Recent selling, page-20

Was I questioning WB's record? I was questioning the loose and liberal usage of his utterances.

1.1 I guess prior to FY2014, when direct costs were such that margins could barely cover depreciation, let alone the interest bill, they were unable to find cheaper feed options (by the way, from what I can tell, it's not just wheat grain that appears to be in oversupply). But never mind, we live in hope (right?).

1.2 How sure are you that FRM is the lowest cost producer? If so, why would it seem it has not increased its market share in recent years?

2. Sure, simple. FRM will always be able to lock in contracts that will always be of net cost benefit to FRM (and of detriment to someone else). You're right, it's not rocket science. No. Rocket science is way simpler than forecasting the future.

3. Sure, there are some barriers to entry in FRM's business. Unfortunately a "moat", or a competitive advantage, or call it what you like, can consist of more than just "barriers to entry". If you think that FRM has sufficient moat that it can reliably generate a superior return on its capital, going forward, then I think you may want to rethink the "5 forces".

For what it's worth, I didn't really think in terms of NTA's when performing my valuation. My valuation was based on what I considered probable returns-on-capital, going forward, and the consequent earnings, leading to potential dividends. I like to think in terms of what those assets will deliver me by way of cash-in-my-pocket. It's just kind of mathematical, though, that if a business can be relied on to generate superior return on it's capital, that the business will generally be worth more than it's book value, and vice versa.