Tompety03

For sure - that makes sense that people can use their own internal valuation models absent a transaction. But if Fairfax just sold more of the airport to Onex at a certain valuation, don't they have to adjust their mark to that valuation? Chris

Got it - the headline made it seem like they were buying more at a lower valuation and I assumed that would require a revision by Fairfax. Chris

Thanks for posting. Hit the paywall - any details on the deal in the article? I guess we will find out when Q2 report is out in a couple weeks.

That is a great point! One way to reduce those headaches is to focus on graduate student style units within these areas. So not the party house with 6 bedrooms, but 1-2 bedroom units that are higher quality. For more responsible grad students or those with families. Still headaches and manual effort that needs to be factored into the price/return. I am not close to pulling the trigger on this, but was just thinking about pockets of the economy that will be impacted. Chris

Many colleges are planning for online classes in the fall and there is a chance that could continue into 2021. I wonder if that will present opportunities to buy rental properties around colleges as many landlords may not be able to bridge that gap. The impact could be severe in college towns where most of the economic activity and rentals revolves around the college. So not colleges in urban areas where there are other groups to absorb the supply (Harvard in Boston or UC San Diego). I am raising this idea because my family just moved to the Dartmouth area and the vast majority of the economic activity in town revolves around the students. Dartmouth is not going anywhere in the long-term. This is just an example, but I am curious if others have considered this. I've always been interesting in buying rental properties around quality schools and this seems like a good moment in time to do that. Chris

I am not intimately familiar with the cap structure at the Bangalore airport, but a 6-12 month slowdown in air travel should not impact the value of the airport this significantly. With 1/2 of the BV in the airport this seems like a bargain. India seems to be taking a very proactive approach to the CV - my friend in Pune has been under social distancing measures for a week or so and has a very young population. Obviously there are other challenges discussed in the thread on India/CV. Would be curious to hear other thoughts in case I am not missing anything. Chris

I read comments earlier in the thread about residential solar, so thought I would share out some relevant data if anyone is considering investing in the space. I run a small side business that publishes/sells residential solar data and we just published our Q1-18 report https://www.ohmhomenow.com/residential-solar-market-grows-11-q1-18-marking-first-growth-quarter-since-2016/. The market fell off in 2017 after the SolarCity acquisition by Tesla, but is starting to grow again. I am not invested in the sector, but Sunrun stands as out as well managed. They have a been using a hybrid model in which they have their own installation crews in some areas but also have a "platform" model that provides sales tools and financing for local installers. Local/regional installers have started to take more share (similar to other contracting sectors - roofing, hvac, remodel, etc.), so Sunrun's platform model has done well and I believe Vivint is now trying to copy that model. Their CEO is pretty smart - I interviewed there and someone told me that one of her favorite books is Cable Cowboy....

Thanks - read this book a while back and really liked it. It was helpful in thinking about how to identify excess costs and org structures.

Green King - great feedback, thank you. We are the leader in a very new industry - the product is not that sticky (main point of differentiation is cost), so the focus is on both cost and making the product stickier. We have some geographic expansion opportunities where we could secure a market leadership position w/ limited competition for a few years. Its a difficult balancing act between geographic expansion, cost reduction, sales and mkting in existing geographies, and product investments and the ROIs on those are all interrelated. Agree with your point on listening to people on the frontlines that understand the customer the best. Would you recommend any reading materials on the subject? I learn best through case studies/tangible examples from other companies. Also, as mentioned earlier, if anyone on the board works in a finance role at a growth company and would be willing to connect offline that would be much appreciated. Thanks, Chris

Board members - I am trying to find some good books, shareholder letters, or other materials on resource allocation in a growth company (basically the outsiders for growth companies). I work for a mid-sized growth company (500 people) and we are wrestling with the trade-offs of investing in sales/marketing, product investments, and variable cost reductions. I've read all the Amazon shareholder letters, which are good principles, but lacking in detailed examples or case studies. Cimpress came to mind as a potential good resource. Any suggestions would be appreciated. Or if anyone works in a finance/strategy role in a similar stage company and wants to chat offline that would be very helpful. Regards, Chris

Here are my notes on Capital Account from a few years ago. I just checked on Amazon and I bought the book for $24 in July of 2014 and it is now priced at $300+, which makes me think that I am better at investing in undervalued books than common stocks and should reallocate! http://www.boardofbooks.com/capital-account/review-and-notes/ There are a lot of parallels with the capital cycle strategy discussed in the book and recent events (Telsa/EVs, solar, natural gas frackers, etc.). Hope my notes help. Chris

JayGatsby - I read capital account a couple years ago and will post my detailed notes this week. I should still have the copy and if so, would be glad to lend it to you. Chris

This was one of the best books I've read in a while. Summary - http://www.boardofbooks.com/shoe-dog/ Detailed Notes - http://www.boardofbooks.com/shoe-dog/review-and-notes/

sounds like a great story. just ordered a copy. thanks for the suggestion.

I liked the comparison of Tom Ward and Harold Hamm's views on leverage: “I didn’t have much to start out with in life, so without leverage I wouldn’t have anything” – Tom Ward “I don’t like using other people’s money, it changes you. You believe your own bull, it distorts you” – Harold Hamm My detailed notes and summary are below. Chris http://www.boardofbooks.com/the-frackers-the-outrageous-inside-story-of-the-new-billionaire-wildcatters/review-and-notes/ http://www.boardofbooks.com/the-frackers-the-outrageous-inside-story-of-the-new-billionaire-wildcatters/

Thank you for the link to the HBS interview. I recently finished Limping on Water (Capital Cities book recommended in BRK 2015 letter). My notes are attached and below. Not on the top of my list, but has good insight into the Capital Cities culture. http://www.boardofbooks.com/limping-on-water/review-and-notes/ There is another book written by a former Capital Cities employee: https://www.amazon.com/Capital-Cities-Early-Years-1954-1986/dp/0801986184 The book also references a detailed HBS report written in 2000 that seems to have more specifics than the interview with Tom Murphy. Does anyone have that? Thanks, Chris boardofbooks.com-Review_and_Notes_-_Limping_On_Water.pdf

Just finished this book. Very similar concepts as Billion Dollar Lessons, but from an investor (vs. former consultants) and includes entertaining details of Scott's interactions with mgt teams throughout the years. Notes are attached and here - http://www.boardofbooks.com/dead-companies-walking/review-and-notes/ Worth the read. Chris boardofbooks.com-Review_and_Notes_-_Dead_Companies_Walking.pdf

Thank you for recommending this book, I really enjoyed it. I've typed up my notes and compiled a PDF of all the mistakes for future reference. - Notes: http://www.boardofbooks.com/billion-dollar-lessons/review-and-notes/ - List of Failures: http://www.boardofbooks.com/2016/09/billion-dollar-lessons/ Jurgis - agree that a lot of companies profiled in the book were using similar strategies in broad terms as the companies in the Outsiders. I think the idea is that there is a right and wrong way to pursue those strategies (managing the pace of acquisitions in a roll-up, entering real adjacencies, etc.) and management has a track-record of executing on that strategy. A friend also recommended Dead Companies Walking, which is very similar. It has some entertaining stories of meetings with mgt that illustrate how out of touch they can be with reality. Chris