jasonw1

Here is a thought exercise: why can't US (and the world for that matter) use inflation to neutralize effect of deleverage (or at least some of that), effectively reduce actual debt load and inflate its way out? This seems to be the path US is taking (China is doing the same, for additional reason of keeping RMB currency low without changing the exchange ratio to USD). Obviously the inflation needs to be controlled so it doesn't run wild, say price of everything goes up 20% in the next 3 years, including your wage, now that mortgage load doesn't look too bad because it's fixed amount, and housing doesn't look overpriced either (I actually think housing price is reasonable now).

I guess it depends how to define "long term"

I won't disagree with Fisher that stocks need to be evaluated with merit of its own, regardless of inflation of not, but I believe in a time of shift, there will be easy places to look for likely winners (5 of 10 companies in a sector will do well) vs difficult places (1 exceptional out 10 in a sector will do well). Like oil sector in the past 10 years, one could have just bought the whole sector EFT and do very well. Price in technology always put a deflation pressure, IMO it's "things you want" and thus less important comparing to price inflation of "things you need", food, energy, housing, education etc. However the official inflation doesn't capture that, and even plain misleading in this regard.

Any specific REIT company which is hurting really bad as described? HRP, which I follow, they don't seem to doing that bad: "Occupancy and Leasing Results (excluding properties classified in discontinued operations): As of June 30, 2009, 89.1% of HRP’s total square feet was leased, compared to 89.5% as of March 31, 2009 and 90.9% as of June 30, 2008. HRP signed lease renewals for 992,000 square feet and new leases for 650,000 square feet during the quarter ended June 30, 2009, for weighted average rental rates that were 2% below prior rents for the same space. Average lease terms for leases signed during the second quarter of 2009 were 7.7 years. "

It's a point of view WEB has discussed quite a bit in the last 6 months, the most likely outcome for US will be: 1) coming inflation, big time 2) dollar devaluation 3) higher taxes Now, what can you make out of this? Here are the things I can think of in terms of where to hide/profit: 1) great business as inflation hedge, like KO, JNJ 2) companies with hard assets, commodity, oil, gold 3) real estate Thoughts?

It really doesn't matter whether companies are using XP or Win7, when they buy a new PC, most of them are preinsalled with Windows, either XP or Win7 Microsoft is going to make money on it, the amount is roughly the same. Few people are upgrading OS without upgrading hardware now, so the key question is really new PC shipment. As a regular user of Vista and Win7, unlike Vista, I think Win7 is going to be a surprise on the upside. XP is stale and has been moved off support, Vista is a failure, Win7 is decent and people would be more likely to upgrade after holding out for Vista.

At the same time ORH-B is up >10% today. Strange.

That's not helping though. All the google ads on the board need to be clicked to pay out anything, so if everyone just gets really good at ignoring them, you suck up with those ads (may even see more coming in order to meet target :-)) but not helping a dime.

Sanjeev, I think you may be a little optimistic about the ad revenue from the bottom of the thread. My guess is that a lot of people didn't pay much attention and clicked on it accidently, so it appears more effective at the begining. People will learn quickly and start avoid it. Before tweaking for more distracting ads, why don't you just make a plea to members to click on the ads to help pay the dues, and see how it goes? At $0.50 to a few $ per click, you don't need that many clicks to pay for your hosting/domain fee. I just paid my due today. ;)

You can get very detailed traffic stats on any site you own, there are many different free tools/services you can use, the best one I used is from Google Adsense, without displaying any of their ads.

I think buying/reallocating money to KO and JNJ are better hedges for the next potential down market, if it happens. It gives you upside potential, while the downside/volatility is limited.

Agreed. I would think that the exact same set of people would be the first ones to chicken out and sell if stocks go much lower and don't recover quickly. :)

Agree. I just want to point out it's not the moat differentiates Coke from Pepsi. Buffett has said in multiple occasions: even given $10 billion (or whatever huge number he used), he can't displace Coke. I think you can have a comparable distribution network if you throw money at it, but the other things of Coke are what you can't buy with money.

Coke and Pepsi switching cost is not zero, because it's about human taste and habit. Human taste can't be standardized, can't be quantified with technical specs and performance numbers, and once you have a habit it's hard to break it, all this add to switching cost. For Google, I agree the distribution network, or the network effect, is a really powerful force; the barrier to entry is high which is another plus. And another thing about Google is that its revenue is recurring, it's not like many other high tech companies where their previous product becomes their biggest competitor, as you have to keep coming up with new/better things to convince people to buy/upgrade. I don't buy the "trillion dollar ad market" comparision though, as Google will be the broker of advertising, a lot of the revenue actually goes the content owners. It's more like a highway toll type of business, which is a great one as long as they maintain their market. However I don't see why distribution network is a moat in Pepsi vs Coke case, I think Pepsi has as good of a distribution network as Coke, IMO Coke's real moat is its taste, human habit and its brand.

