uncommonprofits

I have wanted one of these phones for at least a year now for the same reasons mentioned. About a year ago I let my wife be the guinea pig -- she chose an android. The carrier refuses to upgrade it -- so it is getting to the point where it is almost outdated already (unless we can somehow mod it ourselves). The other problem is dismal battery life and from what I hear the iPhone and others are not much better. Another negative I have not seen mentioned here is iPhone's poor reception (at least for those on the other end) - I have seen a lot of negative comments on this issue. First and foremost a phone should be a PHONE -- so I would like good reception and better battery life. As I understand it -- with heavy use, one has to develop a habit to plug these phones in each and every night -- but I still worry that I will be without a 'PHONE' if I browse on it for a little too long, forget to plug it in one night, etc. You see these screens get bigger, very nice but I am not sure the batteries are keeping pace let alone gaining ground. The other reason I have been hesitant to get the iPhone in particular is it's proprietary closed nature of it's iOS. Something big might be developing on this issue when a couple weeks ago Apple rejected the Sony reading app. Apple has given an ultimatum to all app's that are currently bypassing the iTunes store.... and redirecting the purchase through Safari, etc. There is much speculation that the Kindle, Kobo and Barnes & Noble reading apps are all at risk of being tossed out --- leaving Apple owners with one single reading app (ie. iBooks). This may come to pass but it is an interesting development to keep an eye on -- more should be known in a month or two. Whether they go or not -- Apple is suddenly limiting the innovation of apps for iOS. I am not sure where people are reading some of these newspapers mentioned but if it's app based -- there is a possibility that Apple will soon be picking up a royalty of 30% over and above --- and hence potential that content will also command a premium on Apple versus other mobile OS's. Of course there is the alternative route to go through the Safari browser and manually bypass the extra Apple charges -- or to NOT make the actual content purchase on an iPhone or iPad - but that seems to really defeat the purpose of buying these devices to enjoy a very seamless experience. Many publishers are up in arms over these latest tactics by Apple -- it not only effects ebooks but also comes about at a time when newspapers and magazines are moving toward paid content models. As it is, I figure that any of these phones will cost me +$1000 over a 3 year contract (including the $25/mo data plan + the outlay for the phone itself) - I don't want to pay a further premium for content as well. Am just trying to be very cautious with this before getting locked in to either an iPhone or an android. Incidentally, Google is partnering with Samsung where they should soon be introducing the Samsung Nexus S. I am not sure if these Nexus branded phones are all hype -- but it is interesting to see Samsung partnering with Google this time around rather than HTC.

Crosby didn't get hit in the head by a 'shoulder' - rather, he was hit in the head by a 'shoulder pad' medieval vest of armor. So called shoulder 'pads' and elbow 'pads' are not meant to protect anymore -- they are intended to injure. Well ok they are meant to protect - but only in the sense that the other guy is wearing them, so you best be prepared. Crosby was definitely blindsided. It's questionable whether it was intentional - but it's quite probable that lighter equipment would have lessened the impact - possibly even prevented a concussion altogether. The league needs to look at equipment. Thicker, stronger shoulder and elbow pads made out of more massive rock like plastic are not preventing injuries - they are increasing them. This stuff is starting to look more and more like football equipment!

I'm afraid we are now entering the realm of personal opinions: far more healthy, according to whom? Society's standard of beauty is anything but static. Abercrombie & Fitch (ANF), American Eagle Outfitters (AEO) et al made a killing between 04-08 when the bulky, masculine "country boy" look was all the rage among young male. The torch has since been passed to retailers such as Urban Outfitters (URBN) or J Crew Group (JCG) which sell close fitting shirts and slim jeans that are in vogue with the thinner urbanites. I think you are taking this way out of context. I wasn't talking about some advertising campaign targeted at youths or who-ever. I was talking about comparing two types of elite athletes. Long distance runners look skinny and frail, even bony in appearance (for some you could almost say they are sick looking). On the other hand, sprinters have well developed muscles, they look strong, fit and healthy. It's not a subjective matter of 'according to who?', this is just the way they are. An athletes physical stature might dictate what athletic career path to chose - but their fitness regime has a lot to do with sculpting their physical appearance. And before it is brought up - I don't question either athletes grit and determination at all - both work tremendously hard to achieve the ultimate goal.

