Mark Jr.

I like George Gilder and I liked this interview. I read Life After Television which was released in 1994 and he certainly anticipated some of the major themes of the internet and the world wide web. So when he released Life After Google I read that too and again, I think he'll be proven prescient. The fact that he may believe in Intelligent Design or be associated with a group that espouses it is really irrelevant and in fact a type of logical fallacy known as "poisoning the well". I also find it refreshing whenever somebody with a proven track record for groking tech debunks that nonsensical notion of a coming Singularity.

Say what you want about Bitcoin, Tulipmania is a bad analogy. http://guerrilla-capitalism.com/articles/this-time-is-different-part-i-what-bitcoin-isnt/

Dimon is part of the same apparatus that cryptocurrency evolved to mitigate, so of course, from that perspective "it's a fad". The reality is, since every fiat currency is debasing itself, since every government behind fiat currencies is targeting inflation, suppressing interest rates and since many sovereign state powers are making "bail-ins" part of the calculus, had cryptocurrencies not been invented yet, they would be by now. That is what I think is the primary driver behind all this. It's a type of capital flight, and since the ascent lately has been dizzying, it is starting to feed on itself. If it is a bubble, it's one of the first that hasn't been fueled by credit expansion, so in that respect "this time is different" at least in that aspect. It's easy to say "it's a ponzi" or "it's backed by nothing" or it's "just a digital fiat" when you don't understand the underlying math. These things are an inelastic currency that use asymmetric cryptography to facilitate zero knowledge capital flow. I've never seen anything as volatile is this stuff though. Price can drop 50% in a day or two. Then surpass previous highs within a week. One of best quips I heard to describe it was "bitcoin may be a pretty good long-term storage of value, but it's a terrible short term one". Maybe once crypto-currencies have been around for generations there will be some well known law or axiom showing that crypto-currency volatility is inversely proportional to stock market volatility by some factor symbolized by a letter from the greek alphabet. I've always remarked that the price action is really a side show for me. It's the decentralization of the monopoly control over money that is the big deal, and it is happening, it's completely understandable why it's happening and it's an existential threat to people like Jamie Dimon. As long as global governments are rigging the game, financially repressing savers and trying to chase all capital into the stock and bond markets, these things will not lose steam.

Good one. From an investment standpoint, the more recent Cryptoassets by Chris Burniske and Jack Tatar is pretty good so far (about halfway through). Epicenter podcast episode with Ari Paul of Blocktower Capital is another rational investment perspective on all this. https://letstalkbitcoin.com/blog/post/epicenter-202-ari-paul-blocktower-capital-and-the-cryptocurrency-opportunity

I would like to know more about this course. We should talk. - mark

Home Capital Reaches Agreement with Berkshire Hathaway for Investment of up to C$400 Million in Common Equity and Provision of New C$2 Billion Credit Facility http://www.newswire.ca/news-releases/home-capital-reaches-agreement-with-berkshire-hathaway-for-investment-of-up-to-c400-million-in-common-equity-and-provision-of-new-c2-billion-credit-facility-630038203.html The Home Capital thread is over here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/hcg-to-home-capital-group/

Bitcoin is inelastic in that it cannot be "minted on demand" or by fiat and there is a hard cap on how many bitcoins will ever be mined (21 million). In that sense Bitcoin is a deflationary currency, it has a constraint similar to physical gold, only bitcoin's constraint is mathematical. This is why I think the eventual winner will be ethereum. With Goldman Sachs and JP Morgan behind ethereum the government will leave it alone, or regulate it in whatever manner the Vampyre Squid and the other banksters steer them.

MtGox was flashing bright red warning lights for months before it went bust, anybody who was paying attention had their BTC out before it happened. In this respect it is very similar to any other failure, i.e. the people in Greece or Cyprus lining up at ATMs and banks when they were far too late to get their money out.

