Mark Jr.

But the wealth creating company isn't the same thing as the currency. (I suppose that is the central point going back to what Munger said: that if you get more bang for your buck when you can invest it into companies that can do this, like he and WEB can - and in their case it would perform better than having put into "a block of gold"). But at some point we started talking currencies and whether gold is in a bubble stage and I was just saying that over time the paper currencies trend toward debasement and worthlessness, and gold doesn't. Marc Faber said it best in his most recent newsletter: the USD has lost 2 out of 3 functions of "money": it is no longer a useful store of value and it is no longer a meaningful unit of account. He speculates that at some point it will lose its third function: facilitating the exchange of goods and services.

There are a lot more gold naysayers than there are cab drivers and common folk piling into gold. As I've said more than once, when people flip from calling the highs "tops" to calling the pullbacks "opportunities", then we're in bubble territory. Right now everybody is falling over themselves to explain why gold has nowhere to go but down. This thing still has a long way to go IMHO. Canadian Real Estate is far more in bubble territory than gold is right now. It's almost a perfect mirror image, because you get shouted down in most circles for even suggesting Canadian RE can go down. Cab drivers and newlyweds with no money are "investing" in second and third properties, trying their hand at "flipping". You tell me that's not screaming a top. As far as the USD goes, just plot out the purchasing power of the USD from 1913 to now, it's down 97% and falling. There has been no paper currency that has not gone into terminal decay like this, ever. So if you want to talk about the fallacy of "this time it's different", please explain to me how come a piece of gold dug out of the ground 2000 years ago can still buy you a suit and you can't rent a video with a 1913 $100 bill. People who hold gold are saying the exact opposite than "this time it's different". They're holding gold because they know that this time it most definitely is not. People who deny that the USD is going into terminal decline and that the world monetary system isn't headed for a massive reboot are the one's saying "this time it's different".

Because under WEB, you still get to run the show unless you cockup such as Rich Santuelli at Netjets or General Re - all you have to do is send your excess capital to Omaha. In comparison, with other acquiring companies want to install their management and procedures. You'll get a 12 month contract to consult but then you are on your own. So basically, I take my profitable company, which I own lock stock and barrel, sell it to BRK for the lowest possible price anybody would pay, and then stay on, keep running the place for somebody else, and give them the excess capital? Yeah, that doesn't make a lot of sense to me either. Why don't I just keep the business and the excess capital and not have a boss? If I like BRK so much, I can just buy the stock with my excess capital.

This is one thing I've turned over in my mind for fun sometimes. Berkshire is probably the one company I would never want to sell my business to, because they by definition only pay rock bottom prices for their assets, why on earth would I want to sell to the lowest bidder? If I had wrecked the place and WEB came along with an offer then ok. But as long as business is good, why sell at all? Especially to the one buyer who is going to pay you the least?

Almost sounds very 1979-The-Death-Of-Equities-ish.

A few random responses: - Mac OSX is BSD under the hood, not linux, but both linux and *BSD are basically unix. Anybody running anything serious on the net uses unix/linux/bsd servers, this is unlikely to change - Microsoft never cracked the server platforms - you can't run web apps or SAAS on something that needs to be rebooted every other day. And now with BSD on the desktop (via Apple OSX) and *nix in the mobiles and tablets (iphiones, android) - the full spectrum of net connected devices is shifted more toward the same thing the servers run: *nix or *bsd. (I know, I will draw hatred from the M$ systems types out there for saying this, there are a few) - The comment about Gates coming back or at least a new CEO: bingo. When I think of this and do a rough analogy between situations: Everybody thought Apple was dead and then Jobs returned and refocused them. There is definitely a potential catalyst in there in a regime change. - I think not think the comparisons to Wordperfect, Lotus or dbase are apt, as they were pretty vertical monopolies that were basically nuked by the underlying microsoft monopoly at the the operating system level. I think windows, Vista, whatever they call it, will be around for a long long long time, despite the fact that it's just a god awful operating system that even my 4-year old has grown to view as klunky and torture to use (she much prefers Mac OSX) and on the other end of the scale, used to drive my 80-year mother into near nervous breakdowns. There are no "happy" windows users, just a pretty large locked in userbase, mainly at the workplace, that just suffers and uses it and thinks "this is just what computers are like". So I don't see MSFT "going away" the way wordperfect or lotus did, because there is nothing that can come along at the O/S level and just step in and replace it. Unless everybody switches to Mac, and while they've made huge inroads, I don't see them completely taking over windoze "in the cubicle" (I suppose a good summation would be "as long as there are cubicles, there will be microsoft powered desktops") All just random opinions. I am surprised to see it at these valuations. I can't stand their products.

