Liberty

This whole "the Watch is selling badly" meme that is taking hold in recent news cycles is ridiculous. I think Horace Dediu said it well here: "My email response to a journalist query on Apple Watch sales."

http://www.wsj.com/articles/apples-share-of-smartphone-industrys-profits-soars-to-92-1436727458 I also enjoyed this Bloomberg piece form 2007 explaining why the iPhone will fail: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRelVKWbMAv0

I thought that this vehicle for 3G and Berkshire should probably have its own thread. Thanks to Scott Hall for re-bringing that one to my attention, it had kind of slipped away. I haven't really looked at it, but it's not too hard to imagine that it'll do well. Simple recipe: Cut fat, increase margins, try to change the culture to be more effective at getting growth, make a big acquisition once in a while, rinse, repeat. The main question is valuation. I haven't really done the work, but it doesn't seem cheap at first glance. But it could turn out to be cheap if they succeed with their model, it all depends on how much value they can create, and how fast they do it. For reference, there's the original thread about the Heinz acquisition over at the Berkshire board: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/berkshire-acquires-heinz-for-72-5-ps/ I thought the new public entity could use its own thread on the investment board. The merger presentation is probably a good place to start to get an overview: http://www.heinz.com/data/pdf/Kraft_Heinz_Investor_Presentation_2015-03-25.pdf Anyway, curious to hear other people's thoughts on it.

http://goinglongblog.com/decoding-chinas-swoon-its-impacts/ Interesting read. What do you think, Inner Scorecard? Another interesting take on China’s market: http://scottgrannis.blogspot.ca/2015/07/china-stock-crash-index-up-only-72-in.html

http://youtu.be/QUbQRwKXeCU Found this Malone interview with Betty Liu from 2010 that I don't think I had seen before. Apologies if it's been posted here and I missed it. He says a bunch of interesting stuff on a variety of topics.

Thanks for sharing, mrholty!

Cheap money coming in: http://www.bloomberg.com/news/articles/2015-07-09/charter-planning-six-part-bond-offering-for-time-warner-takeover

Piece on Danaher and the Rales: http://www.washingtonpost.com/business/billionaire-rales-brothers-ready-for-a-new-act-in-split-of-danaher-corp/2015/05/21/3f424d2a-fe81-11e4-805c-c3f407e5a9e9_story.html I had no idea Steven Rales helped fund Wes Anderson films. Grand Budapest Hotel is a favorite of mine.

Shanghai's still up 70% TTM, so I guess the gains are in the trillions too. No idea how it'll all end... Sure, but 1987 was similar though U.S. stocks weren't up nearly as much as China is now. The stock market ended in the green, though it took it more than 2 years to regain its highs. I guess a one day drop of 22% is still enough to put you up there with the best of financial crisis regardless of that the 12 month rolling return was. That being said, stock markets all around the world crash on that day. Many by more than the U.S. I wouldn't have expected that type of market correlation back in the day, nor am a familiar enough to know what caused it, but I certainly don't think world equities will be insulated this time around either. My point was just that you can't look at the losses without also looking at the gains, and that sometimes it's important to zoom out a bit and keep things in perspective.

I probably shouldn't comment, as I've mostly been watching Altice from afar and I'm not familiar enough with them. But from what I've seen, they seem less disciplined and more scattered than I would like. TCI stayed away from glamor assets (ie. out of cities for a long time), waiting to pick things up in downturns, built relationships in the industry and grew content assets organically via partnerships/joint-ventures, etc. Drahi certainly has read the Malone playbook, so that help, but I haven't really seen too much that made me excited about his approach yet. Kind of like on paper Endo is a smaller Valeant, but in practice I don't find the management or the assets as good. But I could be wrong... I found very interesting what Malone had to say about Drahi at the shareholder meeting. He clearly considers him a genius for taking advantage of cheap money and doing the roll-up. It was clear, however, that Malone also considers this a temporary phenomenon of too much cheap money (he ended with: "You know, when that kind of money is around why not go to Las Vegas?"). He also said that the cash flows would support Altice's debt but that Drahi's ultimate interest isn't the performance of his stock price but ownership/control over the assets he's been accumulating. At first that's how I interpreted it too, but someone on twitter made a good case to me that he was being ironic, so now I'm not so sure anymore.

