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#1
General Discussion / Re: Cryptocurrencies
Last post by Dexter - January 17, 2018, 03:09:43 PMLast resource I'll post on cryptocurrencies today....
Here's a YouTube video that provides an excellent primer on how Bitcoin and other cryptocurrencies actually work. It was referenced in the MMM article above.
https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be
Here's a YouTube video that provides an excellent primer on how Bitcoin and other cryptocurrencies actually work. It was referenced in the MMM article above.
https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be
#2
General Discussion / Re: Cryptocurrencies
Last post by Dexter - January 17, 2018, 03:06:19 PMHere's an insightful analysis of Bitcoin from Mr Money Mustache.
https://www.mrmoneymustache.com/2018/01/02/why-bitcoin-is-stupid/
https://www.mrmoneymustache.com/2018/01/02/why-bitcoin-is-stupid/
#3
General Discussion / Cryptocurrencies
Last post by Dexter - January 17, 2018, 01:02:34 PMThe wild ride continues. CNBC reported today that Bitcoin is off 50% from its all-time high...that was made last month!
https://www.cnbc.com/2018/01/17/cryptocurrency-sell-off-continues-as-bitcoin-ethereum-sink.html
Quick question for anyone out there reading this: With these types of price fluctuations, how can Bitcoin (or any other cryptocurrency) be considered a viable currency?
https://www.cnbc.com/2018/01/17/cryptocurrency-sell-off-continues-as-bitcoin-ethereum-sink.html
Quick question for anyone out there reading this: With these types of price fluctuations, how can Bitcoin (or any other cryptocurrency) be considered a viable currency?
#4
General Discussion / Re: Decision Tree for Initial ...
Last post by Dexter - August 18, 2017, 05:33:05 PMJust a quick follow-up. For anyone not familiar with the concept of an economic moat, Warren Buffett provided the following comments in a 2007 talk given at Florida University (https://www.youtube.com/watch?v=2MHIcabnjrA):
Buffett: I like businesses I can understand. We'll start with that. That narrows it down about 90% [laughter]...There's all kinds of things I don't understand, but fortunately there's enough I do understand. You got this big, wide world out there. Almost every company is publicly owned...You got all American business, practically, available to you. Now, to start with, it doesn't make sense to go with things you think you can['t] understand. But you can understand some things. I can understand this [Picks up can of Coca Cola]. I mean you can understand this. Anybody can understand this. I mean this is a product that basically hasn't been changed much...since 1886...and it's a simple business. It's not an easy business. I don't want a business that's easy for competitors. I want a business with a moat around it. I want a very valuable castle in the middle. And then I want...the Duke who's in charge of that castle to be honest and hard working and able. And then I want a big moat around the castle, and that moat can be various things.
The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody's going to have one auto insurance policy per car basically, or per driver. And...I can't sell them twenty...but they have to buy one. What are they going to buy it on? They're going to buy it based on service and cost. Most people will assume the service is fairly identical among companies, or close enough, so they're going to do it on cost, so I gotta be the low cost producer. That's my moat. To the extent my costs get further lower than the other guy, I've thrown a couple of sharks into the moat.
Buffett: But all the time, if you've got a wonderful castle, there are people out there who are going to try and attack it, and take it away from you. And I want a castle that I can understand, but I want a castle with a moat around it.
Buffett: Thirty years ago, Eastman Kodak's moat was just as wide as Coca Cola's moat. I mean if you were going to take a picture of your six month old baby, and you're going to want to look at that picture 20 years from now, and you're going to want to look at it 50 years from now. And you're never going to get a chance — I mean you're not a professional photographer — so that you can evaluate what's going to look good 20 or 50 years from now. What is in your mind about that...photography company is what counts because they are promising you that the picture you take today is going to be terrific to look at 20 or 30 or 50 years from now about something that's very important to you. Maybe your young child or whatever it may be. Well, Kodak had that in spades, 30 years ago, they owned that. They had what I call share of mind. Forget about share of market – share of mind. They had something in everybody's mind around the country, around the world – the little yellow box and everything – that said, "Kodak is the best." That's priceless.
Buffett: They've [Kodak] lost some of that. They haven't lost it all...but they let that moat narrow. They let Fuji come and start narrowing the moat in various ways. They let them get into the Olympics and take away that special aspect that only Kodak was fit to photograph the Olympics. So Fuji gets there and immediately in people's minds Fuji becomes more on a parity with Kodak. You haven't seen that with Coke. Coke's moat is wider now than it was 30 years ago. You can't see the moat day by day, but every time...the infrastructure gets built in some country that isn't yet profitable for Coke but will be 20 years from now, the moat is widening a little bit. Things are all the time changing that moat in one direction or another. Ten years from now you can see the difference. Our managers of the businesses we run, I've got one message to them, which is to widen the moat. And we want to throw crocodiles and sharks and everything else, gators, I guess, into the moat to keep away competitors. And that comes about through service, it comes about through quality of product, it comes about through cost, it comes about sometimes through patents, it comes about through real estate location.
