Liberty

Well, if we're talking about "somewhats" and "spectrums", the US is also somewhat utopian, somewhat anarchic, and somewhat libertarian.

I think if you were one of the millions in jail in the US today you would think that it is already pretty bad. If you were one of the thousands killed by police your loved ones would think it was already pretty bad. Just because it was much worse in other places and times doesn't mean that it isn't bad and getting worse here and now. We live in interesting times, the private sector is doing amazing and wonderful things that are making all of our lives better by the day, but at the same time the government is gearing up for an all out war (both overseas and at home). The police are killing thousands every year, hundreds every month, often getting away with murder even though the video is on youtube. Business is operating under the weight of crippling regulations & licensing schemes in an almost outright crony-capitalist system. Taxes, well this thread has gone over taxation already. Imagine what would be possible if those weights were removed. I never mentioned Hitler btw, I had more of the Mussolini/Italian system in mind when I said "fascist" not trying to imply the bigotry/antisemitism images that the words "Hitler" or "Nazi" seem to bring to mind. The US has the most sophisticated spying system the world has ever seen, dictators and fascists of previous generations could never even dream of having the capabilities of the current CIA/NSA/FBI/etc. The US military is the best equipped in the world. As are the US police forces (federal, state, and local). When it does get "really bad" it may happen quickly. IMHO the only thing holding the whole leviathan back is the knowledge that there are more than 88 privately owned firearms for every 100 people in the United States. When it does get "really bad", as you say, it will be really messy on all sides, which is the one reason it may never get to that point at all. It is more likely to get a little worse, but never cross the threshold where people rebel. It may never get "really bad", but that doesn't mean it is good. I do think the war on drug is a colossal mistake and the incarceration rate is ridiculous. But words mean something, and the US isn't communistic or a police state. In a police or fascist state, we probably wouldn't be having this discussion.

Constant hyperbole does no one any good, and if things start to get really bad, nobody will listen to those who have been crying wolf about police states, communism, fascism, totalitarism, etc, for years. It's fine to say that things are bad/sub-optimal in ways X,Y, and Z, and that they could be improved through A,B, and C, without constantly evoking Stalin, Mao, and Hitler. If I had a time machine and gave these people the choice to live where they live now or to be transported to being an average citizen in one of these regimes they constantly reference as being like today's, I'm pretty sure that they'd stay right here.

http://www.louisaheinrich.com/wp-content/uploads/2015/03/inigo-montoya_that-word.jpg

Multiples aren't that high compared to interest rates. If we had those multiples with 8% or 18% interest rate, that would be something else. Not making a macro call, just saying that what would be much weirder would be to have 10x multiples with almost 0% interest rates... You're right. If I were to look at it from the efficient market view, based on the current interest rates the multiples imply fair prices if everything stays the same. What scares me is that you have record high margins, low inflation, zero interest rates, and these multiples. Not much improvement to be had on all those fronts. So if all stays the same then you have fair prices and get something like 7-8% pa returns. If anything changes, the market is overpriced and you'll have bad returns. To invert the situation, if you're looking at the early 80s you had low multiples, low margins, high inflation, and high rates. A lot of the great returns from 80s and 90s came from improvements in those factors. Now we're in the opposite situation where all those levers have been used up and all the changes can really only go in the opposite direction. I'm not making any calls either. Just food for thought. True. But in the 80s people were looking back at the horrible 70s and expected more of that. Their low multiples didn't seem that low to them at those interest rates at the time, which they expected to stay high longer (because they expected inflation to continue for a long time, even Buffett wrote about inflation a lot). Now we're looking back at the horrible 2000s and expecting more of that. Just from a different angle in both cases. Who knows?

Multiples aren't that high compared to interest rates. If we had those multiples with 8% or 18% interest rate, that would be something else. Not making a macro call, just saying that what would be much weirder would be to have 10x multiples with almost 0% interest rates...

Pretty sure people who have lived through real communism might want to disagree with you...

WOW! I know it was bad, but when put in context the 2000s look like a total disaster! I know we starter at a high and finished at a low but still WOW. Well, this is what people expect will be repeated all the time going forward, apparently...

Waiting for a 'normal time' to invest? https://theirrelevantinvestor.wordpress.com/2015/08/04/waiting-for-normal/

The way I look at it, abject poverty for most people is the default state in history. Most rich people were warlords in one way or another. The people who end up being written about in history book tend not to be part of the 99.99% common people, so don't let that distort your view. Capitalism is a method for increasing productivity (by coordinating unrelated parties, efficiently allocating resources, creating specialization which allows technological progress, etc), which reduces poverty. Blaming capitalism for the people who are still poor is like blaming the scientific method for the things that we don't yet know. Doesn't make much sense. Granted, that doesn't mean that capitalism will accomplish all the goals that we can find worthwhile, but blaming it for poverty is strange. People who are big fans of the welfare state might argue that there isn't enough redistribution and safety nets, but the reason why we can pay for these things and get out of the default state in the first place shouldn't be forgotten or damaged too much.

I like the business model a lot. They only own a few hotels; most are franchised or operated under management contracts. It's a fee based business mostly, collect royalties off the hotels they franchise or manage. So you can imagine, this is a pretty capital light business. The cash is then sent back to shareholders in the forms of dividends and, mostly, share buybacks. The company targets a 3-3.25x leverage ratio to EBITDAR, so for every $1 increase it essentially can (and does) return $3 to shareholders. Planning to return $2 billion this year alone, vs. ~$20 billion market cap. Even though the P/E is high you're getting a large amount of cash returned each year. The debt they use to finance this is very cheap; recently in the 3% range. So they're issuing debt at 3% to buy back stock with an earnings yield of ~4%, that's growing earnings currently at about 20%. It's a smaller position but I was interested enough to buy a starter stake. Very nice ROIC. I remember an earlier incarnation of this being used as an example on Greenblatt's book (when they did the spin-off).

