LongHaul

Thanks for posting lotsofguts. That adds new information and perspective on who the analysts were and Charlie's answers.

I read most of the lawsuit Findings of Fact and Conclusions of Law. I am not a lawyer but it seemed pretty clear that Windstream violated they covenants of the bonds and did a sale leaseback. I would not touch Uniti here, as Windstream could easily file for BK (perhaps from this ruling) and then Windstream rejects the Master Lease in Bankruptcy and would likely end up paying much, much less for the lease payments to Uniti. Who knows what market rates would be - perhaps half of the $650m? I don't know.

I am guessing you nailed it netnet. Great analysis. Unless something was missed but I can't think of anything else right now.

Munger Mentioned at the DJCO meeting that the best picks of a local Investment Manager could not beat the market. It happened 3x apparently. Any thoughts on why this failed?

What do people think of Microsoft's Products? Quality, ease of use, pricing, etc?

This is early in research, but this was a fantastic article on L-Serine and Alzheimers. I have to give a lot of credit to Paul Cox and his team for pursuing this. The world needs more people to experiment in all facets of life. http://fortune.com/longform/alzheimers-disease-cure-breakthrough/

Lot of Wisdom in Stevie's post and others. One thing we are trying to instill is a love of learning. Buying books and stuff that is of interest to them and encouraging their interests. If you really think about the love of learning - that will take someone very, very far especially over a very long time and even more so if in you vocation. Blow past 95% of Ivy Leaguer's if you have that.

If you don't have kids you wont fully realize what it is like until you have them. It is tough and great. People gloss over the tough part but there is a lot in that. I think you want to maximize the odds that your kids turn out well - emotionally as well as everything else. Personally this is not something I would want to outsource to Nannies. Will they care about your kids as much as you? I have heard/seen the effect of child maltreatment quite a bit over the years. Innercity schools, rich kids and other experiences. One police office told me something interesting - if you don't get to your kids, someone else will. Joe Plumeri (old CEO of Willis Group) had a son die, from I believe a drug overdose. In his book he said he was working a ton and if he had spent more time at home his son would be alive nose. He hit himself really hard but I think he was being truthful. As far as women, I am no expert, but whoever you marry will be mother of your kids. So be careful - the last thing you want is a selfish, highly materialistic woman who puts the kids last. (same with husband). And in the swirl of courtship this can be tricky to figure out. My 2 cents.

Imagine yourself in a hospital bed many years in the future and you are on your death bed with about 1 week to live. What will you be thinking of - material possessions or the money you have? Probably not. You will likely be thinking of your family and the mistakes and regrets you have that you will want to come to terms with. Children One thing that surprised me when I became a parent with school age children was how many horrible parents are out there. They are selfish, ignore their kids, teach them very little, don't give them the love and time and validation they need, etc. This can literally have permanent effects on children from finding the wrong crowd to much worse. Children don't need fancy toys and expensive gifts. If you are not paying enough attention to your kids you really only have yourself the blame. It has to be made into a priority and you have to put the time in. Put the electronics down and media down. I am not sure why this seems to be undermentioned by the media but this is probably one of the biggest factors of why kids don't do in well in school and life as they could.

Could be a good case for Cali legislating for black swans, which this appears to be. From an insurance catastrophe modeling perspective, a rising trend had been defined in the last few years before 2017 and 2018. The most important variables seemed to be 1-property development at the wildland interface (40% of new homes, typically more expensive properties) and 2-the length of the fire season. The models tend to be historical (trend following) and include variables that are very difficult to measure precisely (ignition by lightning, ignition by human activity etc). Despite the rising trend, the 2017 and 2018 fire seasons were clear outliers. From an insurance perspective, going forward, could the premiums related to wildfire exposure be a fonction of the location of the property, the bulding materials and a reasonable obligation of the owner to maintain a minimum level of protection (branches, debris etc)? Very interesting CigarButt. Thanks. Here is another article on it. https://www.vox.com/energy-and-environment/2018/11/13/18092580/paradise-california-wildfire-2018 The funds invested in this seem to be from the East Coast. And 2018 was not the worst case. Although high compared to historical numbers - it could have been much bigger.