I don't think the WannaCry worm (which is what you're talking about) has anything to do with "spiking the BTC price" or anything like that, it's just a straight ahead ransomware attack with the added novelty of using a worm delivery system instead of spearphishing. Given that it attacks IIS servers and not workstations this makes sense. Bitcoin has always been the payment method in ransomware attacks, it's a huge business globally, and it's easy to move the BTC around and not get caught. If you're looking for a rationale to dump any bitcoin you're holding, WannaCry isn't it.

I'm almost done this book and I really enjoyed it. He did a good job humanizing investing and managers, I mean I look at a lot of these "stars" and they seem superhuman, but in reality, the successful investors are making mistakes all over the place but have a methodology in place that minimizes the losses and maximizes the gains. But even the super-investors are wrong more often than they're right, I think that gets lost on a lot of us. Also when he speaks of missed opportunities, I had been coming to grips with the fact that after buying Tucows at .60 (2.40 split adjusted) and holding for 8 years, I thought I made one of the best trades of my life (I had a lot of it) - selling at $19. It's now $80. Was having a hard time digesting that but actually, this book helped me in that respect. Made me realize we're all human, and we miss bottoms and we miss tops and we even bet the wrong direction.

Those are the people who are reacting purely to the price of Bitcoin, in that sense we are probably in another bubble, not the first or the last for the BTC price. One thing I have noticed about the crypto-currency economy is that their "secular cycles" are a lot more compressed than other cycles. The whole space is moving so fast it is simply dizzying. If I were a New-Age Futurist Flake (NAFF?) I would say that a "monetary-technological singularity has occurred" (but I'm not). I know one of the investments Overstock made into the space and it's actually one of the better ones I've seen. Real company, actual service, has a nice geographical niche completely locked down, I've met the CEO and he's quite smart and capable. I actually use his platform sometimes. I still think it's for the most part too early to tell not only who the winners will be but what they're going to be. It may not even be bitcoin (wonderful comment made earlier in this thread was "is bitcoin facebook? or myspace?"). There is a compelling book about this entire phenomenon by Nick Gogerty called "The Nature of Value" (I may have mentioned it in the books forum once), about how technology shifts go through 4 distinct quadrants and 2 of them are horrible for capital allocators. Blockchain is still in that "emerging" quadrant. Personally all I did was a few years ago I just started accepting bitcoin as payment at my business (domain registations & web hosting), the volume was so low we just threw it into a pile and left it there. Now that pile isn't looking so small anymore, between the incremental daily transactions of a few years and the price rise it's looking quite nice. Ethereum could be meaningful, when Goldman and JPM et al formed the Enterprise Ethereum Alliance I knew this was the one "alt-coin" to take a flyer on and my first tranche is a 10x. How often does that happen? (I should have bet it EVERYTHING I had! Just kidding). I just knew that with GS and JPM involved it was going to separate from the pack of altcoins. That said, I still haven't seen an actual application that's very far beyond the crypto-currency / blockchain / smart contract equiv. of "hello world" running on ethereum.

That sounds pretty close to what happened with the precursor to crypto-currencies: digital gold currencies of the early 00's era. e-gold was widely used, liquid but had horrible governance and was eventually shut down. Goldmoney had a much better governance structure but nobody used it outside of storing gold digitally (merchants were not using goldmoney for payments, e-gold had that pretty much locked). e-gold went more or less to zero (well it was shutdown, there is still a lingering class action settlement going for what's left) goldmoney is still around to this day, most recently being merged with Toronto based Bitgold, so interestingly, you can now convert bitcoin into vaulted gold (goldmoney) or even physical gold. Bitgold is also publicly traded on the TSX under "XAU".

I'm reading this book right now and I think the chapter on Keynes alone is worth the price of admission. It's fascinating (at least for me) and casts Keynes in a whole new light for me. (A side topic worthy of it's own thread would be how Keynes' work has been mangled and bastardized beyond all recognition). But the big take away was that Keynes, today's poster-boy for macro top-down central planning of the economy, figured out for himself that market timing doesn't work; that macro considerations provided nothing useful in terms of overall investment returns, and that what really worked was a concentrated portfolio of value stocks. It was really quite eye opening and I look forward to the rest of the book.