Shanghai's still up 70% TTM, so I guess the gains are in the trillions too. No idea how it'll all end...

Liberty, I think you gonna take this as attack on Theranos, since you are already defensive. However, it's clear that they can't make money on $3 test even with their automation. It is not almost free. They have to get the blood, which involves human work, the delivery is not free, the sorting and pass through is not free. Anyway, people don't order a single blood test, so the $3 tests are red herring really. The likely number is probably around 10 tests unless someone orders something nonstandard. It is not clear how many tests they can run on a single blood sample. It's probably not a very large number. Once again, don't take that as criticism since the common case is not someone ordering 100+ tests. Don't take this the wrong way, but I think you missed my point. I'm not saying that a $3 test is free in the abstract. I'm saying that the lab person who draws blood is paid by the hour and is going to get paid anyway. The truck that picks up the samples is going to come by anyway. The equipment has already been bought, etc.. So the marginal cost of that test might be almost free (as long as utilization isn't 100%). They're not sending a new truck for each new sample. They're not paying the person who draws the blood per sample, they're not buying a new blood testing machine every time, etc. Fixed costs, right? Some tests might require expensive consumables (chemicals?) or take a long time, so they are more expensive in time on the labs/on the equipment. But some tests might be super quick and use nothing more than the electricity to run the equipment, so could potentially be done for just a few bucks at a profit (because of the fixed costs + almost zero variable costs).

http://basehitinvesting.com/lessons-learned-from-a-history-of-oil/ Good read by John :)

The total for all tests is $3300. It's probably much cheaper (5x cheaper?) than regular labs, but still a huge amount if you wanted to have a complete blood test. I wouldn't be surprised if there are discount for multiple tests at the same time, since a lot of the process is the same regardless of how many tests you do (collecting blood, shipping it to lab, processing it, then sending back results). Possibly. Though Theranos clearly loses money on $3 tests, so they are probably assuming multiple tests per run already. Maybe they lose money, but once you have your fixed costs paid up, running a marginal test (especially if it's an easy one that doesn't require anything consumable) might be almost free. You already have your guy who picks up the samples, your lab and your equipment... as long as utilization isn't 100% and less profitable tests aren't displacing more profitable one, might as well run them.

The total for all tests is $3300. It's probably much cheaper (5x cheaper?) than regular labs, but still a huge amount if you wanted to have a complete blood test. I wouldn't be surprised if there are discount for multiple tests at the same time, since a lot of the process is the same regardless of how many tests you do (collecting blood, shipping it to lab, processing it, then sending back results).

Samsung headed for its 7th quarter of profit decline in a row... http://www.wsj.com/article_email/samsung-sees-seventh-straight-profit-decline-1436227146-lMyQjAxMTI1MjAwNzQwNzcwWj

http://seekingalpha.com/article/3304475-xpel-technologies-compounders-risk-reward-significantly-better-than-last-year

Got your wish.

That seems slow. I'm with Interactive Brokers (in Canada) and think I got the shares on july 2.

If you have LBTYA you should have received 12 shares of LILA. LBTYK gets LILAK.

CHTR credit roadshow (thanks Bluegrass Capital): https://www.sec.gov/Archives/edgar/data/1091667/000109166715000155/igseniornotesnetroadshow.htm

http://www.bloomberg.com/news/articles/2015-07-06/-flash-boys-programmer-in-goldman-theft-has-charges-tossed-out-ibrz5tyj ‘Flash Boys’ Programmer in Goldman Case Prevails Second Time

http://www.hollywoodreporter.com/news/liberty-global-acquires-irelands-tv3-802415

http://www.bloomberg.com/news/articles/2015-07-06/buffett-s-kraft-heinz-bet-valued-at-24-billion-in-debut

The business isn't just the physical activity of making something and selling it. What makes a business like ZINC complex, IMO, are things like the operating leverage that comes from having expensive plants and equipment (high fixed costs, it cuts both ways), the fact that where the commodity trades has a huge impact on financial results yet management has no ability to do anything about that, and that cycles can be longer or shorter than expected (making the use of any debt dangerous), the fact that a lot can go wrong when building and ramping up a new plant (believe me, I know), the long lead times for this means that by the time production comes on-line, the assumptions you used to value the business might be very different, etc.