What do you like about it so far, and what have you learned about?

Wanted to point out for those who want a broker that doesn't sell your orders to HFT firms and doesn't route you first through their own dark pools even if that's not the best execution for you; Interactive Brokers has a policy of not selling order flow to 'internalizers' and other third parties. They also connect with the IEX exchange (you can use their smart routing algo and let it find the best execution, or you can specify that you want to go to IEX directly). I know most here are probably not big enough for that to make a big difference, but if on principle you don't want to support brokers who are complicit with the worst kind of HFT practices, going with Interactive Brokers might be a way (along with the low cost benefits).

When you have inflation for a long time people say it's the natural order, it'll always be like that. When you have little inflation for a long time people say it's the natural order, it'll always be like that. I don't know. Markets tend to end up doing whatever surprises the most amount of people, so we'll see what that is, but it probably won't be quite what people expect (on all sides -- there's always more possible events than actual widely held projections in these complex systems with feedback loops and lots of variables). tl,dr: No idea, but probably not what people extrapolate from the present day, as they always do.

Or genetics. The Blank Slate by Steven Pinker makes a pretty convincing case from studies of identical twins that have been separated at birth (so raised in different environment) that genetic clones tend to turn out pretty similar. Are people smart because they have a good family culture, or do they have a good family culture because they're smart? I know, whole other debate...

http://scottgrannis.blogspot.ca/2015/07/commodity-prices-in-perspective.html

Google Finance has potential because it's actually fast and I like the interface, but there's been no new features added to it in years and years. It seems to be almost abandonware at this point, and some data is wrong or missing. With a little love, it could be quite something (they'd have a huge chunk of the free market if they just added 10-year data...).

I did finish the book a little while back. The second half is better than the first, possibly because the events were taking place as Zuckerman was writing the book. It also gets less redundant as the book goes on.

Just looked up the stock and read the 2014 letter. The letter was very good, and the stock.... well that's simply an insane compounder. Know any books/longform articles about these guys? I'll read the letters this week. Apart from the letters there's not much. They were a very small cap not that long ago. There's a Globe & Mail profile on the CEO that might interest you.

The best annual letters are from Constellation Software in my opinion.

Sort of... you can't tell it how fast you plan on driving and then have it plan the proper route for you. It can set you out down a path and then only later tell you that you won't make it unless you slow down. It's not quite what they advertise it to be. I would suggest that you send a feature request to the company. They're quite receptive with that stuff. It could be in the next software update, who knows?

I would agree with you if gas stations were typically located a few hundred miles apart, with none in between. People in gasoline cars don't need to think about whether they'll make it from point A to point B. Of course range is more of an issue with electric cars. A few years ago it was *the* main dealbreaker with them along with price, performance, looks, safety, public perception, etc, and now it's just something that you have to be more careful about in some very specific situations (day to day you start with a full charge, so you should be fine unless your main job is Uber driver, but for roadtrips you have to plan a route with charging, which the onboard computer does for you). Still doesn't have anything to do with Tesla being somewhat dishonest because they give a range based on the legal speed limit like everyone else does. This is the equivalent of what you can see on every car forum out there: "Hey, I bought Car X, is it broken? Sticker says I should get # MPG with it, but I only get %, what's wrong? Oh yeah, I always drive fast on the highway, race off every red light, etc". Early adopters always have it a little worse than late adopters; early iPhone users congested AT&T's network so much that they had crappy speeds and dropped calls... In a few years there'll be Superchargers everywhere and batteries will have more capacity and this problem will go away, but for now it's something that might inconvenience you. But if you want to trade your Tesla for my Corolla, I'll take it off your hands.

I like the anecdote about the first Gulf war: http://brooklyninvestor.blogspot.ca/2015/07/china-crash-us-crash-and-great-book.html

I don't blame the EPA because the EPA just puts out a number. The average person who talks to me about my car doesn't understand how much range declines with just a modest increase in speed -- like from 65 to 75. Tesla uses the EPA's number as a marketing tool without enough clear emphasis that there is a huge drop-off in range at higher speeds. Probably because they don't want people to see it as the unsexy car that has to be in the slow lane when you set out on the exciting first roadtrip of summer. There you are in your fancy new car, going 65 while everyone is passing you. You dare not speed up for fear that you won't make it to your destination. Elon Musk does not want people to think of his cars that way. It's different with electric cars because the buyer needs to properly assess what the range is going to look like given their preferential speed of driving. This is critically important to get right because of the lack of charging options between waypoints. I don't know, the same is true for all cars. They might advertise that Corolla or Infiniti as getting X MPG on the highway, but if you drive 80 MPH instead of 60 MPH, you'll get significantly worse MPG. That's just physics plus the fact that the advertised number is always derived from testing around the most common legal limit (60 MPH or 65 MPH). You won't see an ad for a Mustang and see "it gets 20 MPG at 80 MPH" or whatever. http://www.teslamotors.com/supercharger As for places to charges, seems like there are quite a few, and within a couple years (you can see on the maps), you won't be able to throw a stick without hitting a supercharger, not to mention all the other stations that aren't superchargers and the fact that most Tesla owners charge at home so always leave with a full "tank" in the morning. I'd say that on average, Tesla owners probably have to think a lot less about "refueling" than gas car owners (is anything more annoying than stopping at a gas station? I'd trade all those frequent stops there for having to stop at a Supercharger on a long trip once or twice a year in a heartbeat). Main exception is someone who is constantly doing day-long roadtrips. That person should probably wait a few years to get an electric car.

Interesting backstory on how they came up with the ludicrous mode.. http://www.teslamotors.com/blog/three-dog-day