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Current Events

An indication of higher risk in small caps


Discussion on Short Selling

An excellent video discussing short selling and the changing nature of managing money. Listen to the first 30 minutes. About the only edge left is to be a longer-term investor.

To Find Moats Look for Monopolies and Consolidating Industries

Buffett’s greatest insight is that monopolies, duopolies, and oligopolies face little competition and little threat of new entrants. Companies that dominate their industries represent toll roads in your daily life. Every time you do anything in your daily life, you are sending part of your paycheck to monopolists.

Given that Google is the doorway through which people enter the internet, the search engine can effectively shut out competitors by demoting them or by taking their data. Google is using its dominance in one product area-universal search—to move into other markets. Economist call this “bundling: which historically has been illegal. ,

Google now controls nearly 90% of search advertising, Facebook almost 80% of mobile social traffic. The two companies captured almost 90% of the digital advertising growth last year. An astonishing 45% of Americans get their news from Facebook. When you add Google, over 70% of Americans get their news from the two companies.

Google uses universal search to dominate vertical search areas like price comparisons, and it uses its browser to further dominate the ad industry. Google is a global utility in private hands. Facebook’s Community Standards project puts the company in the position of deciding arbitrarily what speech is acceptable and what is not. Network effects effectively means monopoly.

Source


The book can help you understand how vastly the United States economy has changed over the past twenty years. If you want to invest on the side of the powerful, you seek consolidating industries, duopolies, and monopolies. However, you will also understand why inequality will keep increasing unless competition is brought back into our economy. Capitalism without competition is not capitalism. This is an important book for both investors and citizens. The authors don’t discuss other major influences on the economy like China joining the World Trade Organization or globalism, but you have a tutorial on how our economy has become hyper-concentrated.

Are US Industries becoming More Concentrated?https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2612047

Elliott Management on Ebay

https://enhancingebay.com/content/uploads/2019/01/Elliott-Management-Letter-to-eBay-1.pdf

Baupost purchases near $27 as well in late 2018

Dear Members of the Board:

I am writing to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. (together, “Elliott” or “we”). Elliott beneficially owns over 4% of eBay Inc. (the “Company” or “eBay”), making us one of the Company’s largest investors. At approximately $1.4 billion in market value, this sizeable investment demonstrates our strong belief in the value opportunity at eBay.

The purpose of this letter is to share our perspectives as a large shareholder and provide our specific thoughts on how eBay can become a better and more valuable company. Elliott believes that by taking steps to unlock strategic value, refocus on the core Marketplace and improve execution – a plan we call “Enhancing eBay” – the Company will grow faster and deliver meaningful operational improvements. As a more focused and efficiently run business, we believe eBay can achieve a value of $55 to $63+ per share by the end of 2020, representing upside of more than 75% to 100% within the next two years.  (Prove to yourself via the 10-K)

Our letter today is organized around the following themes:

eBay as a Public Company: We review the Company’s remarkable history as well as its need for substantive change to remedy its prolonged underperformance. ‒ The Enhancing eBay Plan: We analyze the opportunities for the Company to create significant upside and detail an actionable set of initiatives to unlock trapped value, improve execution and enhance oversight. ‒ A Unique Value Opportunity: We quantify the significant value these steps will create.

Returns vs. Popularity

https://www.cfainstitute.org/-/media/documents/book/rf-publication/2018/popularity-bridge-between-classical-and-behavioral-finance.ashx

Investment Process

Tollymore Investment Process

https://www.tollymorepartners.com/letters

https://www.tollymorepartners.com/insights

Spotlights

Changes in the Finance Industry; A Hatchet Job on Buffett

Structural Changes in the Finance Industry for Junior Miners

https://www.youtube.com/channel/UCyjyUPbLw38tG9iAw0p7nxg

Hatchet Job on Buffett

Special Investigation: The Dirty Secret Behind Warren Buffett’s Billions
America’s favorite investor loves monopoly, not free markets.
By David Dayen

Surprise!  Buffett craves monopolies.  Who wouldn’t want to invest in them?   How about helping citizens by doing away with government controlled monopolies like the US Post Office or the Fed?

https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/

Buffett Interviewed on the Financial Crisis–a Good Review of Buffett’s Thoughts on Investing

BUFFETT INTERVIEW on FINANCIAL CRISIS and MOODY’s Moody Analysis and Transcript-of-Warren-Buffett-Interview-With-FCIC

The Above Book is a good primer on investing.   See course by the author.

http://www.advancedvalueinvestingworkshop.com/register.html

 

Understanding Interest Rates

https://monetary-metals.com/category/supply-demand-report-public/

What could help you with Mr. Market

The first line of Epictetus’ manual of ethical advice, the Enchiridion—“Some things are in our control and others not”—made me feel that a weight was being lifted off my chest. For Epictetus, the only thing we can totally control, and therefore the only thing we should ever worry about, is our own judgment about what is good. If we desire money, health, sex, or reputation, we will inevitably be unhappy. If we genuinely wish to avoid poverty, sickness, loneliness, and obscurity, we will live in constant anxiety and frustration. Of course, fear and desire are unavoidable. Everyone feels those flashes of dread or anticipation. Being a Stoic means interrogating those flashes: asking whether they apply to things outside your control and, if they do, being “ready with the reaction ‘Then it’s none of my concern.’ ”

https://www.newyorker.com/magazine/2016/12/19/how-to-be-a-stoic

Barrons-interview-Bruce-Greenwald-13052017 (1)

 

 

 

 

A WWII Soldier Writes Home 1944

Happy Veterans Day

Two letters from a WWII veteran who won the Silver Star (disturbing descriptions of war) Letter 5 Silver Star Letter Feb 24th 1944

February 1, 1944 Letter rpc to Dash and Mother Flame Thrower


Facing Death

When is a P/E not a PE: Case Study in Indexing

A tutorial on the dangers of Indexing investing. 

Know what you are doing IF you buy index funds!  You can learn a lot by studying Horizon Kinetics.  The video provides a valuation of the index and how to think about investing or not in indexes.

http://horizonkinetics.com/market-commentary/2nd-quarter-2017-commentary/

Also, more on indexing here:

Q2-2017-Commentary_APPROVED_FINAL

Q1-2017-Commentary_FINAL-1

Q4-2016-Commentary_Final

Q3-2016-KAM-Conference-Call