Liberty

Good luck! Let us know how it goes.

That model is beautiful because a email newsletter and direct mail is a lot less expensive than mass advertising (TV, print, radio) and its probably way more effective per dollar spent because the only people who receive your stuff have already expressed enough interest in you to pay money for the privilege of shopping in your store. It's easy to see why Munger likes the business model so much. Among retailers, I still prefer QVC's model, though ;)

I might buy more too if it dropped enough, but even if I don't, I'd like to see it come down so the buybacks are more effective. I hope Vodafone didn't make the price pop for no reason...

Vodafone downplaying the possibility of a deal: http://www.reuters.com/article/2014/12/03/libertyglobal-ma-vodafone-idUSL6N0TN4A420141203

http://www.forbes.com/sites/chuckjones/2014/12/03/apples-iphone-gained-significant-share-in-the-us-japan-germany-and-great-britain/

Agreed, the press release says nothing, a few terms could be substituted and any company in any industry could use it. But I think it speaks to something else. Apparently someone inside the company felt it was very important to do this, to send some sort of signal to the market or outside world. I've been involved in situations where there's a giant corporate event that no one knows about and issuing a press release is discussed. To me the fact that something was issued, something that didn't have numbers and didn't say anything is significant in itself. Maybe I've read this thread too long and am now trying to divine the tea leaves. But inside a giant company news doesn't just appear without a lot of approval, so someone somewhere thought this was necessary. What it means is unknown. I agree that it can be a signal. Or it can be the PR department just keeping busy and justifying their jobs. Unless they really telegraph something between the lines, you can usually only know after the fact, and that's not necessarily very useful. I've noticed that companies in trouble (or perceived to be in trouble, at least) tend to be more active with the press release treadmill. What big retailer isn't seeing "significant increase in mobile site visits and member engagements on Thanksgiving Day, Black Friday and through the weekend", isn't seeing big increases in multichannel transactions (majority or not -- lots of factors influence this, like where you're starting from, and it isn't good or bad in itself), and isn't spreading the sales over more than just those days lately to try to milk out the buying frenzy? These are all industry-wide trends (fast growth of mobile, multichannel, longer sales periods). At least if they had talked about sales rather than the much softer "engagement" and "visits"... If this was 1999 they'd have used "eyeballs". And considering how much Sears seems to spends on buying traffic with "points" and rewards and the low base from which they are starting online, anything other than strong growth would be the surprise. Most of their competitors aren't as aggressive on that front (time will tell if that's a mistake or not).

Oh no, I restarted the dormant sears thread by accident. Woe me :-[

http://www.nytimes.com/2014/12/03/business/media/live-nation-board-adds-jimmy-iovine.html

Looks like they just hit the big green button on the press-release auto-generator. or maybe they spent time creating a web and mobile platform that's best in the industry? What does one have to do with the other? I was just pointing out that the press release basically says nothing. When you have nothing to say, don't publish a press release. "Sears and Kmart are encouraged by the traffic we are seeing on our online platforms", "our members are taking advantage of our hottest deals", "Thus far, our home appliances, tools, outerwear, and consumer electronics categories are seeing the most interest as members find amazing offers on brand-name products." Okay. It also helps relative load times against competitors when you have a fraction of the traffic going to your site. In any case, those metrics don't mean that much because the pages simply aren't the same. If they improve against themselves to deliver the same content, that's good. But if you compare the load time of a Sears and a Costco page and they both have a different number of items and especially images on them, you'll get very different results in load times and page sizes. But maybe Costco has found that putting more stuff per page actually results in more sales, so the extra .5 seconds to load is worth it. What matters for a retailer in the end is FCF, not whether they have the fastest loading page. If that wasn't the case, they could just have a text-based website, or a single image per page. Imagine how fast that would load! But that would that be a better experience for customers and shareholders?

I believe you when you say that you find your ideas from others (especially when multiple names you trust jump in) and that you have no edge on most things. But if one definition of intelligence is "the ability to reach your goals", then knowing your own strengths and weaknesses and doing things in such a way that results are maximized is quite consistent with this. The proof's in the pudding; a zillion people are trying to copy Buffett and Berkowitz, yet how many have compounded at 70% CAGR for a decade or whatever it is? Most people in your situation would probably get a first big success, get a big head, think they can do anything (shoe button complex), and then crash and burn. I think that what hasn't happened over the years is as much a testament to your discipline as anything that did happen. Anyway, I know this armchair psychoanalysis is in bad taste, so I'll stop now :)

Who argued for that?

The less humble way to say it is that most of us have to invest using processes to guide us and keep us from falling off the rails, and Eric invests by sheer raw brainpower. That's how he periodically distills down all these potential ideas that flow through the forum/news into a few bankable insights that he bets big on, structuring the bets so they're as asymmetric and tax efficient as possible. The man behind the curtain might have seemed unimpressive at a glance, but dammit, he still found a way to actually run Oz, something that the story doesn't give him enough credit for ;) Yeah, I know, it's embarassing how I sing your praises. Sorry about that, Eric, but I suspect my take is correct and nobody falling anywhere outside of the rightmost part of the bell curve could do what you do, despite anything you might say about not knowing much.

I'm very sceptical about this. Monetization is not possible at the moment which will keep all producers away who are actually serious about their content and buy high quality equipment. Also why would someone switch from twitch to steam broadcast if you have established a viewer base on twitch? There is a monthly subscription feature on twitch which produces huge cashflows for the popular channels. They will not just give that up. I don't think they'll steal content producers, at least not at first (their plan is probably to build up the platform's capabilities over time and to "professionalize" it). But they might be able to steal a lot of viewer because Steam already has the gamers coming to their watering hole, so while they're there they might watch some streams and spend some time that they might otherwise spend on Twitch. They can try to go after the best content producers later once they have more of a critical mass. No idea if they'll beat Twitch, but they certainly are in a position to seriously compete since pretty much all serious gamers are already inside their ecosystem.

