merkhet

Hahaha. Buffett-hipsters. I love it.

Einhorn had a counter on this one that I thought was interesting. When you realize that you are wrong, you should definitely sell the stock. However, that does not mean you have to sell the stock immediately -- if you believe there has been a total overreaction. Of course, Guy Spier wasn't talking about situations in which he was wrong -- only if a stock tumbles after you buy it, no?

Infidels rarely think of themselves as infidels...

What makes you think that the cost for Google Fiber is so much lower than the cost for Verizon Fios?

Anyone have resources on Capital Cities and/or Tom Murphy outside of "The Outsiders"?

Yes. Both content & distribution have some interesting changes coming. Maffei referred to it as tectonic shifts in the GS interview on the LMCA thread.

The part I enjoyed the most was the amount of intellectual honesty he had. As I said before at the DJCO meeting, I'm not sure I would have been willing to admit to the world that I moved to another continent just because I couldn't handle the distractions on this one. Or that I had a serious case of envy that I struggled with when living in NYC.

Yes. And some Paul Graham's theories of wealth thrown in for good measure.

I'm not terribly worried. Malone's playbook isn't that hard to execute for the next decade or so. What you really need him for, and what he seems to do better than others, is to understand and take advantage of inflection points. My guess is his lieutenants have already received the marching orders on what to do to take advantage of the turmoil that lies ahead.

I think Munger gives you the clue you need re IQ. He's afraid of the guy with a 190 who thinks he's a 250. Say that you're probably not as smart as you think you are. It keeps you honest when you need it most -- when you're truly out of your depth. So re Buffett, I don't think he's lying. You don't need to be brilliant but you do need to be clever.

That's a good read. Thanks onyx1. I'm certainly rather perplexed by the recent stock price movements over the last two weeks.

Umami on 3rd now

We are headed to The Black Fig

Apple can both not have a moat and be actively trying to build one, no? Personally, I think Apple has a moat.

If anyone is downtown already, I'm over at the Novel Cafe.

Still on. Come find me after the meeting. I'm wearing a blue polo shirt and orange sneakers. It'll be hard to miss me.

Okay, so basically, as I understand it, there was a ruling in iowa where certain plaintiffs were denied additional discovery because the court said no additional discovery was needed in order to establish jurisdiction on whether the court could hear the case. The big question was whether this could be then applied to the other cases before various courts, because, as I indicated earlier, discovery is critical to the establishment of a case that FHFA and Treasury had no authority to do what it did. Now, the issue here is that in the case before Judge Sweeney, discovery actually IS needed because they need to be able to establish whether the court has Tucker jurisdiction based on whether FHFA was a government actor -- and/or a government actor acting in conjunction with Treasury. Additionally, there is currently no discovery process before Judge Lamberth (there's merely a motion for summary judgment), so I don't see how the supplemental authority would matter here. And, personally, I think this is the more important near-term catalyst.

The theory has been that the Iowa case decision is bad for plaintiffs. I tend to disagree as it was just a jurisdictional issue for the Iowa plaintiffs. Just landed in LA. I will type more later.

Let's not forget that the appeals process isn't done yet. Perhaps he is waiting to exhaust all his options first. Plus, prison isn't fun, so give him some time and perhaps things will change.

It looks like lunch on Wednesday is the resounding winner. We have a couple of possibilities lined up for lunch. I will probably spend most of tomorrow afternoon bumming around Santa Monica, so if anyone else is around, PM me your number, and we can try to meet up.

That case just went to jury a few days ago...

There wasn't significant interest as of yesterday for the dinner, so I was thinking of moving the dinner to a lunch after the DJCO meeting. Would there be more interest in a lunch versus dinner the night before?

Let's play it through... You spend cash (valued @ 100% of IV) to buy a company worth 2.0x BV @ 1.3x BV. Something big comes along later that you want to buy with the cash you just spent. What would be a value neutral stock issuance to make the acquisition? The answer is very simply that you would have to issue the same number of shares that you bought @ 1.3x BV -- if you issue more than that, you are diluting IV by giving out 2.0x BV per share @ 1.3x BV per share beyond what you bought in originally. What happens if your book value declines below 1.3x at the point in time when you want to make the acquisition? Well, then you would have been better off in cash. Again, implicitly, the 1.2x BV calculation was a calculation not just of possible return on cash employed but on possible cash opportunity cost.

The reason lies in the fact that you don't know @ the time whether a better opportunity will show up in the near future for you to deploy the cash. So buying @ 1.3x BV could be an issue if better opportunities arrive.

In scenario A, worth pointing out the lower coupon older prefereds should still trade well below par for the foreseeable future, maybe forever. For instance if WFC 6% fixed-for-life prefs trade below par (rated investment grade, paying), so will these most likely, even 7 years hence. Especially if rates actually ever move wider. That said, the higher coupons are the much bigger and liquid issues. Two things to add to that: (1) The Fannie Mae Series S has a floor of 7.75% and floats, so it's important to pick your spots. (2) If we are talking about the injunction winning, then you will take your chances on a market rate. If we are talking about the Takings Clause winning, then you will get par.