Liberty

Not regularly, no. When someone points something out specifically as being interesting, I'll read it.

Interesting piece on profit margins mean reverting or not: http://philosophicaleconomics.wordpress.com/2014/05/25/profit-margins-dont-matter/

Most gasoline stations have pumps that work on electricity, as far as I know. There are all kinds of problems that have been solved for that infrastructure that will be solved for electric cars as they become more common and it becomes worth solving those problems on a larger scale, but I don't think that any of them is much bigger than the equivalent problem for gas/diesel cars. Another way to think about it: There's a thousand ways to make electricity and in most places electricity is everywhere, but there aren't that many ways to make gasoline and apart from gas stations it isn't found around much. You are more vulnerable to supply shocks with a gas car than an electric car.

[amazonsearch]Education of a Value Investor[/amazonsearch] It's not out yet, but you can pre-order it. As Sanjeev pointed out, it was mentioned in this WSJ piece: http://online.wsj.com/news/article_email/SB10001424052702303749904579580173018598720-lMyQjAxMTA0MDIwMzEyNDMyWj

How would anything electric work? If you live somewhere where that happens with enough frequency, you probably have a diesel generator (or even better, solar panels). But if it's just your home/neighborhood that loses power, you can always go charge at a public charging station/Supercharger Station/a friend's house/a mall with electric car stations/whatever. Here some grocery stores and dollar stores have started getting electric car charging stations, they'll be everywhere soon.

Looks like the WSJ piece made a nice impression. Guy's book was about 300 in overall sales and #7 in the Investing category on Amazon, last I checked. Not bad for a book that isn't out yet. I bet many people don't pre-order and just put it on their wishlist (as I did).

http://www.simoleonsense.com/lessons-from-cable-cowboy-john-malone/ Excerpts from the book.

Thank you. I'm looking forward to his book! I'm definitely listening to this now. I think I've read a transcript in Charlie's Almanack, but I want Munger's delivery (and I think there's a Q&A at the end): Great process:

https://www.santangelsreview.com/2014/05/23/david-einhorns-comments-at-the-greenlight-re-glre-investor-day-on-may-20th-2014/

Well, of course R&D at VRX will be more effective than elsewhere… after all that’s exactly what VRX is supposed to accomplish: to cut financially unjustifiable R&D costs! But I have also listed 3 other ways Mr. Pearson & Co. might succeed in increasing the true worth of the businesses they purchase over time. I look at it this way: it is not as if VRX will “invest for growth” less than its peers; it will invest the same amount, or probably even more… But it will invest DIFFERENTLY. Instead of going "all in" with R&D, Mr. Pearson will spread the funds at his disposal among a), b), c), and d)… Result: the businesses VRX buys will become more and more valuable! Is this “blind trust” in Mr. Pearson?! Well, of course you must believe he has the right capabilities to correctly invest in a), b), c), and d)! But you also must understand the business model, and why investments in a), b), c), and d) might work much better over time, than simply betting everything on R&D… In other words, you must understand the business and judge the quality of management… Is there anything else about investing? Gio Exactly. VRX is also investing heavily into its sales force, which is another way to get organic growth. Management seems to think that this gives better returns per dollar invested than equivalent R&D investments for certain product lines.

Interesting that Danaher is #2. I wonder if the Rawles will be able to do it again with Colfax.

I don't think recalls are a problem. The problem is when companies should have recalled something dangerous and didn't, or do it too late or reluctantly, or aren't transparent enough about what's going on, etc. Or when a recall reveals a serious design flaw that erodes consumer trust in the safety of the rest of their vehicle ("if they missed that, what else did they miss? did the B team work on my car?"). So far Tesla has gone above and beyond on that front. After the media ruckus over a few cars catching fire after really severe accidents (something that is more likely in a gasoline-powered car because the gas tank is much more exposed and gasoline is more flammable, btw), Tesla concluded that its cars were safe, nobody was harmed either, etc. So no need for a recall, just a minor software update to change the ground clearance by raising the dynamic suspension a tad. But they still offered to install titanium armor plates and aluminum deflectors free of charge to anyone that wanted them to further reduce the already minimal risk. That's a good way to improve trust in the brand. It's kind of like the old story that they always repeat about how JnJ recalled all Aspirins in the US after a couple bottles were found to be tampered with or something like that. There are ways to handle a crisis that makes you come out looking better than you did going in...

