bargainman

meh. Wasn't all that impressed, too touchy feely. Especially when it comes to Apple. He claims that every other company could do or could have done what Apple does; that's baloney. There was a famous decision that Jobs made when he first came back. Jobs said that basically Apple was the only company that built the entire widget any more. Everyone was claiming that was a huge disadvantage but he said that was Apple's key advantage. The rest is history. Since they do the design, the software, the hardware etc, they had a huge advantage over everyone else. No other company did or does that. To claim that Apple succeeded because they focused on "why" vs 'what' or 'how' is a huge simplification and inaccurate. It was more about the fact that they focused on their key advantage and grew it even more, by entering into new markets and by creating an even stronger vertical (opening the Apple stores). The Tivo thing was less than convincing. Tivo didn't fail because it didn't advertise right, it failed because there was no moat. Apple has so far failed in TV. Jobs ironically spoke about why TV is such a tough area to get into recently. On the other hand it was only about 20 minutes, maybe he has something more substantive to back up his claims, it seemed like a lot of hand waving with no evidence to back it up... IMHO.

Take a look at TILDX, read up on Zeke's letters and his presentations at the VICs. They have the added flexibility of selling calls. Kinetics has had pretty good performance but seems to be less known. Also the Primecap Odessey group is a bit less well known but they run some of Vanguard's funds. Just food for thought. Bruce from Fairholme is opening up a new fund too, it will be interesting to watch..

You got some ticker symbols or links I can look up?

Fine, but they make almost all their revenue as a retailer, regardless of how many beanbag chairs and pingpong tables they may have in the office. By which you should classify Google as an advertising company not a tech company too.

Speaking of volatility, LUK is a reasonably good options candidate. Just sell puts to acquire or after a big drop. The premiums are pretty good because it's such a volatile stock. Long term though you know they're going to create value...

How does this work? I was scanning the prospectus here: https://www.ipathetn.com/pdf/xxv-prospectus.pdf and I couldn't find an explanation of how they are implementing this.. The last time I checked the VIX futures there was contango so that rolling from the front month to the back month cost quite a bit. But how is the XXV implementing their strategy to inverse the vxx? Do you know the details? Thanks.

Myth, if you would be so kind, what's your thesis on SSW and FTR in a paragraph or 2?

I seem to remember reading that Buffett also got into a situation like this where the entire town was against him. I'm pretty sure I read about it in the Snowball. I think the town gathered enough funds to buy the company back from him or something, but it sounded like it was pretty charged and that he was definitely being vilified as the outsider activist investor. Anyone remember the company/situation I'm talking about??

The only solution I've heard that makes any sense is what Bill Gross proposed: http://blogs.wsj.com/developments/2010/08/17/bill-gross-refinance-wave-could-lift-home-prices/ Let people who are current on payments and who can actually still afford their payments refi at lower rates even though they have negative equity. I'm not sure why that proposal doesn't seem to be considered seriously. The current mortgages are backed by houses, they'll still be backed by the same houses. Those homeowners will still owe the same amount, just spread over a few more years and at a lower interest rate. It would pump huge amounts of cash into the economy because the responsible people would now have more cash on their hands..

The thing that impresses me about Blizzard in particular is the discipline. What the *? am I talking about? The discipline not to release a product before it's ready and the game play is amazing. Starcraft II was slated for release about 2-3 years ago if I remember right. But they kept delaying the release until they got it right. Can you imagine the discipline and guts it took to make that happen, especially in a public company? That to me is a huge competitive advantage. Gamers love games with fantastic gameplay, and you just don't get that if you have to meet a tight schedule and have to ship. But then the rewards when you do ship a great product are extraordinary. I think that the fact that there is WoW and now Starcraft online too (although I don't know the details here) also means that there is a slow building base of recurring revenue that isn't reliant on the stream of hits.. Oh, getting back to the hits. I agree that this is a hits business. Which makes it all the more important that they get the gameplay right. Once again meaning that the willingness to make a game that will play wonderfully will mean they are more consistent when it comes to hits... Now take this all with a grain of salt as I'm an ex gamer who just doesn't have time to play SC II anymore.. too many family responsibilities.. but I have been reading the review, salivating, hoping for the day I have time to crack SC II open... I hear they just release Civilization 5 too! sigh..

http://money.cnn.com/galleries/2010/fortune/1009/gallery.women_men_highest_pay.fortune/4.html amusing that he's voting against Sardar's comp package :)

How does one make a bearish bet on munis? Is it possible for a small investor to do so?

Very true, which is why you need a double discount to really consider buying. But they also have a very long habit of buying back shares. Which is exactly what you want a company to do if they are constantly selling at a discount. it's basically a guaranteed return. The only downside of course is that they are going to have a hard time growing. But they won't have a hard time growing value per share which is probably what everyone on this board wants!

