[WEB's annual letter]

On p21:

"By 2014, Class I railroads carried 1.85 trillion ton-miles, an increase of 182%"

 

On p22 (BNSF's share):

"Last year the comparable figures were 702 million ton-miles (plus 71%) and 47,000 employees

(plus only 4%)"

 

Is there a typo somewhere because BNSF's market share seem to be way too low.

 

Both quoted figures refer to ton-miles. And according to those figures BNSF has a market share of 702m / 1.85t = <0.1%. But it is the number 1 railroad in terms of market share. What am I missing?

 

BNSF's market share is much much higher in ton miles than it is in revenues, if that is what you are getting at -

 

"In that respect, we are a strong number one among the seven large American railroads (two of which are Canadian-based), carrying 45% more ton-miles of freight than our closest competitor."

[WEB's annual letter]

On p21:

"By 2014, Class I railroads carried 1.85 trillion ton-miles, an increase of 182%"

 

On p22 (BNSF's share):

"Last year the comparable figures were 702 million ton-miles (plus 71%) and 47,000 employees

(plus only 4%)"

 

Is there a typo somewhere because BNSF's market share seem to be way too low.

[Old annual reports]

I remember reading a thread where someone posted old BRK annual reports from the 70s and 80s, but I can't seem to find the thread now. Can someone kindly direct me?

[Myers–Briggs Type Indicator]

INTJ too. Are many successful investors on this board INTJ?

[Short Green Mountain Coffee Roaster (GMCR)?]

Coca Cola takes 10% stake and the price shoots up.

[What are you reading currently?]

The everything store

[Bridge... wait, who plays bridge?]

Used to play poker. To people who played both, how comparable is it? How much bigger or smaller is the luck factor?

 

The variance in poker is very high. Just by purely looking at results of any single session, you can't really conclude who is the better poker player whereas for bridge it is much closer to chess, ie it is relatively clear who is the better player based on short term results.

[Why Hold Cash?]

I don't understand why he would put more money in something that has 5x potential than in something with 2x potential in the same timeframe

[Marks is buying Chinese stocks calls U.S. equities "fairly to fully valued"]

I think most US investors don't have the expertise to invest in Chinese stocks. I bought some Swire Pacific recently and i like the idea to buy Jardine. Matheson:

[http://www.gurufocus.com/news/175836/jardine-matheson-an-undertheradar-asian-growth-story-contest/url]

 

I think Jardine in particular is a nice compounder, trading around book and compounding in the mod teens for a long time. Swire is a little cheaper in some respects (P/NAV) but maybe not as well positioned. In both cases, you get an owner operator and european style management who knows their way around in Asia. Both stocks are buys right now, imo.

 

Buying Matheson is pretty much the same thing as buying Strategic.

["Patience And Capacity To Suffer - Lessons From A Legendary Value Investor"]

This leads me to think how many years of performance data and magnitude of overperformance can we conclude that an investor will outperform in the future.

[One Click: Jeff Bezos and the Rise of Amazon]

[amazonsearch]One Click: Jeff Bezos and the Rise of Amazon[/amazonsearch]

 

Has anyone read this book yet?  Would you recommend it?

[Discount rates]

1. Say you are valuing company X using a discounted cash flow model. What is the appropriate discount rate to use?

 

2. Say you now are the only person who knows the annual free cash flow of company X with certainty to perpetuity. Assume further that all FCF will be paid out to shareholders annually. What is the appropriate discount rate to use and why?

 

3. If your answer to 2. was the long term risk free rate, does it mean that the reason for using a discount rate that is higher to the risk free rate when valuing company X is to adjust for uncertainty in its future FCF?

 

4. If your answer to 3. was yes, why do we not adjust the numerator (FCF) instead of the denominator (discount rate).

 

5. Or am I just wrong to think in this way and that DCF models are next to worthless for valuing companies given its many flaws