gary17

HMMMMm so if we follow the SAME pattern we'd go from 16000 --> 13000 or about a 20% drop whereas it was previously a 50% drop from 400 --> 200

i believe i read somewhere, maybe on bloomberg, that whatsapp do not ask for personal info - just verification of phone numbers - so there is that uniqueness. LINE is really popular - especially amongst Asians because of these crazy emoticons you can download and purchase

On the other hand there's a lot of opportunities for the world to work together and advance - the glass can be half full or half empty. Where there are risks there are opportunities. All I know is there's a lot more wealth today than 100 years ago and we had many crisis this last century and nothing slowed down on that scale (relative to the last 1000 years before 1900).

are you talking about Fairfax?

Hi Sanjeev Thank you for putting up such a great message board and I have really benefited from it. I have learned lots and really appreciate you setting this up & all the people on the board willing to share their ideas and thoughts. I have no idea how much it costs to maintain the IT stuff - I just thought with $10,000 that's probably pretty good? Anyway, I thought I make a $500 donation to the Crohn's and Colitis Foundation of Canada - doesn't directly benefit the website but for a good cause that you've been promoting and a disease I can relate to. Gary

I love Starbucks Coffee. Great taste. Just like coke. Addictive. And free soy milk is wonderful too. They did a nice job upgrading their interior to be more rustic. And they seem to get all the airport spaces too - never seen second cup or blenz or other brands.

This is in my book as a type of business that Guy Described as "providing intangible benefit at a low cost to the customers" and combined with the ability to raise prices to combat inflation... If it wasn't 70bux I would love to load up. Should have during the recession. I can buy Starbucks and go away for ten years knowing it will be fine. Wish there were more like this.

--Didier Sornette, world renowned mathematician. http://www.scribd.com/doc/102565960/GMO-Ben-Inker-Reports-of-the-Death-of-Equities-Have-Been-Greatly-Exaggerated We will begin with a summary of our basic points: 1) GDP growth and stock market returns do not have any particularly obvious relationship, either empirically or in theory. 2) Stock market returns can be significantly higher than GDP growth in perpetuity without leading to any economic absurdities. ... Interesting that's the same message I'm getting in Ken Fishers book. I wonder in all the previous crashed - what did WEB do? Did he hedge? Did he build cash positions or others?

Funny how 1 in 100 year events happen far more often than that. 1929-1932 - peak to trough of 90% over the course of TWO massive market drops (this is what Prem is concerned about) 2007-2009 - peak to tough of 54% 1937-1938 - peak to trough of 52% 1973-1974 - peak to trough of 46% 1939-1942 - peak to trough of 39% 1968-1970- peak to trough of 36% 2000-2002 - peak to trough of 34% Notice in the last 100 years, there were 7 instances of a 30+% corrections. You'll also notice that they all seem to cluster together with 3 occurring from 1929 through 1942, 2 in 1970s, and 2 in the 2000s. Now, I'm a betting man and I see a world that has more debt than any historical precedent, politicians who prefer to paper over the problems with bailouts and moral hazards, and a world that is more interconnected and susceptible to external shocks than it has been in the past....and because we haven't seen a major decline in stock indices in 5 years it means Prem is an idiot or has lost his touch?No. It means he has a better knowledge of history than you. 1929 - 2000 is before we really have Internet - before there are all these forums, blogs, etc - I really think it makes a difference. While I think the market is not cheap I also think the market is behaving cautiously - So of all those events we are still many times better than in 1900 - the standard of living, the quality of life, advancement in medicine, better telecommunication, education, entertainment, etc, etc. We need a bit of bubble to keep the economy growing and get people out of poverty - as long as the bubble doesn't burst. I just keep looking for good businesses that has good pricing power during bad or good times -- so if we'll have a correction then so be it - I'd rather be optimistic and look at how businesses can achieve their goals & prosper G

Prem is hedging for a 100 year event. So that'd be worse than the great depression and the sell of in the 80s... that's like a 50% and more market decline. Think that could very well happen. On the other hand. We have a more interconnected world economy today. There's more study / understanding of economics .... so while the probability of the event occurring is probably as likely as in prior circumstances, the consequence may not be as great due to the advancement of our societies.... Optimism is a competitive advantage.

I wonder how well the world governments are prepared compare to 2008 if we have another recession.

Well, it should go without saying that I've been surprised by FFH earnings and market reactions to them before. However, I don't think we're going to see a drawdown of that magnitude tomorrow. Just so we are all on the same page - $370 USD or CAD?