The hunter gatherer societies that remain today live in marginal territories. There is a reason why tribes like the Namibia remain somewhat undisturbed in a modern world. The territories where they live were of little importance as modern society pushed it's way in to much more abundant lands. The strongest of hunter gatherers dominated the most abundant lands -- until the advent of agriculture and modern revolution that came about. The more abundant lands afforded less desperate means of hunting and physical activity. So when developing an exercise regime would we be better off replicating the physical habits of the strongest? Or, the weakest? I think the answer is obvious. Take a look at the bodies of track and field athletes. Sprinters look far more healthy than long distance runners. Yes, tribes have been known to run down prey until exhaustion -- and it probably has a high success rate. However, as a long distance runner I would be more concerned about the failure rate.... the chances of the runner collapsing before the prey might be low -- but I doubt it is zero. Below is an interesting video of an apparent actual persistence hunt: The interesting thing that Christopher McDougall brings to the subject is barefoot running -- it's a very interesting topic that is developing a significant following. I think Art's comment on Jack LaLanne was more off the cuff and perhaps more of a tribute of his achievement. Jack was 96 and I think he lived much of his later years in the type of health that others can only dream of. I am sure there would be plenty that would love to have had Jack's run on longevity. Peter Cundill certainly had a run in his value investing career; however, I am sure he would have liked to tack on the extra years Jack got out of it. Incidentally, I seem to recall that Peter Cundill was once a marathoner -- anyone know for sure?

You mean the Half-Marathon, no? That would be a heck of a Marathon time! I'm doing my first Half-Marathon in March and aiming for a sub- 2 Hour, 7 minute time. If you have never trained for one before, and want a good training schedule (for the Half), the one i am using can be found here: http://www.halhigdon.com/halfmarathon/novice.htm Good luck! You marathoners might want to have a read of what Art De Vany has to say on the subject. Again, Art has studied the scientific evidence in forming his opinions on this stuff. http://www.arthurdevany.com/articles/20091028 Why is our body not designed for running marathons? Well it has to do with much of what else has been discussed on this thread. As much as we would like to think so, we have not yet evolved to human genome 2.0. We still exist under human genome 1.0, with very insignificant modifications. It's not only common sense but scientific fact that hunter gatherers did not jog -- they sprinted. They may have trail ran a bit but there was a high need to keep the energy balance in place -- there was no need to jog long distances to catch their prey. The human brain allowed them other means of survival. A healthy male adult hunter gatherer could also (at minimum) dead lift twice their body weight - but probably a lot more. Diet is probably #1 in terms of importance of our health. Exercising is #2 - but the key in this regard is doing things that will create an adaptive response particularly in the fast twitch muscle fibers. This involves the safe lifting of heavy weights (low reps preferable) and sprinting. A very effective alternative to jogging is walking with a heavily weighted back pack. I don't know what the alternative to marathoning might be -- maybe two wheel transit?

Fruits are definitely sweeter than when we were kids -- and tremendously sweeter than the paleolithic period (prior to agriculture). An era of agriculture ushered in our present culture of economics --- hence the modern science that have made these goods sweeter. Go back 10-50,000 years ago and fruits would have been much less sweet and far more fibrous. Vegetables have had a similar impact but it has been much less so. Art Devany presents this in his book very well and strongly suggests placing vegetables at the base of the food pyramid with the fruits higher up. He has studied this and fully backed it up with scientific evidence -- and suggests to be more moderate with the fruits (than veggies) because of this trend they have had toward sweetness. It is a very good book and I highly recommend it. The other problem with the strawberries you found in Costco is some would call strawberries more of a dirty fruit in terms of pesticides, etc that they retain. But despite this + the fact they are sweeter than what we might find in the wilderness .... they are a far better alternative than the french fries. But addiction sells and it is part of our culture -- you wont find many people throwing out their bun and requesting strawberries instead of fries -- unless of course they are contrarian type folks!

He hits the nail on the head at the end of that video when he gives a thumbs up on the Paleo lifestyle. Loren Cordain (PH D) pioneered much of the scientific research on the subject and any of his books or periodicals are good. Robb Wolf is somewhat of a student of Cordain's and has a more recent book out called 'The Paleo Solution'. I am part way through this one -- it's a very informative book. Another good one that I highly recommend is Art Devany's recent release (The New Evolution Diet). Art Devany has been doing this since his late 40's --- he is now in his early 70's (not far behind Warren). I have followed Art over the years (until he started charging for his blog). Similar to Cordain - Devany has been studying this for a very long time. His approach as to what to put in your mouth is pretty simple. His exercise regime is very contrary to what goes on in most gyms (and actually includes a lot more rest too!). He can get a little full of himself at times -- but the guy is living proof that this does work -- here is a promo vid from his long awaited book release:

The link you provide is part of Google's search feature that allows one to locate physical books, then link up and compare prices at various retailers (I think this has been around for a while). The more recent news is Google going directly into retailing of digital books. All indications are that Google's platform is very much behind what is available at the present moment; however, I am unable to test it - as at this point the service is not available in Canada. Article on this in Today's Globe & Mail: http://www.theglobeandmail.com/news/arts/books/kobo-is-keeping-canada-in-the-vanguard-of-the-e-book-revolution-for-now/article1828886/ This is of course from a Canadian perspective. But a little quote from the article: The Google service closely resembles the model pioneered by Kobo, “which is something I really admire,” Lefebvre said. “Talk about a Canadian success story.” This writer seems to be in tune with what is going on and has what seems to be a pretty good unbiased write-up: http://americaneditor.wordpress.com/2010/12/07/will-you-be-a-googler/ Interesting quote from the above article" If the ebook race were to be decided simply on the quality of the ebookstore and customer service, the race would be between Amazon and Kobo, none of the other major players would even be a blip on the horizon. Kobo is aggressive and provides customer service at the vaunted Amazon level. Here is another bloggers view - questioning if Google's retail store is a best seller or a bargain bin bookstore? http://www.geardiary.com/2010/12/07/is-google-ebooks-a-bestseller-or-a-bargain-bin-book/ I again look at this from the perspective of the free Kobo option that is thrown in with the already undervalued IDG. Kobo has teamed up thus far with the lead book retailers in Australia, New Zealand, and of course Canada -- and just recently signed on the leading English book retailer in Hong Kong. Google would seem to be teaming up with smaller retailers and independents (but thus far only in the US). While Google's strategy 'sounds' like a game changer -- Kobo is already 'walking the talk' by becoming pre-packaged in pretty much any device out there except the Ipad, Nook, Kindle and Sony. Where there are no conflicts - Kobo is the only one at this point to have deals for prepackaging with most of the other major device makers (to date: Samsung, RIM, HTC, Acer, Asus and HP) and smaller ones too (Velocity Micro, Viewsonic, Pandigital, Sharper Image, etc). About the only device manufacturers missing from the list at this point are Dell, Toshiba, Motorola and maybe Nokia. For the time being I put Google in the iBook camp where Apple has not had a lot of success to this point. Kobo is first and foremost a retailer with a significant amount of experience in the book business. The book business is a far more dynamic and strong industry than the music industry was when Apple (at least in the present short term) monopolized it.

Too much useless Canadian innovation ehh? (haha) All kidding aside - 'THE' Kobo is primarily a promotional device. Kobo is a platform -- that not only includes the reading applications but also commerce. Saying that 'the' Kobo will not achieve much success is akin to saying 'THE' Nexus One would not achieve success. Well actually one would have been right in saying that as Google's promotion of the Nexus One was short-lived. The Nexus One existed as a promotional tool in propelling Android forward with further momentum. While there are similarities -- there are plenty of differences too - in order to 'get it' one needs to understand that 'THE' Kobo is a promotional tool. This Kobo device may or may not be discontinued sometime in the future -- again, the strategy is THE platform. If you had said one platform (ie. Kindle app) will take majority following the lines of iTunes, I might accept that as a possibility. However, to think that the majority of digital reading will be done on one device (ie. 'the' Kindle) following an IPod like pattern -- I find that very unlikely. In addition to dedicated readers -- digital reading of the future will be done from smartphones, tablets, netbooks, laptops and even desktops. Ask yourself this: what is stopping a tablet, netbook or laptop from being e-ink? Nothing really except for the fact that colour e-ink is not ready for primetime at this point. Whether it be e-ink or something else completely different, when that technology is ready for primetime you will see it in every laptop, netbook, smartphone and tablet. Amazon would need to have massive R&D and manufacturing departments (perhaps >15-20x the current size of Apple) to be the dominant maker of all these devices. They would need to own, OR have some sort of monopoly or purchasing power on every new viable display technology including the paper thin game changers of the future. It will never happen - as it stands Amazon does not even have a lot of purchasing power over PrimeView (the owner of the e-ink display technology). If anyone is to over take this in similar fashion as Apple did with the music industry -- it won't be device based. Not this time - things are very different this time around. First of all you have a massive amount of gadgetry coming down the pipes that can read fairly decently and most keep getting better in that regard. Then you have a strong group of 5 or 6 dominant publishers -- far stronger than the music industry and with that horrible experience to draw back on. Something you did not see with the digital music experience was something akin to the Agency Model that most major publishers adopted earlier in the year. Why did publishers adopt the Agency Model? Because they hate Amazon's tactics. Amazon is terrible at relationships -- time will tell but they might have their hands tied a little tighter than others that publishers trust. This powerful group of publishers don't want the 'Winner Take All' attitude that Apple and Amazon are accustomed to -- they will be a lot more receptive to the 'Win Win' type attitude. No question about that - but Kobo's library has increased tremendously in a short amount of time. It is likely the fastest growing library of significance. Not only this, but they are working globally in figuring out all the complicated copy-right and associated geographical restrictions. This is a complicated web and not one that is undone through AMZN's typical bullying practice. There is an opportunity to create one's own niche via strong and trusting win-win relations. Does not surprise me much. The Kindle has been out a long time. I don't even know if the Kobo device was on pre-order yet in the States in May. And a much more receptive wireless version has just now been made available. Will you see more Kobo's or Nooks in your travels next year? In actual fact you will likely start seeing people reading from so many other devices than just e-ink. Kobo may never be the most popular platform in the States -- perhaps AMZN will always own that title.... but for reasons previously mentioned the majority will eventually need to come through the Kindle platform. Incidentally, if you were to travel to Canada -- I think you would see a very opposite dedicated device pattern emerging whereby you see mostly Kobos (perhaps some Sonys - the very odd Kindle). The same pattern also seems to be emerging in Australia where Kobo has really beat Kindle to the punch there. Who cares about Canada eh? And Australia is even a slight bit smaller of a prize? But all these piddly developed parts of the globe add up to an opportunity as large as the U.S. And then what about China and India? As I understand it the only Kindles that have made it into China are through the black market. I have no idea if Kobo can get a chunk of this -- but being partnered with Li-ka-shing's empire can't hurt? One other point on what one might see during future trips in future years. Digital print has barely begun it's evolution. At some point digital media will be wrapped in with digital text. When the camera was invented, a new breed of physical books, newspapers and magazines were not far behind. If a picture is worth a thousand words -- then a short video clip must be worth at least a million -- expect a new breed to emerge that incorporates video... it's already happening with newspapers and will no doubt enter the world of other digital print. E-ink devices are ill-equipped for this advancement. Kobo and Nook are just now being stocked at Wal-Mart in the States. When Kobo was first being stocked at Wal-Mart here -- I made a few store trips to see what was in stock. Whenever I would ask, I was told their last shipment was gone in an hour or two. This was a few months back, well before any sort of Christmas demand.... and also before the more popular wireless version. With the popularity of the Amazon Kindle in the States, perhaps you are right maybe sales are lackluster. Maybe the Samsung Galaxy tablet (which the Kobo app is exclusively pre-packaged for) won't reach their target (of 1 million units in the first month) either. The use of QR codes is merely a thought I have been thinking about that could flip the digital world on it's head and gain some control back to physical stores. It's about the impulse. Whereby a store is say out of an item .... or has some kind of advertising partnership going on with an online retailer and such. With a physical item there is less of an impulse as you cannot have the item right now; however, if a popular book quickly sells out -- no problem just put up the QR code along with the 'out of stock' sign. Sound far fetched for the retailer to receive a commission for such a sale? I don't think so -- of course the QR code would be scanned with a smartphone and almost all of these are now equipped with GPS -- all that is required is integrating the commerce part of the transaction. Yes, the shopper could look up the item on their device or buy it on their dedicated ereader they have at home - but what if they forget or change their mind? Why not do what retailers do -- and facilitate that impulse.

