txlaw

Would you also consider an unexpected tax hike theft? Because I view purposeful inflation through currency debasement as a stealth tax on savers/creditors. A necessary one in the case of the US in order to make sure we don't technically default on our currency denominated obligations. Perhaps not quite an aboveboard tax, since it is not apparent to most people, but more like a tax than theft. Of course, some people consider taxes as theft, so I suppose it really depends on where you stand on that issue.

...and just continue to use up that virtue Charlie Munger was talking about. Then one day, there isn't enough virtue left. Maybe I'm just dense but what the heck does that even mean? Inflating away debt is theft by another name, and theft is not virtuous. The trust that a society commands in the market is a function of its overall virtue. Creditors will tolerate an erosion of that virtue for only so long. Not sure Munger would agree with you that inflating away debt is theft by another name.

Frontline documentary on Wall Street: http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/ Haven't watched it yet, but it looks like it's gonna be good. A number of the interviews have also been put online: http://www.pbs.org/wgbh/pages/frontline/oral-history/financial-crisis/ This interview with Wilbur Ross is a good one, as expected: http://www.pbs.org/wgbh/pages/frontline/oral-history/financial-crisis/wilbur-ross/

I completely disagree with Rodriguez and think his viewpoint is seriously misguided and strident. Sort of a less insane Jim Rogers. Nevertheless, I like to read stuff from people I disagree with, and I'm sure many of you guys are in complete agreement with the guy: http://fpafunds.com/docs/media/wows--listening-in--bob-rodriguez.pdf?sfvrsn=2

What do you mean by gone? Do you mean re-branded as MSFT products? Gone as in replaced by some other startup's technology or product. I guess Microsoft's network effect will keep them around even if superior products appear. That and "nobody ever got fired for buying IBM/Microsoft"… The other thing to consider is that video conferencing is a must-have feature for an OS layer that is spread across devices/screens. Presumably, Skype will be front and center with MSFT's Windows/Xbox offerings. Facetime, I'm sure, will be a front and center feature for the rumored Apple TV. And Google Talk/Voice/Hangouts will probably be the preferred solution in Android-based devices. I still don't know whether $8.5 billion was an appropriate price to pay for Skype, but perhaps MSFT was afraid that if they didn't buy an already established brand/subscriber base, they would get no traction against the competition (AAPL and GOOG).

Yeah, I saw that. Annoying as hell. I'll probably buy credits, and I know my parents already do in order to do group calls with family overseas. I wonder if they will bundle "free" Skype with the new OS?

"People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There's always been a market for people who pretend to know the future. Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts." -Charlie Munger

Found via Dataroma: http://www.fool.com/investing/general/2012/06/14/charlie-mungers-30-best-zingers-of-all-time.aspx

What do you mean by gone? Do you mean re-branded as MSFT products? Gone as in replaced by some other startup's technology or product. I guess Microsoft's network effect will keep them around even if superior products appear. That and "nobody ever got fired for buying IBM/Microsoft"… Okay, I see what you mean. There's also a possibility that MSFT itself will change the underlying technology in the back-end of these products. Take Skype, for example. http://arstechnica.com/business/2012/05/skype-replaces-p2p-supernodes-with-linux-boxes-hosted-by-microsoft/ The idea being that Skype acquisition was based on more than the technology but also the network of subscribers that came along with it, who may stay sticky if we see Skype built into, for example, this rumored Windows tablet that's coming out Monday.

What do you mean by gone? Do you mean re-branded as MSFT products?

I'm quite confident that HWIC has read Gerstner's book. That was likely the impetus for FFH's foray into DELL (at higher prices, unfortunately), as they would appear to believe that Dell can pull a Gerstner. Presumably the folks at RIM also will be receiving advice from Mr. Watsa pointing out the wisdom of Gerstner's ideas. No prob.

This could be the big news. http://news.cnet.com/8301-1001_3-57453729-92/microsoft-to-take-on-apple-with-own-windows-8-tablet/ If true, this would indeed a major announcement.

Lou Gerstner on CNBC. Must watch for DELL shareholders: http://video.cnbc.com/gallery/?video=3000095377 http://video.cnbc.com/gallery/?video=3000096537 http://video.cnbc.com/gallery/?video=3000096580

Well worth watching, especially for those of us in companies undergoing transformations. http://video.cnbc.com/gallery/?video=3000095377 http://video.cnbc.com/gallery/?video=3000096537 http://video.cnbc.com/gallery/?video=3000096580

Nice one. ;D I agree that it will be difficult if not impossible for AAPL to extract the rents that MSFT did. Thankfully, society has learned that we cannot allow that to happen (there's a reason why we have antitrust authorities). Additionally, various constituents in the ecosystem (e.g., the carriers, Hollywood, etc.) know that they cannot allow AAPL to be the new MSFT, or much of the value that they want to capture will accrue to AAPL. One of the interesting shifts will be the ability to run apps developed for one operating system across others (just read the other day that some guy got iOS apps to run on a Playbook) and the increased ability to develop for multiple platforms using common languages (for example, HTML5 apps with wrappers for particular OS's). I still think, though, that AAPL's UI team will continue to churn out design innovations that make them one of the preferred OS providers. There's a reason why both GOOG and MSFT are increasingly focused on UI. Even RIMM bought TAT so that they could build their new platform so that it would be usable.

