Liberty

I know Mr. Market will always do whatever he wants to do, but I always find it amusing to see how Alderon and Altius stocks are so disconnected. Alderon was up almost 10% last I checked, and Altius was down a little. Yet anything that improves the chances of the Alderon mine being built is significant for Altius' future value (both because they own a huge block of stock and because of the royalty). Not that I mind... Maybe someday they'll announce full Kami financing and ALS will barely move and I'll be able to pick up a few more shares...

Is this what you're talking about? https://www.motifinvesting.com/ First I hear of this, I had to google it... At first glance, I don't really see the point of it.

You could add ROIC metrics to the screen. A business with high enough ROIC could return a big part of its earnings and still do better than one that retains more but with a lower ROIC.

Interesting piece on how Amazon might be losing its strategic focus: http://stratechery.com/2014/losing-amazon-religion/

No idea. But he certainly believes in printing money as part of achieving a 'beautiful deleveraging' and helping the real economy. I don't really care about that as long as the logic is sound. People are not right in function of their portfolio or reputation size. John Paulson hasn't exactly been right on his gold call... And I wouldn't be surprised if he's investing millions of his own money. If you follow him on twitter for a while, he sounds a lot more like an experienced investor/trader than an academic economist, despite his brilliance there too.

http://www.uwpgroup.co.uk/wp-content/uploads/2013/10/watching-a-lot-of-tv.jpg

Hey, I'm not fond of these discussions either, and I don't mean to be picking up the baton from others who have been challenging you, but I just think it's kind of a straw man to only see two scenarios: Either he's a totally rational player, a kind of uber-Munger, or he's a total crook who will abscond in the middle of the night with the loot. I think the reality is probably somewhere in the middle. He seems to like to structure most things to advantage himself over his shareholders (look at all the stuff with his fund), he seems to be ready to say certain things to convince others, and once he's got his way, he doesn't think twice about going against his word, he seems to have a big ego (putting his name everywhere, drawing obvious comparisons between himself and Buffett on purpose, etc) and drink his own koolaid, which can be a sign of danger, etc. A lot of his early fans, who know him best, feel betrayed and are now his biggest detractors (ie. Sanjeev). All that's enough for me to not even care too much what the business is (and the notion that unsavory individuals can only be found in businesses with bad fundamentals is also flawed, IMO), there are other places where I can put my money where I don't have to wonder this much about management.

This doesn’t mean it isn’t bad business. It simply means those who choose it don’t recognize it is bad business. That's why imo you are undervaluing Biglari. Instead, I think he recognizes good business from bad. Gio What I'm saying is I don't care how good he is at business because I don't trust him. And as others have pointed out, it's not because he's good at enriching himself that you, as a minority shareholder, will benefit.

Ok, then it is rational to think Biglari would choose to end up like the ex chairman of Enron… worth some millions, when instead he could be worth hundreds of millions; permanently cut off from business, when instead he could be leading a thriving and successful enterprise… ::) As I have said: bad business. Gio Nobody chooses to be disgraced, yet in the end, many still are. Nobody does something bad thinking that it won't work or that they'll get caught (in fact, they often convince themselves it isn't even bad in the first place). They all think they can get away with it.

Ackman says the 90 day "cooling off " period between signing up and opening a nutrition club induces people to partake in the training- I feel like that's a stretch. It stops someone who has the means to just purchase a supervisor package and just opening up a club from doing so. Ackman claims that making bop people consume these shakes during the training process introduces a sense of path dependency due to sunk costs. But this is specious because each of these people taking the class doesn't actually open their own nutrition club - most don't. I'm having a hard time finding herbalife corporate's club 100 advisory. The herbalife nutrition club guideline doc is most searchable and clearly states that attendance is not mandatory/making shakes unpaid cannot exceed 2 hrs, etc... In theory, theory and practice are the same. In practice, they aren't.

Agreed. I've been reading his blog for a while and have posted a few of my favorite pieces in the Macro Musing discussion thread.

There's always something that is blamed when things go wrong. Price controls, the cold war, OPEC embargoes, hedge funds, HFT, globalization/outsourcing, wars, politicians, etc.. Personally I'm not as down on the fed as you are. I used to be, but the more I learn from smart macro guys like Dalio, the more I realize that deflation is bad and that when credit goes "poof", you need someone to step in and add liquidity or you get in a downward spiral that is very hard to get out of. If the fed wasn't doing what it's doing, we might be wishing it was (see the great depression when monetary policy was tight at the wrong time).