To understand Amazon's advantages/disadvantages, you first of all have to think of obsolescence. Kindle might be the device of the day -- but market share is already being taken over by other e-ink devices, dedicated LCD readers and multi-use tablets. A couple years ago Kindle's only competition was Sony. Flash forward to now and that has changed dramatically. Market share for the Kindle device will continue to decline. It would be better to think of the Kindle as the app -- and what the company's strengths/weaknesses are in this respect. If you had your choice of Target or Wal-Mart which would you pick? Wal-Mart has partnered up with Kobo and Nook. As it stands right now - partnering with Wal-Mart would be preferable --- but as digital reading evolves it will likely become more and more valuable. Envision a day when people start buying books via QR Codes etc --- the Wal-Mart traffic will bring higher value than Target. Nothing wrong with having Target as a partner -- I just think I would rather have Walmart. And not to have anything with making money selling devices -- it's about the money to be made in selling content -- and there is becoming so many ways than just dedicated readers. This starts getting to the point of thinking as Kindle as an app -- unfortunately their device strategy is very expensive when compared to a content strategy such as Kobo. Further to just the iPad though --- think of all the other devices out there and coming -- it is immense. Kindle figures their strength is in locking their customers to their store. Yes they have apps for most of the other devices out there and ones coming --- BUT fluid movement, syncing and such are going to become more and more important as we move from device to device -- not only over the course of time -- but over the course of a day too. BB's book trade is very minimal (perhaps non-existent?). So the percentage of people entering the store that are significant readers is likely a lot less than Target or Wal-Mart. Not saying a BB customer won't buy an ereader on impulse -- it's just that they will tend to buy less books on average (of course Borders, B&N & AMZN's online Customers would be at the highest end of the chart in this respect). As mentioned Kobo & Nook are building on their relationship with Wal-Mart. Nook in US only. Kobo in US and globally. If given the choice of Target + BB OR Wal-Mart --- where would you rather be?

The flipside of Kindle's internal conversion are the third party open source developers. There are advantages and disadvantages of supporting these open source developers -- but for Kindle there would seem to be little reason to at all. Playing fair and in the spirit of their open philosophy, Kobo seems to be supporting the most popular one (Calibre) quite strongly. Obviously with the massive percentage of Kindle units out there, this represents a strong opportunity in terms of content sales. Calibre works pretty good and even has free access to newspaper and magazine web-content from around the world (It works with Kindle, Kobo, Nook, Sony -- most of the popular dedicated devices out there are supported). It works pretty smoothly too -- but this and Amazon's conversion tools are more acceptable to the present early adapters. Later adapters wont want the hassle -- so from both sides it will need to get better. As for my Amazon Itunes comment, I just see them going into this with a winner take all attitude just like Apple did. It was their intent and desire to do so from the beginning. Things are shaping up much more differently this time around though. Publishers have the horrific music experience to look back on - where Apple did things their way (period). The open source community has also grown tremendously since then. Back then Linux was more of a cult thing -- perhaps to a degree it still is but there are other far greater movements with Android having evolved from this (and Apple's very closed presence). Don't mean to dwell on my (perhaps already overstated?) point -- but I ran across an interesting timeline graph: http://www.teleread.com/wp-content/uploads/2010/11/ebooks-distributors-timeline.gif More and more open players are entering this space -- this is a very different situation than Apple had with iTunes. B&N is really only involved with this in the States and have followed AMZN's & Sony's lead in being more device oriented. Kobo on the other hand is much more content focussed and a global player -- with Cheung Kong (ie. Li Ka-shing) being one of their partners. While Kobo might be outsized in the US by AMZN and B&N -- China is the real prize here and they might well have the strongest partner in Cheung Kong to get it. Of course I feel that Indigo could be holding a significant hidden asset here with Kobo seeming to be the best situated global open player. One of the more silent players in this (thus far) is Blio -- and my last look at them were supported by Microsoft. I have often wondered if there might be some kind of a fit.... Blio is good at the graphic kind of stuff -- while Kobo is good with the straight text and commerce part. I have also wondered if a Microsoft Kobo might be a good fit with the Microsoft Zune in MSFT taking some market share from iTunes. Just a few more thoughts -- for those that own Kindles might want to take a look at Calibre for the free newspaper web content, etc -- and also the ability to buy books outside of the box if need be. http://calibre-ebook.com/

The Kindle device was a lot farther ahead of the pack a year ago than it is today. A year ago Kindle's only real competition was Sony. The Nook was just being introduced -- and Kobo was still in an incubation phase (under the Shortcovers banner). Back in March/10 an industry analyst estimated that Nook outsold Kindle 2 with the Nook taking about 53% market share. Yes, the Kindle 3 puts AMZN back in the lead -- but they have a couple new players closing the gap. The Nook and Kobo devices will be carried across the entire Wal-mart chain for this Christmas season. The Kobo has two offerings (with the entry version starting at only $99). So while the gap may be closing within e-ink itself -- there is also other competition to consider outside of e-ink. A few days ago B&N announced their colour Nook (LCD display). Meanwhile Kobo has had a whole affiliate lineup already offering such displays, some of which are $50-$70 less than the Nook - egs Velocity Micro Cruz Reader, Viewsonic Viewpad, Sylvania, the Literati™ by The Sharper Image® (most of these are 7" but Viewsonic apparently has a 9 or 10" version due out soon and Velocity Micro also has a Story Pad for the kids). There is also the 7" Pandigital Novel reader that is powered by B&N in the States; but powered by Kobo in Canada. Not saying that all these dedicated reading devices will survive - but the list has been pruned down a fair bit already now with support of a couple pretty significant players (ie.Kobo/Borders and B&N). Nook and Kobo have a sensible strategy as their device sales go also. While the Kindle will be available at Best Buy -- Nook and Kobo devices will be available across the entire Wal-Mart chain. I suspect there is a much higher percentage of shoppers at Wal-mart that are book lovers than at Best Buy.... if simply for the reason that Wal-mart actually sells books. This is very much about content (read below). To put this another way who would you want to sell an ereader to: the customer that keeps going to Wal-mart to buy the latest releases (who is now your customer) OR the customer that goes to Best Buy and needs the latest gadget out there? To this point we are only talking dedicated reading devices.... e-ink and LCD. Yes, looking in the rear view mirror - e-ink is the current best technology that can be produced affordably. However, something better is most likely to come along. Colour E-Ink is apparently several years down the road; however, some are saying that Qualcomm's Mirasol display could revolutionize things as early as next year. That brings us to tablets such as the Ipad, Samsung Galaxy, Blackberry Playbook, Dell, future HP, Asus, Acer, Toshiba tablets (who have I missed? Maybe HTC, Motorola, LG, Nokia, Microsoft??). As current technology stands they are crowding the Kindle's space -- this will become ever much so when/if multi-use functioning becomes more viable. One might think the feather in Kindle's hat is the eventual rollout of colour e-ink - but if that's the case then this technology would likely also become just as viable for all of this tablet/LCD sort of stuff that either exists or is coming very soon. Bottom line is whether you buy any of the dedicated e-ink or LCD e-readers OR any of these tablets expect them to be obsolete way faster than we have seen in recent times. This whole digital evolution of literature has just begun - it is going to change rapidly. With the device technology changing so rapidly - the biggest windfalls will likely involve content. The customer has a couple of choices: 1. Purchase content where you get locked into Kindles vision of being the iTunes of the future. OR 2. Purchase content that is open and portable from device to device (past, present and future). The Sony and Nook make this possible from varying degrees of effort from the user. Kobo's approach is to make it as effortless as possible -- eventually seamless. There are still a lot of wrinkles but they have the right approach - here is The eReaders Bill of Rights (the Kobo Perspective): http://blog.kobobooks.com/2010/09/17/ereadersbillofrights/ Other than the smaller players mentioned above some of the bigger ones are buying into the Kobo philosophy too. To date they have had announcements to be pre-packaged with Samsung Galaxy, Blackberry Playbook and HTC Desire HD. Not only are they prepackaged -- but Kobo is also doing some innovation in terms of reading hubs, social media, etc.

