Liberty

Like Mike Burry did, yes? :P Every now and then life is subject to random error. :P To be fair, while Burry is brilliant, his early investors didn't know at the time that they were signing up for a big macro bet when they invested with him, they thought they were getting something else, so without the hindsight of knowing that the bet worked out in the end, it's pretty easy to understand that they were nervous and some wanted to get their money out. If I had put my money with him for his value-based stock picking abilities and learned that he was buying vast quantities of credit default swaps and side-pocketing the money, I might have gotten nervous too. I don't know.

It's your choice. There are too many dealbreakers in the Android experience for me, even if there's part A or B that is better or whatever, it doesn't matter in the end. btw, you can use third party keyboards on iOS. And on the iPad, you can do a split keyboard if you want it smaller.

Search is a fantastic business, and Google has been diluting it with all kinds of other stuff because they don't have reinvestment opportunities in their core business to use all the cash it generates. This is like Visa or Mastercard buying movie studios and shrimp farms, to use the old Coke story... This stuff might be good for society (R&D), and I'm not against it on that level. But I don't think it's very good for shareholders. The chances that these moonshots will ever be anywhere near as good businesses as search+advertising is very slim, so it's diworsification from a shareholder's point of view. Enough years of reinvestment in inferior businesses and at some point they become bigger than the fantastic core. For shareholders, they'd be much better off focusing on search and a few ancillary things that strengthen search and then doing buybacks and/or dividends with the cash. But since I'm not a shareholder and it's not my capital, I'm glad they are doing R&D in clean energy and self-driving cars and medical science and all that. I love it! :) IMO the best solution would be: If Larry and Sergey want to do moonshots, they can use some of their personal billions to do venture investments rather they use a public company as their piggy bank. Heck, if they had Google use its FCF to mostly do buybacks and dividends, they could fund their venture investments just from the divvys...

You're looking at a list of specs. That's not what the experience of using a product is. And good luck keeping your OS updated in a year or two on the Samsung... But it's your choice.

Samsung recently slashed prices on its S6 (100 euros less, not sure how much in the US). One more price cut and they won't even be able to call themselves premium... Just one more commodity phone maker. I wouldn't be surprised if soon Samsung makes more money from selling components to Apple than from its own phones...

Why?

Interesting reversal. Not so long ago, everything was supposed to become more integrated into Google+ and more focused (they even killed Google Reader, which everybody loved and used, to 'focus' more). Now they kill Google+ and decide that everything should be more siloed and they should go into more separate directions. It will be interesting to see if this approach will be more succesful.

Could this be a case of agent-principal misalignment? Unless management knows something we don't about future prospects and this is actually a good price.. Could it be that being comfortably inside the Berkshire fold is worth a lot to management (a kind of psychic benefit -- less stress, not more public company hassle, access to more low-cost capital, halo effect from Buffett, etc), but all these benefits aren't actually available to common shareholders. So management is getting part of its premium in case, and part of its premium in new working conditions, while shareholders only have access to the cash portion. Just a theory..

http://brooklyninvestor.blogspot.ca/2015/08/mondelez-international-mdlz.html

That's what the Thompson piece linked above is about. Conclusion is basically that there's a lot of semantic crap in there, but Verizon was never subsidizing it in the real sense of the word subsidy, and they're now almost doing the same thing they were. Bottom line is, this might be a slight positive for the iPhone because it's easier to upgrade and the upfront costs are eliminated. https://stratechery.com/2015/verizon-changes-rate-plans-the-importance-of-upgrades-imessage-and-the-u-s-market/

Ben Thompson makes an interesting point that is similar to my thinking in today's Stratechery update (you'll need to subscribe to see it and get the daily updates): https://stratechery.com/2015/verizon-changes-rate-plans-the-importance-of-upgrades-imessage-and-the-u-s-market/

Becky Quick: "Warren Buffett shoots down Ackman's idea that Kraft Heinz would buy Mondelez, at least in the next few years."

