Liberty

Thanks Dustin. What's the best way to learn about the Rales and Danaher? Are they featured in good books or articles that you would recommend? Or is primary material (Ks and Qs) the main way to go? Thanks.

No, but I'd also be curious to know if others have been following it. I've put it on my list of things to check out, along with CFX, DHR and TDY. In the outsider vein, I already had VRX and TDG, and the whole Malone complex (LMCA/LINTA/etc). I'll be busy for the next year or two...

Hi Dustin, What do you know about the new CEO (capital allocation skills, integrity, track record, etc)? Seems like we hear a lot about everybody except him... I've started doing some research on CFX and hope to find out more after listening to the conference calls that are available on the site, but I'm curious to get your opinion. Thanks.

+1

http://brooklyninvestor.blogspot.ca/2013/10/a-really-great-book-outsiders.html This was linked elsewhere, but should be here too as reference for people finding this thread.

Up 80% since I wrote about it. Wish I had bought some... :P

Thanks! :)

iPad Air reviews are out: http://9to5mac.com/2013/10/29/ipad-air-reviews-go-live-highlight-thinner-lighter-form-factor/ Seems very positive overall. As usual, the best and most in depth review is the Anandtech.com one... http://www.anandtech.com/print/7460/apple-ipad-air-review

For those who forgot to mark their calendar, Apple CC at 5 EST tonight: http://events.apple.com.edgesuite.net/13piujbdvohubfevoihabsdvaohubdv10/event/

Sad news. Time to spin some Velvet Underground in memoriam.

2010 writeup here: http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/36443

Could you elaborate a bit on why you think this? International seems like a good growth opportunity, and the high FCF means that even without huge growth in the US they can buy back lots of shares (as they've done historically) and keep the per share value growing nicely. Looks like they have a pretty big moat and very good margins for retail. Seems very high quality at first glance, which is why I'm wondering if you've found negatives I haven't seen yet.

Any opinions on whether the QVC tracking stock should be better or worse to own than LINTA ? I'm a bit confused about the new tracking stocks. Will LINTA stick around and still include everything, or will it turn into QVCA + the other new ecommerce one? The writeup gave my the impression there would be 3 tracking stocks (LINTA + 2 new ones), but the investor day slides gave me the impression there would be two (LINTA to split into two new ones). It was just a quick look, though. I'll take a deeper look tonight. Update: Ok, to answer my own question, I misread something (LINTA and LVNTA kind of look alike when scanning quickly), and I think LINTA will become two new trackers and disappear. Correct me if that's wrong.

Good piece on Amazon. Love the apex predator analogy for Bezos. http://www.eugenewei.com/blog/2013/10/25/amazon-and-the-profitless-business-model-narrative I just wish I could value the business, and figure out if it's Walmart in the 70s or 90s.

http://www.thegatesnotes.com/Topics/Development/Great-Books-on-Science-and-Innovation?WT.mc_id=10_25_2013_ScienceBooks_tw&WT.tsrc=Twitter Good list. I've added a few to my pile.

Mr. Market seems to be really missing the point on SIRI (down another 5%). Subscribers are up significantly, free cash flow is up 26%, average cost of debt is down from over 9% to 5.5%, revenues are up and guidance for the next year is up, big buybacks are taking place.. But they missed the analysts' net income target (which isn't the best metric for this company -- all Malone companies like to show little net income), so all hell breaks loose. Oh well, as I said, that's great for buybacks.

That would be my answer too if I thought that was safer for me as a shareholder, but as I explained above, I don't think it's safer. For most companies it would be safer, but we have to look at the specifics of the situation. Feel free to show me where my logic is wrong, I might have missed something.

