Liberty

http://files.shareholder.com/downloads/ABEA-4CW8X0/3152651436x0x752463/4d500edc-fd71-4b5b-8b60-542f73d9c64e/Q1'14%20Shareholder%20Letter%20final.pdf • Record Q1 Model S production of 7,535 vehicles • Delivered 6,457 Model S vehicles, slightly exceeding guidance • Net income of $17M and $0.12 EPS (non-GAAP), loss of $50M and $(0.40) EPS (GAAP) • Expansion in Asia starts with first deliveries into China • $2.3B raised in convertible notes offerings • Significant Gigafactory and capacity expansion progress • On track for more than 35,000 deliveries in 2014 There's a letter to shareholders at the link above.

Allergan Q1 results: http://agn.client.shareholder.com/releasedetail.cfm?ReleaseID=845882

Feynman actually used Brazil as an example of how not to run an education system (back when he went there - I don't know if it has improved since). So even more credit goes to Mr. Lemann for surmounting that disadvantage too (though maybe he was lucky and he went to good schools in Brazil).

This post contains a decent primer on what makes QVC a good business: http://oraclefromomaha.wordpress.com/2013/10/08/92/ (and it'll be even better when they merge with HSN; LINTA already owns 40% of HSN and controls it, but HSN sells at a much higher multiple than QVC despite being a worse operation (lower margins, no international growth), that's because QVC is hidden inside the LINTA mothership -- that's what the new tracker is doing, and once QVC trades at a more normal multiple, I expect them to merge and have even better economics).

I don't really see the similarities between groupon and QVC, apart from the fact that both are selling stuff without brick & mortar stores. Everything that makes QVC a good business with a moat and industry-leading margins is absent in Groupon, IMO.

http://investors.livenationentertainment.com/news-center/news-center-details/2014/Live-Nation-Entertainment-Reports-First-Quarter-2014-Financial-Results/default.aspx Live Nation:

Yes, Herbalife is just like the fast food franchise world. Most fast-food franchise owners are regular, non-business savvy people who were out of traditional jobs and kind of tight on money, so to make ends meet they figured, hey, I can be self employed, I'll open a McDonald's! It doesn't matter that their particular McDonald's sells burgers for $15 a pop, the money is supposed to come from signing up a lot of other people to be franchise owners anyway. Who cares that the business couldn't work as a standalone restaurant without the chain-letter aspect when you have a multi-level network of other franchises working under you and sending you juicy royalty checks from all the new franchises owners that they're signing up! In fact, I bet many of the people you see in the Pershing Square video are serial franchisers. I suspect many of them have owned Subways, Wendys, and Burger Kings before they jumped into Herbalife. I swear that lady who looks like a cancer survivor has served me a fajitas somewhere! Serves them right for falling for the publicity targeting them during prime time shows and believing what was drilled into their heads by expert salespeople and true life testimonials from people just like them. I guess my only question is, who here is an Herbalife distributor? There must be many, right? I'm thinking I need to make some extra money to invest, just a few thousands a month, so maybe I should sign up. Can anyone send me a form and show me the ropes?

I noticed this change in how revenues were being booked booked, but I haven't yet had time to figure out that question. This is a legitimate point. This is mentioned here: http://seekingalpha.com/article/2073923-why-chanos-and-grant-are-wrong-on-valeant

I think that's slightly incorrect. They only give parts at a loss while new airplanes/helicopters are in development. Once they are in production, they make money on what they sell to OEMs. It's just that the margins there are much lower than in the aftermarket. They do sell relatively inexpensive parts for which they are the sole source in about 90% of the cases, so it's usually not worth it for anyone else to go through the trouble of developing a competing part and getting it certified for a platform (a process that is long and expensive, and doesn't even guarantee they'll be able to steal much business from Transdigm because there are also non-monetary factors -- airlines care a lot about safety, and won't risk putting a part from a manufacturer that doesn't have the good reputation of transdigm just to save a few bucks. Not a good risk/reward profile). Transdigm is very good operationally too. They tend to buy businesses making margins in the 20% EBITDA range most of the time as far as I can tell, and over time bring them up to their own average which is in the high 40s. Anyone trying to compete with them likely won't have their low costs, so if they do get competition, TDG can probably undercut them and still make a profit because they have more margin to play with.

I think they have a huge M&A runway. The industry is gigantic if you take into account both the commercial and defense side. They barely have started buying businesses HQ'ed outside of the US (they have 4 businesses in Europe, but I think 3 came with other businesses, only one - the most recent EME acquisition - was directly acquired in Germany). In many of their investor day presentations they have slides that show how many potential acquisitions targets they estimate are out there (and what proportion is of what revenue size and EBITDA margins). Looks like a huge fishing pond. Maybe it'll become a problem in 10-15 years, I don't know, but I don't see it for the foreseeable future...

http://dealbook.nytimes.com/2014/05/06/alibaba-files-to-go-public-in-the-u-s/ http://projects.wsj.com/alibaba/

Here is the link to the Henry Singleton episode I mentioned above: http://seekingalpha.com/instablog/315877-the-manual-of-ideas/30189-the-manual-of-ideas-on-business-leader-henry-singleton-founder-of-teledyne-audio There are links to the audio files in 3 different formats right in the middle of it, so you should be able to listen on any device.

http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=1927287&highlight= Presentation : http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjMyOTQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

http://dealbook.nytimes.com/2014/05/05/ackman-urges-allergan-board-to-begin-deal-talks-with-valeant/ Ackman's letter: http://www.sec.gov/Archives/edgar/data/850693/000119312514181838/d721048dex995.htm

http://www.cnbc.com/id/101642613 From the May 5 interview.

Those costs flowed directly to BV. No artificial inflation of BV there! Gio I generalized what you said into "Prem won't overpay" rather than just on a GAAP/goodwill basis. Sorry for the confusion. IV matters a lot more than GAAP, and I'd rather see him pay 3x book for a business that is worth even more than that than 0.4 book for a business that is worth less, and I'm sure you'd agree.

What do you mean? He paid less than BV for those acquisitions, therefore no goodwill was recorded… Gio Prem should have paid even less than what he did for TIG and C&F. But, hindsight is 20/20. That's what I meant. Even below book value, fixing these rather low quality businesses seem to have cost a lot in extra money, management attention and time, and opportunity cost. I wonder what their IRR would look like... I doubt it's too high. I'm glad that Fairfax now seems to be focusing on higher quality insurance acquisitions (f.ex. Zenith). It seems very hard to change the whole underwriting culture at an insurer and make sure you catch and discount all of the skeletons in the closet when you acquire...

I'm definitely ordering this one, thanks for putting it on my radar.

Intro by Prem. https://m.youtube.com/watch?v=5Sa-T9nOxIk&feature=youtu.be Found via Crowdturtle, thanks.

Good post by Glenn: http://glennchan.wordpress.com/2014/05/04/lmcalbtya-malones-cable-strategy/

For those who aren't lucky enough to be at the Markel meeting, @HardcoreValue has been live-blogging parts of it on Twitter:

I wasn't around back then, but wouldn't you say that Mr. Watsa overpaid for some acquisitions that turned out to be very problematic around the early 2000s (from memory: TIG, Crum & Forster).

I've just found out that there's a 8-part TV miniseries that exists based on The Prize. Has anyone seen it? Is it good?

http://online.wsj.com/news/articles/SB10001424127887323330604578142990790347674 From 2012. Via Planmaestro.

I'll take that over the Corner of Berkshire & Sears ;)