.com/se/perfect-company-2/1172282/this-company-built-one-of-the-worlds-most-efficient-warehouses-by-embracing-chaos/

None of that matters one iota to him. He's just attacking Bezos because he owns the Washington Post.

Are you trolling now? Obviously I don't literally mean that there's no enough water, I meant that when you're trying to pipe in lots of water into the parking lot of SpaceX and pipe out lots of slurry, things get complicated quickly, including with logistics and permitting and such. Driving away with trucks filled with dirt, though, is a lot easier. No, I'm not trolling. I thought you were referring to the fact that there may not be water available since LA has water issues from time to time from drought. I was just pointing out that for the process sea water is just fine and that it's plentiful in LA. I'm not 100% sure what normally happens with the slurry. But I'm pretty sure that usually they have a waste water station on site where they process the slurry and recycle the water. I'm also not sure what the Space X parking lot has to do with anything. If you optimize a process to drill tunnels under the Space X parking lot it doesn't mean it's an optimized process to drill tunnels under a city. There's our problem. You haven't watched the video, right, so you don't know what was said. They described and showed their test tunnel setup, not what they would use to tunnel under the city. Their test tunnel opens into the SpaceX parking lot.