I will read the book. In terms of Agora, I was a longtime reader of Daily Reckoning, I also subscribed to a few of their newsletters over the years and was led into them by certain books ("Invest Like a Dealmaker", good book) all of Wiggins' and Bonner's books are IMHO highly entertaining and I agree with a lot of the core principles (i.e. you can't centrally plan an economy) But know that the entire book -> newsletter chain is part of a marketing funnel using the tried-and-true "front-end-back-end" model. Every step sets up for an upsell to the next step (larger packages, larger ticket items) and once they get into actual "stock picks" they are about as good as any other service. Once you're at that point you're either into "black box" territory, where you will simply buy what the newsletter recos, or you are using them to garner ideas you will research independently, in which case, why do you need to subscribe to an ultra-premium options advisor at $2500/year for yet more ideas? So in short, love the Agora crew, agree with a lot of their viewpoints, but grew tired of the incessant marketing upsells (and yes, they will rent your contact details out to other pitchmen) - mark

Pretty critical article on Clayton out of Buzzfeed yesterday: http://www.buzzfeed.com/danielwagner/warren-buffetts-predatory-lender-charges-minorities-a-lot-mo Zerohedge summary: http://www.zerohedge.com/news/2015-12-27/slumlord-how-warren-buffetts-clayton-homes-intentionally-targets-preys-upon-minoriti

The mere reality of NIRP is conclusive proof that central planning of the economy by central banks simply doesn't work.

Well since I posted this, I long finished it and I have to say it is one of the best books I've read in a long time. In a case of "small world" it turned out the author and I share a mutual friend so I was able to have about a 90 minute skype session with him.

Which is really ironic for a value investing board. Some miners trading for less than cash, mines closing, extreme negative sentiment.

Hey, sorry for the delay replying. Their revenues are probably a combination of 1) PPC revenues (ads on the parked domains) - which are in secular decline across the entire industry, 2) aftermarket sales of domains based on PPC (domains with cashflow) - which are also in secular decline - multiples coming down as PPC dives, the business model looking less attractive and 3) aftermarket sales of "brandable", and "generic" domains - which are not nearly as lush as they used to be (names that used to go for xx,xxx now go for high x,xxx, etc) So I haven't read the docs, but that 28M will be under relentless downward pressure. The good news is their costs are near nil per domain - they are mining their expiry stream so each domain simply costs them the wholesale cost of a domain with their respective registries (something like $8.25 for .com, 6.25 for .net, somewhere around there) So whatever that channel does yield, it's nearly pure profit. Which is always nice. (I'm speaking in general terms, I have NOT reviewed the NAME filings at all) - mark

NAMEV ended up being the Rightside spin-out right? So Demand put eNom into Rightside. Most of your comments in that article are accurate, some minor qualifiers - I have a long mixed history with whois privacy - we used to not sell it, now we do but we sell with that caveat that you can really screw yourself with it. Godaddy has made it part of their business model that they use whois privacy to make it an insurmountable headache to transfer out (the price usually resets from 1.99 to 9.99 in concert with this) - also - whois privacy costs the registrars nothing. There is no COGs on it, it's all margin. Anyhoo, your comments on Demands business model are spot on, I wrote about it on WVI here: Not Needing Google. The Web version of a "wide moat" http://webvalueinvestor.com/value-investing/not-needing-google-the-web-version-of-a-wide-moat/ Also, Network Solutions (along with Register.com) got rolled up into Web.com (WWWW). Rightside and WWWW both have enormous investments into the new TLD space, Tucows on the other hand, while enabling their resellers to registers all thenew TLDs, did NOT pile in and throw a tonne of money into becoming any new TLD registries. This was very smart IMHO as I think most of the investments into new TLD registries will be written off over the years. The Tucows approach was to let their competitors get distracted by the new TLDs and they would concentrate on their own stuff.

Let me help you... ;D http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/vrsn-verisign/ - the Verisign thread http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/dmd-demand-media-11074/ - the Demand Media thread Thanks, I will check out those threads. Briefly: Verisign has a moat. It isn't as wide as it used to be, but it's there. In practical terms they will probably run .com for a long time, although IIRC their annual 7% price hike which was baked into the contract was striken down last year (I could be wrong on that, 'cause my wholesale price on .com and .net still went up), they still have the ability to raise prices and .com will be the dominant domain for at least a decade. I'm not following them too closely tho. After the GFC, like around 2010 or so, they were trading at a single digit P/E, but I never picked any up (actually I had a bit for awhile, nothing huge and I sold fairly early on in the run) If they ever get cheap again they may be worth looking at (basically I think nothing is cheap right now, hence selling Tucows) Demand Media - never understood why anybody would want it. If you were compelled to invest into the space, with Tucows sitting right there actually making money, buying back shares, why buy Demand? Just buy Tucows instead and now you get Ting as part of the package. Doesn't make any sense. Godaddy, like Demand Media, will not cheap, is losing money, doesn't pay a dividend or buy back shares and will use the proceeds of their forthcoming IPO to pay out the PE firms. Again, doesn't make sense to me. If you *must* be invested into the public domain companies, buy Tucows and Verisign - ideally next time they get cheap. My 0.02

I'm not aware of any thing about the new TLD pricing per se. They are a lot more expensive than .com / .net etc (registrar wholesale cost on a .com or .net is about $8.50 or thereabouts) on the new tlds they run from $40 or higher. This is because most new TLDs will fail over the long run, I think the operators know it, and the basic play is to make as much money as possible in the initial sunrise (which is even more expensive) and landrush phases. For specifics if you google the TLD you want you'll probably see adds for the rars who are running specials with the best deal (just make sure you actually get the advertised price, registrars are famous for bait-and-switch google ads that advertise a low price in the search result and than the signup process upsells you six-ways-to-sunday and your final checkout is about 100X more expensive. I wrote a couple of articles on the new TLDs: Who will be the big winners and losers of the new TLDs? http://www.domainnamenews.com/editorial/big-winners-losers-tlds/9646 Do you really need yourname.BLARGH? http://blog.easydns.org/2014/03/28/the-new-tlds-are-here-email-guru-holdings-blah-blah-blah

