Liberty

Gio, I don't know where that's coming from all of a sudden. Did you miss our discussion about this, which I thought was over? :) I never said I thought holding cash was a waste just in itself, in the abstract. I said that I don't see the point in holding cash if I see enough good places to invest (ie. holding cash for holding cash's sake). If I don't see enough good places to invest, then I'll hold cash. The examples you give are meaningless because they are handpicked to show what you want to show. I can make up numbers too that would show that holding cash over time is worse than being fully invested, even through downturns (which is actually what the REAL historical numbers show, as per Joel's paper). My thinking is that since it's almost impossible to time the market and there are no metrics that are reliable enough (ie. that don't predict 10 of the past 2 recessions, or that wouldn't keep you out of the market for decades because they see them as overvalued). Even if you do better during period A because you had cash, you might do worse during period B because you had cash, and so you aren't better off on average (but cash fans tend not to look at their opportunity cost -- what if your 30% of cash had been invested in your favorite companies in the past 5 years or whatever?). And since the market tends to go up a lot more than it goes down over time on average (capitalism and demography at work), there are more period Bs than period As... So under the condition that you can find sufficient ideas that meet your criteria, holding cash seems to be, on average, a drag. Remember, good investors/companies made money even in tough markets like the 70s or the 2000s.. Caveat is: If you have an operational business or external investors or your investment universe is very limited because of size (like Buffett who can basically just invest in the top of the SP500), then you might have to hold cash because you need liquidity elsewhere or can't find enough good ideas. But I thought we had gone over all this already...

You're welcome. I'm using Audio Hijack Pro, a Mac app: https://www.rogueamoeba.com/audiohijackpro/ I'm using the mono 16kbps AAC setting. I find the quality is still good enough, and it results in fairly small files.

I have a bunch of TDG calls recorded. I tend to record most of the calls that I listen to for archival purposes. It's no extra work for me to post them, but if you also want to record some and share them here via dropbox links (or whatever other hosting works -- dropbox might block the public links if too many people download), I think that would work and I'm sure you'd record some that I don't record. But then again, maybe you and I are the only people interested, so I'm not entirely sure it's worth it :) Exactly. What if currencies had been flat, or if the USD had fallen vs. most others? The restructuring charges are going away, GAAP and non-GAAP are converging in the right direction (GAAP going up to non-GAAP, rather than the opposite), and they're proving that the businesses grow AND that their one-off expenses really are one-offs. Where's everybody that was saying that the business was all smoke and mirrors and accounting tricks now?

Thank you.

Ok. These are just placeholders, with money set aside, for the execution of the rights and the oversubscription that you asked for. Not sure when the real shares will show up. If anyone knows, please let me know. Thanks.

Maybe… nonetheless I much preferred to read his stuff when he concentrated on analyzing owner-managers! ;) Cheers, Gio Me too.

How is IB showing your shares? Just as regular LBRDK? I looked this morning and still saw them as LBRDK.EX and LBRDK.OS, so I think it's just amounts that were put aside until I get the real shares (I doubt I'll get everything I asked for in oversubscription, but that's what it shows right now).

Why should you devote so much time to something you believe to be basically useless? ??? Gio Useless doesn't mean uninteresting. But what's truly useless is what you see on CNBC or Bloomberg. This guy doesn't make forecasts or pretend to understand all the variables that affect the macro. He's thinking about it on a more meta level, explaining what he thinks can work and what doesn't and why, and sharing his mental models. His posts are also usually 3/4 digression about other things than the supposed main topic, and that's the best part (they're rarely really about actual macro anyway, more about investing strategies). Very different from what you're implying it is, and not useless, at least not to me.

Good post. I'm just watching oil for fun, I have no intention to invest because it's not in my circle of competence and I don't feel like it's possible to time commodities (if someone's call is right but it takes 5+ years to happen, is it different from being wrong?), but I think that one thing that might surprise some people is how shale production costs can keep going down over time as the tech becomes better. On first level thinking, this might seem like a good thing ("hey, we spend less on capex so we'll have higher profit margins"), but what will probably happen is just that a higher total number of wells will produce, keeping the oversupply around longer than if this was all traditional oil (with exploration and development becoming more costly over time, having to go farther offshore and drill deeper, etc). Basically, it's a bit like Buffett's story about the textile industry and more efficient machinery. The textile companies don't benefit from the increased productivity, their customers do. Shale production seems to be getting better over time, but because all the players can't coordinate and maintain discipline on price/supply, all they're doing is driving down the price of the commodity. Nobody wants to sacrifice their production just to see others who didn't cut benefit from the higher price... That's my impression from casually reading about the area. I could be wrong on this, so take it with a grain of salt (a grain of salt from brazil's pre sal sedimentary layer, preferrably).

Another one that might interest the Singleton fans: Leon Cooperman giving a presentation on him. http://videos.nyssa.org/a-case-study-in-financial-brilliance-dr-henry-e-singleton-of-teledyne-inc

Another one: http://brooklyninvestor.blogspot.ca/2015/01/what-to-do-in-this-market-gotham-funds.html

You're very welcome :) I started recording these a little while ago when I wanted to find an older recording of a presentation on a company's website and they had deleted it. And since it was a conference presentation, not a quarterly call, there was no transcript available anywhere. I found that very frustration since something very interesting had been said, and I wasn't sure I remembered it all.

http://variety.com/2015/film/news/brad-pitt-christian-bale-and-ryan-gosling-to-star-in-financial-drama-the-big-short-exclusive-1201404038/ Hopefuly it's as well-made as Moneyball was.

yadayada, are you buying more?

