Liberty

Part 2: http://brooklyninvestor.blogspot.ca/2014/03/buffett-market-timer-part-2-berkshire.html It includes this interesting aside:

Doom fan I see, Liberty? ;) I still have the box of the original on the shelf next to my desk 8) http://i.imgur.com/GfM14st.jpg Spent countless nights in LANs with my friends, I even built my own DOOM and Quake maps.

He wrote:

John Carmack now works for Facebook. What a strange world we live in ???

It's not exactly like it's a well-kept secret. I think it takes a certain kind of person to really get it and act on it :) Hopefully that movie is as well-made as Moneyball. That would be entertaining.

Very sad news...

I found this a good read and thought others here might enjoy it: http://oraclefromomaha.wordpress.com/2014/03/24/random-thoughts-on-moats-and-competition/

http://brooklyninvestor.blogspot.ca/2014/03/markel-2013-annual-report.html

Thanks for the update, looking forward to your findings!

I've read all the FFH letters and I never got the impression that this was a multi-decade bearish view and that their stock-picking was dependent on their macro views. Maybe I need to read again. Personally, I'm more with Buffett. I believe that people wake up every day and try to find new ways of making things better; building new factories, inventing better machinery, creating new services and ways to delivers them, etc. That's why the lower middle-class today has access to things that only rich people had not so long ago, if at all (cheap air travel, safe and reliable cars, big screen color TVs, large music and film collections, appliances that do a lot of housework, wirelessly networked pocket supercomputers, etc). We can expect a lot of value to be created over the next 10-20-30 years. It's certainly possible to make good macro calls and avoid big catastrophes, as Fairfax did with the CDS during the GFC (though it's also possible to be wrong in such calls...). But being hedged for years and years in a symmetrical way (unlike the CDS) with no ceiling on how much can be lost doesn't make sense to me. You're betting against history and human industry. Even if the market was to drop by 33% (which means we'd be 50% overvalued), this likely wouldn't make up for the lost opportunity of the past few years, and what are the chances of perfectly timing the bottom and removing the hedges at the right time? All the money that went into the hedges up to now could've been used to buy great operating businesses that could easily survive a big recession with Fairfax's backing. Heck, just buying more WFC rather than selling it would probably have been a good idea, as WFC isn't going away any time soon. Anyway, this has been discussed elsewhere so I'll stop now.

What's the RSS link? I can't seem to find it! http://brooklyninvestor.blogspot.com/feeds/posts/default

The epicenter of that crisis was housing, and that part of the economy did go through a depression (in Buffett's words) and will take some years to get out of it and back to where it was: http://www.economist.com/blogs/graphicdetail/2014/02/us-house-prices My understanding is that on the stock market side, it's not like we suddenly realized that almost everything was worthless (like the NASDAQ after the dot-com bubble), but rather that liquidity froze and for a while nobody knew if they could meet their obligations and had to try to sell assets are fire-sale prices to raise cash. Re-injecting cash in the system did help because that was a big part of the problem. Injecting cash in the dot-com bubble would've been pointless. So you looking at the SP500 to see the fallout might be missing part of the story. Look at housing, and at the value of many financials now compared to 2006, and you'll see that the crisis left deep scars (though not everywhere as deep). From what I know, the Great Depression had quite a different effect on the 'real' economy than the 2008-2009 crisis and the reaction by governments was also very different (I've alluded to some aspects in a post above), and so it's not surprising that the recovery to both looks different. Just my 2 cents, though, I could be wrong.

