giofranchi

+1 giofranchi

- Mr. Taleb, "Antifragile" And he identifies the exact opposite of owner-operators in the banking industry: - Mr. Taleb, "Antifragile" I guess that’s really my problem with the kind of BAC. I am interested only in owner-operators, and it is extremely hard for me to spend much time studying something that is as far from an owner-operator as it could be. In the short run (2012 and, most probably, 2013 too) I surely let some good opportunities go by, but in the long run I am confident my predilection for owner-operators will serve me well. Here his another thought: of course, if you jump in and out of stocks, buying when they are extremely cheap and selling as soon as they approach your estimation of fair value, the banking industry should be a sort of amusement park for grown-ups! Especially big banks: in fact, you can predict with much confidence that once in a while they will go bust, so no reason at all to hold onto them when they approach fair value, and then they will be bailed out and won't be allowed to fail, so no real risk to buy them when they become extremely cheap. A sort of free lunch, isn’t it?! ;) giofranchi

BTW, notwithstanding the wild stock price gyrations, from 2004 LMCA has delivered a 15% CAGR vs. a 6,3% delivered by BRK during the last 10 years… not bad at all! :) giofranchi

At the end of Q3 2012 LMCA had Total Debt of $543 million with Cash and liquid investments of $1,813 million. Why do you say it is very leveraged? Thank you, giofranchi

Very good idea!! And I will follow you! ;) giofranchi

Starz distribute 1.8b to LMC in total or 1.4b since last 30sept balance sheet (see p43) $500 millions > senior securities 5% 2019 $995 millions > revolving credit facility (see p11-12) Thank you Grahamisback! And welcome to the board! :) giofranchi

I think Liberty Media is the platform Mr. Malone will continue to use in the future for the majority of his value accreting initiatives. giofranchi

1.1B w/450M available http://www.reuters.com/article/2013/01/14/starz-trading-idUSL2N0AJE2720130114 Thank you, compoundinglife! Do you also know how much Starz pays on its debt? giofranchi

Yesterday the spin-off of Liberty from Starz was completed. Now, what to do with Starz? Anyone has ideas? For what I can see, Starz has a $406 million TTM operating income. Its market capitalization right now is $1,670 million. Starz is trading at 4.11 x operating income. Furthermore, Starz has approximately $400 million available under its stock repurchase program. It seems pretty cheap to me! My only concern is I could not find how much debt Starz assumed in the transaction. Anyone can help? Thank you, giofranchi LMCA_News_2013_1_11_General_Releases.pdf

Mauldin's Forecast 2013. giofranchi TFTF130114.pdf

I certainly have not said that. I just acknowledged I have not read everything Keynes wrote. The same holds true with Cicero. We all operate with partial or incomplete tools. On the other hand, if you have perfect tools, please let me know! ;) Although endowed with incomplete tools, we must reach conclusions, in order to act. And, if I don’t act, people don’t get paid at the end of the month… BTW, I don’t really have to choose between Cicero and Keynes: the incomplete knowledge I have of both of them suggests they were not in antithesis at all. My preference of Cicero was based on this simple rule: something that has endured 2000 years is more robust than something that has endured 100 years. No, I don’t think so. Why should I? I repeat: history provides you with tools. Do you get emotional with tools? Your idea of a hoe is influenced by your temperament? No. Instead, the way you use that hoe might very well be influenced by your temperament. So temperament plays a big role in the second phase: the analysis you perform with the tools you have. Not in putting together those tools! Keynes either advocated deficit spending and zero interest rate during economic growth, or he didn’t. That’s it. I don’t think the opposite is relevant at all. Policy leaders are justifying deficit spending and zero interest rate during economic growth, citing Keynes. I don’t have to prove the opposite. I just say: the tool you are using had never been advocated by Keynes, it is just a tool of your own invention: therefore, at best untested, at worst very dangerous. giofranchi

LC, scc, twacowfca, thank you very much! Really, too kind of you! :) giofranchi

Why do you believe that about Keynes? Why are other people getting it wrong? BTW, Cicero is known more for rhetoric - not quite conducive to analytical thinkning. Why do you believe that? Well, I guess the reason is simply that in all I have read about Keynes (I cannot claim I have read everything there is to read, but I have read a lot), I have never found even hinted at a 0% interest rate policy, or a 350% world total debt / GDP, or a deficit spending policy in a time of economic growth. Instead, I remember him advocating to build surpluses in a time of economic growth, surpluses that would enable us to engage in deficit spending during a contraction. Deficit spending is the “easy part”, building surpluses is the “hard part”: preaching keynesianism, while adhering only to the easy part and disregarding altogether the hard part, will end like everything ends, when you do what’s easy and procrastinate what’s hard: very badly. Maybe, you might argue, it is me that should read Keynes more carefully, and have not understood his economic thought correctly. Of course, it might be. But what that means is simply I have not studied history well enough. Not that history is irrelevant. Furthermore, I am not advocating history as a substitute to analysis. Far from me! The usefulness of history should be just to provide you with the most reliable tools to perform your own analysis. If you know history, and you perform your analysis, and you come to the conclusion that “this time it really is different”, you might then very well go for it! What I mean is this: if you already “sit on the shoulders of the giants of the past”, and you find that something new and useful applies to today’s environment, then you will make a great leap foreword. Congratulations! Extremely well done! But why deprive you of the wonderful eyesight you might enjoy sitting on the shoulders of those giants? You surely got something to lose. And nothing to gain! Big downside, with no upside at all. giofranchi

