Liberty

Selling Landquart would definitely be a good move. If they know it can at least break even or make a little bit of money soon, it can make sense to wait until then to shop it around, but just the freed up management time and energy from getting rid of it would probably be worth it. I used to be more on the fence about it - figuring that if they're keeping it there's a reason - but as time goes on I'm starting to lean more heavily on the "sell it soon" side. For Dresden, I think it's a good deal either way (a sale for 200m+ or keeping it operating close to 40m EBIDTA/y), and it seems to take very little of management's time since it runs so trouble-free.

I did it too a while ago, and I think my result was pretty similar to yours.

http://www.macrumors.com/2012/09/25/teardown-of-apples-a6-chip-reveals-manual-layout-of-custom-dual-core-cpu/ A6 might be even more custom than we thought..

Some news from Alderon: http://www.alderonironore.com/_resources/news/2012-09-25-NewsRelease.pdf

Sometimes it's all about the way you think about things. That's what so great about Buffett and Munger, they have all these mental shorthands that help frame thinking..

http://arstechnica.com/apple/2012/09/early-adopters-experiencing-issues-with-apples-latest-iphone-5/ http://arstechnica.com/apple/2012/09/iphone-5-a-little-bit-taller-a-little-bit-baller/

https://www.privateinternetaccess.com/blog/2012/09/warning-bank-of-america-giving-access-to-random-accounts/

http://www.bbc.co.uk/news/technology-19699632

I don't have much of an opinion on him one way or the other, but could you elaborate on what you mean here?

As I mentioned in the writeup, that definitely seems to be the main competitor when it comes to the delivery technology, but it doesn't change anything on the content front. Ok, so you plug in your smartphone, but what content does that give you? Music -- sure. But who can afford to do the deals with well known talking heads and major sports organizations to have all that expensive content? That seems to be most of the moat, along with the fact that being built into cars removes a few steps for users, and making stuff simpler and more convenient always helps a lot with Joe Average (ie. original iPod vs mp3 players at the time). If they grow for a few years, and Malone does big buybacks for a few years, all this while fixed costs stay mostly flat, the FCF/share could start looking much better. By how much? I don't really know yet...

They do seem to have good pricing power (everything changed when 2 competitors became the only player in that niche). They've recently done a price increase without any apparent negative impact (that I could see, anyway). But to me what makes it interesting is the operational leverage. Current multiples are pretty meaningless if adding 10% more subscribers makes FCF jump by 100% or whatever (made up numbers just to illustrate). The question is: How much certitude can we have that things will happen that way? I doubt Malone would want to flip it quickly. He's been after it for years. I think he'll improve operations and capital allocation and use it as a cash cow to finance other investments. So a lot depends on whether you trust Malone to do a good job.

Their growth seems to be heavily influenced by car sales and by the used-car cycle. I think they still have lots of room to grow. Not forever, but the way they are gearing, adding a few million subscribers could make the free cash flow go up by hundreds of percents, I think. "I think most folks who like sat radio already have it." I don't feel it's quite how it works. People don't start out with 'hey, I think I'll get sat radio so I'll just go out and get it'. I think they buy a new car, get a trial, and then 45% of them stick with it (according to SIRI's conversion rate numbers). In recent years the replacement rate of the US passenger vehicle fleet has slowed down a lot..

Here's one I've been researching a bit lately. I don't own any, and don't know if I ever will, but it's just fun to broaden my circle of competence... The basics: -Found this one via Horizon Kinetics, they were discussion John Malone's Liberty Media and its huge stake in SIRI (they're about to take control, they had 49.5% last I checked). LMCA is spinning off the Starz tv channel and what remains will most likely take outright control of SIRI soon, possibly having SIRI merge with LMCA to use SIRI's NOLs (I hear Malone's nothing if not a tax-efficient guy). -SIRI is now the merged Sirius and XM satellite radio corps and doesn't have a sat radio competitor in the US. They should have pretty great operating leverage because their costs are basically fixed whether they broadcast to 1 listener or 100 million, and those fixed costs for the tech and the content shouldn't grow too much from here. -On the music side they have competition from terrestrial radio (though with ads) and internet radio (pandora, spotify, etc), but on the non-music side they have lots of exclusive stuff like tons of sports, talk-radio, etc. Seems like most of the "worth subscribing for" value is on the non-music side, which their free and freemium competitors probably can't afford. They also offer an internet radio option, so subscribers can listen while at work and then keep listening while they commute in their car. They're also coming out with an iOS and Android app, and by the end of this year they should have more 'on demand' features. -They have deals with all carmakers operating in the US to put satellite radios in cars, they do a lot of free trials with new cars with apparently pretty high conversion rates (I've seen 45% in the financials), and since these sat radios because widespread about 5 years ago, they are now hitting the second-hand car market. Their deal with carmakers has the benefit of convenience; people get a free trial subscription, the radio's in the car when they buy it. They basically just have to start listening without having much to set up or figure out by themselves. -If Malone takes control, I believe he's going to use the free cash flow for buybacks, debt repayment, some acquisitions, and other moves that should be shareholder-friendly if his track record is to be believed. Here's some excerpts from Horizon Kinetics: -This is just an anecdote, but my father bought a Hyundai Santa Fe about a year ago. He got a Sirius XM 3-month trial subscription. My parents don't really speak English or listen to english-language music, so I figured that 99% of what Sirius XM offers wouldn't be for them, and that he probably had let the trial lapse and never really used it.. Well, tonight I asked, and he actually renewed for 3 months after the trial and then for 1 year for $125. He says that for $2 a week (for effect he takes out a handful of coins from his pocket as he says this) it's worth it to not have to deal with ads, and all he listens to is a couple of french-language music channels out of Sirius XM's hundreds of channels. If a couple of channels make it worth it for him, I'm guessing that English-speakers probably would see even more value for the money. I showed him the iPhone app, and he was pleased. -I don't know if it would be better to approach this via Liberty Media or directly via the Sirius XM common. I've just started researching this and might never do anything about it, but I thought it was interesting enough to share and see what the smart investors here though. I haven't yet dug into all the financials and everything - this is just a 'high level' look at this idea, so if it interests you, do your due diligence, I can't give you an IV estimate or anything precise like that - but the free cash flow seems to gear up nicely and so far the moat seems strong. The barriers to entry are mostly in the cost of the satellites, the cost of getting the required radio spectrum (probably not possible anymore), and of getting the content. As long as the company keeps its costs under control, keeps its content producers happy and exclusive deals with high-profile talking heads and sports organizations, it'll probably have a pretty impregnable moat for direct competitors. Indirectly: Internet radios will keep getting more popular, but for people who want more than music, I kind of doubt that internet radio will be able to compete because its business model probably doesn't allow big investments into exclusive content deals and well-paid talking heads, though if there's a challenger it'll probably come from digital over 3G/LTE via a smartphone connected to a car radio. A lot of this would be a bet on management keeping costs lower, keeping the subscriber growth healthy, and allocating capital well (including unlocking hidden assets in the form of radio spectrum at some point, maybe?). The value's not in the assets as there are lots of intangibles here; I'd mostly look at the moat and capital allocation qualitatively, and then try to value it based on free cash flow per share and how I see it gearing up if they can maintain some minimal subscriber growth rate. Even without huge growth in subscribers they could theoretically do well if they can use the cashflow to do huge buybacks under IV... Anyway, anyone have any thoughts? As I said, I'm just looking at it for fun at this point, there's still a lot I don't know about the company and it's not my favorite idea right now, but it's an interesting business to learn about and seems like it could be a good investment. --- And as a reference and for completeness's sake, here's an old thread about Sirius and XM: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/why-do-non-value-investors-(aka-traders)-love-siriusxm-stock-so-much/

