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How does the MV decline of a wholly owned sub impact BV? Also - highly doubt BNSF equity is financed with 1:1 debt/equity. Jay, see my posts. I think he means "mark to market book value" when he says "true book". MTM book for BNSF has certainly decreased with UNP, NSC, CSX and KSU all down significantly. XLI is also off 12% this year if we use that as a proxy for Marmon, Iscar, and the like. So it's fair to say that MTM book value of wholly owned subs has decreased, in addition to the decline in MTM value of the stock portfolio. BUT the MTM book value of those 2 subs was and is still WELL above GAAP book value. And KHC added a good bit after Q2 to help offset this, as will $23B or so of pre-tax investment income + operating earnings, plus whatever underwriting profit shakes out to be. and yes, BNSF equity is not levered at all. The company itself is levered, but the equity stake is definitely not! Not to pick at nits, but ...For a company, in this case the BNSF sub, that does not own tradable assets as a meaningful part of its book, i.e. it's not a finance company or does not own substantial financial assets, saying marked to market book value really has no meaning. The point of book value is a more stable estimate of value. Now you could adjust book value with estimates of replacement costs, but that is not what is being discussed. No one is suggesting that the value of the railcars, tracks, etc has gone down. Instead of book, you are comparing BNSF to its publicly traded peers, which of course is fine, BUT it is NOT book value, by any stretch. (Jeez, I sound like a seriously anal accounting prof at a community college, with apologies to any such accounting profs out there.)

Too true!

I like the book. For those into Munger, there is not anything that is new, but it is a great introduction to Munger for those not in the cult. ;) I do like this quote though: As Munger said, he is a collector of mental models and inanities to avoid. Collectors have well grooved dopamine circuits. Incentivize your learning!!! h/t to Shane @farnamstreetblog

Food trucks, I think not. Take a marginal business, restaurants, and make it mobile? You can't even really sell it if you are successful. To paraphrase Munger, avoiding taxes does not in general make a business good. Now if you could franchise them well... I was just talking to a food truck owner this weekend, boy oh boy he was not a happy man.

Like what.... (not to be that guy ;), but the purpose of the thread was what are some of those business models.)

That is a great thread. I missed it the first time around. Lot's of good ideas. I was looking for something for my two kids, whom I was going to grubstake.

I wanted to kick off a discussion of business models, what are some of the best ones? I think looking at this as an entrepreneur and an investor. 1) What are some of the best small business models, really the best businesses and 2) What are some of the best larger businesses (models). Please explain the model not just say that BRK has a great business model. There are of course the business that are great if you happen to wind up being one or (sometimes) two in the market. My current pick for both a large and small business model: * operating or buying mission critical software companies--see Constellation on this board. The beauty of this business is that you basically 'win' on the purchase. There are some limited synergies (in Constellation's case)and generally you can ramp back on the sales and R&D expenses. The businesses are stable and your customers can't live without you. Otherwise: * small business, a geographically concentrated number of laundromats. * large business, Google, of course!

+1 So to paraphrase, history doesn't repeat, but it does rhyme....You can't just run a Geiger counter over the market as you could from '30 to '55, but Ben Graham never goes out of style.

While on vacation in Massachusetts I enjoyed Jack's Abbey Jabby Brau Lager Portico Chroma Amber Ale Smutty Nose Brown Ale Loved them all. (I do not like hop forward beers.) Back home I'm drinking Duvet, Goose Island Sofie (and Matilda), Sierra Nevada Kolsch style, Blonde Ale from Leffe abbey (a Belgian ale). For the holiday, I will be making watermelon, beer (only time I tolerate ipa's is in this drink) with a dash of limoncello, vodka and garnished with cucumber slices!

Interesting idea. I wonder how they make money on the site.

Wow, what have I not learn from Charlie and Warren, okay here are somethings The necessity of continuous learning Rules number one and two of investing, 1)don't lose money and 2)always remember rule #1 The punch card method Concentration in your best ideas Shoot fish in a drained barrel Have and build a circle of competence When learning an industry, be fanatical, use the Phil Fisher method, plus read everything,

Mindware, Tools for Smart Thinking This is among the absolute best books on how to think. It is brilliant, simply brilliant. Nisbett is a psychology professor at U. Michigan. (Not that it matters, but he is one of the most distinguished psychologists in the world.) Basically, if you want to think better buy this book. I am reminded of what Munger said of another book,(paraphrase) if you can't learn from this, too bad for you, give it to someone who can. Nisbett gives the reader tools to use and concrete examples how to employ these tools from psychology to economics to statistics to enrich your thinking and your life. Nisbett with a razor wit and mind informs that working statisticians, often don't apply what they know to their own lives. (Kind of scary actually.) One caveat, he totally blunders when talking about buying stock, but other than that, this is the work of genius, and will make you a better thinker. Enjoy