Something I saw this weekend... ;)

Cook has already said he will donate all his money to charity, so he's probably motivated by the share price to an extent, but that doesn't seem to be his prime motivator. He seems to have a real love for Apple and its employees, and to the extend that a low share price might hurt recruiting and retention, that's probably what bugs him. I wrote something in my investing journal last week about Apple. It wasn't written with public posting in mind, but I figure, why not share it. Just some stuff I had on my mind at the time: The modern smartphone is a very special product. Historically, it might be a bigger thing than the car or the TV. Everybody on Earth will someday have one, and this thing is giving people at least thousands and thousands of dollars of value. It’s a camera for video and photos, an internet-connected computer (which means it can do million things and access the sum of human knowledge in real-time), a gaming device, a GPS, a phone and a video-phone, you get weather forecasts, streaming video, music, etc. Your smartphone can get a car or food to you, you can shop on it, stay in touch with friends and family, etc. And it’s personal and private, a kind of second brain, secret garden, whatever. Yet smartphones don’t cost anywhere close to the value they deliver, and because of this relatively low absolute cost, premium models are affordable to a lot of people (unlike, say, premium cars). This helps them being upgraded much more frequently than computers (low cost + very high utility + big improvements every generation + more personal/visible than other products = easy to justify), which is what makes smartphones so special too. Among people who can afford iPhones, there will always be a fairly large segment of the population who doesn’t mind paying a bit more to have the “best” product experience. They want to buy it in a nicer store, have fewer things to worry about while owning it, they want it to look and feel nice, be supported for a long time, have access to all the hot new apps, etc. Almost everything else is optional. I sometimes compare Apple to Nike and Porsche when I explain how they can have higher margins because a certain segment of the population will always be ready to pay more for the best, but that’s actually an unfair comparison; Apple is in a much better position than Nike and Porsche. There are much higher barriers to entry to compete against Apple, and there’s an ecosystem/network effect that creates barriers to exit (stickiness). Almost everything else is optional - nice shoes, nice car - but a smartphone isn’t. It’s easy to justify buying one, and if you want an iPhone, it’s easy to justify paying a bit more for one (unlike going from a Corolla to a BMW). The reason why the iPhone will stay the biggest thing for Apple is the same reason why the rest of Apple products are building an ecosystem around the iPhone to make it more valuable and stickier; A computer or a tablet are optional, but not a smartphone. The Watch might someday become less optional, but at first it will be (over time it’ll become our physical manifestation in the digital world, because it’s better in that role than a phone is - it’ll unlock our car and house doors, pay for stuff, contain all ID tokens we need for various things, keep track of our health, alert us when we need to know things, work with home automation stuff, maybe control your Apple TV, interact with beacons in public places/stores, etc). One last thing that grinds my gears: The whole media circus around “is the Watch a flop or not? Did it sell enough at 2 million? 3 million? 4 million?” is r-i-d-i-c-u-l-o-u-s. Analysts and journalists have pulled out all kinds of numbers right out of their butts, and now they are benchmarking against them. I’m sure Apple only had a vague guess how many they would sell, and obviously that wasn’t enough since they were supply constrained despite launching in the part of the year when they supply chain should have a lot of slack. The Watch is a brand new thing. It’s not a small iPhone on your wrist (unlike the Android Wear stuff that mostly shrinks existing paradigms), it has very different use case (you go to the phone, the watch comes to you) and pros & cons. The target market isn’t current watch wearers… I think most of the current backlash against the Watch comes from mis-calibrated expectations. No other product will be the iPhone, ever. This was a special thing like the car or the TV. And not every product needs to do everything like the iPhone. I think that when pundits get over the fact that the Watch isn’t actually magical and perfect and that it’s a lot harder to easily encapsulate the use case of this mostly passive, brand new device, they’ll realize how cool it actually is to have all this stuff on your wrist at all time. Being able to just glance at ‘complications’ that show every-day useful things like the weather, your calendar events, health stats, message and notifications, and whatever else third-party complications are next to catch on once watchOS 2.0 is released. People also forget to skate where the puck is going to be. The Watch will iterate into something better, just like the original iPhone did. It’ll get thinner, have more battery life (though that’s already not a problem), get new health sensors, get standalone GPS, etc. Just having native apps next fall will make a big difference in speed, and developers are still figuring out how to make a good watch-sized UI, so apps will keep getting better and more useful. All this takes time. Lastly, the Watch is part of an ecosystem of products and services. If some other company was making the Apple Watch as its only product, that would be one thing. But Apple is making it, and the long-term impact of the Watch should be judged in relation to the whole; how many people buy iPhones because they want a Watch? How many people are even less likely to leave the iOS ecosystem because they also have a Watch? It’s the same as with Macs and iPads: Once you’ve bought one Apple product, you are much more likely to buy more, and once you have a bunch, have bought a bunch of apps and all your photos are synched into iCloud, it becomes a lot harder to leave. And what matters is not how many Watches are sold in the first year, but how many are sold in the 5th year. You have to plant seeds for the long term even when everybody discourages you to do things if they won’t have a big impact by the 2H…

