Liberty

Article on the health exchanges in the US (which were mentioned in the last CC): http://www.bloomberg.com/news/2012-11-20/governors-have-no-excuse-not-to-build-insurance-exchanges.html

Very interesting, thanks for posting.

Congrats to Francis! :)

Thanks for posting! :)

$9.35. Mr. Market really doesn't like Altius right now.

http://www.weku.fm/post/why-coke-cost-nickel-70-years I think they probably should also have mentioned the inflation during the period, but it's still an interesting bit of historical trivia.

http://www.bloomberg.com/news/2012-11-14/berkshire-cuts-105-jobs-shuts-paper-bought-by-buffett.html

I think RR is EBIX's biggest asset. The whole thing is his brainchild, he engineered a very unique software company with very high margins, very low customer concentration, highly recurring revenues, pricing power, and an infrastructure/picks&shovels kind of position in a greenfield market with secular tailwinds (paper is going away in insurance/finance, and SaaS will replace perpetual licenses in most enterprise software), etc.. He is unconventional and unpolished compared to the 'suits' that run most businesses, which is partly why the shorts have such an easy time making him look bad (heck, he even looks like a movie villain), but I believe he's honest and talented. As I wrote elsewhere, the dividend isn't my favorite thing, but merely because it's not optimal, not because it's bad per se (returning money to shareholders isn't the worst thing in the world). It's a relatively small percentage of FCF and leaves them apparently more than enough to reinvest and do buybacks. I think that after a few years of being attacked and publicly dragged through the mud by powerful shorts, it's just human nature to want to make life harder for them, so I don't hold it too much against him. Not sure what I'd do in his position...

http://www.theglobeandmail.com/globe-investor/baby-berkshire-leucadia-matures-with-jefferies-deal/article5203491/

Thanks for posting :) Is this all there is to it or is there a longer interview coming out at some point?

It's definitely something I often ask myself (I always hear that quote in my head said in Munger's voice). I think it applies when you realize you've made a mistake and what you are holding isn't worth or doesn't have the potential to be worth what you expected. In that case, I'd definitely sell. In cases where the drop in price is due to Mr. Market overreacting or other non-fundamentals-related or temporary problems, I think it's fine to hold and ride out the storm, or even average down. On EBIX, I totally disagree with the short thesis and it seems to be pretty much the only thing keeping that stock down, so I'm not selling a share. On FTP, like all shareholders I'm disappointed with the delays and cost overruns, and the macro environment certainly isn't cooperating, but I still think that once all its assets are online it will have enough earning power to provide me with a nice return (and maybe more if the macro improves). Hindsight is 20/20 and had I known things would look like this, I would certainly have waited to build my stake, but as things stand, I still am confident in the business, it just needs some time to play things out.

The past week has been a bloodbath for me (EBIX, FTP), and I wasn't even around to see it happen in real time. It's at times like these that I have to go back to first principles and remind myself of Mr. Market, and go back over my analysis, and remember that fundamentals are what matters in the long run, etc.. But even knowing all that, it's still not fun to see your portfolio go off a cliff. :-\

Looks like the shorts figure a way to cause a market panic about once a year, always using the same old anonymous allegations. The "error" about how the CEO had apparently sold most of his shares (of course, fewer people see the retractation than saw the original claim) was expert scumbaggery. Personally, I'm not too worried. Just one more chance for the company to vacuum up some shares. I was pleased with the progress during the last quarter and like the strategic direction of the company (simplifying things with the 'one product' approach with lots of modules that can be turned on or off, expanding to London insurance market, working on private health exchanges, putting more focus on a strong sales force worldwide, etc). Of course, there's always a doubt in the back of my mind that maybe my due diligence wasn't good enough and that I'm missing something important... But it's impossible to have perfect information when investing, so all I can do is keep working hard to reduce the probability that I'm missing something. Just make sure you do your own DD.

Wow, I go on vacation without internet for a few weeks and come back to market armageddon. I was expecting bad results from Q3 because of the macro environment and the planned and unplanned shutdowns, but this was a bit worse than I expected. I think the market's way overreacting, though, pricing things as if thurso will never ramp up and the cogen will never be turned on and the US/Europe/China will never come back... Basically only pricing in the short term. I haven't sold a share and might buy some more, and I'm sticking with my plan of waiting for thurso and lsq to ramp up with their cogens. By my count they have more than enough liquidity and access to credit facilities to get there.

They did... and then wrote them off.

All right, just bought my ticket for the Fairfax dinner. Sanjeev, would love if you could confirm via PM or here that you got the order (I left a "note to the vendor" to say it was me). I guess you guys will be stuck with me this year! :) edit: Wow, I found a hotel room across the street for 69$ CAD for one night. Who can beat that? It's about as big as a broom closet, which is probably the way a young Buffett would have liked it 8)

All I can see is this: http://www.businessweek.com/news/2012-10-18/google-falls-after-third-quarter-sales-miss-analysts-estimates

As far as I know Chad has never mentioned the food aspect explicitly.

The hardware often permits them to do software that others can't. Instant Search, for example, requires a lot more processing power and bandwidth than just a regular search. Even the adsense network is HUGELY hardware-intensive and not easy to do for a smaller/less-efficient competitor. The quality of searches is also dependent on hardware bottlenecks; more processing power and bandwidth means you can crawl more often and take more signals into account to determine rankings, and refresh cached results more often. Software and hardware aren't as independent as some people think.. One usually limits the other.

That's a silly comment. :( +1

http://www.bloomberg.com/news/2012-10-17/africa-asia-may-face-food-shortages-by-2050-group-says-1-.html I don't believe in the specifics of these forecasts (nobody can be very specific about the future), but I do believe we're seeing important long-term trends: that as world population keeps growing and as more people get out of poverty and eat higher on the food chain (if you eat meat instead of grain, that requires orders of magnitude more grain to be grown to feed the animals that produce the meat), that there will be huge competition for arable land (even if we can keep increasing yields). Cotton acreage will be pressured, and substitutes that come from non-food sources (ie. cellulose from trees) should increase their market share because they don't have to compete with other crops in the way that cotton does. So FTP is not only betting on billions of people being able to afford more clothes, but also on demand for food-producing arable land increasing, leading to higher food prices and thus more competition for cotton, making it even harder for it to keep up with growing demand. It's part of my thesis, anyway... We'll see how it plays out :)

I've loaded up the iPad with books and PDFs... But even so, the withdrawal might be too much. If I don't come back in 3 weeks, you'll know what happened... :-\

Thanks. Going mostly to Spain. Guess that's the bargain-hunter in me ;) Then taking a trans-Atlantic ship and landing back in Florida.

That's very interesting. I wonder if the US drought caused these bad quality problems if it's unrelated.