If anyone wants the audio of Valeant presenting at the JPM healthcare conference, here it is: https://www.dropbox.com/s/lkukym6nhx03m4o/2015-jan-VRX-JPM-conf.m4a?dl=0 Howard Schiller and Ari Flescher present first, and then there's a Q&A where Pearson also participates. Funny detail: At the end their left the mics open and you can hear journalists and analysts mob Pearson, and you get to be a kind of fly on the wall and listen in. One asks about animal health, and I think Pearson says that he certainly wouldn't buy Zoetis at today's valuation. I recorded that part too, it goes on for a while at the end. Update: Pearson on CNBC earlier today: http://video.cnbc.com/gallery/?video=3000346116&play=1

Maybe he can start a fund with the former Soros analyst who pitched Herbalife? ;)

They still benefit (indirectly) because people who fly tend to book hotels. More flying equals more hotels...

Great post Rishi, thank you for sharing your thoughts on the company.

By then Tesla won't sell just cars. They're already talking about this. http://www.greentechmedia.com/articles/read/Tesla-CTO-on-Energy-Storage-We-Should-All-Be-Thinking-Bigger I have no idea what they market cap will be at any point of the future, but I know that anyone who just looks at numbers of cars produced is missing part of the story (and they might not stop at cars and storage, they might do other things... they're not exactly just following the traditional playbook so far). Musk has already said he wants to do an electric pickup truck, similar to a Ford F150, but "better" with a dynamic suspension and gobs more torque than an ICE because electric motors just have superior characteristics on that front. He also said he had a design for a vertical landing and takeoff electric plane... Who knows what the company will do over time? Did anyone foresee them being where they are now when they had the Lotus-based $100k+ Roadster a few short years ago? Personally I would expect them to start work on a second battery gigafactory sooner than most people expect and go big in storage, especially as solar panels fall below everything else in cost per kWh, also do the electric pickup (which would sell great in the US), and maybe a smaller 'Model 1' EV that would be more targetted to Europe and Asia.

I didn't go super deep in my analysis, but here's some of what I found... Classic two-sided market network effect. Kind of like Visa and Mastercard. I think it'll stay an oligopoly with a small number of players. http://www.gurufocus.com/news/155261/twosided-markets-and-mastercards-moat-ma The network with the most hotels will get the most travellers, the one with the most travellers will sign up the most hotels and be able to get more concessions out of them (better prices and other incentives, which further attracts more customers, etc), and the biggest network can spend more than others on customer acquisition, which further drives the flywheel. A new entrant has to build a huge network of relationship and a complex technology platform before they can even hope to offer something half attractive to customer #1, and they won't make money for a long time because all the costs are upfront and fixed, which explains the operating leverage with scale of PCLN (in the past 10 years, op. margins went from something like 1% to 35%). I like these types of businesses where scale improves the economics tremendously (like with most of the Malone businesses; CHTR, SIRI, LYV, QVC, etc) Priceline is especially strong in Europe because hotels are very very fragmented there, which gives more value to their platform. In other places, like the US, where big hotel chains have more of the market, the network is less valuable. IIRC, Asia is fragmented too and so the model could work well there.

This is like the "Death of Equities" cover page. :) Capitulation and panic. My guess is that 'never' is shorter than 5 years. Or maybe $100+ oil was CISCO in the dot-com bubble. What is the intrinsic value of a barrel of oil? I certainly don't know :)

I looked quickly at it a few months ago (it was a natural thing to find when I was taking another closer look at MA/V) and ended up passing, but very interesting business. What stood out most is that their ROIC, using Greenblatt's method, is in the thousands of percents. Talk about asset-light and implied moat!

Yeah, it's a bad book about an interesting topic, which is a very frustrating thing. The Forbes article on Singleton is a good starting point, and the Manual of Ideas 2-hour podcast on Singleton covers pretty much everything that is interesting in Distant Force: http://seekingalpha.com/instablog/315877-the-manual-of-ideas/30189-the-manual-of-ideas-on-business-leader-henry-singleton-founder-of-teledyne-audio

I don't think it's BS. Why wouldn't they have a shopping list of companies that are a good fit? AGN wasn't the only company in the world with the type of assets that they want and with enough bloat to cut. I think they've learned from the AGN experience and decided to wait a little bit to strengthen (just in the past year they went from 4.5x EBITDA to 3.5x despite doing 1.3bn of small bolt-ons, so it's pretty fast) the balance sheet and prove that GAAP moves in the direction of cash EPS without the restructuring charges, so that the next time they do this they can't be attacked with the same kind of claims and their stock is at a higher multiple, so they have to issue less of it. They'll announce who's next when they're ready. No point in rushing anything.

Saudi prince: $100-a-barrel oil 'never' again http://www.usatoday.com/story/money/columnist/bartiromo/2015/01/11/bartiromo-saudi-prince-alwaleed-oil-100-barrel/21484911/ Interview with saudi prince Prince Alwaleed bin Talal on oil. Sorry if it has been posted elsewhere.