Liberty

These two were my guess (legal and travel expenses for MOFCOM, and legal and bonus expenses for selling Dresden).

Yes. Did you get the feeling that he has lost a little money and wanted someone to suffer for it? That guy was intense. The questions were fine, but the tone was total condescending d-bag squared.

Mentioned on CC about buybacks: They were blacked out for most of the time since the NCIB was approved and couldn't buy. They tried to buy large blocks during the short non-blacked out window, but weren't able, and didn't want to buy just small amounts that could've raised prices for larger blocks. So it seems like the intention is to buy relatively large amounts.

The CC is at 12 EST, so it hasn't started yet.

It looks like you might have been right, at least so far.

Sapphire screens at some point? http://feedly.com/k/18p1sh3 Any manufacturing technique that requires a particle accelerator will leave some competitors behind...

I don't expect the stock to move up before January. Too many people just waiting for any uptick to sell and get a tax loss for the year. But I'm happy to be proven wrong... But starting next year, without that pressure, with Landquart breaking even or making some money, the cogen, and thurso closer to full ramp up, even with the tariffs (which hopefully drive DP prices up by more than 13%), things should get more interesting. But now we also have to keep an eye on NBHK prices (and remember they have capacity for 250k tons of that, not 200k tons like DP). Hopefully that holds. Ah, the joys of being levered to commodity prices :P I wish they had gotten that subsidy to switch to natural gas at thurso. Anything to bring costs down...

I checked with IR on the same on a similar question, they said no impact on co-gen re: NBHK. Good, thank you!

Does anyone know if there's an impact on cogen capacity/efficiency if they switch to NBHK? My understanding is that a big part of what they were burning will end up in the final product (lignin) with NBHK, so if they swing that way for a while and they run out of what they stockpiled, do they need to buy more to use as fuel? Or maybe there are sawmills in the area who would be glad to get rid of the stuff and it's not a problem, I'm not sure. Either way, probably not a huge expense, and maybe they'll never go NBHK long enough for it to become a problem, but I'm curious if anyone knows about this would work.

My feeling is they're still trying to see if something can work for LSQ or not, and in the meantime, they're holding on to all the cash they can. That's the main thing I can see for not at least buying back some debentures at 60-70 to reduce their interest expenses.

I know this has already been posted, but worth posting again: http://www.nfpa.org/research/fire-statistics/the-us-fire-problem/highway-vehicle-fires So if you had 20% market share, you could expect around 37,000 of your cars to catch on fire each year. Imagine if the media covered each one...

Thanks bmichaud.

Let's agree to disagree. I think Apple is cheap, you don't. We'll see who's right over time.

I meant that it's possible to overshoot on CPU speed and things like that, making something that is more than your average user needs. But it's not possible to overshoot on ease of use and quality of experience; nobody will ever say "this is too intuitive, too fun to use, too pretty, too delightful, it meets my needs too easily and without friction". That stuff is hard to get right, you need a company focused on the right things and with the right culture; if it was easy to just decide to wake up one morning and become good at design and UI, Microsoft would be a very different company. Apple has never had the majority of users in anything, and they don't need them to thrive. They just have the most profitable ones. I never said it wasn't material, just that most people are looking at it the wrong way. You mean like Blackberry? Sure, if that happens, it's really bad. I just don't think we're anywhere near there yet. You mean that Android makers, with their smaller margins, will have an easier time securing supply than Apple with its big margins? I think their money is just as green. The only reason for supply problems are timing issues (ie. trying to get something out for the holidays, but your suppliers have lower yields, etc) and Apple's scale. It's quite hard to make tens of millions of a new technology like the fingerprint sensor or the iPad Mini's IGZO retina screen. If Apple was selling as many devices as Nexus phones and tablets, I'm pretty sure there would be no supply problem. I think that survey makes no sense, even by JD Power's own criteria of giving a 16% weighting to price. So yeah, I heavily discount that survey because it makes no sense. And even if you take it at face value and people give top scores to Apple in every category except price, yet Apple still sells a ton of devices, it doesn't seem like such a problem. That's exactly what Apple has been doing, making its OS updates free. It doesn't mean that having the best OS isn't a great way to sell hardware and services, though, and making that OS exclusive to you is an advantage when everybody else is using the same OS and so lack differentiation. Apple makes money on hardware, not software. They've just had a very well received product cycle update, selling a record number of iPhones at launch, without having to reduce their prices, and it's a "S" year. Next year will be even more attractive because the iPhone 6 will actually be visibly different (probably bigger screen model too). They still have tons of opportunity to expand internationally (few stores in China, no China Mobile deal yet), they are buying back tens of billions of dollars of shares, the tablet and smartphone markets are growing fast and the Mini retina with A7 should be a monster once there's supply. Things look good for the foreseeable future. I'm not saying I can see 15 years in the future (did you see far ahead for Blackberry?) and know what will happen, but to me Apple is undervalued and the foreseeable future looks quite good. If Android phones become similar enough to iPhones in the ways that differentiate Apple, I'll be worried. Right now I don't see it, and reviewers agree, as well as all those people at the top end of the market who buy iPhones when they could buy less expensive Androids. I think that you can't overshoot on ease of use and quality of experience, and as long as Apple stays ahead and others don't radically change their approach, the value proposition is different enough even if that doesn't show on a spec sheet, so things are not likely to change. We'll see what happens.