I've been thinking about the buybacks, about what's safest for me as a shareholder. Here's what I came up with: 1) What does the cash on the balance sheet do for Apple? As a shareholder, does it really make the company safer for me? It probably does up to a certain point, but not past that point. What makes consumer product companies successful is culture, ideas, focus, talent, taste, network effect, branding. Not sheer amount of money. Microsoft has all the money in the world and they're losing money on tablets, a distant third in phones, losing money on search, etc.. 2) So if there's a lot of money that doesn't really change the future of the company (past a certain point -- always good to have a fat buffer to get over temporary problems), what should be done with it? We can't know what's the "right" amount for buybacks without knowing the future. If the future is great -- they sell tons of devices over the holidays, they do a deal with China Mobile and it's a blockbuster, they enter new categories and come up with great stuff, iPhone 6 has a bigger screen and sells massively, etc.. Then the biggest buyback you can do while the stock is cheap, the better continuing shareholders will be. Heck, by the time a 150B buyback is done, there will probably be 50-75B more coming in. If things don't go so well in a temporary way, how much cash do they need to ride out the storm? A few tens of billions maybe? It's not like they are super capital intensive. If things turn to crap in a more permanent way (they somehow lose their way and stop making products people at the high end want to buy), then all the money in the world won't fix that. It wouldn't be a money problem. 3) So what's safer for me as a shareholder? If they keep most of the cash, it doesn't make me any safer under the "lose their way" scenario. If they do big buybacks but keep a buffer, they can easily ride out a temporary storm. If they do big buybacks (even with debt), I get a bigger share of any future earnings automatically. Even if we hit bumps on the road and growth isn't great, earnings could still grow nicely on a per share basis. If they want to be conservative, they can even start reducing the debt as soon as the stock price isn't so undervalued. Even 150B of debt could be wiped out in a few years (or immediately if there's a tax holiday on foreign cash holdings). Bottom line: Seems like big buybacks are actually SAFER than sitting on a mountain of cash, because all that cash earns nothing right now and wouldn't be that useful defensively anyway, but having a bigger piece of earnings makes my shares worth more with certitude.

We're seeing the new pecking order. Apple can hire from whoever they want. But Tesla can hire from Apple :) http://www.teslamotors.com/about/press/releases/tesla-hires-apple-vp-doug-field-lead-vehicle-programs

http://investor.siriusxm.com/releasedetail.cfm?ReleaseID=799681 SiriusXM Reports Third Quarter 2013 Results -- Record Revenue of $962 Million, Up 11% From Third Quarter of 2012 -- Net Income of $63 Million -- Adjusted EBITDA Grows 21% to a Record $296 Million -- Free Cash Flow Increases 26% to $245 Million -- Share Repurchase Program Reaches $1.6 Billion Year to Date -- Stock down, which is good for the big buybacks they're doing.

True, though these guys constantly daydream about retiring but few ever do. Even Buffett told Suzy he was retiring after the partnership closed, iirc. IMO if he steps out, it'll only be at the top of a cycle or if he's forced to by a hostile takeover. It doesn't seem in his nature to exit at the bottom...

http://www.reuters.com/article/2013/10/23/us-bankofamerica-hustle-idUSBRE99M14B20131023

Did you expect a radical departure? OS X, like most desktop OSes, has been pretty mature for a while. It's just getting more and more refined and incorporates a few features from iOS. https://www.apple.com/osx/whats-new/ Here's a 24 page review of Mavericks. Guess there are a few new things to write about: http://arstechnica.com/apple/2013/10/os-x-10-9/ I think it's not bad how a free OS, rather than bloat up and slow down your computer, makes it more responsive, gets more out of your RAM (compressed memory), and gives you hours more battery life (about 3.5 extra hours on an already power-efficient 2013 Macbook Air)*, and integrates better with your mobile devices. * http://www.macrumors.com/2013/10/23/13-inch-2013-macbook-air-gets-up-to-15-hours-of-battery-life-with-mavericks/

As usual, the canonical review of the new OSX was written by John Siracusa (basically a small book that he's been writing since the first beta came out, updating it all along until the GM came out recently): http://arstechnica.com/apple/2013/10/os-x-10-9/

I'm quite pleased with the announcements. The only thing that I would've liked to see that wasn't there was touch ID for the iPad, but I guess they're in no hurry, and it's not as important to have on an iPad as on the iPhone (which you take more in public places and unlock more often in a day). Also, I think making so much of their software free is quite smart. I hope the stock will tank like after so many announcements so that Apple can buy back more cheaply for a while.