http://investor.siriusxm.com/releasedetail.cfm?ReleaseID=862557

http://investor.siriusxm.com/releasedetail.cfm?ReleaseID=862557

I think there's a big difference between a correction and a bubble bursting. I don't think anyone here is saying that a correction is unlikely at basically any time. You just need some random event to want to make everybody hit sell at the same time. But a bubble bursting usually takes years to sort itself and wipes out whole sectors of the economy, and it scars people about a certain asset for a long time. I think we could have a correction tomorrow, but I doubt that we're in a bubble/mania. I don't remember who said it, but there was a quote in another thread about how we're the bubble generation and seeing bubbles everywhere because we had 2 in a decade, but for most of the past century, bubbles weren't really a frequent problem. There were corrections and recessions, but it's not a given that there's going to be a bubble every 5 years.

http://www.marketwired.com/press-release/alderon-announces-off-take-transaction-with-glencore-tsx-adv-1933512.htm

A Former Enron Chairman Is Selling His Texas Mansion For $14 Million http://static1.businessinsider.com/image/53d664b56bb3f76d3b523a5c-921-690/john-wing-enron-house-20-2.jpg ;) http://www.businessinsider.com/enron-chairman-selling-mansion-for-14m-2014-7

Maybe Gio wouldn't have to spend quite so much time defending his approach if people accepted that it works for him and stopped constantly challenging him. Just saying. I think it's great that he's transparent about his process and framework, and I wish more successful investors did the same so we could all learn what works for different folks and maybe incorporate some aspects into our own approach.

Why would that impact a decision whether to invest or not today? Rear-view vs. windshield. I think it can matter if the thesis has been "any day now, you'll see" for a decade. The windshield has been foggy for a long while...

I was paying attention a little bit to the market, but I was just starting out managing my money. I was mostly in a low-cost bond index and cash, with a little in a TSX index, iirc. I remember constantly reading in the Economist about the goldilocks era, and then about some problems with the subprime and banks, but how it'll be contained... until all hell broke loose. Not that I can predict what the market will do, but now does feel different. You can't read two business articles without reading about 2008-2009, and there's frequently people on TV calling for a crash (well, I don't watch financial TV - don't even have cable - but I see the headlines and clips online). I kind of feel like people are happy about the bull market, but they can't really believe in it... Like their heart has been broken before, so now they have this fear of commitment.

One of the thing with permabears is that when they are right, they are hailed as visionaries, but if you look at the whole picture, I bet you'd often see that you'd have been better off buying an index fund and just riding through any crisis than trying to time things following their advice and ending up on the sidelines or hedged or in bullion or whatever, missing years of good performance (and the better you are an investor, the higher your opportunity cost of not spending these years finding good businesses). I prefer the approach of buying things that will do fine in good times as well as in a recession (either they have a good M&A track record and will pick up assets at low valuations, or do buybacks, or their competitors will suffer more than they do so the field will be less crowded, etc... just constructive stuff that will create value for the next up-cycle). That's easier than timing the market, IMO.

These guys used to have a free site of value investing in French, and they've recently started a paying investment club with lots of analyses and interviews and such. I'm not a member, but they have some free materials like that (I posted another one in the LMCA thread about the Malone complex of businesses). The URL of their site is at the end of the PDF (don't want to seem too promotional about it).

Yeah, he's super bullish. He does give a wide range of potential values to the RE, but he seems way more bullish on SYW than even most raging bulls here. But even if you discount that, his sums of the parts analysis still gives a big margin of safety... But even with that, it's still not the kind of business I want to own now. I'm done with ugly. Maybe it'll turn into something I want if the "Lampert turns it around, extracts tons of value, and makes it his vehicle" thesis is true, but it's been a lot of years of much smoke and little fire so I don't feel the need to hurry (not to minimize the important structural work that has been done over the past 5-7 years, but it's still not exactly a FCF machine).

That's why I say IF the thesis is that this will be a long-term compounder and not just a single pop back to IV. If once it gets going it's expected to be doing 20%/year for 10-20 years or whatever, it doesn't matter that much if I miss year 1, even if it's the best year. But if it pops 100-200% and then kind of flatline, obviously I'd have missed it and oh well. I'm ready to take that risk (can't win them all).

Sure. He constantly mentions his mistakes. I don't think he's pretending to be batting a thousand. He's still been doing pretty well for almost 15 years doing what seems to me one of the hardest kinds of investing (concentrated portfolio, high-profile activism), and that's not nothing. I certainly wouldn't want to be doing what he's doing... If you're going to go through all that trouble, you'll need a situation that is almost binary. You can't do all that and just do a little better than you would otherwise, or do something that anyone else could do. So there are big homeruns that pay for the big failures (GGP vs. JCP) and in the end the average seems pretty good so far. As I said, if I learn really terrible things about Ackman, I'm going to change my mind about him.