Liberty

Nice compilation of numbers from the last Q by Horace Dediu:

I thought the company was deemphasizing its market making. Why do you say that all earnings are being reinvested in that business? If I remember correctly, they are taking 10% of equity out of the MM unit per year, so if it earns less than 10% ROE, it'll shrink to nothing over time, but if it earns more than that, it'll keep going. But the broker side is growing so much faster than the MM that over time the MM will become relatively less important even if it doesn't shrink in absolute numbers. That's my understanding, anyway.

Yeah, I didn't mean to imply that MA management was like this. I was actually thinking of Mark Leonard at Constellation Software when I wrote this. His conference calls don't have any prepared remarks, he goes straight to questions. He doesn't take much BS and will readily admit when things are not working out or turning differently than he expected. He talks a lot about strategy, how his industry works, how he tries to create incentives within the company to accomplish certain things, what metrics are important to him, talks about long-term goals, etc. Same with his letters. He's even stopped getting any compensation from the company and only benefits as a large shareholder. If only all management was like this...

Thanks Liberty. I found the q call this morning to be pretty useless. Analysts are focused on trying to get their models right - all the questions are about the little changes that occurred in the numbers. This kind of minutiae does not help to judge how the competitive landscape is changing (or not changing). Overall, fx headwinds are a big problem, but that's a temporary issue imo. Here is my 15 year spreadsheet with data from latest Q: https://docs.google.com/spreadsheets/d/1YIdhJxUHy9CAP7xMa4gC3oYaxFmAUmkjPhqqxfeBXQc/edit?usp=sharing I share your frustration with analyst questions. I find that most of the conference calls that are worth listening to are those where management is in some way exceptional (often owner-operators) and brings up interesting things on their own (strategy, long-term, market structure, etc). Most of the analysts are just looking to fill in the holes in their Excel spreadsheets, though there are exceptions there too. Thank you for sharing your data on MA, much appreciated.

Q4: http://s2.q4cdn.com/242125233/files/doc_news/2016/4QFY15-Earnings-Press-Release.pdf http://s2.q4cdn.com/242125233/files/doc_presentations/2016/4QFY15-Earnings-Presentation.pdf http://s2.q4cdn.com/242125233/files/doc_financials/supplemental/2016/Supplemental-Operational-Performance-Data-2015Q4.pdf

http://investor.visa.com/news/news-details/2016/Visa-Inc-Reports-Fiscal-First-Quarter-2016-Results/default.aspx

Thanks for sharing your notes, much appreciated!

Come on I expected better of you. The biggest retard "on the development team" (hardly lol, he made a few small commits over the years) gets his panties in a bunch because people are not listening to hist stupid suggestions and makes a blog post. Complete non-event. For the record, here is a point by point rebuttal: https://fixingtao.com/2016/01/point-by-point-response-to-mike-hearns-final-bitcoin-post/ Don't expect too much of me about Bitcoin. I just vaguely keep track of what's going on, and I thought a negative article by an insider was interesting. Thanks for posting the rebuttal, I'll have a look.

Cannibalized by larger phones, and longer replacement cycle. But iPhone growth has also slowed. If it was simply cannibalization, then we'd see growth in iPhones mirror declines in iPad. Instead this is a substantial 25% YoY decline, despite the addition of a new, higher priced product (Pro). Some people who bought a larger phone last year didn't buy/replace an iPad this year. But there's no doubt about it, the iPad business is definitely challenged. The question remains, is it readjusting after a first few years that were unnaturally strong, making the comparison look bad, but at some point it'll stabilize and start growing again, or is it some terminal decline that just won't stop. I doubt tablets are dying as a category, and within the category the iPad dominates the premium segment, so I think the decline will stop at some point.

Cannibalized by larger phones, and longer replacement cycle. Apple still makes most of that money. Draw a straight line from launch to now, it would still be one of the fastest growing and biggest businesses in the world as a standalone. It kind of went gangbuster out of the gate with no competition and tiny phones. Hopefully it gets back to growth after maturing a bit and differentiating (more multitasking capabilities and accessories?) .

https://www.apple.com/pr/library/2016/01/26Apple-Reports-Record-First-Quarter-Results.html https://www.apple.com/pr/pdf/q1fy16datasum.pdf This one shows the currency impact: https://www.apple.com/pr/pdf/q1fy16supplementalmaterial.pdf About 5 billion lower than would be because of FX. Revenue would be up 8% from the previous year's blockbuster quarter in constant currency... And that with a much weaker economy/macro picture than last year. Not too bad. Some nice graphs here: https://sixcolors.com/post/2016/01/apple-q1-2016-results-live/ Highest iPhone ASP ever (691) despite big negative FX impact. Impressive.

https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7#.hz0jeyl6z

Eric, I'm curious to know, were you still fully hedged on your BAC going into the latest correction?

http://www.stewardwealth.com.au/wp-content/uploads/2015/05/Real-iron-ore.png If you look at long-term inflation-adjusted charts, I think it's similar with lots of other commodities. In real terms, prices tend to stay fairly constant or even fall over time, with a bunch of volatility. What if the current prices are the new normal (or rather, back to the old normal)? Sure things will keep going up and down, but what if we were at an abnormally elevated plateau for a while - long enough for our puny human brains to get used to it and think that's how things were - but going forward we just won't get back anywhere near there for a long while? Altius' cashflows are nice, but with every passing year, the bathtub is draining a little bit, and prices could stay low compared to the levels at which they made their investments (over the past 10 years) for a decade or more. Not saying that's what will happen, but it seems a risk that has been underestimated by many bulls (including me in the past). Just wanted to point it out.