Fans of quality television rejoice! http://davidsimon.com/the-wire-in-hd/ http://www.hitfix.com/whats-alan-watching/omar-in-high-def-comin-the-wire-gets-a-high-definition-widescreen-makeover

very true. So hard to predict these things. Often the reason you like something can be very unexpected. And it is generally very difficult to predict how you will feel about something. I think it's like investing. It might not be possible to know the outcome of a decision ahead of time, but it's not like nothing about the situation can be known; it's certainly possible to tilt the odds in your favor by thinking about it carefully, analyzing the situation, making sure you have all the relevant information (gathering evidence about the top choices, thinking of ways to do trial runs or find proxies (people who have done what you are thinking of doing) to gather more data to make a better decisions, etc), etc. I have a friend who told me once that she doesn't take any supplements (vitamins, Omega 3, etc). I asked why, and she said: There's so much information, a lot of it is contradictory, the science changes with new studies, how can you know what's the right thing to take? The thing is, by taking nothing, she's also making a choice. She's not actually avoiding the problem. It could turn out to be a very sub-optimal choice. If rather than think "I can't know for sure, hence I'll do nothing", she said "let's see what I can know, what seems most likely to help, less likely to do harm, and I'll do what seems best based on the best information I can find", she might be doing something different that has a higher chance of being closer to the optimal path, whatever that is.

http://stratechery.com/2014/best/

Looks like they just hit the big green button on the press-release auto-generator.

Amazon paid about a billion for Twitch recently. Looks like they'll have new competition, as all Steam titles will now have built-in broadcasting capability: http://arstechnica.com/gaming/2014/12/steam-streams-valve-introduces-gameplay-sharing-broadcast-feature/

Speak of the devil. MA increased its dividend and buyback today: http://newsroom.mastercard.com/press-releases/mastercard-board-directors-announces-increase-quarterly-dividend-3-75-billion-class-share-repurchase-program/ Thought this graph was interesting: http://i.imgur.com/KuzxG50.png

Smallcap, on the human scale, the Earth seems very static, but on geological scales (the planet is about 4.5 billion years old), things are quite dynamic. The earth's crust cycles around quite a bit, and in comparison, biomass (esp. aglae and plankton, since 70% of the planet is currently covered in water and more of it was during warmer periods) grows incredibly rapidly (try to visualize how much biomass is produced over just 1 million years just in the amazon forest (to put things in perspective, what we consider 'ancient' history is maybe 2-3 thousand years old). Now multiply that by a much larger surface, over hundreds of millions of years). These are time scales and volume scales that our brains simply haven't evolved to intuitively grasp, so that's why you have to trust the math and the evidence uncovered by scientists (which you can verify for yourself if you are so inclined -- you can read up on all these topics if they interest you, it's all available at the library, in various journals, or via books on amazon). Good starting point: http://en.wikipedia.org/wiki/Petroleum http://en.wikipedia.org/wiki/Geology

Hi Rishi, Glad to find you so close to home ;) And happy to see that you are still writing. Your recent piece on See's Candies was quite good and highlights just how good these asset-light, high-ROIC, differentiated/moated businesses can be if you can find them at fair (or better!) prices. It's an interesting exercise to look at the multiples you could have paid for some of these 10-20-30 years ago and still have beaten the market (caveat: I know, survivorship bias, etc. Not all cigar butt investments work out either). Which brings me to MA (and V, since they're almost the same thing). I'd be curious to know about how you think about fair value (is it a specific FCF multiple?), at what FCF multiple would you be buying more and at what multiple would you be selling? Or is it more of a "I'm hanging on to this one until the story changes, any non-crazy overpricing will be corrected over time, I'd rather ride these out than sell and risk missing out on years of good growth, and non-crazy underpricing will be good for buybacks, so let's do nothing unless in crazy territory". Not to put words in your mouth, but that's how I think about some things :) IMO the biggest challenge with these very high quality businesses is what value to assign to the quality. With a business that is ok-good, it might be fairly easy to say "ok, growth is about X, normalized earning power is about Y, at a conservative multiple it's worth Z, and right now it's selling at 0.6x Z so I can buy and wait for it to revert to about Z". But with high quality 'compounders', I feel like the margin of safety is in the attributes that will protect the business and keep it growing value at superior rates over long periods; if your analysis of these is correct, paying what seems a high price for an ordinary business can actually be a bargain, and if you're wrong, well... It's the same as being wrong on the true IV/earning power of an ok-good business. Your margin of safety could turn out to have been an illusion all along... All this to say that I'm curious to learn more about how you value that quality and how much extra you are willing to pay for it in the case of MA (and V). Looking forward to your next blog posts. Cheers!

http://basehitinvesting.com/some-thoughts-on-markels-intrinsic-value/ More about valuation in general than about markel, but he uses the company as an example so I'll post it here.

That article is from one of our fellow board members, FYI. Really? May he raise his hand, please? I was just thinking yesterday that it's too bad this author doesn't write anymore, and I actually tried to search for another blog or twitter account using his name (maybe he goes under un alias?) and was disappointed to not find anything. Had I known he was here, I would have asked directly :) I'm certainly curious to know if he still holds MA (V?), and what his updated thoughts are.

Good post, wise words.