The thing about high tech is not lack of moat, but market change too quickly which makes previous moat obsolete. A company could dominate a market completely and have moat around it, until one day people move to something else and that market doesn't exist anymore. This is very different from Coke and Gillette where you can count on people will always drink and shave, you just need to be the best for making soda or razor. In high tech, you need to worry about the rug may get pulled under you, the demand for your product can be gone completely in a short time frame. EBAY has a strong moat in online auction, but that market is not growing anymore. I don't think AMZN killed or can kill EBAY's moat, I don't think anyone can displace EBAY as the online auction leader. But that market does have the danger being nibbled by fixed pricing marketplace or free listing sites like craigslist.com, it could become less revelent. The other gem EBAY has is Paypal, great business model, and its moat as online payment is incredible, not even Google can shake that, although they've tried with their Google Pay.

I don't really understand why Munger thinks Google's moat is "something he's never seen before". The switching cost for search is ZERO, and it only takes 10 seconds to switch. As matter of fact I routinely use a couple of different ones, if I don't find the the information from one, I'll try the other one. I would agree Google is the clear leader in this space, and I usually don't need to use anything else. The switch cost for publishers is the easy as well, all you need is to copy/paste some scripts to your web pages. I don't have experience about switch cost for advertisers, but from their sign up process it looks pretty easy as well. One big moat I can think of is the "network effect", where more search query brings more publishers, then brings more advertisers, which is similar to the moat like EBAY. Although switching is easy, people don't have any incentive to switch, as long as Google's service is at least as good as the second one. Google's technology is definitely ahead of others at the moment, but it's not something they can sleep on as it changes quickly and others are catching up fast, though Google has managed to stay a few steps ahead so far. But if they have a few flops, even minor, the whole pictures could change very quickly, as the switching is so easy and fast. I really like Google's products and their culture, although not shareholder friendly, which is common for technology companies, as they rely heavily on the creativity and hard-working of engineers, but hey people get rich investing with MSFT before. It's good to see Google is putting some control into their cost and becoming a bit more focused, it probably also indicates their fast growth days are over and they're now big and mature. BTW, Microsoft doesn't own AskJeeves, it has its own Live search. Full disclosure: long EBAY, MSFT, no position on GOOG, yet.

Buffett, Munger praise Google's 'moat' http://www.marketwatch.com/news/story/Buffett-Munger-praise-Googles-moat/story.aspx?guid=%7BCADB3B8E-7DD3-4943-AC90-1E964D35B709%7D I was quite surprised to see Buffett and Munger’s comments, considering they have traditionally shy away from technology companies, plus the comments came from nowhere during the press conference, so I guess they must have been thinking about this for a while, and Google’s moat must have been obvious and widening to convince them. What do you think of Google as an investment?

NWS is Klarman's largest equalty holding, he thinks it's worth at least $15-20 in current environment, and north of $20 in normal times. The debt of NWS is not that high, they can pay it from operating income and cash on hands.

A lot of best run China companies are listed in US and HongKong, same company is commanding higher valuations in SSE, so you're probably better off with something like FXI or EWH.

How is HRP-D conversion price going to be adjusted when HRP spins off GOV? I assume HRP price will go lower, will HRP-D still be converted to 1.9 shares of common? The other thing I noticed for HRP-D: The preferred shares are convertible any time at the holder's option into 1.9231 common shares of HRPT Properties Trust (NYSE: HRP), an initial conversion price of $13.00 per common share. On or after 11/20/2011, if the price of the common stock exceeds 100% of the conversion price for 20 of any 30 consecutive trading days, the company may, at their option, force the preferred shares to be converted into common shares at the then prevailing conversion price. Does this mean they can essentially cap the HRP-D price at ~25 through forced conversion when the commom stock stays >$13 for 20 days? So the call benefit isn't really there.

It's hard to get apple to apple comparison and data for remote regions are not as available as big cities, so the data shown here is for premier city cneters, which defined as: Administrative capital; and/or Financial capital; and/or The centre of the rental market The ratio essentially shows how many years of GDP per capita it takes to buy a 100 square meters apartment in one of the prime locations of individual countries.

Housing price dropping another 50% would mean that people can buy a house with roughly 2 years of household income, that would be among the lowest of all countries. I don't think there is a great bubble in US housing now, it's one of the most affortable in the world. You can see some numbers and comparisons here: http://www.globalpropertyguide.com/Asia/Japan/price-gdp-per-cap http://www.globalpropertyguide.com/North-America/United-States/price-gdp-per-cap In Asian countries house routinely cost 5-10 years of annual household income.

Both BRK and the stocks it holds are down significantly, if you have $ to invest, will you buy BRK or a basket of its common holdings? Which would offer better opportunity and returns? Same question for FFH. There are obvious reasons to buy BRK which put you in great hands and ride, there is also insurance float giving you extra couple of points in return. At the same time the holdings of BRK has gone down significantly and you can be nimble and buy great companies at bargain prices, much lower than Buffett and Watsa paid.