Tim seems to have a preference for quality type companies. However, he did not just buy VFF. I noticed that he was buying it about 3 years (or so) ago; however, his average cost of $2.50+ did not seem very undervalued to me. But at about this time last year (when I bought my entire position at $0.50-$0.65/share) I felt it was a screaming bargain. Through owning and understanding VFF better for the last year or so - my thinking is Tim was finding value in the biosphere technology and that VFF would be rolling these out rather quickly (thanks to easy financing). Then along came the financial crisis which put that thesis to bed in short order. But in the mean time the company's balance sheet is looking better -- and they seem to be talking quite seriously about beginning to build these biospheres soon. It's hard to put a number on it but the more I look at their Gates research facility (these biospheres) the more I think there is significant hidden value. My feeling is the on-going operations of VFF could be worth the price Tim was paying a few years back - with Gates adding significant value over and above. Time will tell but they are not building any more land. Here in Canada if you want field grown tomatoes you would be best to grow your own - OR go to to a farmers market -- field grown tomatoes are non-existent in grocery stores. Greenhouse tomatoes represent 99% of what is sold at Canadian grocery stores year round. Part of that is due to our climate, part of it due to the demand for grain, part of it is due to retailer acceptance of greenhouse grown (ie. reduction of in store labour costs, increased shelf life, consumer preference and presentation, etc). I don't know if the U.S. will ever reach 99% -- but greenhouse market share is definitely growing. VFF is the largest greenhouse tomato grower with a first class distribution network. The free cash yield of 40-50% from a year ago seems to be a thing of the past -- but the current FC yield of around 18% still looks pretty decent especially when the growth possibilities are thrown in for free.

Prime View International (a Taiwan firm) owns the eink technology. About a year ago it was estimated the cost of the screen alone was $50 .... but that figure has been coming down steady as volumes increase and alternative devices create competition. And for what it's worth Kobo is again leading the price drops as evidenced by the original Kobo now reduced to $99 at Borders -- with the $140 wireless version including 4-5 free ebook purchases.

There are so many of these devices due out. Here is a spreadsheet (updated regularly) of all the tablets due out (in android format alone!!): https://spreadsheets.google.com/ccc?key=tEHKyz7d6FqqhgrujfHtCiA&hl=en#gid=75 Interesting to note that Kobo is coming prepackaged with the Cruz Reader and tablet, Viewsonic and Samsung Galaxy (I expect more announcements with many of the other players). I have mentioned this before in another thread that Kobo's goal is to become 'the' engine where much of the global trade of digital reading content takes place. 'Powered by Kobo' could become as popular as 'Intel Inside'. We are in the very early days -- from a value investor's point of view these devices are very expensive compared to what they will cost in a few years.

I bought my wife the original Kobo when it first came out in the spring - she loves it! The original Kobo is actually already been knocked down to $99 -- but according to Indigo's online shopping site appears to be temporarily out of stock because of this price drop. I have owned a position in IDG dating back 5-6 years when it could be had in the low $4's. So I follow Kobo fairly close -- (I feel it is a significant hidden asset which could possibly be spun off to an IPO eventually). Kobo has big plans -- they feel that when all shakes out there will be 3 global e-book content providers and they intend on being one of them. Kindle will not rule this market like Apple achieved with itunes. Kobo is beginning to appear everywhere. They have worked with Samsung on their Galaxy and will be prepackaged with this 7" tablet due out shortly. Same thing with RIM's playbook that was recently announced. Not only will Kobo be prepackaged with it -- they have also created some sort of social media to go along with it. Kobo is also being prepackaged with the HTC Desire HD smartphone -- and Kobo says to expect more announcements as such. The Kindle, Nook, Sony, etc strategies are very device based. Kobo is very content based - and they are definitely executing on their 'powered by kobo' strategy. Anyone considering purchasing a Kindle should realize they are probably tied into Amazon forever --- and for at least the present they cannot access library books. Nook, Sony, Kobo are all interchangeable in terms of where you can shop -- they have adopted the open 'epub' platform. This whole ebook evolution is just beginning - but I don't think you have to worry much about Kobo not being here some years down the road. Amazon will no doubt be the dominant closed platform player; however, it is looking more and more as though Kobo will be the dominant open platform player (at least on a global basis). It is certainly a David vs Goliath story going on here; however, unlike B&N's strategy Kobo is not attacking Amazon head on --- they are creating their own market through these partnerships such as Samsung, RIM, HTC and many more to come.

