Liberty

Bob Iger is out: https://www.cnbc.com/2020/02/25/disney-names-bob-chapek-next-ceo.html

Back below $10 CAD. First time since 2016.

How deep? They seem to have many positions and not be *that* concentrated. Sounds like it could've hurt performance, but take the whole fund down? I'd need a bit more evidence or numbers to believe that against my priors that they have at least 15-25 positions at a time.

Aero drag is also a huge factor at highway speeds. I can get a ~25-50% increase in MPG from drafting a semi on the highway, depending on how close I want to be to it. At lower speeds aero is just not much of a factor in terms of energy use. Between lower aero drag, regen, and poor efficiency of ICE at lower speeds, the energy consumption b/t ICE and EVs for city driving is enormous. Yeah. One of the reasons why Teslas have really really good coefficient of drag . The 2017 Tesla Model 3 has a 0.23 Cd 2016 Tesla Model S – 0.24 Cd 2018 Tesla Model X – 0.25 Cd A lot of other cars have also improved over time, but a few years ago, you'd find this range almost only on the Prius.

The kind of driving makes a big difference too. EVs are, counter-intuitively for those used to ICEs, often more efficient in city driving than in highway driving because of the regenerative braking. It also matters what kind of elevation delta you had. If you were going downhill you'll get better efficiency than uphill (obviously, but most people forget to take it into account). There should be somewhere in your software that shows the elevation differential for a planned trip, and the range estimates should automatically take it into account, afaik. Most trips are round trips. You drive somewhere then you drive home. So if you drove uphill there you will drive downhill back. Unless you are driving to where your parents went to school you usually aren't driving uphill both ways. Absolutely. But it's still worth pointing out because a lot of people will look at these numbers after a long trip ("we drove 500 miles to Las Vegas and I got X MPG/kWH-mile") and they fail to take into account if the trip had a significant elevation change because they just didn't think of it.

The kind of driving makes a big difference too. EVs are, counter-intuitively for those used to ICEs, often more efficient in city driving than in highway driving because of the regenerative braking. It also matters what kind of elevation delta you had. If you were going downhill you'll get better efficiency than uphill (obviously, but most people forget to take it into account). There should be somewhere in your software that shows the elevation differential for a planned trip, and the range estimates should automatically take it into account, afaik.

New CEO: https://www.cnbc.com/2020/02/25/mastercard-names-product-chief-michael-miebach-as-ceo-ajay-banga-moves-to-executive-chairman.html

Reminds me of old USSR anecdotes about cab drivers having to light small fires under their engines to unfreeze their Lada's oil so they could start up... Sounds like the lady should just use a block heater. Many people used to use them here in Canada, but i don't see them much anymore. Modern engines are much better at starting up in the cold. https://en.wikipedia.org/wiki/Block_heater

On top of the fact that the battery isn't as efficient in cold weather to begin with. They sell a lot in Norway and have testing tracks there (iirc). Batteries are less efficient in cold weather, but so are ICEs, by a significantly amount, depending on conditions (cold start + higher rolling resistance if there's snow on the ground and from winter tires + worse aerodynamics if there's ice and snow on the exterior of the car). On EV you can mitigate some of that by pre-conditioning the cabin of the car while still plugged, so that you start with it already warm, and you keep the battery warm that way too. But you still face the other things. But in the end, all that matters is that you have plenty of energy to do the driving that you need to do, which is one reason why having spare juice in the batteries and not making them too small (to lower costs) is probably a good idea.

Jonas acquisition: https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Acquires_QuickQube h/t @pearnick

First off, Tesla says that you will shorten the battery life if you regularly charge the battery beyond 90% or discharge it below 10%. So you can use the full advertised range for the infrequent trip, but you'd better rely on 80% of published range most of the time in your daily use. Otherwise, the range is realistic if you drive in a certain manner, and in weather that is not too cold: 1. Don't speed on the freeway 2. Allow regenerative braking to do it's thing, instead of preempting it with the brake pedal 3. Turn off the climate control and heated seats Cold weather reduces battery performance, and obviously headwind/tailwind is a factor, and altitude change is a factor. I've found the range is pretty accurate in mild weather and where I measure the range after returning to the starting point of the trip. The same thing applies to the fuel economy for ICE vehicles. To get the sticker numbers, you need to drive like they drove in the EPA testing methodology, in similar conditions, and in a car that is in perfect condition. Let's just say that real-world fuel economy varies a lot more than most people think, and a lot of people are getting a lot less range than the sticker number.

