Liberty

Well, Bill Gates and Buffett probably wouldn't publicly recommend a book that is out of print and that most people can't easily get. If it was still in print, maybe they'd have done this 2 years ago or whatever. Maybe they were involved with the reprint, but probably because they want people to read it, not because it's material money wise. IMO this is probably Warren's 'favorite book ABOUT business', but he also has different favorite books about investing (Intelligent Investor, Security Analysis) and such... Everybody has a bunch of favorites and depending how you ask you'll get a different answer, and then the media will punch if up by said it's THE favorite.

Thanks Sanjeev, In part 4 he mentions that he's writing another book, but doesn't really say much about it. Anyone knows what it's about? Has he mentioned it somewhere else?

They make the real money on the aftermarket, so their profitable customers are more those who operate the planes than those who build them. Not much concentration there. As long as planes fly, they'll need replacement parts, and if you look a chart of revenue passenger miles, even 9/11 just made things plateau for a while and 2008-2009 was a small dip, so it would take a lot to keep enough planes grounded to really make a difference... Even in bankruptcy airlines keep flying. Even if all the manufacturers had a big slowdown, individual planes have such long lifes and the new additions from a single year are such a small part of the total fleet that it would take many years of that to make a meaningful difference.

Here's the CS piece. Thank you, much appreciated :)

Anyone have access to Credit suisse's new report? I'd be curious to see how they justify a 230 price target. Thanks in advance.

[amazonsearch]Business Adventures[/amazonsearch] I haven't read it, but it was just reviewed by Bill Gates here: http://online.wsj.com/articles/bill-gatess-favorite-business-book-1405088228 Apparently recommended to him by Buffett as his "favorite book about business". Definitely on my list now. There's a video produced by Gates about the book and author here: Brooks also has a few other books that seem interesting: The Go-Go Years: The Drama and Crashing Finale of Wall Street's Bullish 60s Once in Golconda: A True Drama of Wall Street 1920-1938

I think we have to be careful with comparisons based on just 1-2 variables. There are many more things going on. f.ex., of course valuations will go much lower when interest rates are 8-10% or more than when they are 0-2%. The opportunity costs are very different. Of course marco-economic mismanagement can make a bad situation worse. F.ex. the recent financial crisis would've not doubt been much worse if the fed had cut off liquidity instead of adding some, since most of the problem in the financial sector wasn't that everything was worthless all of a sudden (some stuff was, but far from all), but rather that nobody had cash to finance short term obligations and nobody wanted to buy anything from anyone else until uncertainty was lifted and they knew what was toxic and what was fine. GE and WFC and JNJ didn't all suddenly become worth a fraction of what they were worth the week before, their stock prices didn't fall off a cliff because of a nuclear war that wiped out their factories and customers... The 1970s had all kinds of SNAFUs that made things worse than they could have been with saner policies. Anyway, it's all so complex that I don't find it worth trying to predict. It's fun to read about, but I leave it outside my decision-making as much as possible. If a specific business is too expensive, then it's too expensive.

I'm not calling anyone crazy. But consider the fact that some of those same people who got that call right before the crisis stayed bearish after it and missed or partly missed one of the best rebounds ever. Crystal balls are rare (John Paulson's halo certainly doesn't shine the way it used to). I certainly don't have one. Every time I say that I don't know, people seem to read "I don't think anything can go wrong, the bull market will continue". That's not what I'm saying. Maybe we'll drop 20% tomorrow. But I can't invest as if that's going to be the case, because I don't know. What do you think should have happened? 15 years or bear market? A break-down of the economy, with soup queues in the streets and 20% unemployment? We've already discussed this. I find this moralistic approach (people should be punished for their excesses) not useful when it comes to investing. And it did take 5 years for the market to go back to its high water mark, so it's not like there was no pain (esp. considering the bubble's epicenter wasn't in the stock market).

Who says I'm not concerned? But I'd certainly be more concerned if people hadn't been predicting a crash for years now. I just realize that I have no ability to time the market - what if I had decided last year that things were too pricey and went to the sidelines and missed 2013? that's an opportunity cost just as bad as not foreseeing a drop - so I don't try, and that goes for either up or down. And I don't think that much about the market in general when making investment decisions, because I don't buy indexes. As long as I find businesses that I like and that are selling at prices I think are fair, I don't feel I have to wait for the next correction to buy because what if we get a 10% correction after another 30% run up? I bet a lot of people in late 2012 though they should just wait for a big drop before buying something... I wonder if people would be as worried if we weren't in "all time high" territory. I think it's a normal thing in a world where the population and economy are growing and there's inflation to eventually start hitting all-time highs and keep hitting new all time highs for a long time (ie. look at most of the past century). There will be corrections, and recessions, but who knows when? Tomorrow? In a year? We hit a plateau for a while? Doesn't mean the landscape will be like in the 2000s, that's just the recency effect. It could be worse, or it could be much better... No idea. People will always point out the long list of reasons why everything's about to go to hell, but that list has always been there (as Buffett says, look at what the world went through in the 20th century and look at how the stock market did -- now look at what above average capital allocators did over long periods of the same). As long as the people I invest in are really talented at creating value in all kinds of conditions, I think in the long term I'll do all right.

http://www.macleans.ca/economy/realestateeconomy/why-canada-isnt-immune-to-a-u-s-style-housing-crash/

Just to invert a bit on the starting point that shorting is out of favor right now; What's the right level of shorting anyway? Is it possible that the 2000s have accustomed us to a certain level because we had two huge crises? What was the right level in the 1990s? 1980s? 1970s? 1960s? 1950s? etc. I don't have an answer, but I think it's an interesting question. Maybe too many investors are still fighting the last war and are expecting a repeat of 2008-2009 any day now?

http://www.peridotcapital.com/2014/07/sears-holdings-confirmed-third-party-tenant-leases.html

I agree. I also would have liked to see a tender by AAPL. But at least they used ASR opportunistically to, f.ex, grab $14 billion in two weeks when the stock dropped, so it's not like they're just buying in a straight line regardless of price. http://www.reuters.com/article/2014/02/07/us-apple-repurchase-idUSBREA1606820140207

Nothing goes up 16,500% in less than a year just because of liquidity issues. Something seriously weird is going on here, and I pity anyone who has lost their kids college funds in the past few months shorting this...

http://www.businessinsider.com/a-closer-look-at-introbizcom-2014-7

http://www.thereformedbroker.com/2014/07/10/the-only-reason-investing-works-is-because-things-can-go-wrong/

IMO eventually Amazon will release its Firefly shopping app to all platforms (once they realize that their Fire phone is doomed to niche status) and there will be a lot more 'showrooming' going on, as long as Amazon has better prices. Others can make great ecommerce sites if they want, but if they want to maintain their margins, it means that amazon will have a price advantage, and if there's very little friction finding what you see in the other store on amazon, that'll hurt. Not everybody will do that, but probably enough people for it to matter...

I'm not sure what you meant here. ???

http://brooklyninvestor.blogspot.ca/2014/07/catmulls-mental-models.html

http://brooklyninvestor.blogspot.ca/2014/07/cost-cutting-r-etc.html Touches on Valeant, among other things (Apple, R&D, cost cutting, 3G, etc).

Thanks Sanjeev! :)

Thanks Ham, interesting read.

If you know the result, any bet is a good bet. I know that. I just meant that we're not talking about the same thing.

I meant the result. I would never make a bet like that.

I'd say that's a pretty good bet: