Liberty

My first iPad was the 3 (first retina model), and I upgraded to the Air when it came out. It totally changed how I use it. If you guys with 3s haven't tried the Air yet, I suggest you give it a try (or the next one will be even better, I'm sure). Reading the specs on paper doesn't do it justice. My 3 was really useful, but it always felt kind of like a secondary computing device. The Air is so much lighter and faster, that makes it a lot more useful and it's now a primary computing device for me. I got an Origami keyboard support thingy for it with an Apple wireless keyboard and the combo has replaced my laptop and it's the only thing I use when not at my Mac Pro workstation (I'm writing this on the iPad Air right now). I use the iPad so much now (reading ebooks, 10K/Qs, web stuff, CC transcripts, listening to audio of calls, RSS feeds, Twitter, email, podcasts, writing notes in investing journal, listening to streaming radio (mostly New Orleans Jazz public radio, if you're curious), etc) that I'm thinking about upgrading this year too, since a faster CPU and more RAM would improve the experience further, and any improvement to something you spend hours on every day is worth a lot. Any new features on top of that (fingerprint sensor, etc) would just be a bonus.

Bearish view: http://y0ungmoney.blogspot.ca/2014/07/credit-acceptance-and-subprime-auto.html (Not saying I agree with it, just posting it)

FWIW, I think this is likely true. Here's a guy that Jobs says "is not a product person" (from the Isaacson bio). Yet, he thought he was the right man to be the next CEO of Apple. After the Sculley disaster, it says a lot about Cook that Jobs picked him inspite of that limitation. That's why Jony Ive was given so much power within the company. It's a bit like how Buffett wants his role to be split between different people after he's gone. Except that in this case, Ive was already there doing much of the work in cooperation with Jobs, so we already know how good he is. I recommend the recent biography of Ive for those interested about him. He doesn't reveal a ton about himself and is kind of media shy, so it's a good place to learn more about how he operates and where he's coming from (early career, approach to design).

I think I just don't understand what it is that you're questioning, so maybe you can elaborate a little bit on what you're thinking? The way I see it, the enterprise is a huge, huge market. It's not Apple's traditional market, and they're not set up to target it. But even without trying too much, their consumer devices are so desirable that people in the enterprise want them; problem is, most big companies want a "solution" package with devices, support, customized software that connects into their various processes, auditing needs, security needs, certifications, etc, and this requires a very different set up than what Apple has. By joining forces with IBM, they get all the pieces that they were missing for free and suddenly their devices now meet the expectations of the enterprise market for a lot more things than they did thus far. When Tim Cook talks about penetration, he means that even if iPhones and iPads are in 98% of the fortune 500, there's huge growth available if you go from 20% of employees using these devices to 60% or whatever. I do agree with that. There won't be another Steve Jobs. But i don't think it means that Apple can't be great. In fact, it's not because Steve was the perfect guy for when Apple was the scrappy underdog that he would be great to lead Apple as what it is today (being arrogant when you are small isn't perceived the same as when you are gigantic). Steve Jobs can't be replaced, but thankfully he wasn't doing it all at Apple and the people who surrounded him are still there. Also, part of his genius was designing the company itself, and it's culture. That can survive him. Maybe not eternally, but so far I think the company has gotten better in many ways. I think people underestimate Tim Cook tremendously. The "he's Apple's Steve Ballmer" meme that everybody repeats is way off base, IMO. Go listen to the interview he did last year at the All Things D conference and tell me that's what Ballmer is like.. It's a bit like Buffett will never be replaced, but part of his genius is finding talent, teaching others, and designing Berkshire so that it can keep going without him, at least for the foreseeable future.

So you're asking, why do they need to make more money? Because money is nice? They're already in the enterprise very broadly, but not as deep as they could be. This should help them go deeper and sell a lot more devices and make services revenues. Not sure how this can be spun as being bad, especially since they're not taking their eye off the ball but partnering with someone who's already good at that stuff. This doesn't even make enough sense to be worth answering. I totally disagree with all this. Steve Jobs was a great editor and a genius, but he didn't do any of it single-handedly, and some of Apple's biggest successes were despite Steve Jobs (he didn't want to put iTunes on Windows, which would've made the iPod stillborn and there probably would never have been an iPhone without that early success...). Tim Cook doesn't pretend that he's a designer. Jony Ive (Steve Jobs' soulmate and the guy who actually designed the stuff that Steve Jobs then critiqued) is still there and has more power than ever within the company, along with his team of designers. Most of the engineering team is still there and they can attract top notch talent. But most importantly, they have kept a strong culture that is focused on the right things - a better than ever in many ways, as we've seen at the last WWDC that blew ever geek's mind by doing more at the same time than ever before - and their products are better than ever (what is worse than early versions?). Are you one of those people who thinks Steve Jobs constantly came out with revolutionary new product categories all the time? Because the iMac was late 90s, the iPod early 2000s, then the iPhone was 2007, and iPad 2010. We're not even late by the old schedule when it comes to entering new categories.

One more business for Markel Ventures: https://www.markelcorp.com/About-Markel/NewsRoom/Reuters1950509

Thanks for the quote. But it seems opposite to your conclusion though. Presumably if AAPL hadn't partnered with IBM, the best alternative would have been to build an enterprise sales force. This deal allows AAPL to focus on creating products. IBM focuses on selling to enterprise. Agreed. Apple cleverly avoided having to build a big enterprise sales organization, which is very different from a consumer organization because you need to customize everything for every big client and give them a different kind of support. They're keeping focus on the products and letting IBM do that other stuff.