You have to think about the whole package. Aerodynamics (including the underside of the vehicle, the door handles, etc), weight savings, how the motor(s) are tuned and how the regen is tuned, how software optimizes various things, how non-motor power electronics are optimized for power efficiency, how the thermals of the battery packs are managed to keep them in peak operating conditions for as long as possible, how the tires are tuned for lower rolling resistance, etc.

I'm not arguing that the alternative is better, just that there are some merits to the swapping idea. Also, the market has certainly moved in one direction already, so the conclusion is largely written, as I've noted a few times. Having said that, I was trying to put myself in Tesla's shoes and tried to figure out what data is necessary to determine the path to go if I were to rewind time. On one hand they could have pursued the path that they have chosen (SC network, etc.). On the other hand, maybe a viable option would have been to lease the batteries (as Eric suggested a few days ago), lower the price of the car significantly, removing a consumer concern around battery life (it's real. I own 2 Pri and there are a few apps that specifically test out the cells of used Prius battery packs), putting up battery swapping stations, and securitizing the battery leases since battery life is somewhat predictable. I think this potentially speeds up adoption rate since the biggest complaints about EVs are the charging times and cost, but obvious that path has its own risks. Again, not trying to have a Betamax / VHS debate. Just trying to think through how else the market could have developed. You don't need battery-swapping at public stations as a way to "charge" to do battery leasing and to be able to swap the battery at a Tesla service station, if that's what they want to do. These can be two separate things. But battery degradation seems to be very low and not really a problem, unless maybe if you use the car as a cab and drive way more than average. But that's not unlike the extra wear and tear on a gasoline car from extra mileage. They've also made improvements in battery longevity over time, so I suspect that newer EVs will have batteries that degrade even less over time.

ACCEO acquisition: https://acceo.com/en/news/acceo-solutions-inc-a-wholly-owned-subsidiary-of-n-harris-computer-corporation-acquires-solution-icc-technologies/ Pearnick: "110+ employees, 800+ clients"

They partially scale in and out as relative valuations change among their portfolio picks, it's not trading in and out fully like most do it. Maybe they have mostly non-taxable LPs? Not being like Buffett doesn't have to be a bad thing. There's not just one way to invest well, especially since Buffett had a lot more churn when his AUM was still small (and I don't mean just cigar butts.. he sold stuff like Disney and Capital Cities (bought back in when they bought ABC, iirc), I think).

Interesting Model 3 review from someone who actually owned it for 1 year (most reviews are people's first impressions): Seems to be pretty fair, contains a good list of pros and cons that aren't all obvious to someone who is more used to regular cars.

There's already an electricity distribution grid that reaches most places. A supercharging station is basically just adding an end point. There's no distribution network for heavy battery packs. It would have to be built up from scratch, and there's always stuff that goes wrong with lots of moving parts and mechanical/robotized processes. It was smart for them to pursue both at first, because if for some reason supercharging hadn't be possible, they still had a way to succeed. But it was just a plan B, and now it's unecessary, as EVs have much longer range than they did in 2013, there's zillion more supercharger and regular fast chargers everywhere on the map, and there's now millions of EV-driven miles proving the theory that supercharging is enough and works. And Supercharging has gotten better over time too, V3 is now really fast compared to what it was when it came out. Case closed, IMO.

Do you know how big the batteries are in an EV like a Tesla, and how important it is for that battery to be well protected from impacts? This isn't like changing the 12v lead-acid in a gasoline car. This is taking apart a major part of the mass of the vehicle that happens to contain a lot of potential energy and is connected via high-current cables that need to be disconnected and reconnected flawlessly every time, as well as all the shielding that comes with the underside of the battery. Yes I do. The difficulty is from convincing a whole group of people with potentially divergent interests to converge on one standard. Look at how long it's taken lap top manufacturers to go to a standard charging cable. But that's a business issue and not an engineering issue. Go take a look at the differences in car dimensions for a class of cars and you'll come to the conclusion that they are largely the same per class (e.g., Model 3 vs. C class vs. 3 Series vs. A4s vs. Genesis vs. Lexus ES vs. Camry vs. Accord vs. Sonata and so forth). You probably already know that most large car groups already share platforms across models / brands, and this is just an extension of that. So I'm not dismissing your point. It's a valid one, but not nearly as difficult as you might think if the stakeholders truly were aligned in making it happen. BTW - most of the issues you raised are just as valid for a single car (reconnection, shielding, etc.), and yet Musk thought that it warranted enough resources to invest some money behind it for the Model S, so I think that speaks to the fact that it's not an engineering problem as much as an alignment of incentive one. I'm not saying it couldn't be done. I'm saying there's no reason to do it when there's a much better and easier alternative, which is fast charging.