Now we're cooking! This debate is great -- much more useful than just posting biased articles about how AAPL is great and Android sucks. ValueInv, you seem to be discounting the effect of increased competition on AAPL profit. Despite Android's problems (e.g., fragmentation), it's still a great OS, and most in the tech world would agree. And now MSFT is entering the picture with an unified OS experience that a lot of people are lauding. Competition is coming online, and there's only so many times that having a better screen resolution than everyone else on a new product can keep you ahead of the pack. I can tell you that I would have seriously considered getting an Android phone if the iPhone 4 had not had a retina screen. I'm not sure its realistic to expect that AAPL can undercut the price of Android phones without having an adverse effect on the entire product line, which I view as the OS rather than the various form factors of computing hardware. Android phones are low cost because the cost of the OS is minimal compared to other OS'es. If we have an iPhone 3g competing with the latest Android phone at close to the same price point, the Android phone wins hands down. Moreover, if AAPL does shift to a strategy of undercutting on price, you have to take into account margin compression. So how much will increased market share be offset by margin compression? This factor is what makes me think that AAPL is not a home run at this price but, instead, will compound at a nice clip. Vinod, I would disagree with you on comparing AAPL with RCA. RCA produced goods that led themselves to being commoditized, like a Samsung or Asus. They were subject to the "everything becomes a toaster" phenomenon. AAPL, on the other hand, produces an OS and development platform. IMO, this is inherently an oligopolistic market. You simply can't have a commodity operating system where there is a fungible product that can be supplied by close to an infinite amount of producers. (Of course, the web as platform could become the ultimate OS, which would be awesome.) On the other hand, you can have obsolescence in the OS space where market share gets rapidly destroyed due to disruptive innovators providing a better product. So I'm not really sure what the best analogy is.

Spot on, Sanjeev. Spot on.

I was just about to post the same article. Seems a little nutty to say that TARP contributed to an "unnecessary panic in the marketplace that still hasn't been fully restored." Or that it was TARP that caused financial stocks to plunge after it was put in place. If there had been no TARP, the financial system would have been done for, and even WFC would have been decimated in terms of real future business prospects, as the economy would be in shambles. Now, perhaps he has a point that the banks that did not need capital shouldn't have been forced to take it, but I don't think you can go from there to saying that TARP was an "unmitigated disaster."

Personally, I think that AAPL is a great company trading at a reasonable value. I don't expect it to be a home run, but I would not be surprised to get an annualized return over the long term that beats the S&P index by simply buying and holding. Even a double digit annualized return is possible over the long term. Having said that, I sold the little amount of AAPL I owned a couple of months ago, as I'm looking for much greater returns. I've said this before, but AAPL must be viewed as a software company that bundles its software with the best hardware in order to provide an optimized experience. Moreover, AAPL does not just create any software -- it develops operating systems, and the competitive market for such complicated OS's is currently oligopolistic and lends itself to network effects. Yeah, if we ever have the Web as platform, things could change, but I think that, even then, Apple will grow market share and profits and will add enough value to keep unit sales of the OS family growing. It seems like people are getting a little too influenced by stock charts and price action. It doesn't matter what the price action of a stock has been for the last X years. It doesn't matter that AAPL has been a 4 bagger from 2010 or that DELL has done nothing from the very same time. Only the future prospects of the business and the price you're paying for those prospects matters. Finally, ask yourself this on batting average. If your portfolio does nothing for two years but then doubles in the third year , giving you a pretty nice annualized return on an after tax basis, did you make the wrong decisions along the way? Couldn't you have structured your portfolio differently so that you could have grown your portfolio steadily while still being able to take advantage of whatever caused you to get that double digit return in the third year? Maybe. Maybe not. Ideally, IV gets reflected in price action as soon as you're done buying or shorting, but that's not how the market works unless you can create a catalyst.

I like hearing Michael Dell say that the dividend will be paid into "perpetuity."

Great interview, brker_guy. Thanks for posting.

I just finished it and loved it, but I always love Buffett interviews (especially when that CNBC Joe guy isn't always screaming stupidities). Thanks for posting. WEB was in great form in that one.

Finished it today, truly amazing. The examples are so good that I will have to watch it again. But now I have a problem ... Mrs wants more hehehe. Any more suggestions Txlaw? Nothing that comes to mind, but I will post if there's anything else worthy to put up here.

Could be the right time to get an "infrastructure bank" rolling.

Your welcome, Plan. This stuff was too good not to post about, and I know a lot of the folks on the board will appreciate it.