I compared it to BMW, actually. And I meant for quality, not exclusivity. And yes, the bottom end of the market that cares more about saving a few bucks than the experience, and won't spend on apps and music and movies and services, these don't "have money" and aren't targeted by Apple. Doesn't mean you have to be a billionaire, though. Are you doing this on purpose? Do you think I meant it as: "They sit down and write a list of criteria, and on it is 'find the very best'". No, they look at a bunch of products, and one of them has the best build quality, best looking interface, smoother animations, best graphic design, best apps, best brand, best buying experience, things are more intuitive, etc.. And it feels like the best thing they can get so they do. Mass-market in how many they sell, high-end in quality, and affordable luxury in branding. That's not what we were talking about. You were talking about how many luxury automakers there were out there. I said that mobile computing devices are different because there's huge network effect, so huge barrier to entry for new ecosystems. This means that you won't have a ton of different new OSes, and we'll probably stay with iOS, Android, and maybe Windows for the foreseeable future. So while a few companies can make phones to compete against Apple, their differentiation is seriously limited because they all run the same OS, kind of like the HPs and Dells and Lenovos out there are less differentiated from each other when compared to the Mac.

Strawman, I never said it was some exclusive product. When I call it high-end, I mean in the quality of the hardware and software. I called it "affordable luxury", which is what it is. Strawman. I don't believe Android is trash or a poor copy. But to me it is inferior in many ways that matter. It doesn't mean that nobody can prefer Android or like it. Strawman. I never claimed that. Sure they're competing in the high end, I never said they weren't. I just don't think they're close to being as good, and Samsung spending 11 billion in marketing and sales commissions and still generally having lower prices probably helps. I don't see that happening in the near future. But longer-term, who knows. But even that doesn't make much sense as criticism; the Mac isn't a small part of Apple's profits because the Mac did badly. It's small because they had huge massive successes with the iPhone and iPad. Pricing is not what matters to me, it's user experience. When Samsung makes a user experience that I feel is as good as Apple's, I'll be ready to sell my shares. No, but as I wrote earlier, general computing devices have huge networking effects and ecosystems matters a lot. Is there as many OSes in PCs as there are car companies out there? Why not? Well, same in mobile: There's space for 2, maybe 3 OSes, so I'd be very surprised if the high end fractured much.

I give up. Strawman someone else.

I don't understand why you're saying this. I never said that because the iPhone was best everything else wasn't "good enough". My whole point is that "good enough" doesn't matter in ease of use and quality of overall experience, you can't overshoot on those, and that as long as Apple makes better products than the competition, they'll get the money of the top end because these people want the best, and they won't say "well, Android is now good enough, even if Apple is better I'll just use Android because it's "good enough". No, they're looking for the best overall experience. Heavy smartphone users with money spend their lives on their mobile devices, and they won't care about saving a few bucks if it makes their experience worse. A Corolla's good enough, but the top end of the car market has money and wants the best and so won't settle for it.). They're a niche device that takes pretty much all of the profit in the consumer PC market, has a thriving software ecosystem, and has been outgrowing all competitors for 10+ years. Not bad. I'm not sure I understand your question about Samsung. Sure they're higher-end than most, but they're not Apple level overall in user experience, both hardware and software. It doesn't mean it's a bad strategy for Samsung. They'll make a ton of money I'm sure. But based on what I've seen, I'm not afraid that tomorrow Samsung will release a phone that will be better overall than the iPhone or a tablet better than the iPad. Now that would be a big problem for Apple. On average (especially before the 2008 recession), people didn't keep their cars that much longer considering it's something that costs 30-50x more... But still, I fail to see how that makes them so different. They are consumer product bought by the people who use them, to be interacted with closely very frequently. That's why people care a lot more about features, brand, design, quality, user experience, etc, than with products that are a lot less 'personal' (a gas furnace, a dishwasher, a septic tank).