See my previous note regarding my calc on free cash flow and the mistake it would be to use 2009 financials as this is far removed from the realistic view. If on the other-hand one believes in persistent deflation then this and/or farm land may not be a good place to be. What I do know is that farmland is NOT trading at 3x pre-tax FCF -- in fact far from it! I would agree with you that this is a commodity type business in terms of the produce they sell having to compete with other edibles (egs when things get tough ... perhaps people eat more potatoes. Or, if apples drop below $x/lb it puts pressure on tomato pricing). But with tomatoes being a staple of the typical diet -- I still categorize this as a moat. And the moat I am referring to is within the produce category (primarily tomatoes) -- the competitive strength they have over other producers (both field growers and greenhouses). Now with that said, I also believe in such a thing as building a stronger moat -- and I see that developing here. VFF is establishing a distribution network with pricing policies that have far less volatility than their commoditized counter-part.... and they will gradually be the ones dictating the product price (ie. a formula equating to a fair return to themselves). As for ROA's etc -- this is how I figure it. Based on pretax FCF of $14 million+ I figure there to be after-tax FCF of at least $10 million. I come up with net assets of $80 million for a RONA of at least 12.5%. And I am hopeful that will improve as they improve yields at existing facilities, roll out the smaller but bigger bang for the buck biospheres and continue adding the low capital cost third party distribution.

The special share structure came about due to the American owned company merging with a Canadian company structured as an Income Trust. Income Trust rules forbid non-Canadians from controlling ownership. The special ownership structure was a work-around. The bulk of the special shares are owned by the CEO and COO -- who combined own around 50% of the company. Special share structure is not an issue for me. And btw, the company has since converted to a corp. I think you are under-estimating FCF significantly. The 2009 calender year reflects a severe down cycle under a severe recession. I find it far more accurate to use the trailing 12 months to June 30. During this trailing 12 month period the company generated $19.4 million EBITDA. Capital Expenditures were $2.2 million. Interest expense was was $2.9 million. That leaves about $14.3 million pretax and before derivatives, non-cash changes and such (which to the best of my ability figure they wash out in the end). By the way EBITDA was higher in 2008 at $21 million+. Since that time the company has had some growth initiatives such as adding third party distribution and the very recent opening of a 30,000 square foot value added packaging/distribution facility. As for debt - don't forget to discount the cash on hand. I come up with present net debt of about $43 million. They have made paying down debt a priority and I definitely find it within their means to get this down to <$30 million (2x pretax FCF +/-) by this time next year.

Advantage 1. They use 1/5 of the water than field grown producers - and have been expanding on this multiple. As water supplies become tighter in the future - the advantage increases. Advantage 2. Versus field grown - they are far more efficient and preferred option for the grocer (ie. the product has a longer shelf life) -- hence lower labour costs for the grocer. Also a greater appeal to the customer (ie the product looks nicer). Advantage 3. Far less competition from field supply during the winter and spring months -- so at least half the year is far less competitive. Advantage 4. There is becoming less and less land for which to plant. There may also be a day of reckoning for field grown suppliers when the US government makes drastic cuts to generous farm policies. Advantage 5. The distribution network gains competitive footing as energy prices rise as they have. Assuming energy prices continue to climb there is a tipping point where their distribution system will have a definite competitive advantage (summer and winter). Here in Canada -- due mainly to the climate over 90% of tomatoes (100% in winter) are greenhouse grown. In the US I believe it is around 20% but growing due to the advantages and trends mentioned. With who's technology? As mentioned -- the new biosphere technology they have within their Gates facility is achieving the highest yields in the world. And with who's distribution network? Who are they going to sell the product to - not only do they have the distribution network but they also have their customer base in which they work closely with and have much more stable contracts with (than the general market pricing). It would make far more sense for someone with deep pockets to buy them out. By the way -- they are in discussions with partners in very hot climates where food is in short supply and water supply in critical shape (middle east for example -- where they could one day license their technology) They continue to pay down debt. It now stands at about 2.2x EBITDA -- three years from now they could pretty much be a debt free company (with little focus on the more capital intensive growth that is). Debt is getting under control -- while there is some volatility in pricing -- I think it is far more more stable than you are assuming.