Could someone have predicted that there would have been a series of fires this big in California in 17 and 18? Thoughts on risk assessment? 2015 was the highest dollar damage year on record before 2017 and it was $3b (see Cali Fires History). Verisk had ~2 million households at high risk of wildfire damage in Cali https://www.verisk.com/insurance/campaigns/location-fireline-state-risk-report/# Cali Fires history http://cdfdata.fire.ca.gov/pub/cdf/images/incidentstatsevents_270.pdf California Wildfire history https://en.wikipedia.org/wiki/List_of_California_wildfires Electric Service Area of PG&E https://www.pge.com/tariffs/tm2/pdf/ELEC_MAPS_Service_Area_Map.pdf

Munger's comments on value investors from recent WSJ article. Any thoughts? The money managers among them are “like a bunch of cod fishermen after all the cod’s been overfished,” Mr. Munger tells me. “They don’t catch a lot of cod, but they keep on fishing in the same waters. That’s what’s happened to all these value investors. Maybe they should move to where the fish are.” https://www.wsj.com/articles/when-charlie-munger-calls-listen-and-learn-11548421209?mod=hp_lead_pos9

link no longer works

Some interesting history on the El Paso BK https://www.elp.com/articles/print/volume-79/issue-2/industry-news/speaking-from-experience-bankruptcy-dont-do-it.html

Inverse Condemnation - seems like the elephant in the room. Unless Cali reverses Inverse Condemnation why would I invest in PG&E stock or bonds? Every summer and fall it is like playing a financial version of Russian roulette. There could easily be a $10b - $20b+ liability in many years to come and additional liability where investors get wiped out. I don't like relying on Cali regulators to bail me out either.

Thanks for posting this. What are KYJ And EC?

I really admired the late Bogle. One of the biggest things he did was make Vanguard a mutual. By doing so he gave up an unbelievable level of wealth to the customers of Vanguard and likely competitors customers who had to lower fees. How much did he give up? If he had made Vanguard a for profit lets assume that on $5 trillion he would have made 5 bps. That works out to $250m per year so let's put that at 20x = $5b plus all the profits he would have collected over the years and that could of easily been $7b+. He is probably saving people billions per year on fee reductions. Amazing. He is opposite of the private equity manager/hedge fund model.

What Country Handbooks/Surveys are Available that everyone knows about? These are a great way to get an overview of the companies that exist in a certain market that I think is very efficient. 1. Value Line for US. 2. Japan Company Handbook https://www.amazon.com/exec/obidos/ASIN/B07CXK4Y9J/ref=nosim/addallcom-20

Buffett is >$100b in cash

Accounting is the most valuable language in the world to know. And few seem to know it really well. For basic financial accounting you can probably pick up some college textbooks. For advanced, ie forensic accounting, check out Howard Schilit's books. Then go and study a lot of frauds and see what you could of seen before they blew up. Accounting is something that is a lifelong learning process.

Ah the blamethrowers come out. Until recently the lowest interest rates in 500+ years. ~3.7% unemployment now in the US The last time the Fed had a lot pressure on it to keep rates low (Lyndon B. Johnson) we ended up with a ton of inflation and a very low stock market for a long time 70's and early 80's. Perhaps the Casino is just running out of booze.

Thanks for posting and writing this Eric. The more I think about it, long term call Leaps are probably one of the best way to achieve this. Long with puts could be similar. Options pricing does not take fundamental values into account and therefore on a long term basis this can be the inefficiency. To get really great odds though I think 2 things have to be present. 1. Extreme undervaluation 2. Low cost of the option premium. The upside is magnified returns vs unlevered long only. Downside is getting wiped out if the stock is down. So to be 100% invested in calls has wipeout risk.

1. Start an asset management firm and charge incentive fees. Losses on LP capital are non-recourse to you, but you get a nice slice of the upside on any increase in value on that capital. 2. Invest in the equity of highly levered firms. Small changes in their enterprise value will lead to large changes in their equity prices, which would be similar to the effect on the value of your portfolio of levering your own balance sheet to buy unlevered firms, with the benefit that debt at the firm level is non-recourse to you. Both potentially good ideas. Equities of highly levered companies act like warrants without an expiration. Another option is what Beal Bank did - delevered prior to the financial crisis then lever up when it hit. Not sure how much leverage Beal used and there are regulatory issues. Insurance companies like Berkshire is also an option but probably also regulatory constrained. Are there any non callable bonds/preferreds or other debt instruments that don't act like margin debt? Margin lenders get nervous and can call the loan quickly.

Can anyone think of a strategy to take on a huge amount of non-recourse leverage with little down and invest in stocks? The only thing I could think of was Leaps.

I personally would not deal with the lawyers. That is likely to be lose/lose with the gf/mother in law from a money, time and even business perspective. Agree to a deal that is fair to both parties and then get the lawyers to draw up a contract. I think convincing the step mom with logic and a fair price would work, otherwise the lawyers could have a field day and she would not get full control and economics. I also don't like what the step mom did with the lowball offer. To be blunt sounds like she is trying to "steal" the business from you GF. Think about the Step moms character carefully and if you want to be partners with this person in such a small business. Unlimited number of ways she can steal.