I don't care if I convince anybody, but thought I'd expand on my statement quoted above. It often makes sense to build or buy something to meet peak rather than usual usage. In some cases it is obvious. Who wants to drive across a bridge designed to hold an average load, instead of a peak rush-hour load. The electrical grid needs to be designed to handle a peak load on the hottest dozen days of summer, not just an average load. Same can be true of purchases. I have a guest bedroom in my house. It is useful for the "peak" 20-30 days a year we have people staying there, even if it is not needed most of the time. There are convenience and other benefits in addition to the economics of simply not needing a hotel room for guests. Turning to a vehicle, seems to make sense to me to buy something that meets peak needs. Someone may usually only drive 15 miles at 45 mph with no passengers, but weekly or monthly drive longer ranges with 6 in the car. Someone may use a vehicle during the week only for commuting and not need any particular range, hauling or truckbed for those times, but have more demanding monthly uses. Most will choose a vehicle that meets those monthly "peak needs." Might be ok to ask a friend to borrow their truck or to rent a vehicle every once in a while, but I wouldn't want to do that monthly. Certainly, some people may over-estimate their peak needs. Some people may also buy for some type of extreme peak need that doesn't occur often enough to be considered. However, I think the idea of buying a vehicle that meets peak needs rather than usual or typical usage makes a lot of rational sense. Would it be rational to buy a bus because I might sometime want to haul 20 people? No. Would it be rational to buy a minivan because I occasionally but regularly take road trips with 6? Seems rational to me. We're probably agreeing, just not thinking of the frequency and magnitude of the peaks the same way. Most people will buy for imaginary peaks, or peaks so rare that they might as well be. I'm not talking about weekend or monthly needs, but stuff that happens once a year or once every few years, and sometimes never. For more frequent peaks, yeah, it can make sense.

Do you know how big the batteries are in an EV like a Tesla, and how important it is for that battery to be well protected from impacts? This isn't like changing the 12v lead-acid in a gasoline car. This is taking apart a major part of the mass of the vehicle that happens to contain a lot of potential energy and is connected via high-current cables that need to be disconnected and reconnected flawlessly every time, as well as all the shielding that comes with the underside of the battery.

Buffett did technical analysis when he started and made plenty of mistakes, including buying Berkshire. Mauboussin hasn't made stock recommendations in all the time that I've known him, and looking back at a bad call from 20 years ago with obvious hindsight bias has little value to me. I judge him on his output, and that output is brilliant. If you throw out the baby with the bathwater, it's your loss.

Battery swapping is a transitional fossil. Won't be there in the future (at least not for mainstream use -- maybe for some specialized uses, maybe for large semi trucks?). Too many reasons why it's a worse idea than alternatives. Tesla could even attempt to do it just because they control every aspect of the vehicle and station, but doing it across manufacturers and vehicle models would be a nightmare. Imagine the stockpile of heavy batteries you'd have to have on hand to be able to service all kinds of models of vehicles, having to build hundreds of expensive robotized stations that might have operations problems in every large city. Imagine how some vehicles would have really dirty and corroded undersides, how much trouble you'd be if a fire started in a damaged battery pack stored right next to hundreds of other battery packs, how some people would try to do fraud by swapping crappy batteries for new ones by hacking into the metadata on batteries, etc. Much much much easier to just do fast charging.

You've never made mistakes? Good for you. All the smartest hedge funds were in Valeant. ValueAct, Ackman, Glen Greenberg, Sequoia, and a bunch of others. I'm sure they're all terrible stock pickers. Mauboussin is one of the best the field has to offer and has thought more people more useful things than almost anyone this side of Buffett and Munger.

Tesla did it in 2013. They built it in the Model S, because they didn't know what would take off, Supercharging or battery-swapping. Turns out, Supercharging was better and almost nobody did battery swapping.

Seems rational to me to buy a vehicle suited to peak needs. Perhaps people overestimate their peak needs or how often they'll hit that peak, but makes total sense to buy something that meets actual peak needs. Not that rational if those peaks are really rare and it's fairly easy to meet those peak needs in other ways, such as by borrowing or renting or getting things delivered or whatever. Better than paying for too much vehicle and polluting more the other 364 days of the year.