I think the points regarding risk control on shorts are very valid points. What's the old statement "the markets can stay irrational a lot longer than you may be able to stay solvent"? As investors with a clear value leaning, we can get so focused on business risk that we forget about or minimize quotational risk. Quotational risk is pretty important from a shorting perspective. I also find it interesting to see a modified value style. Basically it seems to me like Harry does look at value but won't necessarily sell when the business reaches intrinsic value. it seems like he has some kind of momentum stop or trailing stop that lets him get out if the stock loses it's momentum. Or maybe it's an asset allocation guideline (sell some whenever it becomes > 5% of the portfolio) Of course the danger in that is that when momentum stocks fall, they can fall hard. You can get earnings drops and PE multiple contraction in one go, and then the trailing stop can mean nothing. For those interested, there is an interesting study floating around called the "Capitalism distribution" it's a study on a momentum based system which proves quite successful and shows that the vast majority of market gains come from stocks continuing to make new highs. People may not be interested in it since this is a board dominated by value focused investors, but it's important to learn as much as possible imho.

Well I'm going to disappoint you, ie I'm not going to answer your question... but here's something else I remember from the strategy slides. NFLX's lowest monthly sub price is $10. Ten bucks! Their model is the lowest cost/lowest producer etc model. Ie they figure that even if someone has cable at $30-60-100/month, they'll spring for NFLX too since it's so cheap and people get access to the library online. On top of that, ubiquity was their other key. There's a NFLX online player for every friggin' device out there... As such their business has some cushion in a downturn. That said.. I wouldn't buy NFLX today.. neither would I short it... Option premiums are probably too high to buy puts too..

I remember seeing the strategy slides for NFLX. Their idea was to drive watch now usage which would eventually reduce postage costs and increase margins. I sold my NFLX around 138. But I would never short them. I once read an extremely compelling short analysis by a very good investor who I really respect and has a tremendous record. It was on AMZN. The stock proceeded to from from overvalued to supremely overvalued. My rule after that has been.. never ever short a strong company no matter how high the valuation. Find crummy companies with lots of debt, incompetent management, no advantages etc etc, and short them. NFLX is a strong company with a visionary CEO that revolutionized an industry. If I were to short them I'd either buy call options to protect myself or just do puts... Shorting story companies with great CEOs is just not my cup of tea... my 2 c.

Sounds like he's on board with Andy Grove's thoughts: http://www.bloomberg.com/news/2010-07-01/how-to-make-an-american-job-before-it-s-too-late-andy-grove.html

I'm sorry Partner, can you walk me through this.. I see the note, and I see what it says, but I don't see anything about M. Smith's compensation or ownership attached to that note. How do you know that note is tied to his compensation/ownership? Thanks.

Does anyone know what M. Smith's insider ownership status is? It's great that he's creating so much share holder value but I've always had a hard time finding what % of the companies he owns. Does anyone know? It doesn't look like her personally owns any of TTT...

The one thing that bothered me about the interview was that I thought he skirted around the question regarding Citi and other financials being black boxes. He famously said that he read 1-2 pages in the 10K of AIG about derivatives and didn't understand it, so he passed on all the financials. Now when she asked about Yacktman claiming that they are black boxes, he sort of answered, but he didn't take the question straight on I don't think. He did say that they've had time to play out, and that there has been a lot of scrutiny, but he didn't say anything about derivatives etc. I was a bit disappointed in that. But I still like the guy :-)

I like Bruce B. a lot.. I have money in his fund. But here's the thing. He's got 15.21 Billion in FAIRX (according to yahoo). You said this fund is for your heirs. Bruce is also in his 50s. Say he does 10% a year, that's a double every 7 years (rule of 72). Based on that performance alone he'll be up at 30 billion in 7 years, and 60 billion in 14 years, and 120 billion in 21 years. Now in 21 years 120 billion won't be as much as it is today, but still... Plus.. He hasn't closed his fund yet! Plus he'll be in his mid 70s by then, and then what's his succession plan? If this money is for your heirs, this fund is definitely not the only place I'd put the money.. I think you'd have to diversify it in several places. You basically have the problem Warren Buffett has of wanting to watch over the money posthumously. :-)

Where???

Lol This should say either you agree or you dont. I dont. Gold has a value just like corn, wheat, or labor but its not money to the vast majority of people walking around today. Im agnostic towards it from an investment perspective, but I would venture to say you are the minority in this argument. I think the 2 most convincing arguments I've heard regarding gold are 1. it's a store of value because there are thousands of years of human history saying gold is valuable. Plus, if you ask any Joe, Jane on the street anywhere in the world, if gold is valuable, they will say "yes" pretty much unequivocally. It's basically human behavior, ingrained, and it would take a lot to change it. Changing behavior and beliefs on a large scale like that is next to impossible. I mean it's the whole idea of having a brand! A brand means something, just like gold has a brand which means 'money'. Only 'elitist' investors ( ;D ) argue about whether it's actually valuable or not. The vast majority of the world just takes it as a given, and that's not going to change. 2. There is a very limited supply and it's not growing very fast not will it grow very fast. That said, I personally won't invest in it because I agree with Myth and Watsa_radian that it doesn't produce any cashflow or do anything productive other than just be. But the 2 points above do convince me that it's valuable in and of itself.

Is there a link to the online article?

I agree with the rest of what you said.. but.. Gold is not as much of a fiat currency. There is currently a limited supply of gold in the world. Pretty much all the gold that's ever been mined in the history of humanity is around, and according to wikipedia: "A total of 165,000 tonnes of gold have been mined in human history, as of 2009.[1] This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8,500 cubic meters, or a 20.4m cube." So we're talking a 20.4 m cube vs all the printing presses in the world :-)