Looks like the traditional watch industry is having a bad time: http://www.bloomberg.com/news/articles/2015-08-07/apple-helps-push-u-s-watch-sales-to-biggest-drop-in-seven-years

I don't see it as a sale. He probably expects to keep the majority of the shares in his family for the long-term and this is probably the best way to do it (more tax efficient). Guy was flying economy or whatever until recently, I don't think he has an extravagant lifestyle and expects to be liquidating his holdings any time soon... but that's just my guess.

Here is your answer: http://www.csisoftware.com/2015/08/constellation-enters-agreement-with-1388369-ontario-inc/

http://imgur.com/a/69Fta

Well, if we're talking about "somewhats" and "spectrums", the US is also somewhat utopian, somewhat anarchic, and somewhat libertarian.

11 million trials in 1 month: http://www.usatoday.com/story/tech/2015/08/05/apple-music-hooks-11-million-trial-members-app-store-has-record-july/31197721/

http://files.shareholder.com/downloads/ABEA-4CW8X0/523463770x0x843991/DCDCCFDA-0709-405B-931A-B2F48A224CE8/Tesla_Q2_2015_Shareholder_Letter.pdf

Ackman takes a 5.5 billion position: http://www.wsj.com/articles/activist-takes-5-5-billion-stake-in-snacks-giant-mondelez-1438825313

I think if you were one of the millions in jail in the US today you would think that it is already pretty bad. If you were one of the thousands killed by police your loved ones would think it was already pretty bad. Just because it was much worse in other places and times doesn't mean that it isn't bad and getting worse here and now. We live in interesting times, the private sector is doing amazing and wonderful things that are making all of our lives better by the day, but at the same time the government is gearing up for an all out war (both overseas and at home). The police are killing thousands every year, hundreds every month, often getting away with murder even though the video is on youtube. Business is operating under the weight of crippling regulations & licensing schemes in an almost outright crony-capitalist system. Taxes, well this thread has gone over taxation already. Imagine what would be possible if those weights were removed. I never mentioned Hitler btw, I had more of the Mussolini/Italian system in mind when I said "fascist" not trying to imply the bigotry/antisemitism images that the words "Hitler" or "Nazi" seem to bring to mind. The US has the most sophisticated spying system the world has ever seen, dictators and fascists of previous generations could never even dream of having the capabilities of the current CIA/NSA/FBI/etc. The US military is the best equipped in the world. As are the US police forces (federal, state, and local). When it does get "really bad" it may happen quickly. IMHO the only thing holding the whole leviathan back is the knowledge that there are more than 88 privately owned firearms for every 100 people in the United States. When it does get "really bad", as you say, it will be really messy on all sides, which is the one reason it may never get to that point at all. It is more likely to get a little worse, but never cross the threshold where people rebel. It may never get "really bad", but that doesn't mean it is good. I do think the war on drug is a colossal mistake and the incarceration rate is ridiculous. But words mean something, and the US isn't communistic or a police state. In a police or fascist state, we probably wouldn't be having this discussion.

A company that does what Apple does to minimize taxes won't just stupidly repatriate cash they don't need and pay full taxes on it. Chances are they'll just keep borrowing against it at ridiculously low rates to fund buybacks and will wait until there's a better deal offered by the politicians. The US tax system is overdue to be updated and made more competitive internationally, so being patient will probably be worth it.

Constant hyperbole does no one any good, and if things start to get really bad, nobody will listen to those who have been crying wolf about police states, communism, fascism, totalitarism, etc, for years. It's fine to say that things are bad/sub-optimal in ways X,Y, and Z, and that they could be improved through A,B, and C, without constantly evoking Stalin, Mao, and Hitler. If I had a time machine and gave these people the choice to live where they live now or to be transported to being an average citizen in one of these regimes they constantly reference as being like today's, I'm pretty sure that they'd stay right here.