Buffett: I like businesses I can understand. We'll start with that. That narrows it down about 90% [laughter]...There's all kinds of things I don't understand, but fortunately there's enough I do understand. You got this big, wide world out there. Almost every company is publicly owned...You got all American business, practically, available to you. Now, to start with, it doesn't make sense to go with things you think you can['t] understand. But you can understand some things. I can understand this [Picks up can of Coca Cola]. I mean you can understand this. Anybody can understand this. I mean this is a product that basically hasn't been changed much...since 1886...and it's a simple business. It's not an easy business. I don't want a business that's easy for competitors. I want a business with a moat around it. I want a very valuable castle in the middle. And then I want...the Duke who's in charge of that castle to be honest and hard working and able. And then I want a big moat around the castle, and that moat can be various things.
The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody's going to have one auto insurance policy per car basically, or per driver. And...I can't sell them twenty...but they have to buy one. What are they going to buy it on? They're going to buy it based on service and cost. Most people will assume the service is fairly identical among companies, or close enough, so they're going to do it on cost, so I gotta be the low cost producer. That's my moat. To the extent my costs get further lower than the other guy, I've thrown a couple of sharks into the moat.
Buffett: But all the time, if you've got a wonderful castle, there are people out there who are going to try and attack it, and take it away from you. And I want a castle that I can understand, but I want a castle with a moat around it.
Buffett: Thirty years ago, Eastman Kodak's moat was just as wide as Coca Cola's moat. I mean if you were going to take a picture of your six month old baby, and you're going to want to look at that picture 20 years from now, and you're going to want to look at it 50 years from now. And you're never going to get a chance — I mean you're not a professional photographer — so that you can evaluate what's going to look good 20 or 50 years from now. What is in your mind about that...photography company is what counts because they are promising you that the picture you take today is going to be terrific to look at 20 or 30 or 50 years from now about something that's very important to you. Maybe your young child or whatever it may be. Well, Kodak had that in spades, 30 years ago, they owned that. They had what I call share of mind. Forget about share of market – share of mind. They had something in everybody's mind around the country, around the world – the little yellow box and everything – that said, "Kodak is the best." That's priceless.
Buffett: They've [Kodak] lost some of that. They haven't lost it all...but they let that moat narrow. They let Fuji come and start narrowing the moat in various ways. They let them get into the Olympics and take away that special aspect that only Kodak was fit to photograph the Olympics. So Fuji gets there and immediately in people's minds Fuji becomes more on a parity with Kodak. You haven't seen that with Coke. Coke's moat is wider now than it was 30 years ago. You can't see the moat day by day, but every time...the infrastructure gets built in some country that isn't yet profitable for Coke but will be 20 years from now, the moat is widening a little bit. Things are all the time changing that moat in one direction or another. Ten years from now you can see the difference. Our managers of the businesses we run, I've got one message to them, which is to widen the moat. And we want to throw crocodiles and sharks and everything else, gators, I guess, into the moat to keep away competitors. And that comes about through service, it comes about through quality of product, it comes about through cost, it comes about sometimes through patents, it comes about through real estate location.
#5
General Discussion / Decision Tree for Initial Busi...
Last post by Dexter - August 17, 2017, 07:25:45 PMNice decision tree by Connor Leonard, Public Securities Manager at Investors Management Corporation.
https://twitter.com/Connor_Leonard/status/760824678734782465
The following articles by Connor explain the distinctions between Legacy Moats, Reinvestment Moats, and Capital Light Compounders.
http://basehitinvesting.com/importance-of-roic-reinvestment-vs-legacy-moats/
http://basehitinvesting.com/reinvestment-moat-follow-up-capital-light-compounders/
https://twitter.com/Connor_Leonard/status/760824678734782465
The following articles by Connor explain the distinctions between Legacy Moats, Reinvestment Moats, and Capital Light Compounders.
http://basehitinvesting.com/importance-of-roic-reinvestment-vs-legacy-moats/
http://basehitinvesting.com/reinvestment-moat-follow-up-capital-light-compounders/
#6
Investment Ideas / SNAP - Snap Inc.
Last post by Dexter - July 11, 2017, 12:05:09 PMRead this timely article about Snapchat yesterday and found it interesting. Wanted to share.
http://adventuresincapitalism.com/post/2017/07/09/SNAPageddon.aspx
SNAP is down ~8% today after lead underwriter Morgan Stanley downgraded the stock and slashed its price target by $12 to $16/share.
https://www.reuters.com/article/us-snap-morganstanley-downgrade-idUSKBN19W1HA
Those who short SNAP with puts may well wind up happy -- even after today's price decline.