QVC investor day audio is now up on site. Slides here (warning: 43-megabyte file): http://ir.libertyinteractive.com/common/download/download.cfm?companyid=AMDA-GY7JI&fileid=757050&filekey=4cc392b1-9bf8-4955-80c0-ae1eb0b73b69&filename=InvestorDay_Webcast.pdf Nice slide on margins in the industry: http://i.imgur.com/vDX5W9N.png

http://qzprod.files.wordpress.com/2014/05/output_masynl.gif?w=640&h=426 http://qzprod.files.wordpress.com/2014/05/output_gjwmv9.gif?w=640&h=426

There's definitely a list of pros and cons for each. For each of those pros you listed, one could find cons like: You can't move as easily, whether just because you want to or because you lose work and need to find it somewhere else, or you need to get closer to a sick family member, etc. Some friends of ours are moving to another province because they want to adopt a child and it's much easier over there. They're having a hard time selling their house and feel kind of stuck where they are... You are on the hook for all maintenance, repairs and problems. If your neighbours suck, you'll probably be stuck with them for longer. If you have a mortgage, you are levered to real estate prices. Might be great if you bought at the bottom, but not so great if you buy at the top... A small move in price could wipe out all your equity (which is just as real as if prices were quoted every day like stocks, even if you don't see it as much). Etc. I think a lot of people look down on renting partly because of social pressure, but partly because they compare the crappy student apartment they had with the nice house they now have. I bet if you compare renting a nice house or apartment, the quality-of-life issues are a lot less problematic.

True. That time isn't now, though, IMO. If you are living in it - might as well be now - this is like waiting to buy Berkshire A in the 1970s at low valuation. Here's the competitive advantage of real estate in Vancouver (i can't speak for the rest of the country): - the warmest city in Canada - protection from the US (real or not - that's how Asians perceive this) - 1st world country - decent education - within 10h to Asia (where healthcare wait time is 1h) - diversity The condo market will definitely correct - but if you think about where the top 1% of the world wants to live -- you know, those sitting on over $50M in asset no where else to spend - they don't mind dropping $5M for a piece of land in Vancouver most of these buys we are seeing are all cash purchases too - so it's not 100% leveraged like it was in the US. I agree things are expensive; but if you look hard there's still "reasonable" prices out there and can be good long term tax free investment..... Gary Personally, I think Canada is in a pretty big real estate bubble (compare to historical rates for rents, incomes, compare to US, compared to after-tax income even at these low interest rates, compare to anything). Some places are worse than others (Vancouver, Toronto), but it's not just a local thing, the whole country is too expensive and people are piling up more debt than the US had before their bubble burst. What can't go on will stop at some point. I plan to keep renting until things get more affordable. The argument that Vancouver is so great so that explains why crack houses from the 60s are selling for a million bucks isn't convincing, IMO. A lot of great US cities with a long list of attractive characteristics had huge declines in 2008-2009. It's all about sentiment. People feel things can't decline so it's worth paying anything because you'll pay more later anyway. Once sentiment turns...

True. That time isn't now, though, IMO.

http://www.bloomberg.com/news/2014-05-21/bofa-said-to-end-market-making-unit-amid-trading-scrutiny.html

Excellent post, JAllen. Thanks! The Malone comparison when it comes to avoiding taxes is very apt, IMO. Better to spend that money to invest in growth than to pay it in taxes, even if it makes GAAP earnings look horrible.

New product launched today: http://www.marketwired.com/press-release/biosyent-pharma-launches-new-repagyn-hormone-free-vaginal-suppositories-tsx-venture-rx-1912515.htm

I don't know BNL and KMI, but to me MKL gets a management quality premium. I know they won't do stupid things, will be shareholder friendly, and will allocate capital well. That's subjective of course, but it still matters a lot, especially if you intend to hold for a long time. I also think that soon because of Ventures, book value won't be as clearly linked with IV as before, kind of like BRK, so historical comparisons of valuations aren't apples to apples.

Good read on profit margins: http://philosophicaleconomics.wordpress.com/2014/05/21/profit-margins-accounting-for-the-impact-of-a-changing-financial-share/ It's a follow up to this one, which was also very good: http://philosophicaleconomics.wordpress.com/2014/03/30/foreignpm/

I wrote that totally calmly. No killer here. I just didn't like the sub-text of "you write this because you've been seduced, not because you've thought it through". But if that's not what you meant and it wasn't directed at me, apologies. That's the problem with the ambiguities of text. That's awesome. I'm just telling you what I think of it and why. Isn't that a discussion? To me it sounds like saying that the original iPhone was a proof of concept and that Apple should then have stopped making it and become a supplier of parts to the smartphone industry, mostly focusing on phone chargers and batteries.

Seduced? I never owned a share of Tesla, I think it's probably pretty overvalued. But the stock and the company are two different things. I think I understand the company pretty well. You're the one saying that the best car maker in the world should stop making cars; maybe you are seduced by a certain business model and are trying to force it into places where it doesn't make sense?