Liberty

That's going on the list, thanks!

Book mostly about Uber and Airbnb. Just started it, in good part because I like the author. https://www.amazon.com/Upstarts-Airbnb-Companies-Silicon-Changing/dp/0316396818

Well, the story isn't over yet. With 20%+ of GDP related to housing, with houses over a million dollars in two of the most populated areas, household debts at record levels, an economy still very dependent on a few other sectors that aren''t doing too well, etc..

To me, this is a very odd thing to say when we're in the middle of a massive housing bubble, when--in a world where houses are considered affordable at three times income and grossly unaffordable at five--houses in Vancouver are going for eleven or twelve. Canadians pay high fees because of the oligopoly. That's how the banks make money. We're always way behind the US in getting lower cost options and nice incentives on things like credit cards...

Isn't the main difference that most other currencies are being used and most cryptocurrencies are being bought to speculate at the present time? Seems like that changes the analysis when comparing BTC to M2 as a TAM or whatever...

So it was you moving it up 3%. Mad volume, bro :P

Thanks John, and thanks Joel. I've also appreciated your writings I've the years.

The supply of bitcoin is fixed (and declining as people lose access to them..), but the supply of cryptocurrencies in general is infinite. That'll be an interesting dynamic to see in action over the coming years and decades..

On Friday, tech tanked, but financials were up iirc, so no big surprise that BRK was also up. ¯\_(ツ)_/¯

Buffett is very likely the source of that personal information. I don't remember having any problem with it being in the book. He's human, I'm human, we all have our stuff. I feel like I get him much better as a human being thanks to the personal stuff than if all this was about were his business dealings (there's plenty of books about those). To each their own I suppose ¯\_(ツ)_/¯

The Tim Ferriss Show: #244: The Quiet Master of Cryptocurrency — Nick Szabo https://overcast.fm/+BmGV410hM

https://www.amazon.com/Zero-Notes-Start-Ups-Build-Future/dp/0753555204/ Just finished reading this and enjoyed it a lot. Lots of clear thinking in it. Whether you end up agreeing or not with various points, I think it's worth reading. t's very hard to summarize or get the gist elsewhere since the essay style builds things up step by step, so f.ex. talking about step 9 doesn't really give you what's in the book.

On a related note, here's a good explanation of the "Lump of Labor" fallacy by Marc Andreessen. I was familiar with it, but never seen it explained to the second, third, and fourth level effects the way he does, which makes it a lot more useful as a model to think about things:

Bob Magness had a pretty good deal on John Malone for a long time...

For those of you who listen to Patrick O'Shaughnessy's podcast, this is his father. Presentation notes (not mine, from the youtube page):

https://www.forbes.com/sites/chloesorvino/2017/05/23/james-leprino-exclusive-mozzarella-billionaire-cheese-pizza-hut-dominos-papa-johns/

Another interesting video by the same author, using the idea of inversion: "7 Ways to Maximize Misery"

You're welcome.

To add further to your point, while Liberties did not have GAAP earnings, they were *reasonably* valued on a FCF & EV/EBITDA basis. I don't think you can make the same case with Amazon... What TCI spent on m&a and debt interest, amazon is mostly spending organically. That's different optically, but it's all really growth expenses when you get to the bottom of it... If Amazon spent $1 billion to purchase a single billboard in Montana with the Amazon logo on it, it would likely grow revenue. Is this a "growth expense" that should be taken out to normalize earnings? If you gave me billions of dollars a year to piss away I could grow revenues really fast too. How do you determine that Amazon's "growth expenses" are good investments and not billboards in Montana? They may turn out to be great investments, time will tell. But it is very far from the TCI days where they were investing in monopoly cable systems where the unit economics were clear. There is only one thing I'm certain of when it comes to AMZN, that is that this (and the AMZN thread) is going to be an incredible thread to look through in 10 years. There will be some amazing lessons, one way or the other. Exactly, you have to judge if Amazon is getting good ROIC on its investments. That's what's hard about this situation. I didn't say that cable was the same as cloud computing and 1P/3P e-commerce, just that on one side TCI's FCF was apparent because it was used for M&A while Amazon's FCF isn't because it's mostly reinvested above that line. If Amazon was mostly growing through M&A, it's financial statements would look very different but that might not necessarily be better underlying economics. Not all sources of value have to be converted to FCF right now to be worth something. For example, Moody's or See's untapped pricing power had value even long before they actually use it fully. Edit: btw, one interesting thing that many don't understand about Amazon: The economics of third party sales on its platform are more attractive than 1st party sale. They basically just take a cut on what's sold through their website, like Ebay, and that's inherently higher margin than carrying inventory and operating warehouses, etc. 3P sales have been growing faster than 1P sales, but for those, only the actual amazon cut is recorded in revenues, not the whole dollar amount of the pricetag of what was sold. So accelerating 3P sales are actually a second-derivative headwind on overall revenue growth (ie. for the same amount of merchandise sold, the revenue will be lower for 3P than 1P but profits will be higher) but actually increase the velocity of value creation.

To add further to your point, while Liberties did not have GAAP earnings, they were *reasonably* valued on a FCF & EV/EBITDA basis. I don't think you can make the same case with Amazon... What TCI spent on m&a and debt interest, amazon is mostly spending organically. That's different optically, but it's all really growth expenses when you get to the bottom of it...

MOSTLY MONEY with Preet Banerjee: 51: What is going on with the Canadian housing market? Ben Rabidoux weighs in. https://overcast.fm/+8XSGzLPc

Josh Tarasoff (2013) comments on AMZN profitability: https://youtu.be/XAubRoZbI9U?t=23m15s

There's more than one way to reinvest into growth. He could do it by slashing his prices/margins. This way, he would be reinvesting the potential profits that he would otherwise be making into growth. He can also reinvest the profits into the business in other ways. For example, he could keep his profit margins normal, but take all that money and add more employees, more equipment, maybe rent a new locations, etc. He's still keeping the money inside of the business rather than taking it out. Both approaches look different from an accounting point of view, but the general idea is the same; use money that could go in your pocket and instead "spend" it on accelerating the creation of value. f.ex. When Amazon uses money from its more mature and profitable US retail business and uses it to pay for the startup of its operations in India, that's what it's doing. When it's using profits from AWS to invest in Prime Video content to attract more subscribers who then spend more on retail and are stickier sources of revenues, that's what it's doing. When it invests in CAPEX way over what it needs strictly for maintenance (more fulfillment centers, more data centers, more robots, entering more new markets, etc), that's what it's doing.

Almost everyone is short-term oriented. This only works for long-term oriented people, and for public companies, you have to spend a long time educating your shareholder base about what you're doing and they have to trust that you really mean it and can pull it off, otherwise they won't give you the latitude (also helps if you are a founder-majority owner)...

Correct. It's easy to beat your competitors on price and grow if you don't need to make a profit. For now Amazon is not a business. It's a non-profit. You're looking at it wrong. For sure I am. After all a company is not supposed to make money. A company is supposed to create value. Reinvesting all your earnings internally is one way to create value. TCI didn't have any earnings either. Update: A bit more here http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/amzn-amazon-com-inc/msg300226/#msg300226