Hi Stahleyp, That's a good point, but at the same time, hindisght bias can go both ways and picking particularly bad periods might not tell us more. Looking back 30 years seems fairly statistically significant, especially since as you pointed out this period includes the GFC as well as the dot-com bust and various other smaller recessions. 30 years is pretty much my whole life (I'm 31), so while it's not going back to the civil war, it's also not like going back just 5 years.. If you go back 30 years from 1982, this probably look different than if you just take a bad decade like the 70s. I also think the future will probably be more similar to the past 30 years than to the 30 years before that, or the 30 years before that... just because the economy isn't a static thing. If a large portion of the economy is now services, software, pharma and other asset-light, IP-heavy stuff, globalized multinationals, etc, it is bound to have had an impact on things like profit margins, cyclicality, and various other trends (which I can't pretend to understand or predict, but I just know that the past 30 years are more similar to present day in many ways than 1900-1930, for example). I think we must be careful to separate business fundamentals from morals. Should we repent or not for some mistakes isn't relevant if fundamentals are doing ok and getting better. It's also important to remember that in 2008-2009, we didn't go through the Great Depression. We avoided it. We had huge liquidity problems and we were on the brink and lots of things went really badly, but we didn't get 25% unemployment and global protectionism and fascist dictators rising and a huge part of the world economy splitting off into communism and such. When comparing, we must look at the differences too, not just the similarities.

Here's a follow up by the author of the piece link in the first post of this thread: http://brooklyninvestor.blogspot.ca/2014/03/buffett-market-timer-part-1-partnership.html

http://bits.blogs.nytimes.com/2014/03/20/apple-after-jobs-pretty-much-the-same-as-ever/

You can certainly see in hindsight that it worked for some, but can you use it looking forward and win more than you lose? I think that's the crux of the matter.

Hi Packer, I was wondering if you had looked at Liberty Global? I know it's probably not cheap enough for you (it's certainly not GNCMA level), but I'm curious to know what you think of the assets, management and their M&A strategy? Any obvious problems you're seeing? I'm looking at it from a "good business at a fair price" point of view. It seems like one that could keep compounding for a long time just by scaling up - running the TCI playbook in the fragmented European market - and buying back shares with the FCF -- a buy and forget about it kind of business.. Thank you in advance.

This post isn't just about wmt, but worth a look. It includes a link to the 1974 wmt annual report. http://philosophicaleconomics.wordpress.com/2014/03/22/wmt/

Something tells me he's going to get some flak for saying that. He is correct though, giving money to Elon Musk rather than to someone like Bill Gates, would do humanity more good and help pull more people out of poverty in the long run. This reminds me of those NPO trying to make a laptop for 100$ or less for the last 10 years. They have been getting grants and donations for many years yet, they can't compete with free markets bringing better priced products. It goes to show that scale and incentives are powerfull tools in regards to success! BeerBaron For things that the market does, definitely. But using Gates as a counter example doesn't quite work IMO because he does a lot of things that the market isn't much interested in because there's not much money to make (ie. medical research into poor country diseases, vaccinating people, etc), so he's definitely making a big difference. But if the Gates Foundation was trying to make a better CPU or lithium-ion battery, they couldn't compete for sure.

I thought this was a nice moment, brought to you by an iPad: http://youtu.be/cU-eAzNp5Hw

He mentioned it here http://brooklyninvestor.blogspot.ca/2014/03/email-updates-not-working.html RSS still works, though.

Hi Sanjeev, and everybody who has the chance of going to the FFH dinner this year. I won't be able to make it because of family obligations. I know its a bit last minute, but I was wondering if it would be possible for someone (anyone, as long as you have permission from the organizers) to put a video camera on a tripod near the stage (if it can be plugged in the audio board even better, but as long as we have sound) and later upload the video to youtube for those of us who can't make it? Or even just an audio recording from a smartphone uploaded somewhere would be really great. These are so interesting that it's a shame they're not preserved online, and I'm sure a lot of people wish they could go but can't for various reasons. But if it's not possible or too complicated, I understand. I just thought I'd suggest the idea. Thanks! :)

Sounds like a great time! I'll definitely be getting the book. Sanjeev is between Guy and Monish.

http://brooklyninvestor.blogspot.ca/2014/03/perils-of-trying-to-time-market-ii.html I thought this was a good read, just wanted to share it with you guys.

Thanks Gio, I was wondering when the whole interview would surface.