Well, let me put it like this. People on this forum have discussed RRGB quite a lot. To me, it's quite clear that there's value here. It's a $300 million company that's generating $90 million in cash from the business, management have already started to try and turn the company around, so it's clear you already have an instant catalyst for a great turnaround here. Farmland though, I dunno, I just can't see the value. Best I can tell is that $90 million in cash flow is not FREE cash flow (seems like at least half this amount gets gobbled up in capital expenditures?). Just an observation that seems to make this a bit misleading. People interested in ag plays however, might take a look at VFF (Village farms International) - trades on TSX. * Currently trading at about 3x FREE cash flow (pre-tax for the trailing 12 months) - has a moat in being the largest (North American) greenhouse producer and distributor of tomatoes, cucumbers, bell peppers. [i pretty much backed up the truck on this when at 50-60 cents (so <1.5x free cash) -- but at $1.15-$1.25 as of late it still seems very cheap] * Uses about 1/5th the amount of water as field grown produce. * Will eventually be building out their biosphere technology that to date is only being produced on a small scale basis - this new technology is world class churning out the highest yields in the world by a fair margin.

O Without a doubt this is a range bound market - it has been since about '98 - so thats about 12.5 years of being range bound. Buffett and many others say these things go on for about 17 years -- so perhaps we have another 4.5 years of this. Who knows maybe this time it will be 25 years instead of 17 and we are only half way through this. But the main thing that happens when markets become range bound is PE's shrink. So I agree with having some cash on hand to buy stock when the PE's shrink to where one thinks will be the bottom; however, if you can find stocks where you think the valuation has already shrunk to below where the bottom PE ratio will be --- why not buy if you find the opportunity. The trick is finding the individual stocks - but they are out there particularly the small/microcap stuff. Even at the height of the tech bubble in 2000 there were lots of opportunities - situations which rose while the overall market fell. I don't remember the exact words but Peter Cundill once put it this way -- that a bear market has a way of causing equilibrium in stock valuations. I have raised my cash levels only slightly to about 5% (much of this is currently placed into a couple of thinly traded bids). I have another 5% in high certainty workouts that I anticipate should produce cash in the next 12 or so months... if anything I would like to increase the later portion of my portfolio some. The bottom line is no one knows where the bottom or top of any range is going to be - but we could hazard a guess that the ultimate bottom will come in between around 6.5-10x PE. My aim is to buy well below this range as much as possible - or in fix-up situations where one is buying in at least half of this range on earnings a few years out - or at some sense of bottom book value ratios where applicable.

The period in which you are referring had stocks yielding around 5.5 - 6.5% - per S&P 500: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm Meanwhile you could get the same or even better yield from a safer 10 year bond - as they were yielding 6-8%: http://finance.yahoo.com/echarts?s=^TNX+Interactive#symbol=%5ETNX;range=my That same 10 year government bond today is yielding 2.5%. Stocks might not be real cheap on an absolute basis -- but on a relative basis they are not trading at a PE of 40 to match the current 10 year bond yield. This is Not at all similar to the late 60's/early 70's. We had that situation in the late 90's -- but not now. I continue to believe that there is risk we are entering a similar period as the 40's where bond yields incurred negative real returns for almost a decade. I can imagine there was plenty of fear in the markets while the world went to war in the first half of that decade (perhaps escalating on and after Dec 7, 1941). In the second half of the decade one can well imagine the fear about how the bills would get paid. Incidentally the 2nd edition of Security Analysis was published at the beginning of that decade ..... what is taught in that book is just as viable now as it was then.

For anyone interested - the first 9 pages of the book are available to read free at Kobo: http://www.kobobooks.com/ebook/Buffett-Beyond-Value-Why-Warren/book-4yF-DcfTVE6mdUZQ3mf7zQ/page1.html Should also be able to do the same with the kobo app on either iPhone or Android 1.6 (Donut or higher). Alternatively you could try the Borders website and smartphone apps which are run off the same kobo engine. Then again, I guess you could just go sit your butt down in a Borders, B&N or Indigo -- read what you want (even the entire thing - if you are so inclined) and put it back on the shelf!!

Latest Schlage Link Commercial http://link.schlage.com/Pages/home.aspx also a featured app on an Apple iPhone 3GS commercial:

Even before this tragic spill in the gulf - I have been of the belief that many would be surprised at the pace in which innovation occurs in alternative energy over the next several years. Let's hope this is not the case -- but there is a strong possibility that the environmental destruction trends toward the worst end of current predictions (and it might be worse). The only thing I can say about short term macro-economics and the possibility of a double dip is that about 90% (or more) recessions of the past have had a similar catalyst of high energy prices tipping the balance. The last recession is perhaps the most understated obvious example -- the economy was in such denial year after year fueled by cheap credit to keep it going. In classic fashion it took a tremendous run-up of oil prices to choke out the fire. Oil prices might be high right now - but are down over the last few months. The problem with predicting a recession is that often it is over before it is even realized. If there is a silver lining in this tragic oil spill - there is real potential of speeding up the political will of reducing significantly the reliance on fossil fuel. Economically it could also surprise many in being a boost to the American economy both over the short and long term. Hopefully the environmental destruction can be corrected -- unfortunately the loss of life is gone forever.