goldfinger

Good points! 1. While margins and moats are in the enterprise businesses it is still interesting to go after consumers which they do across the board. That's how they started. It allows to gain traction and use and to disturb competition. 2. The same technology can be shaped in different ways to fit enterprise needs and consumer needs. I wouldn't be surprised if they also add APIs to allow developers to integrate skype services into their own software.

I think they are trying to shoot multiple stones at once: - getting critical mass in the phone business with Nokia + Skype. This is cheaper than acquiring RIMM and they failed doing it on their own. - becoming a major player in VOIP + Video over network. Remember one of the new corner stones of Cisco's strategy is video. Cisco wants to go to more software and applications. This is where margins are now. - integrate unified communication technologies across their products (Office, Lync, CE, cloud, etc...). Skype's technology can be upgraded in the future to meet new challenges or just to fit in the evolving technology landscape. - increase the value of other investments like Facebook and fend off some competitive pressures from Google and the like. They probably have plans for cost cutting, monetization and market expansion. They are less dumb than everyone says they are but it still is an expensive acquisition. However they are spending money they cannot bring back advantageously. Some of the cost has to be understood as a capex necessary to maintain business. Some of it could be used to adjust free cash flow figures. The current stock price would still look cheap however.

Is it at QE12234350689943?

Ross I like the way you think. I believe the same. Hopefully we are not completely wrong! I heard Bing is a great search engine. Let's see what happens there...

Does that mean we need to get ready for S&P at 1500 in the next 2 months ? >:(

It might very well be what will happen. However, one of the problems is in who and how many weak hands there are. Italy for example may be much weaker than the markets expect and it is a big fish.

Thank you Charlie!

How can we have hyperinflation when we are still a 14-15T$ economy? I mean by that that our productive capacity hasn't been impaired and we are not trying to make up for a that kind of a catastrophe by printing. I understand high inflation or a risk of disinflation to deflation but hyperinflation or hyper-deflation seem like very remote risks at the moment.

American multinationals are definitely cheap and have been for a while. Small caps seem much more expensive in absolute and relative terms (http://www.zerohedge.com/article/gmo-quarterly-review-us-small-cap-stocks-are-now-expensive-we-have-ever-seen-them). Who knows if and when the herd realizes that and leadership changes. I am definitively in agreement with you and have been deploying cash into ABT, JNJ, MSFT, DELL, HPQ, BAC, C, WMT, etc... over the last few months.

http://pragcap.com/macro-thoughts-from-a-rail-industry-insider

Sanjeev was even more right when he expressed his doubts about BRK's succession months ago on this board!

http://www.politifact.com/truth-o-meter/promises/obameter/promise/446/enact-windfall-profits-tax-for-oil-companies/ Republicans may not go for it even though the 2008 Obama proposal may come back with sustained high oil prices.

Totally. And Berkowitz has not bought other oil stocks since then. I remember that Buffett actually visited CNQ before the crash and said that he worried about the cost of production also. We are small investors however and certain investments will be very profitable even if companies get taxed for oil prices above current levels (or actually below...).

Few will say no to QE3 when the shit hits the fan (even republicans)! This said I agree that it smells fishy and that this is a serious problem. I have lots of cash and I have resisted buying massively up to now.

Say welcome to QE3!

Some key members of the FED already hinted at the possibility of QE3 since MENA events happened and oil skyrocketed.

This is a value investor board and I do understand that macro calls are not our specialty. However, this thread was created in the "General Discussion" and it seems to me that we still live in a democracy. As far as I know Buffett, Prem and others are pretty tolerant, open and polite individuals also. My personal suggestion for Plan would be that he just disregards threads that he is not interested in.

I have stopped wondering because I think I know some of the culprits and there is nothing I can do about it! :'( I can find really undervalued propositions but I have lots of cash on hand because at some point they will get it wrong! 8)

No fan of Mish either but he has good sources to share: http://globaleconomicanalysis.blogspot.com/2011/02/worlds-largest-pension-fund-needs-to.html It seems that the un-winding has started with the largest japanese pension fund selling JGBs progressively.

http://www.zerohedge.com/article/moodys-changes-japans-aa2-rating-outlook-negative-stable (Like txlaw I am no fan of ZH but it has interesting references). It is slowly taking shape. I am investigating shorting JGBs or equivalent strategies. Hopefully we will keep this thread alive a little longer. I am slowly building a portfolio with: - undervalued very high quality and resilient to shocks: right now basket of pharma (ABT, JNJ, TEVA). Better than bonds. - a-symetric bets as fat tail events are becoming "more probable" around the world. These act as hedges in addition to being potentially lucrative. - very undervalued securities preferably small/mid caps in US or Canada. - lots of cash and equivalent. I want high margin of safety these days. I already took bearish positions on the euro as I believe that the european situation will lead to mixed results at best. Hamburg's state voted against Merkel in a big way confirming what I already knew: the germans won't go for a lot more bailouts. Ireland is electing a new gov in a few days and I cannot see irish people agreeing with bailing out foreign banks at their own expense. Portugal is rapidly taking the path of asking for bailouts as their rates exceed 7% consistently. Spain, Italy and Belgium are not looking much better mid term.

Exactly my thoughts! Thank you Sanjeev!

As some members justly noted in this thread the macro is still there even more threatening and sheeps are just who they are, changing of opinions along with promises from the FED and increasing markets. I was all in late 2008 early 2009 but at this level markets look frothy at best. Soon we will be close to 2006-2007 levels where the market was very expensive in the middle of one the biggest housing bubbles ever, when world imbalances really can make this recovery tip over on a dime. By the way I have a decent bet on ATPG that I like at this time, so we are still partners in crime on some opportunities.

I could not have said it better than you! I am also nibbling at an opportunity and another here and there and selling for nice profits but I am not going all in or waiting for long periods of time. There is just too much risk out there and it is an expensive market filled in with earnings estimates reflecting the past when the future might look really different. Investors are completely bypassing the fact that this is a high risk environment. It is amazing watching everybody dense on top of the highest pile of private debt to GDP or assets ever seen by this country and by far.

I am not sure the war is over yet. It may have only started and more battles are to follow. I find it absolutely weird that so many are already partying when there is so much debt in both public and private sectors as compared to any rational measure of solvency in most advanced countries and when the most important emerging nations seem to be catching our diseases pretty quickly. There are not that many historical periods like that. Moreover we may be in the process of discovering that our assets may not be sufficient to cover that debt.

Happy new year and thanks for this great board.