Here's a TV program that gives an overview of the Bre-X fraud for those - like me - who weren't around back then. http://www.youtube.com/watch?feature=player_embedded&v=pNvixeqlKdQ http://www.youtube.com/watch?feature=player_embedded&v=0YNnjitbcaE#! http://www.youtube.com/watch?feature=player_embedded&v=-2hTKWZZz74

Send it my way and I'll take care of that for you ;) What was that quote about being worried about the return *of* your capital vs *on*? ;-) :D I don't know, it seems like a good strategy! Efficient market theory says that higher risk = higher reward, so sending your money to a stranger on the internet should be extremely rewarding. In fact, you all should do exactly that! ;) ;) ;) ;)

Ha! I doubt I need a book. What needs to be done is very simple and could fit in one sentence. It's the execution I have trouble with. ;) Hmm how about a support group for those with too much cash? I'm sitting at about 50% cash :-P Send it my way and I'll take care of that for you ;)

Sorry if it's a repost, but I found this by Dalio: http://www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-Dalio-Principles.pdf

The app is just a client for the back-end which is on Google's servers. Google maps on Android and iOS should be functionally pretty much the same.

I'm buying this for the earning power of the assets, because I think liquidation value is higher than what I'm paying for, protecting the downside, because I think the billions of people in developing countries who can afford a few more clothes will put significant pressure on cotton production which won't keep up because of structural reasons, and because I trust management to add value (they've bought great assets for peanuts in very cleverly structured deals) and be shareholder-friendly (the CEO owns ±20% of the stock). It's a kind of risk/time arbitrage. I think these assets are worth X when running, but right now they aren't so the market assigns them a very low value. Sure I could wait for these assets to all be cash-flowing optimally to reduce risk, but maybe by then there would be no gap between IV and market price and thus no opportunity. As someone else said elsewhere: Is it a sure thing? No. Few things are. But I like the risk/reward profile, and we'll see how things turn out in a year or two...

year mean this ? http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=sr_1_2?s=books&ie=UTF8&qid=1348198003&sr=1-2&keywords=security+analysis+second+edition+2008 If you're thinking of getting that one, keep this in mind (I'm just cut & pasting an amazon review): "This is a re-issue of the 2nd edition in more modern form. There's no need to talk about the content and importance of this book to value-investor. But some reminder concerning this edition: 1) It is an abridged edition of the original 2nd edition (published in 1940). A total of 10 chapters have been deleted. 2) The Appendix Notes was also deleted. That's why the publisher could keep the pages at around 700+ something. 3) In compensation for the missing chapters, the publisher has attached a CD which contained the pdf format of the original 2nd edition (with 52 complete chapters as well as the Notes). I think that's really the most valuable part of this edition. That why I commented that it's a more convenient version of the 2nd edition."

I have the second edition (1940). Seemed like the 'best' one (or at least it sounded like that to me at the time) back when I researched which one I should buy, but I guess I should check out the others at some point.

I wish more financially successful people gave more money to scientific endeavors. That's definitely a great thing he did. So he deserves kudos for that.

If you really want to know, all the info is in this thread and the company's financials. It's definitely not an investment that will fit everybody's style, but in my opinion, it's a great asymmetric opportunity.

Your info is very old. Dresden now produces 56,000 tonnes per year, has around 50% of world production market share (and growing) in its niche, and lower costs than its competitors (they coat the paper online, which nobody else does, etc), and it throws off close to 40m EBIDTA per year, so even at a 5X price it would be around 200m.

Ok, so basically you haven't really taken an in-depth look at it and it's not your style. That's fine.