CR

Read the article a bit closer. That $12B is a sum of all of the amounts his funds have initially raised since inception in 1983. The article mentions nothing about raising money in the last 3 months.

Claphands, as a heads up, I grew up near WinnDixie / Publix and the fight was just never fair. Winn never had any people in it and always felt like the depths of supermarket hell. Publix on the other hand was always brimming with people and was generally a pleasure to shop in. Point is that I never understood how WinnDixie was in business and still dont.

But that's Einhorn's book, correct? Why would he tell a story any different than his own perspective and experience? It is Einhorn's book and I expected it to be primarily from his vantage point because it would be understandably difficult to report the story from Allied's vantage point. It would be like Jim Chanos writing about his experience around Fairfax and how hard he tried to convince everyone that Prem was a fraud. I wouldn't read that piece of crap either. Unknown. I am unfamiliar with that story's details but I dont think thats relevant to the authenticity of Einhorn's claim against Allied and the book that details it. The worst parts of the Allied case have been verified, such as Allied illegally obtaining his phone records. Some more specifics: http://www.reuters.com/article/idUSN2310508920100323 ---> SEC reports its own failure http://www.nytimes.com/2009/02/01/business/01gret.html?_r=1 ---> SEC reports Allied in violation http://foolingsomepeople.com/main/the-allied-story/white-papers.html ---> A trove of 3rd party sources describing violations etc. I do not believe that the book is meant to be a marketing or pumping ploy; he already had all the acclaim and ability to raise capital that he could have wanted before writing it and the payoff was small for his fund's size. Rather, I think it was a sincere attempt to highlight plenty of problems that he found in the system in the course of trying to bring a fraud to justice, including getting the authorities to actually act. I'd rather not trash a guy for doing that. Isn't there an inherent conflict of interest in the fact that he's making a profit on his short, and writing a book about the experience? Why doesn't he write about his experience at New Century? Did he attempt to contact the SEC about the fraud there? He disgorged half his profits to charity. And any profits he made on the book are surely miniscule compares to what he makes in his career. You could look at it that way though and say the same about all short sellers who open their mouth at all, but then why not say the same about people going long and declaring their calls? For example, there seems to be a noticeable sumzero effect for small stocks when a post gains traction there. Is that not kosher either? I have a different view and I would love it if someone could challenge it. I see these questions of people's character in issuing short/long reports (traditionally people only dislike short ones though) as being flies in a really big jar of ointment. If it was a small jar, then it would be noticeable and it would matter. But almost always (for liquidity reasons), these are really big jars and as long as the business produces and succeeds, then a short report really does not matter. It's very difficult for an individual to continue a short when the street keeps seeing positive gains QoQ and YoY. And if they can't report positive gains, if the value isnt there, then its worthy of that short report. And if it's a fraud, then I am wholeheartedly in favor of someone calling it out and getting rewarded for doing so. There isnt enough regulatory power in this world to come to the rescue otherwise. For a very strong example of this, see the plentiful number of recent Chinese equity frauds. And if it's not a fraud? Again, success will overcome a false moniker. Regards, - CR

ubuy2wron, you should consider reading Einhorn's book and its tale of the SEC and other authorities' dismissal of everything he says before making that claim.

I am pretty sure everyone understands that the walled garden / internet country / itunesModel is what facebook wants to do and is actively trying to do and that is why the valuation is so high. My point wasn't about facebook. It is likely that it is worth some # between and 50B and the 200B that google trades for. My point was more about the bubble around facebook, e.g. STVI, Zynga, etc.

I've been watching Snap Interactive (STVI) and wondering when the masses will decide to stop bidding this auction up and I came across this article: http://www.allfacebook.com/are-you-interested-watches-their-stock-surge-1000-2011-01 It made me realize that there seems to be a facebook bubble effect in general and not just on STVI. Thoughts?

Thanks much Onyx.

There was a post not too long ago with an excel spreadsheet comparing various insurance companies. I thought I had saved it, but cannot find it anywhere. Anyone mind sharing it again? Thanks much.

