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Video

India’s Budget Airlines slash fares upto 75%

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Links

Linkfest:Feb 26,2014

Some stuff I am reading today morning:

SEBI makes monitoring agency compulsory for IPO funds (Mint)

Another fake demat scam under SEBI lens (BS)

New Govt faces a stiff PSU Bank test (ET)

Innovative gold smugglers (CapitalMind)

The best way to learn as an investor (MotleyFool)

It’s time for Bill Gross to retire (Reuters)

Prince Alwaleed’s son did not fall far from the tree (Dealbreaker)

People who cannot accurately forecast markets (TRB)

Why is it so difficult to make long term predictions? (Climateer)

Investing and the Triumph of Optimism (HowardLindzon)

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Anecdotes Realty

What my Mother-in-Law and Warren Buffett have in common

Warren Buffett penned a recent piece where he talked about his real estate investments.

One was an investment in farmland in 1986 where the normalized return from the farmland he calculated to be 10%

The other was an investment in New York Realty where the unleveraged rental yield was around 10%

Both these investments worked out very well for him

Whats interesting to me was that both the investments gave him double digit yields when he invested.

Realty investors know how difficult this is to achieve.

In Mumbai,residential yields are now around 2% and commercial yields are around 6%.

The only other person I know who is getting double digit yields on the current value of her property is my Mother-In-Law.

Maybe,I should blog less and listen to her more !

Categories
Letters

Carl Icahn:Marc Andreessen has screwed eBay shareholders

Since Mr. Andreessen has been an eBay insider, he has engaged in several transactions that lead us to question his loyalty to eBay. During Mr. Andreessen’s time on the eBay Board he has purchased large stakes in two former eBay subsidiaries, reaping significant personal riches. In September 2009, an investor group that included Mr. Andreessen, preempted a planned Skype IPO (in which stockholders would have ended up making multiple billions of dollars) and bought 70% of Skype for less than what eBay had paid to acquire it(1). Mr. Andreessen basked in the purchase, saying that “Skype is the archetypal phenomenon: a breakthrough technology”(2). His partner was even more excited, stating that “Skype is on its way to becoming one of the most important companies in the world(2). One cannot help but wonder what happened to Mr. Andreessen’s fiduciary responsibility to share his feelings with Mr. Donahoe and the board rather than preempt the planned IPO to further his own interests. A mere 18 months later, Mr. Andreessen’s investor group flipped Skype to Microsoft for $8.5 billion, a value three times what they paid for it(3), netting approximately $4 billion(3) at the expense of eBay stockholders. After the sale to Microsoft, Mr. Andreessen, a sitting eBay Board member and fiduciary to stockholders, stated: “one reason we were enthusiastic about buying Skype was that even though we thought it would be a tremendous standalone business, we also knew that for Microsoft and a number of other companies Skype would be an obvious thing to buy. We knew we’d always have the fall-back of selling to strategic buyers(4). Did Mr. Andreessen share this strong view with Mr. Donahoe? Was Mr. Donahoe completely asleep, or even worse, so naive and deferential to his “world-class board”(5) that he allowed a sitting board member and several private equity firms to walk away with over $4 billion in what was essentially stockholder’s money after a sale to a strategic that he obviously should have orchestrated himself? Many others have been vocally critical of the Skype transaction(2,6), but, until now, none have taken on the task of standing up to Mr. Donahoe and this board.

Mr. Andreessen’s next eBay sourced grand slam was his investment in Kynetic. In March 2011, as part of eBay’s $2.4 billion acquisition of GSI Commerce, the eBay Board decided they no longer wanted the Kynetic portion of GSI Commerce and sold it back to the company’s founder for just $31 million in cash and a $467 million sellers note at below market interest.(7,8) In June 2012, Mr. Andreessen pounced, making a $150 million investment in Kynetic at a $1.5 billion valuation, leveraging the low sale price and below market financing which the eBay Board had recently approved.(9) Just a year later, Kynetic was valued at $3.1 billion, giving Mr. Andreessen a paper gain of more than 100%.(10)

Additionally, during Mr. Andreessen’s time on the eBay Board – a time when he has been privy to nonpublic eBay Board information – he has made investments in and actively advised, no less than five direct competitors of eBay (four of which are competitors of PayPal), including Boku (mobile payments platform), Coinbase (Bitcoin wallet), Dwolla (secure online money management), Jumio (online and mobile credit card payments) and Fab (design e-commerce)(11). How can Mr. Donahoe and the eBay Board allow Mr. Andreessen to advise these competitors while he simultaneously possesses not only nonpublic eBay Board information but also intimate proprietary information about PayPal’s operations?But perhaps more importantly, how can Mr. Andreessen be trusted to objectively advise Mr. Donahoe and the eBay Board about the strategic direction of PayPal when he has vested interest in so many of its competitors? Regarding Square, another powerful PayPal competitor, Mr. Andreessen publicly lamented his regret in passing on the opportunity to invest in that company as well.-from Carl Icahn’s Open Letter to eBay Shareholders

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Technology Video

Facebook Fraud:Click Farms and Fake Likes