As long as they don't do anything desperate or idiotic (like going out and buying Facebook or Twitter....)

11X earnings and yielding 2.4%, interesting. Seems to be nearing out-of-favour in terms of tech. It certainly isn't Apple or Google here, is it?

Wow, you said it in two sentences. Although you could go one further and say we're shorting more than just the dollar, since right now there is a competitive devaluations going on, or at risk of flaring up.

I was invested in gold before I was ever exposed to the concept of "value investing". I still hold my gold shares, and I have a pile of physical. I got my gold shares so cheap I wouldn't really care if gold sold off by 50%. In terms of my physical, I own the only domain registrar that accepted e-gold for a few years, and I just redeemed it into physical coins as fast as it came in. I also sold a few domain names which cost me essentially nothing and pocketed tidy sums which I just rolled into gold and silver at much lower prices. From where I'm sitting it feels like my cost basis is zero (since I obtained it selling services with a very very low COGS) and my physical stash is worth a decent sum at today's prices and my gold shares are worth more. So basically, I've done well with gold and basically got there for all the WRONG REASONS because when I started investing in gold I had absolutely no idea what the hell I was doing and thought I did. It's basically an investment that I fell into backwards. Today, I stay in gold because my cost basis is just so bloody cheap and there's a bull market on. I plan to keep my physical gold forever, as a currency hedge. I'll sell the stocks when I see a "buying panic" ensue and I don't see us being there yet. Here's where I think non-goldbugs get it "wrong" when they look at gold. They think "If gold goes up in some meaningful way, it'll mean the end of civilization, so what's the point?" Currencies collapse all the time (in a historical context), and civilization marched right along. The Black Swan event is most people think this is an unthinkable scenario is when it comes to the USD. In fact if you look at the historical patterns, it's not only "thinkable", it's damn near inevitable. The one sentence scenario is simply: US defaults on debt via currency devaluation which terminates with or without a bout of hyperinflation in a "new currency", probably a North American Dollar of some sort and a new worldwide monetary regime in which central bank reserves are held in a basket of euro, north american dollar and something else. In the overall scheme of things it'll be confusing to the masses, newsworthy and novel, but it won't mean we're living in a "Mad Max" world fighting over tins of dogfood with clubs. In that process, gold will probably experience a massive spike/bubble whatever you want to call it. It's just pure speculation to play it and make no mistake, it's a trade, not an investment. But since I'm in early and up huge (purely by luck, not by skill) I'm going to let my profits run and see how far it goes. (When it's finally time to take the money off the table I hope to benefit from my recent years of education and be able to deploy that capital fairly sensibly. The thought has crossed my mind to roll the whole enchilada into FFH, depending on how it's doing when the time comes) There will not be a return to the gold standard, and that far fringe of goldbugs called "free gold" who think there will be a "terminal event" where the paper currencies go worthless and everybody owning gold will become instant trillionaires are wrong, for reasons too numerous to cite here. We can start sniffing for a top in the gold spike when: - the inflation adjusted highs of the last gold spike are surpassed (around $2500/oz) - when there is a buying panic in gold (during the last gold/silver spike people were lined up around the block at one particular silver foundry in the US. They were smelting it, stamping it, cooling it and selling it in one motion) - when the popular press shifts from calling new highs the top, to calling new pullbacks opportunities - all the standard bubble hallmarks: bookstores full of "get rich in the gold market", when the TV hucksters flip from buy-side ("sell us your unused gold for top dollar") to sell-side ("if you don't buy gold now you're missing out on a fortune!"), late night infomercials hawking gold investing workshops, the works. This is another bull market, and a bubble in the making. There will be a time to pull the trigger and take the profits. I am NOT recommending anybody here try to invest in gold on the basis of this argument, not unless you find something that has a real value angle to it, and I've frequently commented that if I had no position in gold at all, I'd really hate to try building one at these prices.

I've been neck deep in the internet business going on 15 years now. I was talking with a friend of mine who gave me my first internet job, who's built and sold a few hi-tech companies, been a partner in a tech-oriented VC, etc, and we were joking around about the idiocy of the entire "cloud" meme. He said "basically you can dust off your old business plans from 1998, search and replace the word 'web' for 'cloud' and BINGO, instant funding at a ridiculous valuation." Cloud is meaningless, it's another word for "internet". Unless a company is involved in the direct facilitation of cloud computing (i.e. storage appliances, server virtualization companies) then if all they can offer the marketplace is "cloud based _______" (fill in the blank) then it doesn't make any sense. You may as well invest in internet companies that "run on electricity". There is also a serious non-public tech bubble happening. If you look at private pre-IPO marketplaces like sharespost, you see "pre-revenue" "web 2.0" companies trading back and forth at market caps in the billions. In many ways it's even more ridiculous than 1999.