Oh boy, I can't believe I missed this thread until today. Now you guys will never get me to shut up about this. I've been immersed in the domain name business for about 20 years, I've been running a managed DNS provider and ICANN registrar for 16 of those 20 years, there a few "silos" within this space, but most of this thread speaks to three of these silos: Domain Registration (registrars - Tucows, Godaddy) Domain Registries (.com - Verisign) The domain aftermarket - buying and selling domain names, also in this silo is trying to monetize domains via pay-per-click (PPC), etc. So the first thing to understand is what drove the heyday of the domain aftermarket, including PPC values and that was the anomaly of "type-in" traffic on generic terms, which peaked around 2000-2003. In those days two things drove value: 1) people treated the browser location bar like it was a search field, and just typed keywords into it and 2) the browsers auto-completed non-FQDN's (non fully qualified domain names) by appending ".com" on the end of it. There was a 3rd factor that enabled a few fortunes to be amassed: 3) the aftermath of the .COM meltdown (2000 - 2002/2003) kicked off the "drop game": a lot of generic (and because of 1 & 2) valuable domains "dropped" - they were not renewed by the original registrants and people who figured this out started re-registering the good ones as they expired. Guys like Frank Schilling, Gary Chernoff and Yun Ye created HUGE portfolios of domains like this, grabbing names for the price of registration and immediately monetizing them via PPC and earning $100 CPM or more, occasionally selling a name or two for hundreds of thousands or even millions. In 2007 I wrote an article that basically said the golden age was over and I was widely reviled by "the domainer" industry (that segment which formed around this) for saying it, but pretty well over the next few years pretty much what I predicted came to pass: The browser location bar morphed into a search field "type-in" traffic entered secular decline competition from other segments would arrive: dns resolvers, ISPs etc would all start getting in between the browser and the destinations But not before the space heated up so much that Big Money started entering the space. Yun Ye sold his portfolio for a few hundred million to Marchex, which was publicaly traded. A few other "domain incubators" came into existence, trying to make a model around "investing in undervalued domain assets and developing them" which basically translated in practice into "overpaying stupid money for over-valued assets and then wrecking them". Because the golden years of 2002-2005 were still fresh in everybody's minds, the concept of "the category killer domain name" got a lot of traction and with it the erroneous belief that "if you owned the generic descriptor .com of given market, it would enable you to own that market". Epic value destruction ensued. I wrote another article about it (the lead off post in my WebvalueInvestor blog) and, once again, was burned in effigy. My point in that article was that there was still money to be made in domaining, but it wasn't where everybody was looking. Tucows was mentioned in this thread, but I think misunderstood. Tucows was for a long time, the 2nd largest domain registrar in existence (I think now 3rd or 4th), but was a penny stock. I bought them for between $2 and $4 (split adjusted) starting in 2005 and finally sold them recently a little north of $17. Tucows was my very first textbook value investment gone right for me. Totally within my circle of competence, I realized in early 2006 that Tucows (as could all registrars) was still able to amass expired domain names long after "the drop game" became too crowded for the non-pro to be viable, because they could front-run the drop and mine the expiring domains of their own customers. Because of this, my rough but hyper-conservative calculations, the value of Tucows stash of aftermarket domains was worth more than twice the market cap of the company, that portfolio didn't show up on the balance sheet, and it wasn't priced into the shares at all. It was a punch card investment, and I kept buying until it was the largest position I have ever held. I won't say this was a "life changing" transaction for me, but I did it all within my RRSP and suffice it to say that it has been a significant factor in my retirement fund. Where are we now? I too thought that the new TLDs would have a reciprocal effect on legacy TLD aftermarket prices, that .com, .net and ccTLDs like .CA would enjoy a lift from the confusion all the new TLDs would produce. I was wrong. In the year running up to the new TLDs I personally saw deal flow drop measurably in the domain aftermarket that I have personal visibility into. Both frequency and dollar amount of deals. Brokers I know concur on this - the only ones experiencing increased dealflow are representing sellers who have massively adjusted their expectations downward: domains they were holding out for a xx,xxx sale, they are now accepting offers in the x,xxx range, and so on. After the new TLDs, the aftermarket has dropped off the cliff. The odd breathless, manic story you hear about some domain selling for millions are atypical and usually represent situations where the buyer had deep pockets and was completely over a barrel. My plan is to write a third installment of my domain aftermarket commentary "Welcome to the Dark Age of Domaining", it's more or less what I indicated here but will have a lot of specific examples in it. I'll post the URL when it's done.

Just started reading this and it looks pretty good. A mulch-disciplinary approach to examine "what is value" itself which circles back to value investing vs the common approach that "value == price". Haven't seen it discussed here yet, I note that "Education of a Value Investor" is mentioned here, I got it around the same time. Haven't started on it yet.

Been following Garth Turner a long time, met him in person a couple times, good guy, fabulous writer. I think he's right about housing but he then goes on to make some recommendations which I find puzzling: He eschews savings for the most part and advocates taking out credit lines against your home to invest in things like equity indexes and bank prefs. Yet, if interest rates have nowhere to go but up, and housing values have nowhere to go but down, won't this eventually squeeze somebody who follows this advice from both ends? Your borrowing costs go up as interest rates rise Rising interest rates typically dampen stock market returns Your collateral (your house) is losing value Bank shares in particular would come under pressure in a real estate bust, the prefs too I would think But when I asked him about this in the comments of his blog once he just gave a one word retort like "*groan* or something like that, as in "obviously you're too stupid to understand so I won't bother explaining why I'm right" sorta deal.