At current price that's about 6% of the market cap. If you really believe that this is a temporary bear market in commodities and you think Dalton & co are great capital allocators, you'd probably want them to redeploy that capital rather than return it to shareholders, though. But the thing with royalties, even long-lived ones, is that they are wasting assets. They have a finite life, so you can't just put a multiple on them, and as commodity prices go down, what becomes economic for the mine operators goes down (they go for high-grade, leaving less of it for later). There's also some political risk for the coal assets. The existing plant might keep going for a while (can never be 100% sure, depends on politics to some extent), but the undeveloped coal assets might never leave the ground under some scenarios. As I said, I don't know. Things could rebound tomorrow.

I don't know. The various long-term inflation-adjsuted charts of various commodities that I've seen lately make me think that there's a good chance that we're headed toward more normal prices, rather than being in a depression. But it's commodities, so who really knows, right? No real way to be sure... Lots of things were said to be game changers in the past 4-5 years that I've been following the stock. We'll see. By that I meant that for Alderon or Julienne Lake to be worth something, someone has to build and operate the mines. Same for the other partners and promising land stakes. Not saying there won't be another upswing in commodity prices and some stuff won't be built, but at some point you have to look at what CAGR you are actually getting if you have to wait another 5 years for that...

ALS first hit this price in the summer of 2006, so it's been basically flat for almost 10 years. I understand that the stock price isn't the IV, but still, I think it should give owners of the stock some pause, especially if they don't see a positive catalyst on the horizon (and remember, Alderon was supposed to be a catalyst, and now the market cap basically fits into a thimble), and there's potentially a secular negative if it turns out that the past 15 years have been a commodity anomaly caused by China's double-digit growth... Is this a case of a brilliant management being in a business with a reputation for bad economics..? Royalties are very clever, but the price of the commodities still matter, and someone still has to do the capex...

http://ir.valeant.com/news-releases/2016/01-25-2016-120434461

Interview with Mike Fries in Davos: http://www.bloomberg.com/news/videos/2016-01-22/liberty-global-ceo-more-cable-consolidation-potential

Thanks for sharing, must've been an interesting conversation! Anything else you can share is appreciated. Cheers.

The main reason why it makes sense for Apple to be looking at the car space right now is because the industry is at an inflection point because technology is about to turn the product into a general purpose computer rather than a specialized device (like pre and post 2007 phones), and because their expertise can make a difference (almost no car has truly great design and user experience and customer service, or is a good computing platform). It's one of those rare times when the advantages of the incumbents are diminished, and can even be anchors, and when new things that they are not very good at will become crucial (software, cloud services, user experience, etc). All the expertise at making the hundreds of parts in gasoline engines and transmissions and stamping steel won't be worth as much on aluminum EVs, and all the billions sunk in old tech will hold many back (psychologically, if nothing else) from fully committing to the future techs. I think there's a decent probability that Musk sticks around until the Model 3 is on sure footing and then sells the company to Apple or Google. Probably Apple, because Musk's plan was never to be CEO of Tesla for this long (he'll stay at SpaceX) and all he wants is for his dream of electric cars to live on -- Apple is proving to him with project Titan that they are serious about it, and Tesla and Apple share more DNA than Tesla and Google (Google has great engineering, but not so much the design and product focus that Tesla and Apple have, and Musk could never live with himself if Google bought Tesla and eventually made goofy Googly awkward EVs...). In fact, I think there's a possible future where Apple's cars are all sold under the Tesla brand (kind of like Beats kept its branding). Tesla is such a valuable brand that they'd keep it for sure. I'm sure that once the transition to EVs and autonomous cars is done, most of the industry will be low-margin, but if Apple can stay differentiated at the high end, I think it could make very nice margins more similar to BMW and Porsche (maybe even better since they'll be even more differentiated by the software ecosystem/integration with other products) than Hyundai and Ford... If it goes well, anyway. Just speculation, of course. It could go many other ways.

AnandTech review of the iPad Pro: http://www.anandtech.com/show/9766/the-apple-ipad-pro-review

I wasn't saying that repurchases could offset problems. I was just saying that I often see people talking about revenues and market cap and other per company figures, but they rarely bring them down to per share numbers, and in this case it makes a difference.

Whatever estimates you guys & gals make, don't forget to look at per-share numbers. Share count is going down at a decent clip.

ICE powered lawn and garden tools are crap. They are loud, smelly, they need maintenance every year. I only have electrical ones (even snowblower). The only problem with electrical tools is the battery weight/power or cord if you go with AC power. I hope that we'll get to high power/low weight/battery electrical tools soon. But it is a harder problem than cars, since you don't carry cars in your hands. :P The world will be such a better, more pleasant place when all these tools are electric. Nothing ruins the summer months more than hearing one lawnmower after the other every day, and now the people with leaf blowers because raking/sweeping is too much work... Ugh.