As I've said a million times, there is only one thing wrong with Elliot Wave Theory: It doesn't work. Having said that, I think some of the people (some, not all) who think we are immersed in an era of serious economic trouble are right. There's a difference between people who look at clearly out-of-whack debt levels in the US (and elsewhere) and make fairly logical inferences from them, and quacks peddling trite systems that supposedly "explain everything". Prechter is the latter.

http://www.valueinvestigator.com/en/valuefavourites/ocx.php#update Basically taking profits off the table and waiting for more market weakness.

Here's another article via Techcrunch: It’s Time For Microsoft’s Second Inception http://techcrunch.com/2010/07/08/microsoft-inception/

Vancouver home sales drop sharply http://www.theglobeandmail.com/report-on-business/economy/vancouver-home-sales-drop-sharply/article1629806/ "Vancouver's housing market slowed considerably in June, with 30 per cent fewer sales than a year ago." Although I have to admit, the actual article is less dire than the panic stricken link to it from Clusterstock suggested.

Try ycharts.com: Examples: http://ycharts.com/companies/BH/price_to_book_value http://ycharts.com/companies/LUK/price_to_book_value http://ycharts.com/companies/BRK.B/price_to_book_value

Ok, since others have mentioned Zeitgeist and The Creature from Jekyll Island in this thread without being shouted down, I feel safe enough to point out that the original poster has opened the proverbial "can of worms". Because, the Federal Reserve is not really "federal", it's privately owned. And they don't simply "print the money into existence" to buy things, they print it into existence, lend it to the government who then has to pay interest on it back to the Federal Reserve. The same year the Federal Reserve was created was also the same year income tax was introduced (in the US). Which is simply boggling. The obvious question being Why doesn't the government just print it into existence itself and not have to pay interest on it? It's been tried. In addition to the Creature from Jekyll Island, you should read Web of Debt by Ellen Brown. I just recently started researching this and I get more perplexed the more I learn about it. Problem is the more you delve into this, the further you get into capital-C "conspiracy theory" and tin-foil-hat land (no, I'm not wearing one at the moment). But once you look at it, it just doesn't make sense.

Is there a particular thread that outlines what happened? I am combing the archives and see some references to "the compensation package" but that's about it.

What did I miss. I saw the thread where the board was hacked and Parsad had to restore some data. But I was pretty sure I saw the SNS board still after that. SNS now BH, the board is gone, what happened?

Ok, I took a bit more of a look at bnx, a.k.a banks.com tonight. In 2005 they paid nearly 12 million for the irs.com domain, and a couple years later they ran into trouble with the government because I think the real IRS didn't like it. People were typing "irs.com" into their web browsers, ending up on their site (not the government irs.gov site) and then signing up for commercial products. So I think the government position was that users were being misled - there was some legislation pending, never passed. In the end, they shutdown the irs.com website and now redirect it to banks.com/taxes Their searchexplorer.com property does nothing more than regurgitate paid search listings from a PPC feed, there are no organic search listings at all. There is nothing compelling to keep users coming back there, I can't imagine how it sustains any traffic at all and my guess is that they would have to employ keyword arbitrage to keep it going. Oh, here we go: Keyword arbitrage is the practice of buying up cheap keywords on one search feed (i.e. google) and the redirecting the traffic to your own web pages, or PPC feeds where you hope to convert enough clicks at higher payouts to make it profitable. I'm not a fan of the business model as you are constantly subject to the whims of entities external to you, namely the search engines you're arb-ing. I've seen entire companies go up in a puff of smoke *overnight* after getting banned by google, for example, from doing this (anybody ever heard of Geosign?) I note their current search partner on the PPC feed is InfoSpace, a distant also-ran in the search space, as both Google and Yahoo have taken steps to drive out the keyword arbs. They also use keyword arb to drive traffic to their look.com property. As for banks.com, it just looks like a combo scraper site / MFA (made-for-adsense) site for me. You see these things all over the web. Most of them are auto-generated, but it looks like they have a couple of in-house writers to generate some original content. The problem with the banks.com website is that it's written for search engines, not people. Everything in the page, from the layout of the content, to the placement of keywords, labels, headlines, it is geared primarily to rank high in search engines for financial terms (which yield higher PPC and CPA payouts), so that users click on the links when they are searching for something, and when they land on a banks.com page, the emphasis is purely to convert that user into a click, or a CPA action (opt-in), etc. Problem with this approach is you basically only get one shot at a user, because the website is never compelling enough to bring them back. If you manage to collect their email, there will be follow-on marketing efforts, bordering on spam in some people's mind, and it's just all a treadmill and a numbers game with a lot of factors that can suddenly shift against your favour at any time. I think they originally hoped for a natural lift in the traffic to these properties via the natural "type-in" for banks.com and irs.com, but as I've said in previous writings on my blog, I believe type-in traffic to have entered a period of secular decline, for reasons too numerous to mention here. In other words, I see no moat around *any* of these properties. Sure, banks.com is a premium domain, as is look.com but it takes more than that to run a successful business. I note they're eeking out a profit but I did also notice that they sold off some non-core domain names (camps.com, summercamps.com, etc) so I'm wondering if the profitability comes from one-time, non-recurring events like selling off domain names (that they may have bought for god-knows how much, sometime earlier)

