Liberty

http://valueseekerinvestments.blogspot.ca/2016/03/moodys-corp-mco-106-page-slide-deck.html https://drive.google.com/file/d/0BzG5iyelNfWfakxFV2xieEE5QWM/view?usp=sharing

46-minute interview with Dr. Malone and Dr. Richard Green.

I'm not sure what you mean by mean-revert. Do you mean that they would converge to the average margin in the rest of the economy as a whole, or with other sectors? I don't think we'll ever see companies like Visa and Mastercard and Johnson & Johnson and Microsoft and Google have gross and operating margins similar to retailers or miners or carmakers. The industry dynamics are just too different. Some individual companies could lose their way, squander their edge, get their moat breached, or maybe even whole industries could be impaired by government regulation, but I think that's different from saying that there's a secular force pushing the margins in those industries down to the level of other industries. Some businesses are just better than others, that's a fact of life.

People also forget the change in composition of the SP500 over time. High-margin software and healthcare businesses (for example) weren't as large a part of it before, so it's expected to see margins increase. People compare today's SP500 with the SP500 of the 1970s as if it was actually the same thing, but I'd be curious to see how many companies are the same, and how much even those that remain have changed over time (not saying it's always for the better, but there's certainly a difference).

Why is the end of 2008 a reference number? Maybe the number was too low at the time because of panic? Quick look at Morningstar shows a 10-year total return CAGR on the SP500 of 4.47% and of 3.03% for 15 years. Not exactly a golden era. Picking start and end points matters a lot.

If this was a simple shift in the supply-demand equilibrium because of growing population, wouldn't rents be up with the prices of housing? As things are, as far as I know, the ratio of owning to renting is out of whack with historical normals and with the averages in other countries. As for supply, I've seen the statistic a few times in recent years that Toronto had more condos under constructions than all of the other cities in North-America. http://www.cbc.ca/news/business/130-highrise-building-projects-in-toronto-lead-north-america-1.2504776 Most people I know have these beliefs about canadian RE: 1) It can't go down. 2) It'll keep rising at rates similar to the past decade. 3) FOMO, buy now or be forever priced out. 4) HELOCs are free money.

The RE logic of the rest of the world? What is it? Over the long-term, housing tends to follow inflation and incomes. When it diverges from that for too long, it tends to come back to it. Let's look at the alternative. Let's say what's going on right now in Canada is normal and will keep going on. So in 10-15 years, regular Canadians will have 1-2 million dollar houses while americans are in their 350k houses? First time buyers will get mortgages over half a million to get a crappy starter house, something that would cost more than $2k/month just to service the interests at a more normalized 5% (don't believe interest rates will normalize within 10-15 years?). How high will debt levels be by then? They're already at very elevated levels right now, above where Americans where in 2007... The rate cut by the BoC stirred the pot, but that can't go on forever either. I believe that when something can't go on, at a certain point it must stop. Who knows when... But I'd rather buy after that happens than before.

Talking about something for a long time doesn't mean you don't have a point, and being wrong about one aspect of something doesn't mean you're wrong about all of it, just like people who started warning about the dot com bubble in 1997 or 1998 weren't necessarily completely wrong. Timing's always hard, but we all have to do what we feel makes sense. I just don't believe that Canada is some Shangri-la that isn't bound by the RE logic of the rest of the world, where families making $50k/year can carry mortgages of over half a million and live in ugly old bungalows from the 1970s selling for $800k+, etc.

I don't think he foresaw interest rates stay near zero for this long, as most didn't. That doesn't mean that his argument about canadian RE being disconnected from fundamentals isn't right, just that he got the timing wrong (that's always the hardest thing to get -- ask Burry). In fact, the longer this goes on, the worse it's probably going to be in the end. I'm happy to keep renting, in the meantime. I don't know about elsewhere in the country, but in my area, I've definitely felt a plateauing and softening in the past year. I know people who've tried selling a house for months and given up, there's a million condos for sale in a 10 km radius, we've tracked many houses that have been for sale for a very long time and aren't moving. I don't know what will make sentiment change further, maybe interest rates at some point, maybe prolonged low oil prices, maybe just RE-fatigue or something else. But I know that when house prices disconnect from incomes for this long, the difference is debt, and that can't pile on forever. Same for something that everyone knows can't fall -- it has to fall. Stability creates instability because it drives people to go too far and do things they shouldn't do. edit: BTW, to make things clear, the part in bold in the cwericb quote above is written in a way that makes it appear like it's from four years ago, but it's from today's post: http://www.greaterfool.ca/2016/03/06/suck-it-up-3/ He might have said similar things four years ago, though.

