Liberty

Maybe. What other good businesses has their non-core R&D produced so far, though?

I tend to think it is. If it's big enough for content, it's big enough for some form of ads. They might just not look like ads on a bigger screen. For example, part of how Facebook makes money is selling reach. When corporate accounts post something, they only reaches a small fraction of their followers organically (because it's all mediated by the news feed algo). So you pay up to reach more people. You also pay to increase your number of followers (the algo recommends you to more people than it would organically if you pay). That's one non-conventional way to "advertise" (company pays money to reach potential customers -- it doesn't have to look like a banner ad). There might be other similar models.

This seems to assume that mobile is just desktop on a small screen. But what if users keep increasing the time that they spend inside apps rather than on the open web? Want to buy something, fire up your Amazon or Costco or Walmart or QVC or eBay app. Want to check the news and what's going on? Fire up Twitter or Facebook, or the CNN app. Etc. Maybe people who want to buy a car will at some point just get apps from GM and Ford, etc, because these apps will one day be so much better than the websites (with localized dealership integration?), etc. On the desktop, the starting point was often search. On mobile, it appears to be increasingly less so. That's not to say that there won't be more searching done year after year in absolute terms, just that advertising dollars follow potential customer's attention, and Google can't penetrate the world of apps the way it permeates the open web. So I'm not as certain about their growth rate as I would've been a few years ago. As lots of companies finally crack mobile advertising over the coming years, advertisers might get many more appealing options than they ever had online before. And this increase of choices and inventory might also drive overall advertising prices down. Just thinking out loud. I don't know.

I quite agree that search ads are probably the best kind of ads because there's intent embedded into them. But the question is, is search going to keep growing in value as fast as it has in the past, and will Google be as competitive in non-search parts of the advertising business, which are pretty huge. I'm not saying I expect them to stop growing. Just saying it's not quite clear to me that the rate of growth and level of profitability that some people are expecting is quite a done deal.

For the record: Merkhet's a true gentleman. We had a nice private discussion. Sorry everybody for derailing this off-topic.

I haven't followed Google closely in a while, so my analysis is probably shallow, but there's a challenge that I see on the horizon for them. Not that Bing will suddenly really compete in search. Rather, that as an advertising company, they'll find that their customers (the people who pay for advertising, not the people who click on ads) start spending their dollars differently, and maybe they don't get quite the share of the pie that they used to. More online activity is moving to mobile and to apps, and away from the web and search. Facebook has a lot of information on everybody to target ads because people voluntarily fill out profiles and tell them everything, along with their real names and relationships, etc. Google tried to get that kind of data with Google+, but that was mostly a failure, and despite them tracking you as much as possible with cookies and such, their targeting is a lot less precise, and that breaks down even more on mobiles and in apps. So search could stay just as ahead of everybody technically as before, but it could start attracting relatively fewer advertising dollars than before. Same for third party site banner and text ads, where the desktop experience is optimal. Google's search+advertising business is one of the almost uniquely good businesses of the past century. It's almost like a Visa/Mastercard. This means that almost anything they invest in with their heavy R&D spend will, at best, create much inferior opportunities and dilute that primary cash generating engine. It's kind of like I don't expect Visa/Mastercard to create something as good as what they have, so after they spend on growing the moat, buybacks/dividends are the best use of capital. Some of Google's projects might help make the flywheel spin faster or dig the moat a little, but a lot will probably prove to have very low ROI if any (though they might be good for society, that's a different thing from being good for shareholders). I think that to understand Google's future, you have to look very deeply at advertising on mobile. It's not something I feel I understand well enough, but I think the answer is probably there. Too many people seem to forget that Google is, from a business point of view, mainly in advertising rather than Search or whatever. They can have the best search in the world, but what people will pay to advertise with them might fluctuate significantly when there are big shifts in the landscape (mobile being one). These changes might not happen slowly either, and they might not be obvious looking ahead. Some will say "Google's doing well with mobile so far", but rather than a fall on their part, it can be the rise of others that sucks dollars away from them. Right now advertisers might not feel they have good enough alternatives, but someday, maybe they will. My feeling is that some people might underestimate the longer-term challenges of mobile for the company and project the recent past forward without taking into account this important inflection point.

Now you're the one projecting. I said I was calm, I just wrote what I thought about your comment and that's it, there's nothing to get over. Most of what I know about nature vs nurture comes from evolutionary psychology (The Blank Slate by Steven Pinker and The Moral Animal by Robert Wright are good books that summarize some of the big findings of the field), but it doesn't mean I'm not learning and gathering food for thought from other people's experiences, from Ben Franklin to the people here. So yes, I'll keep doing that.

I'm super calm. I just have something against condescension. Maybe that's not how you meant it, but "I feel like if we debate it a little bit more on the Internet, we should have this question wrapped up in just a few more posts" read basically as a big eye-rolling "you guys are stupid, this is pointless". I just wanted to point out that I didn't think it was pointless, and that even if you thought so, there was no reason to be rude about it. Maybe I misread what you wrote, which is always a possibility with the text format (the exact same line can be read in 10 ways and with 10 different tones and that can change a lot). And I'm the one who posted about settled science, but I didn't mean it as anything that applies here.

I like snark, I just dislike when the implied message to people here is "you guys are stupid, your discussion is pointless". But my main point wasn't that, it was that I thought he was wrong to say that we should not discuss things that we can't conclusively prove. Most knowledge isn't binary. If you can move your priors from being 50% certain about something to being 75% certain about it, based on whatever experience and data you can gather from others, it might be enough to totally change how you act and how the rest of your life turns out, yet you might still not be able prove anything.