Disclosure: No position in SNAP.
http://adventuresincapitalism.com/post/2017/07/09/SNAPageddon.aspx
SNAP is down ~8% today after lead underwriter Morgan Stanley downgraded the stock and slashed its price target by $12 to $16/share.
https://www.reuters.com/article/us-snap-morganstanley-downgrade-idUSKBN19W1HA
Those who short SNAP with puts may well wind up happy -- even after today's price decline.
Disclosure: No position in SNAP.
#7
General Discussion / Network Effects
Last post by Dexter - April 19, 2017, 03:32:58 PMAn important reminder regarding network effects and competitive advantage.
https://www.nytimes.com/2017/04/19/technology/facebook-snapchat-instagram-innovation.html?_r=0
https://www.nytimes.com/2017/04/19/technology/facebook-snapchat-instagram-innovation.html?_r=0
#8
Events, Meetings & Notes / Charlie Munger at the 2017 Dai...
Last post by Dexter - March 15, 2017, 06:01:09 PMA good helping of worldly wisdom was served at this year's annual meeting. Enjoy!
https://www.youtube.com/watch?v=BLctqhNClqY
And here's the unofficial after-party:
https://www.youtube.com/watch?v=5YR_5el2IuM&index=1&list=PL4vpPkFFra2tjDtIJ69Ju4SnwQyNvSmIG
https://www.youtube.com/watch?v=BLctqhNClqY
And here's the unofficial after-party:
https://www.youtube.com/watch?v=5YR_5el2IuM&index=1&list=PL4vpPkFFra2tjDtIJ69Ju4SnwQyNvSmIG
#9
General Discussion / Stop reading the news?
Last post by Dexter - January 12, 2017, 11:23:52 AMJust finished reading this insightful article:
http://observer.com/2016/11/want-to-really-make-america-great-again-stop-reading-the-news/
Couldn't agree more. Seems like we are constantly caught up in the thick of thin things. We consume huge amounts of news and social media, but actually do less real work.
I believe that this author's solution is right: Be selective about what media and content we take in, and don't watch everything develop in real-time. Maybe then we can get a portion of our sanity back, and start focusing on more important matters.
http://observer.com/2016/11/want-to-really-make-america-great-again-stop-reading-the-news/
Couldn't agree more. Seems like we are constantly caught up in the thick of thin things. We consume huge amounts of news and social media, but actually do less real work.
I believe that this author's solution is right: Be selective about what media and content we take in, and don't watch everything develop in real-time. Maybe then we can get a portion of our sanity back, and start focusing on more important matters.
#10
Strategies / Re: International ETF Exposure
Last post by Dexter - January 04, 2017, 02:40:17 PMCheck out Jack Bogle's answers to the first two questions in this interview: http://www.marketwatch.com/story/jack-bogles-secrets-to-becoming-a-winning-investor-2016-12-20?siteid=yhoof2&yptr=yahoo
On the index he would pick if he was starting the first index fund again:
Bogle: I would choose the Standard & Poor's 500 Stock Index for the same reasons I picked it in the first place all those years ago. The reality is that it's weighted by the market capitalization of each stock, so if a big stock goes up in value, you don't have to buy any more, it goes up in value by the exact same amount in the fund. It is a very low-transaction costs investment. It's the best index around.
On people who would criticize that choice because the S&P 500 is a U.S. stock index:
Bogle: I'm out on kind of a limb on this, but I realize — and everyone else should know — that in the S&P 500, almost half of the revenues and half of the earnings of those 500 corporations come from outside the U.S. It is an international portfolio, it just doesn't have a stock price that floats in the international market.
So I am happy to have a totally U.S. portfolio, and that is what I happen to do myself.
I can't tell you it's right. I can't say that international won't do better in the future, because it has done so much worse in the past since I first made this statement back in '93. ... You don't need to use international, however, and if you do, keep it below 20% of your portfolio.
On the index he would pick if he was starting the first index fund again:
Bogle: I would choose the Standard & Poor's 500 Stock Index for the same reasons I picked it in the first place all those years ago. The reality is that it's weighted by the market capitalization of each stock, so if a big stock goes up in value, you don't have to buy any more, it goes up in value by the exact same amount in the fund. It is a very low-transaction costs investment. It's the best index around.
On people who would criticize that choice because the S&P 500 is a U.S. stock index:
Bogle: I'm out on kind of a limb on this, but I realize — and everyone else should know — that in the S&P 500, almost half of the revenues and half of the earnings of those 500 corporations come from outside the U.S. It is an international portfolio, it just doesn't have a stock price that floats in the international market.
So I am happy to have a totally U.S. portfolio, and that is what I happen to do myself.
I can't tell you it's right. I can't say that international won't do better in the future, because it has done so much worse in the past since I first made this statement back in '93. ... You don't need to use international, however, and if you do, keep it below 20% of your portfolio.