And what are first principles? I guess they are the ones which have stood the test of time. The longer a principle has been around, the longer, you may be confident, it will continue to stay around. And that is the best definition of first principle I can think of (beside, of course, a truth sent by God Itself…! ;) ). That’s my idea of history: to study and understand which principles have withstood the test of time, and, if a probabilistic outcome implies that those principles will no longer be true tomorrow, to bet against such an outcome. I believe you will be far more right than wrong. giofranchi - Cicero, 55 BC I guess those are first priciples. giofranchi Would Keynes agree? I truly believe Keynes was a much much much greater fiscal conservative than a lot of people believe, or pretend to believe. What it is currently sold for Keynes’s school of thought or Keynes’s economic ideas is deeply flawed and, probably, only a mean to justify incompetence and “kick the can down the road” policies. But let’s assume Keynes was only about deficit spending (regardless of whether it occurs in economic expansion or contraction) and money printing (he clearly was not, but let’s pretend it anyway…): if you ask me whether I would choose Keynes or Cicero, I would bet on Cicero 100% of the times. If Keynes is still studied 2000 years from now, then I might change opinion! giofranchi

And what are first principles? I guess they are the ones which have stood the test of time. The longer a principle has been around, the longer, you may be confident, it will continue to stay around. And that is the best definition of first principle I can think of (beside, of course, a truth sent by God Itself…! ;) ). That’s my idea of history: to study and understand which principles have withstood the test of time, and, if a probabilistic outcome implies that those principles will no longer be true tomorrow, to bet against such an outcome. I believe you will be far more right than wrong. giofranchi - Cicero, 55 BC I guess those are first priciples. giofranchi

And what are first principles? I guess they are the ones which have stood the test of time. The longer a principle has been around, the longer, you may be confident, it will continue to stay around. And that is the best definition of first principle I can think of (beside, of course, a truth sent by God Itself…! ;) ). That’s my idea of history: to study and understand which principles have withstood the test of time, and, if a probabilistic outcome implies that those principles will no longer be true tomorrow, to bet against such an outcome. I believe you will be far more right than wrong. giofranchi

Sorry. Unable to take survey because we don't target a particular"style". One place we rarely go is micro cap, not because that is beneath us, but because it can be illiquid, and sizeable perks for managers or control shareholders could nullify the ability of minority shareholders to participate in the success of the company. Larger companies are more transparent, and occasionally we can find a great company with a CEO who has a lot of equity or quasi equity who puts minority shareholders pari passu or even ahead of the CEO (think Buffett). :) There is an exception, however. Occasionally, an OK larger company gets knocked down drastically in price. Then, it is classified as a small cap or micro cap. This is often a good fishing hole. Interestingly, a large part of the "small cap effect" is actually some of these larger companies rebounding after they have been beaten down. :) As always, I agree with twacowfca. I put much more emphasis on the quality of the managers I am partnering with, than the size of their company. I know it might sound ridiculous, but also when I buy gold and silver, I pay attention to "management"…!! I prefer the Sprott Physical Gold Trust (PHYS) to the GLD ETF, and I prefer the Sprott Physical Silver Trust (PSLV) to the SLV ETF… Call me nuts! ;D That being said, I generally don’t like too big a company (even the best manager will face difficulties to grow things to the sky), and I don’t like too old a manager (if something cannot go on forever, it eventually will stop… as sad as it might be, such is life!). So, it is very difficult for me to vote. Anyway, being FFH my firm’s single largest investment (by far), I vote $1 billion to $10 billion… but it clearly is not all that meaningful! giofranchi