I have done this some over the years in three different states with wildly different laws. Frankly, the money in stocks is way easier. So it is a headache, to directly answer your question. Regarding caveats, I mostly concur with Berkshire and Oddball. It is not easy money. But sometimes you do wind up with property. The biggest returns are in the big deals You HAVE to do your DUE DILIGENCE (That is on the property and on the state and county laws.) What I would recommend is that you observe and maybe do some deals and when there is a massive disruption either locally (oil patch?) or nationally like 2008, etc. then pounce. The lien sales are really popular when real estate in hot and the returns are just bid away. Not to be a grave dancer, but I know some people who also do this after disasters, fires, floods,etc. I never had the stomach for that. A story on due diligence. Crappy little one room apartment in Chinatown, (I don't think it even had bathroom )it had been in arrears for years and years. One year someone actually paid more on the lien than the property was worth given the time in default and interest charges; price of the lien was maybe 2 or 3 times value! Sometimes there used to be price fixing amongst the locals, i.e. mutual non-bidding, but that was mostly in the old days when this was not so popular. (Notice to the lurkers here: You are not, repeat not going to get a beach front property in the Hamptons or in Santa Barbara. If you do get a property, more than likely it will be a sh&t hole in a marginal neighborhood. (but if you get enough of them, you could make a down payment for the Hamptons!) 8)

What is your favorite insider buying tracking web site? Dataroma Gurufocus Insider-monitor (I confess to doing it "by hand", which in today's world is a bit dense.)

Well the Washington Post was a great business great back in the day. The Rales brothers had started Danaher; that turned out pretty well I would say.

such as here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/great-investor-letters/msg228471/#msg228471

I'll join!! on Skype: nr.henderson

What AR/ investment letters do you read? (other than BRK, AMZ, Sequoia, Baupost)

CoBF is a great community indeed. Having a mastermind group is good. This kind of group is great. It is a virtuous circle, where each person is making him or herself better along with helping the others get better. Putting a group together is another issue tho... FYI, there are a few business that basically create and maintain mastermind groups. Vistage is probably the biggest and most well know. (but, it is not that well know, really) It is very expensive, however. I was in a Vistage group; it was a good experience.

Munger may have been implying longevity, but I think not. But as to your second point. You misread my question. Not how you find the next [fill in the blank] although that would be glorious, rather how to be a better investor, i.e. what did Buffett do for that extra 10 to 15% that enabled him to outclass Singleton. Once you are rational, apply yourself, have a circle of competence, etc. what else to do? Perhaps Buffett was/is more focused on this than Singleton was. Thus was willing to go through every publicly traded stock from A to Z, repeatedly.

At the Daily Journal meeting, Munger said (quote below) that Henry Singleton was smarter than Warren Buffett. Singleton was very rational, a truly excellent businessman, (one of the best ever) yet Warren was a way better investor. My question is for us mere mortals, what lessons do we draw from this? Singleton was a genius, as rational as a human can be, versed in the capital markets, unclouded by "conventional wisdom" yet Buffett really out paced him. Once we quell our emotions, gain a circle of competence and behave rationally (admittedly 85% to 95% of the deal) how do you get to that last bit that allows Buffett to lap Singleton as if Singleton were Aunt Minnie? Munger hints that the question is important, but did not answer it! (Minor side note, Munger is, of course, going to think more favorably of his business partner of over 50 years and thus is talking his own book; additionally, he and Buffett disagreed with some of Singleton's transactions, but still, Buffett is the better investor. )

Excellent question. Nevertheless, the most important process is the winnowing of ideas, how and why you choose out of the companies in your 'funnel'. I think that idea generation is the weakest part of my process, but so far I am comfortable with that. What do I do? Screening and reading value blogs, WSJ, Fortune, Forbes, Valueline (cover to cover) etc. Now after being on Twitter for years, I have started to follow various investors, but the amount of noise there is overwhelming. I also maintain a list of companies that I want to buy but the current prices are too high.

Very impressive and focused woman!!

Do you want a general CS history? Seminal ideas from CS or do you really want a history of programming languages. For a history of CS: Ada's Algorithm Seminal ideas from CS: The Ingenious Ideas that drive today's Computers CS from a societal perspective Program or be Progammed and Blown to Bits Code the hidden language that Yadayada recommended is a good book. If you want to go beyond this and get really profound sense of what is going on under the hood in a computer look at Nand to Tetris. There is a website (separate and complete) here http://nand2tetris.org/OR a MOOC course. This is really great, you build a virtual computer from first principles, i.e. from the logic gate to running a Tetris game: https://class.coursera.org/nand2tetris1-001

Does anyone know where I could get a complete video set of the course Joel Greenblatt has taught (at Columbia I believe) I have seen two lectures from one of courses but not the whole semester.