Exactly. And the vast majority of people buy Android, but the top of the market, where the money is, most buy Apple. I never said that most people bought Apple or knives made out of S30V steel. What I said is you can't overshoot in ease of use and quality, and the top end of the market will follow you as far as you go, not that average people will all use luxury brand because nothing else is "good enough". I would also say that a washing machine is closer to a gas furnace than to an iPhone. Depending how you define things, it's not the same kind of consumer product and isn't judged the same way. A car or a computer is probably closer in how "consumer" it is. One more thing to keep in mind about "market share": http://www.theguardian.com/technology/2013/nov/07/android-market-share-smartphone-users-google-apple Which is why the usage surveys are so telling. That JD power thing made no sense at all. Apple beat it in all categories, except in price, but even that highly depends how you count price and for which models http://techcrunch.com/2013/11/01/jd-power-explains-why-samsung-beat-apple-in-its-latest-tablet-study-price/ But saying that Samsung beats Apple in a quality survey because of price is like saying that a Corolla is a better car than a BMW 3 series because it's cheaper. If the top end were to fragment heavily and Apple only had a slice of it, maybe that'd be a problem. But Smartphones and tablets (which are basically general computing devices) aren't watches. They have strong network effects and ecosystems matter. There's a winner-takes-all aspect which means that we probably won't see much more than 2-3 platforms. I doubt the high end will fragment, and Apple can retain a big chunk of where the money is. And Apple is affordable luxury, it's not Rolex, so let's not get carried away with the implications of the word "luxury". True, but it's less subjective for computing devices than for wines. Exactly, except imagine a world where there's just 2-3 car makers. There are many reasons why people pick Android, but I'm pretty sure one of the biggest ones is price. Sell the iPhone for the same price as the competition and you'll see what happens to Android's perceived advantages over the iPhone (especially after they have a model with a bigger screen -- Apple has always taken its time to get things right, but they do give people what they want eventually (ie. iPad Mini)). The Feynman quote is very good - in fact it used to be my signature on this forum - and I encourage you to also apply it to yourself..

The iPod wasn't just the iPod, it was also iTunes. What did the Zune have? It's not just about comparing specs, it's about putting an easy to use and useful product in people's hands, and the Zune was too little too late. People also had little trust in microsoft because they knew their other products; that trust has to be earned, and it has value.

Thanks, good read.

Hi Eric, Thank you for being so generous with your ideas with the board. I was curious to know what you think of AIG. I know you used to own it a little while ago, but you seem to have stopped posting about it and I was wondering if you had stopped following it, and if so why. Did it get too expensive for you? Is it too unpredictable compared to BAC so might as well put it all in BAC? Did you see something you didn't like in management? Something else? Thanks.

http://www.asymco.com/2013/11/04/do-ads-work-the-ad-budgets-of-various-companies/ http://stratechery.com/2013/clayton-christensen-got-wrong/ If there was a 'good enough' in consumer product when it comes to ease of use and quality of experience, the world would be a lot different and Macs would've stopped selling years ago when windows got "good enough" and Porsche and BMW would've stopped selling decades ago when the average car got "good enough" and fancy kitchen knife companies would've stopped selling when the average knife got "good enough", etc. That mentality comes from the corporate world where buyers and users are different people, and buyers judge things on spec sheets (easily quantifiable things, unlike user experience, which buyers don't care much about beyond a certain point because they won't be the ones using the products). That mental model doesn't work for consumer products like those Apple makes. But in all markets (Wine, audio equipment, knives, cars, restaurants, etc) there are people who can't perceive or don't care about quality. That's fine. Apple isn't targeting these people, and they aren't that profitable anyway.

I had an interesting experience tonight. It's just anecdotal, but for me it's one more data point on top of many others... A friend of my wife has just bought a new smartphone today, upgrading from a feature phone. She got a Galaxy because she said 'it was less expensive than the iPhone' (wonder if it's all those sales comissions paid by Samsung, making salespeople in stores push the Galaxy as "just like the iPhone but less expensive"...). I looked at her trying to add some new contacts, find and play a video on youtube, go on Facebook, and generally interact with the phone for a long time. Once she was done, I asked her if I could have a look myself and played with most of the main features of the phone and looked at built quality and feel. Short conclusion: I feel like iOS and the Apple hardware are even more ahead than I thought.

I'm very happy for you Gio :)