I will borrow from valueInv: +100 ;D ;D giofranchi

Thank you valueInv, I have just purchased “Management Rewired”, and I will surely read it! Actually, I am well aware of the fact that stories might be dangerous and misleading. But stories are not history. I remember Mr. Rodriguez saying that at the beginning of his career he had the chance to ask Mr. Munger three things that would help him improve his skills as an investor the most. And Mr. Munger replied: “Study history, study history, study history”. Don’t study what historians say or write. Instead, study what the great minds of the past might still have to teach us. I mean, if you read Seneca, whose writings are still relevant after 2000 years, how faulty can your compass be? And, by the way, he not only was the greatest philosopher of ancient Rome, but also the richest man of his time! 8) giofranchi Gio, funny you should mention Seneca- I am just halfway reading the book "Letters from a Stoic" - apparently a classic english translation of the writings of Seneca. I don t normally read this type of book, but I am finding it useful to balance all the things that we worry about here and puts life in perspective. biaggio, I find that book to be a wonderful reading! And I would suggest it to anyone. Actually, I don’t understand why any book should be preferred to “Letters from a Stoic”… I agree with Packer that the micro aspect of history is always more useful that the macro aspect. But we should be aware of two components here: intellect and temperament. The micro and the macro aspects of history are intellect, Seneca (and others) is temperament. If we don’t invest some time in nurturing our temperament, we might be missing something very important: under certain circumstances, temperament might be even more important than intellect. ;) giofranchi

Thank you valueInv, I have just purchased “Management Rewired”, and I will surely read it! Actually, I am well aware of the fact that stories might be dangerous and misleading. But stories are not history. I remember Mr. Rodriguez saying that at the beginning of his career he had the chance to ask Mr. Munger three things that would help him improve his skills as an investor the most. And Mr. Munger replied: “Study history, study history, study history”. Don’t study what historians say or write. Instead, study what the great minds of the past might still have to teach us. I mean, if you read Seneca, whose writings are still relevant after 2000 years, how faulty can your compass be? And, by the way, he not only was the greatest philosopher of ancient Rome, but also the richest man of his time! 8) giofranchi Take, for instance, the Q4 2012 Hoisington Review and Outlook. Dr. Lacy Hunt draws 7 conclusions about fiscal economics and the growth problem, reaching as far back as David Hume, leader of the Enlightenment in 1752, and David Ricardo, originator of the law of comparative advantage and diminishing marginal returns in 1821. If Hume’s and Ricardo’s thinking is still relevant after more than two centuries, how faulty can Dr. Hunt’s compass be? I guess very little. giofranchi

Find in attachment the Hoisington Quarterly Review Fourth Quarter 2012. giofranchi HIM2012Q4NP.pdf

Thank you valueInv, I have just purchased “Management Rewired”, and I will surely read it! Actually, I am well aware of the fact that stories might be dangerous and misleading. But stories are not history. I remember Mr. Rodriguez saying that at the beginning of his career he had the chance to ask Mr. Munger three things that would help him improve his skills as an investor the most. And Mr. Munger replied: “Study history, study history, study history”. Don’t study what historians say or write. Instead, study what the great minds of the past might still have to teach us. I mean, if you read Seneca, whose writings are still relevant after 2000 years, how faulty can your compass be? And, by the way, he not only was the greatest philosopher of ancient Rome, but also the richest man of his time! 8) giofranchi

- Adam Smith, The Wealth of Nations, 1776 giofranchi

James Grant: The Bubble http://www.ritholtz.com/blog/2013/01/james-grant-the-bubble/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29 giofranchi

+100 It might very well be so, although I don’t necessarily believe that, and I am going to explain why. Anyhow, even if it were so, ask yourself the following: “What do I prefer? To be lost at sea, in a dark night, with a completely starless sky, and without compass at all. Or to be lost at sea, in a dark night, with a completely starless sky, but having a compass, although not a very precise one?” Of course, the answer depends very much on what “not a very precise one” means: if it points south, better to be without compass at all! Vice versa, if it gives you a general idea of where the north is located, even if it errs by some degrees, well, then I would certainly prefer to have that compass. By itself it won’t save me, good judgment and sound reasoning on my part will always be required, but it will provide some help. Now, why do I think that history might err by some degrees, but doesn’t point south? The answers lies in the so-called “LINDY EFFECT”, that Mr. Taleb describes in his book “Antifragile”: This basically means the probability a book, that has been around for 2000 years, will still be relevant 2000 years from now is the same of the probability a book, that has been around for 10 years, will still be relevant 10 years from now. If you think of it carefully, biographies are only “gates” to a knowledge that has been around for much much longer. “Keynes 1883-1946: Economist, Philosopher, Statesman” is a gate to “The General Theory of Employment, Interest, and Money”, “The Einstein of Money” is a gate to “Security Analysis”, “Prophet of Innovation: Joseph Schumpeter and Creative Destruction” is a gate to “History of Economic Analysis”, “The Life of Adam Smith” is a gate to “The Wealth of Nations” (ok, “The Wealth of Nations” doesn’t need any gate at all!), “Benjamin Franklin, An American Life” is a gate to “Poor Richard Almanack” and his own autobiography, etc. I can already see a new Warren Buffett biography 100 years from now, that will be the gate to his shareholder letters, and I guess the content of those letters will still be very relevant! So, the biographies might be flawed. I agree, no doubt about that. But, if you dig deeper, if you go where those biographies might ultimately lead, there is much more robust and thus enduring material to be studied and to be used as a guide. giofranchi