Good article about the IBM-Apple deal, and makes a good argument for why this is a very good deal for IBM: http://stratechery.com/2014/big-blue-apples-soul/

http://www.marketwatch.com/story/biosyent-pharma-signs-exclusive-licensing-and-distribution-agreement-for-new-urgent-care-drug-product-2014-07-23-91734413 New licensing deal.

Here's what I'm typing on right now. Works perfectly: http://goincase.com/shop/incase-origami-workstation-for-ipad-2

Good series of short videos of an interview by CNN with Ackman: http://money.cnn.com/investing/bill-ackman-herbalife-exclusive/index.html After a night to sleep on it: http://www.thestreet.mobi/story/12783062/1/greenberg-ackman-and-herbalife--the-day-after.html

I see it as still the same, it's just a precision on how the customers aren't customers in the way the word is normally used for any other business. They're almost all there for something else than the overpriced commodity products ("training" to join the get-rich-quick scheme, doing a favor to a family member who's "training"/selling the stuff, etc). The main thing is the recruiting, not the products, and that's what a pyramid scheme is.

Yes, that's my understanding. And there's nothing wrong with that. If the company is eventually found to be an illegal pyramid scheme that scammed million of poor people, he should probably get a whistleblower award or something.

I think sales will be higher in 3 years. Likely significantly so. When someone says something I disagree with about something that interests me, I want to understand why they think the way they do in case they have a good point and I should change my thinking. When they say something I agree with, that's less interesting. In fact, I find the idea that Apple needs me to defend it pretty funny...

Just had a chance to listen to the call. Overall, I'm quite please with how the business is doing, and am excited about the fall product cycle. Very impressive number out of China and many developing markets.

Not applicable? Let's be more concrete. Do you think iPad sales will be higher or lower than they are now in 3 years?

You didn't understand what I said. I wasn't talking about just the launch, but everything so far. I'm saying that it only looks like it's decelerating because of the huge recent spike in sales, but that's just volatility, and over time it'll grow again (and probably not in a straight line either). If things had happened differently and every quarter had been higher than the previous one in a straight line to the exact total sales of today (in 4 years, in a new category, they sold like 230 million devices), everybody would be saying it's a huge success, but because it spiked up and then dropped back down, everybody seems to extrapolate that recent trend into the future, but I think that's wrong.

I still think iPad sales got ahead of themselves in the past because of a certain "perfect storm" context (I've written about this previously). People fixate on the short-term decceleration instead of the longer term trend. But if you draw a straight line from launch in 2010 to now, it's still the most successful product launch ever and a great performance, especially if you consider that they cost more out of pocket than subsidized phones, that the update cycle is longer than phones, that they don't have carriers with a lot of marketing muscle pushing them, that they can't be carried everywhere like phones, etc.

https://www.apple.com/pr/library/2014/07/22Apple-Reports-Third-Quarter-Results.html

I thought this chart was interesting: Mostly a feature-phone company.

Ackman said he would donate any profits he made from HLF to charity. But it could be a case of the double-standard applied to shorts as opposed to longs. When investors explain their long thesis, that's fine, but when they're short, they're the antichrist. It's kind of ridiculous though to think that there aren't easier ways for Ackman to make money. It's obviously a high-conviction moral thing for him, not some random way he found to make a buck. He cried while talking about how unfair it is for the victims! He knew he would be personally attacked, would have to go through a zillion hours of research, and that this would take a long time to play out (he went through MBIA); why go through all that trouble when he's already a billionaire? I think it's very possible that the perception is that he's arrogant and greedy. But I think he's doing it for the right reasons. I think his main sin is showing how smart he is. Buffett understood long ago that you've got to hide how smart you are most of the time and overcompensate with humility if you don't want people to dislike you.

That's a very short-term view of the situation, mostly reacting to the stock price movement (if it was going the other way would it be said that he did a great job?). You know what they say about Mr. Market. He's fighting a company that has devised a very complex and obfuscated system and will go to any lengths to protect the golden goose. There's no easy soundbytes to unravel it, sadly. Ackman is all about the details, and I think he overestimates how others are willing to follow him through hundreds of slides and connect lots of dots to understand something. He needs an editor to summarize the important stuff and then make the details available separately for those who want them. But regardless of the stock price today, pyramids collapse when they get too big and there's a shock. If he's right about the fundamentals, that's what will matter in the end, like with any other investment, and people will point back to his various presentations as important steps. He could speed things up a lot by providing the shock himself, which is what he's been trying to do. We will find out over time if it worked (ongoing investigations, loss of confidence within the system, law of large numbers, etc). I don't think one day means too much fundamentals-wise, though of course HLF will claim that this means they're vindicated and that cynically promising riches to poor people in supposedly non-retail 'clubs' where new members pose as customers, do unpaid work and buy tons of expensive commodity products for their never-ending "training" isn't just a devious scam (can you imagine any other business operating like that?). What's sad is that the media doesn't seem to be doing much investigative work anymore and just reprints press release or looks at which way the market is going to decide who's right. Too bad.

I have no idea what you mean.

Not exactly. He said he wasn't the one who made the investment in that company at the time he was at Gotham Partners, and he explained what the thesis was at the time.

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?