I think you missed my point. But fuck North Korea.

Well, see, I mistakenly stumbled into doing something good. I like when that happens. You're very welcome, augustabound and tengen :)

Why discuss anything? Are we about to crack investing? Making judgements under uncertainty* is one of the most important skills in life. If every time we can't know something for sure we just give up, we'll do worse, not better. Personally, I feel like I've made progress by discussing these things with others and learning about their hard-earned lessons. If you feel you haven't, maybe you should still avoid being snarky. Here's a couple good books on that: http://www.amazon.com/Judgment-Under-Uncertainty-Heuristics-Biases/dp/0521284147/ http://www.amazon.com/Rational-Choice-Uncertain-World-Psychology/dp/1412959039/

Anders, maybe all you need to do is take a breather and figure out what you really want. I mean, maybe you figured what you wanted at age 20 and then worked for X years in that direction without really stopping to think "is this still what I want? is it turning out to be what I expected?". Maybe you don't really want to be the next Buffett (or even a quarter of a Buffett). If the summum bonum of your existence is spending time with your family and having financial independence so you are master of your own schedule and don't have to worry about paying the bills, you don't need to be a billionaire to do that. Some people can probably pull that off with a frugal lifestyle and a lot less than 1 million...

Probably because of the ticker switch. I changed the ticker on the old thread, should be easier to find.

That's very wise, and definitely something I recognize, in myself and others. My wife is a rather perfectionist person, and she'll always focus on the 1 thing she got wrong even if she nailed the 99 others. This leads her to be very hard on herself, which leads to exactly the opposite reaction that most people who succeed at something have (instead of being happy at the accomplishment, she's sad that she didn't get 100%). I suffer from some of the same, but not quite to the same extent. Those of you who recognize themselves in that might want to check this out: http://www.amazon.com/When-Perfect-Isnt-Good-Enough/dp/157224559X/ It's a book I ordered for her. Haven't read it yet, so not sure how good it is, but it sounded like it could help. So now we're off-topic from even the off-topic music discussion... How did we get here? Oh well, that's what discussions do :) "Contentment is under-appreciated." Words to live by.

This is getting off-topic, but I so envy people like you. I love music. I probably own over 2,000 albums of all genres, love discovering new things and immersing myself in the world of all kinds of artists. But I can't sing and I can't play. I tried electric guitar for years, and I had good technique but no ear for it. I have synesthesia so sometimes I think that I enjoy music differently than other people, and that this hurts my playing because I don't see the notes the way most people do in my mind's eye... Anyway. Enjoy your good musical genes for me ;)

I've just noticed that Gio has also posted it in the OAK thread on the investment board. Apologies for the duplication.

http://www.oaktreecapital.com/MemoTree/The%20Lessons%20of%20Oil.pdf

Good point. You reminded me of something. I used to have a computer desktop background that read: "What's the most important thing you could be doing right now and why aren't you doing it?" Sometimes doing better is just about paying attention and not making too many choices by default... I'm not saying that the desktop reminder worked and that I almost did the most important thing, but sometimes it did work, and made me realize that I wasn't consciously avoiding doing more productive stuff, I was just drifting away from it. It's cliché, but if you really want to get somewhere, keeping your eye on the ball at all times is the first step.

I wonder if in 10-20 years many investors who started out close to 2008-2009 will regret that they expected it to repeat every few years... That certainly seems to be the case for many people.

These questions repeat themselves because there are new people coming in the community all the time. It isn't Parsad that is asking for tips on what to avoid in the beginning and such. Whenever you started out and didn't know anything about anything, I'm sure that having a friendly place to ask for advice would be much appreciated. And if people discussing things in threads that nobody is forced to click on is really enough to scare someone off, then that person will have nowhere to hide on the net. But I don't think that's the real reason anyone would be driven off anyway, though it might be a convenient excuse. Nobody who liked everything else here would give it up because of harmless threads like this one. It's also funny when I hear some people talk about how this forum has change since 2008-2009 or whatever. Of course. Everything was on sale in a once-in-a-lifetime fire sale that lasted for a long time. Of course there are fewer life-changing bargains to write about today. It's not this forum's fault. I think Plan just preferred the Twitter format, where he posts regularly. He also stopped writing in his blog...

If that's what you meant, then I misunderstood you. I've just seen too many people write sneering remarks of the kind. My apologies. Hmm. I thought that was exactly what value investing is all about. You know it isn't in this context. Finding undervalued companies and betting on them when it's an unpopular opinion is different from writing condescending remarks on the internet.

Some people are investing hipsters. They publicly complain about what other people are doing, implying that they're better than them, etc. It's a lot more annoying than people discussing whatever they want to discuss without forcing anyone to participate. Don't like it. Skip it. What is a waste of time for you might not be a waste for someone who is at a different point in their life journey, or who simply has different tastes and priorities. Nobody needs to know how OG Investor you are because you only think about 10Ks 24/7 in between reading your daily 500 pages...

Thanks. I think this deserves to be highlighted for people who judge everything based on indexes and ratios based on indexes:

Funnily enough I found Prem's slide on interest rates after the Wall St crash and in Japan today. Average trough for long term rates 2%, average time taken to get there after the panic, 14 years, average rates 20 years after the panic 2.5%! I know these are different times, but I do wonder whether we are in for a much longer period of low rates than anyone thinks. Maybe, maybe not. First thing that comes to mind though is that the US is pretty different from Japan on many levels.