I hear a lot of discussion about how the hedges don't turn out so well..... i just have one question: If you have a $4B portfolio and the info Prem had 4 years ago.... what would you have done to protect the capital base? I think it just comes down to: did Prem make good decisions based on the info available? I think in this increasingly interconnected world the difference between a global recession & "chugging along" is a very fine line... G

Interesting WEB was okay with that much debt relative to MC - wonder if interest rate was much higher than today. I also noticed that WEB's punch card buys are companies that can raise the prices -

BG2008 - can you please elaborate on what you mean by "market neutral workout"? thanks Gary Why shooting so low? You should aim impossibly high so that even if you miss by a mile you still do great. So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years. See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer. I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire. It's akin to Munger's "Man with a hammer" approach. If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself.

what telco's have you been looking at? if you don't mind sharing i'd like to take a look at them!! thanks!! ;D

thx for all the insight - very useful & indeed tech is difficult to predict... on the other hand, i still think price is the best thing to controlling the risk in an investment - rather than being able to guess what future events will transpire. so i think what John Hempton says has some truth to it; if not, why are we seeing competition - clearly, the pie is too good to be true to be enjoyed by a few - and the telecom / cable cos will do their part to sustain their competitive positions... so the only game there is for me is to find the ones that's very, very cheap..... so i'd be looking at the beat down ones in europe like Ti-A and Orange instead of verizon , etc. Gary

what is transpiring in his companies? can you please elaborate - or is there a news article somewhere that i can catch up with the reading ;D

there is an interesting discussion on spectrum on pg 49 of this document from Deloitte http://www.deloitte.com/assets/Dcom-Taiwan/Local%20Assets/Documents/2013%20documents/dttl_TMT_Predictions2013_en.pdf Gary

saltybit, thank you so much for sharing this - very insightful. i really like how he says the cable industry is more like real estate than manufacturing - makes a ton of sense... i think one could probably extend that to any capital intensive industry .... also really like this quote:

i just personally have a different experience, but that's just me may be. back to the topic - i think John has a really good point here about longing an industry with pricing power - it's something that i've sort of been thinking about this past 6 month, but this interview for some reason really 'clicked' for me - i now have a better sense of it is i am looking for ..... and i think it really makes a lot of sense when looking at some of Buffett's bets in the past - he seems to bet on the best company in an industry that has good pricing power.... what industry will have pricing power over the next decade? and it's really difficult for the customers to switch? and for rivals to compete? - Banks? - Insurance Companies (which has more to do with the cycle) - Consumer products - those made by P&C / J&J - Coke? - credit cards? as prices go up, they charge the same % of service fees, so appears to benefit from higher prices - productive real estate - basic materials? - music / movies <-- itune went from $0.99 -> $1.29 last 3 years; and movies are more expensive now - food / groceries - TELECOM???

although if the market's down it might not be a bad idea to turn this into a tax-loss event for your home - iv'e been thinking how to short-sell my home if the market turns around , and this is the only way i could think of.

thanks txlaw for your insight on this - i have a simplistic view on this as well - perhaps overly simplistic. i think over the next few years we are likely going to just have wireless providers and content providers for the general consumer & wireline will just be for enterprise.... wireless coverage & capacity seems to have a lot to do with installing cell towers & their back haul connections; and there is a cost associated with that. if i already have a certain market share in an industry.... and so are my competitors, would i want to spend a whole bunch of money so i can gain a bit of market share, but at the risk of losing my pricing power? i agree the absolute capacity is infinite - just like the airline industry there's a lot of space in the sky for planes, and all the players in the industry could just get more planes - but that's clearly not happening, and more and more people do want to travel. agreed on owners earnings vs us gaap - i was a bit surprised when i hear that... Gary PS. Look at alaska airlines, delta, etc - they've done really well the last 5 yrs

perhaps.... wait until that paper says wireless waves cause cancer or affect childhood development -

hi saltybit - you didn't ask me, but I want to respond! i have alsk & gncma... but started thinking about telecom italia & orange. i think i like them equally - alaska is very simple - it only needs to work on its wireline business. pay down debt. then it'll do ok. gncma - cable co & wireless + tv i like this one too and i agree with others' calcs that both alsk & gncma are very cheap... they may never get acquired though... i'm just thinking about manitoba telecom in canada - it's been flat for 5 years and it was talked about as a potential for being acquired by one of the big 3s in Canada - so may be the market in alaska is too small no body will want these guys and they continue to trade at a discount. i like telecom italia & orange for their exposure to EM and the fact europe, in my opinion, is going to do alright in the long term. both are very cheap if not as cheap as the alaskan ones. i've been debating about whether 'cheap' = margin of safety when it comes to telcos though. when the price is cheap, the risk of going to zero is a lot less - on the other hand, telcos that are fairly valued seem to have less debt and positive cash flow - this is a natural advantage - if i'm cheap because i'm in debt, how do i compete with the guys that have much less debt in a capital intensive industry? so may be in the end the fair valued guys do deserve the slight premium and will do better in the long run. perhaps this is why WEB says buy great businesses at fair value - just my 2 cents Gary