Liberty

Thanks Meiroy.

Amazing post, Zach, and I don't even care much about BBRY... I wish more people would do post-mortems like that, there's a lot to learn in there. Thanks for sharing you experience!

http://stratechery.com/2014/smartphone-truths-samsungs-inevitable-decline/

I would not use complex formulas while investing, but I also wouldn't skip a book that otherwise seems interesting because it has formulas. I'm currently about 4 chapters in McKinsey's 'Valuation' and it has some formulas too, but they just help support what they're explaining about ROIC and growth, etc. The book has make clearer some things I had been thinking about for a while about business quality, and just for that the book is already worth it. I hope that Penman's book will similarly contain some interesting ideas that I can incorporate in my mental models even if I never use any of the formulas directly.

Every time I see Vinod Khosla's name I can't help but think about how he used to be a huge cheerleader for ethanol a few years ago. That left a bad taste in my mouth... But thanks for posting the interview, I'll check it out.

It turns out sapphire is awesome (if you can get it):

Got it in the mail. Looking forward to it.

WWTD? (What would Tepper do?) ;)

Great book.

http://dealbook.nytimes.com/2014/07/07/pershing-square-offers-slate-of-directors-for-allergan/

My favorite is Adapt: Why Success Always Starts with Failure, which I highly recommend. I think this book is so useful I have given copies to my daughter and some of my students. That's a strong recommendation. I added it to the list!

Thanks for the recommendation. I've had Schelling's Choices and Consequences (http://www.amazon.com/Choice-Consequence-Thomas-C-Schelling/dp/0674127714/ ) on my shelf for a while, but haven't read it yet. I think it similarly deals with game theory, so it might interest some people here.

http://greenbackd.com/2014/07/07/john-maynard-keynes-and-the-performance-of-value-glamour-and-the-market-1926-to-april-2014/

I've read the first couple of chapters of McKinsey's Valuation and like it so far. Thanks jschembs for recommending it!

Here's a paper by Damodaran on return on capital and valuation: http://people.stern.nyu.edu/adamodar/pdfiles/papers/returnmeasures.pdf

Happy birthday, have a good one! :)

I'm adding this one to the list, thanks guy. Found it while looking up reviews of McKinsey's "Valuation" and then found this thread... Any of you read Damodaran's 'Investment Valuation'?

McKinsey's Valuation interests me... I've read a few reviews on Amazon, but I'd love to get your opinion (or anyone else here who has read it) on why you think it's good and useful, and the kind of stuff that it does well. Is the thinking in the book directly compatible with value investing, or is it more general tools that you can then try to transpose to a different approach? Has anyone read Investment Valuation by Damodaran? Seems like another interesting one.

http://brooklyninvestor.blogspot.ca/2014/07/heinz-update-whos-next.html

I wouldn't recommend buying from a source that infringes on Andrew Kilpatrick's copyright (as I'm pretty sure this PDF is), as he obviously put a lot of work into compiling this book over the years. He also reads this forum, afaik.

Someone made a market order?

Indeed. I think the environment he was operating in had something to do with it too, though. He had more bargains than he knew what to do with and seemed to frequently trade up (or trade down, depending how you look at it), which is something he couldn't do as often when 1) overall valuations went up and 2) he had more money, limiting him to bigger companies.

I also don't think they need it - it would just be a nice way to create a lot of value at once - but even without it I think VRX is still undervalued. They've said recently that if they weren't prevented from doing so by the outstanding AGN offer, they would be seriously looking at doing buybacks right now. They're quite disciplined about not overpaying, and they've walked away from big deals in the past when they could get a price that let them meet their hurdle. They recently said that they have a "walk away" price with AGN, so I'm not worried about them chasing this one to the end of the Earth just to build an empire or whatever. Agreed about the buybacks. Without VRX's offer, AGN wouldn't trade anywhere near where it does now, so it would be a bad move to take billions of debt to do billions in buybacks at this level to try to make VRX go away... I think Valeant's Q2 and especially Q3 will be catalysts. If they show strong performance without any big acquisitions in the recent past, with GAAP and the adjusted metrics converging toward GAAP rather than diverging further, the bear thesis will lose its bite.

loganc, not only that, but if management was so sure that this was a bad deal and they could explain convincingly why to their shareholders, they should welcome a vote on it to be done with it. But by doing all these others things (how does refusing to even meet with VRX management just once help the shareholder be confident they're making an informed decision?), management is showing that it's more about what the C-suite wants than about what the owners of the business want. I sincerely hope you're wrong about them going full retard, because the next step is burning the furniture and flooding the basement to make sure nobody wants to buy the house anymore... (which is kind of what a bunch of crappy capital allocation decisions would be equivalent to) And if they do lever up to buy back shares and VRX still gets a shareholder vote in favor, can't VRX then just issue some equity at the likely high post-deal price to pay back that debt and delever to where they would be if AGN hadn't done that? It would be a pain and might destroy some value, but swapping debt for equity is a reversible thing, so it might not deter Valeant. What might scare them is a sizable, overpaid acquisition that would load the company with assets undesirable to VRX (big patent cliffs, lots of government reimbursed products in slow-growing markets, etc). They could still go ahead and then divest those things the next day, but if AGN overpays they might not be able to get a good price, and what a pain that would be... AGN just needs to let the owner of the business decide what they want to do.

I think it depends what you think the thesis is. I would agree with "Buffett cared about quality earlier than most people think", that he wasn't one-dimensional in his thinking even that early, but I would not agree with "everything he bought back then was high quality rather than cigar butts". There were a bunch of those too, and I'm sure he did quite superbly with them too. It's a bit like Ben Graham is known for cheap stocks but a lot of his returns came from holding GEICO for a long time.