I haven't looked too closely at it. They spent somewhere around 11 million dollars to acquire their domains and they were losing money like crazy (looks like they swung to a profit last quarter, but still never really got me interested)

I think you're right - and you'll be happy to know that when you get your iPad you can just install the free Amazon kindle app, hit "sync" on your kindle and then "sync" on your ipad, and it'll pull down all your books. Amazon made a very smart move by releasing an iphone, ipad app pretty quick. Even if they lose on the hardware front, they still have a shot at getting on everybody's ipads. They've correctly deduced that it's more about the channel than the hardware. Even if ipad kills the kindle, they can still penetrate the market. I have both a kindle and an ipad, and as I said, they "sync" to each other. I read on one and when I open the book on the other it goes to where I left off. My notes and bookmarks are available on both devices. It's just brilliant. There are a few minor complaints I've had about the kindle, but I think they made the right move in response to the ipad: Put out an app on the enemy's platform.

Those here who know me know that I come from the internet space, kind of the antithesis of "value investing". But, this is my circle of competence, so I look at things within it from a value perspective as much as possible. I'm trying to decide whether to launch a standalong blog: http://www.webvalueinvestor.com or just a new channel within my existing one, but anyway, here is my inaugural piece about domain "investing" http://www.privateworld.com/archives/240-The-Domain-Aftermarket-Redux,-Are-Domainers-Investors-Yet.html [ Brief synopsis if you want to save a click is that very few "domainers" are approaching things from an actual "investment" approach. The industry is driven by speculation. The concept of the "category killer" domain name is debunked. The real reason a few select companies made untold fortunes in the space. And a couple of gems in the rubble, undervalued domain companies, one of which is even publicly traded ]

I've been wondering about this lately. Is there any kind of formal "investment tracker" people use to keep track of their holdings? I don't mean the myriad "stock tracking" and "trade tracking" tools out there. But what about things like: stakes in private investment partnerships, ownership stakes in private businesses, real estate holdings (including syndicated holdings, joint ventures etc). I'm realizing I have positions in a couple investment partnerships, a real estate development in another country, some private businesses, etc etc. and that I should have some centralized repository of the details of these investments. If only for the planning purposes of "getting hit by the proverbial bus" so my estate can make some sense out of what's all involved. I mean my accountants have the numbers and transactions but maybe not all the contact details, contracts, etc. And then on top of the how much and wheres, whys and hows, it would be helpful to track income derived, or NOLs, dividends, NAV, etc. Are there any systems like this in existence already? If not, is this something people may be interested in? Or are people more comfortable keeping track their own way, be it a black book in a safety deposit box or a shoebox full of business agreements jotted on the back of cocktail napkins? Just wondering.

I have always had a soft spot for Reeds as a company, 'cause I've been a junkie for China Cola for over 20 years. Everybody always talks about the impossibility of ever challenging Coke, but I always thought China Cola had a shot at making some inroads as a "trendy" niche alternative. Everybody I've ever given a china cola to has been hooked instantly and I drive across town once a month to buy a case at the only place I know in Toronto that stocks it - when they can get it. The staff there tells me it simply "flies off the shelves" when it's in stock. But REEDs never struck me as a compelling investment, granted I haven't looked at it in a couple years, but the last time I looked I seem to recall it looked pretty weak to me. A lot of debt and not a whole lot of free cashflow. This Jones deal is pretty interesting. It may be a make-or-break move for them. I wonder if they'll try to take out Hanks Beverages down the road (assuming they manage to digest this acquisition).