Down over 13% today.

I also recently read Frackers, last summer, so I feel like I know him just a tiny bit. Always sad when situations like these happen, regardless of whether it's a suicide or not and of whether he was guilty of what he was accused of.

Mrs comments: https://twitter.com/mrsmoneym/status/703751806325641220 https://twitter.com/mrsmoneym/status/703747460384948224 https://twitter.com/mrsmoneym/status/703748858224865280

Well, the out of court settlement is based on things are going in court (how long it takes, how much it costs, whether you feel you can win, how friendly you feel the judge/jury are, etc). I'm still a bit surprised they couldn't find a more tax efficient way to do it, but maybe they see something very attractive that they have to move on quickly.

Q4 is out: http://ir.libertymedia.com/releasedetail.cfm?ReleaseID=957430 Settled with Vivendi. Lesser amount than expected, especially after taxes and fees, but I suppose that with the courts, you take what you can get.

Which is a little interesting, being that Bill Gates is publicly backing the FBI. http://www.bloomberg.com/news/videos/2016-02-23/gates-disputes-report-that-he-backs-fbi-in-apple-dispute

Looks good to me. Guidance up 6%. Only thing I don't understand is why the super-voting share is $12-14 higher than the As, but that's not new and probably not changing soon...

Microsoft just came out backing Apple against the FBI : http://www.bloomberg.com/news/articles/2016-02-25/microsoft-says-it-will-file-an-amicus-brief-to-support-apple

I think LBTYA sold off because it ticked a few boxes: 1) hedge fund hotel (all stocks popular with HFs sold more than market during that period) 2) leveraged 3) europe 4) complex (especially with unknowns about VOD deal at the time, CWC transaction that the market doesn't seem to like/understand, etc). The good news is that none of this impacts the long-term fundamentals, and it has allowed the company to buy back a fair amount of stock at low prices.

Some stuff that MMM wrote to correct inacurracies or missing detaild in the new yorker piece: http://forum.mrmoneymustache.com/welcome-to-the-forum/new-yorker-article-on-mmm/msg987552/#msg987552

I think lumping all conglomerates or acquisitive companies together a bit like lumping all tech or insurance companies together. It can tell you something, but the real insights are at the company level IMO.

Actually, that's just something he imagined. Here's the full sentence: His wife seems pretty on board. She has written posts on the blog, actually, and did the same thing he did to retire early from the start.

This NewYorker piece provides interesting perspective on the guy. I understand his thought process around frugality and it resonates with me. I was like that when I was younger. But to me the point of money is to trade it in for life enjoyment. To me frugality is a means to an end.... the article says he makes $400K a year from his blog now and yet he doesn't seem willing to make any changes or compromises in any way. That personality seems a bit on the obsessive side. If his wife is completely aligned with those beliefs and practices, then great! Otherwise seems like it wouldn't be much fun to share a house with him. Maybe it is partly for show now to maintain the personality cult that has developed around him from the blog. If you read his stuff, you'll find out that he does exactly what he wants to do (works only on what interests him, takes vacations and travels for as long as he wants, designed his own house to his specifications, spends tons of time with his kid, has lots of time to socialize with his friends, etc). He doesn't feel like spending more would make him happier, so he doesn't. I think the idea of donating that money to charity probably makes him happier than spending it, kind of like Buffett in miniature. If you optimize for happiness and freedom, then spending more isn't necessarily a way to get there. For some people, maybe, but not everyone. For many, spending more means less freedom and more stress, not more happiness.

http://www.nytimes.com/2016/02/23/technology/mark-zuckerberg-backs-apple-in-its-refusal-to-unlock-iphone.html?smid=tw-dealbook Edit: Good summary of the situation and implications of the legal precedent: http://blogs.lse.ac.uk/usappblog/2016/02/20/the-fbis-demands-to-hack-tashfeen-maliks-iphone-are-a-threat-to-everyones-online-security/ Another one: https://stratechery.com/2016/apple-the-fbi-and-security/

Profile of MMM in the New Yorker: http://www.newyorker.com/magazine/2016/02/29/mr-money-mustache-the-frugal-guru

http://fortune.com/tim-cook-apple-q-and-a/ http://www.apple.com/customer-letter/answers/ http://assets.amuniversal.com/1ba0d980b96d01334099005056a9545d