How much is there? How would you go about answering this question? (I know this is an odd thought exercise, but I think that an explanation of an answer may be quite interesting)

An article referring to the problem that I mentioned: http://gigaom.com/cleantech/where-tesla-better-place-dont-agree/

Good points all around. One to add to the conversation: With how car demand works, are the switching stations viable? What I mean by that is let's take an SUV and a sedan. They require different batteries because one wants power and the other wants comfortability. You can continue this and look at sports cars with speed, etc. Basically there's a barometer for all of these attributes and the battery requirements are different dependent on where each barometer set. So a battery for an SUV is different than a battery for a sedan. How are the switching stations going to be able to carry such a wide variety of batteries? A gas station only yields 3 different types. Who is going to demand of the car companies that all of the batteries and all of the cars fit some modular physical description so that they can accept the switching station's input? And even if they did that in terms of physical interpretations, how are they going to do that in terms of car needs? This last question leads to the overall gist of my post: How will there be more than just a few models of cars? And if by some magic we forced all of the car companies to one standard, who is going to decide that standard? BetterPlace does not seem like the logical answer to the 2nd question.

Regarding them being private, that is often the point. They dont want to be heard of or known outside of their niche. Most of them were producing a commodity very very well and dont want more players in their space who think that they can pull off the same. Also, they were mostly families who didnt want the business to leave their hands. I was reading those books to understand how it could apply elsewhere. I dont imagine ever getting a solid opportunity to invest in one of the German [Hidden] Champions.

Baoxiaodao, there's the follow up book "Hidden Champions of the 21st century." There are a lot of semi-similar books such as Gorilla Game, Built to Last, Good to Great (prequel to Built to Last), and even Jim Roger's book on China "A Bull in China." I have only read the first and last but hear good things about the two Collins books. If you pick up one of em, let me know what you think.

The book that they mention, Hidden Champions, is also quite good and gives an excellent account via examples of how the best German companies work. One interesting takeaway is that many, if not most, of the market-dominating ones are family-owned and operated.

Saumil, a heads up that the link "Berkshire's letter to MBIA" does not work. It seems to be dead.

Thanks much to both of you.

In the early 90s, there was a back and forth between one of the early Microsoft Execs and Buffett regarding Microsoft as a strong business and how to understand it. I am having trouble finding this again. Does anyone have a link or a copy? Thanks very much.

(Long time techie, recent transplant to a more corporate place.) The arguments that MarkJr and Bronco are putting forward resonate much more strongly. I think its worthwhile to remind ourselves again that MS's dominance comes from its corporate connection. I look around and see everyone typing away on windows computers, using excel docs, and creating powerpoint presentations. This is huge and it should be underlined that this is why their margins are so strong in their core competencies. But you dont invest in a company based on just what it has made in the past. So the why here is predicated on MS continuing its core dominance in the corporate world because it sure does not have a grasp on mostly anything else (regardless of how awesome MS Research is, it has not produced a corresponding increase in quality of tangible products). At the same time that I see my colleagues using their services at the office, they are not using them at home. They have ipads, iphones, macbooks, droids, googletv (one guy bit the bullet), etc. The person responsible for new computer/monitor purchases here uses an iMac as her corporate computer. I easily foresee a time when Microsoft loses their dominance in this world as people more apt with technological change demand products that they also use at home. We havent even seen a non-developmental version of Chrome O/S yet, nor a formidable chinese O/S. Both of those products will likely dramatically change the scene, especially in the big markets of tomorrow (i.e. the 50% extra that someone mentioned above in their 150% market size commentary). In addition, I can see the burgeoning emerging markets totally skip the microsoft phase of development similarly to how china as a whole is mostly skipping the traditional gas station setup and investing much more in an electric infrastructure. But coming back to today, I understand that this is a play on their value. I have not studied them in-depth in regards to an investment, but its tough to imagine that you would really want to be in a play where the value thesis is that the core competencies stay at a high margin when there's so many forces suggesting that they just ... wont.

Bronco, any luck finding that article?

Thanks for the explanation coc. Tariq, thanks for the link. I just read through the first page and I especially liked your anecdote on Edward Witten.

BeerBaron, what do you mean by "colibri in the mine"? Tariq, do you mind sharing the link for your blog? Thanks much.