RichardGibbons

This is an interesting observation, considering that Canada has more businesses started per capita than the USA. (e.g. 78K in Canada in 2014 versus 452K in 2013 in the USA. I'd expect this just from the difference in healthcare policy--if the finances and literal survival of your family depends on you working for a large corporation that provides decent health insurance, it's pretty irresponsible to do a start-up. So it makes me wonder if your observation is simply anecdotal and not representative of reality, or if Canadian immigrants do start-ups at substantially lower rates than families that have been in Canada for longer.

This is quite good, I think, rkbabang. It makes me wonder about how to achieve this efficiently in a world with Putin. Like, tiny groups can't efficiently do defence, or highway systems, or big buildings, or law systems, or healthcare. But is there some easy way to take a bunch of tiny groups and make agreements between them to deal with these bigger issues, and then agreements between these bigger groups to deal with even bigger issues etc.?

In the spirit of continuing the list, I too care about these ones. I also care about: 3) Concentration of revenue by customer 4) Terms of convertibles & preferreds (basically looking for anything where management or investors are incented to drive down the share price, like saying a preferred can be converted into enough common shares that its value will be $25.) 5) Distribution of revenue by product type or geography (looking for incongruences between what I believe is happening in the company, and what is happening in the company) There's probably more, but I can't think of them now. The checklist is a really good idea for this one, rukawa.

I'd be into trying it and seeing if it actually works. That said, I suspect it wouldn't work because medicine is one of the markets where price signals to consumers don't actually work because consumers are incapable of understanding what medical treatment is required, nor judging the quality of the treatment that is delivered. Combined with profit-maximization in medicine, the result is overly inflated costs. Munger's heart-surgery example from the Berkshire AGM is a good example of the problem. Nevertheless, it seems worth trying because without experimentation, it's very hard to know what works. I feel like you almost need 10 states to sign up for 10 different approaches, wait a decade, and see what worked and what didn't.

Almost everything I know about Libertarianism I've learned from COBAF. Thanks rkbabang! :) So for me, I use the word libertarianism somewhat as you describe: "The most sacred value is individual freedom as long as one's freedom does not infringe or harm other's freedom. " But I don't mean this part: "The society facilitates this by creating and enforcing laws to prevent harms against individual freedom." Because rkbabang's prescription against use of force forbids taxes, which eliminates the ability create and enforce laws (well, unless you mean the guy with the most money who builds the biggest private army makes the laws, but that seems to violate the "freedom" thing). Yeah, this makes sense to me, and the "pairing" strategy you talk about is new to me, and an interesting idea. (That said, I think socialism is stupid also--there needs to be great rewards for innovation.) I think your argument about why the right tends to have religious values is probably flawed. I suspect it's actually based on attributes of the individuals involved (e.g. belief in authoritarianism, belief in luck vs. hard work responsible for success, intelligence etc.) rather than a deliberate pairing. I think the optimal strategy for humanity is to throw out ideology, figure out what works, and moving in that direction, where "what works" means good happiness outcomes for most members of society, and almost no members of society for whom the outcome is abysmal. (i.e. avoiding awful genetic lottery outcomes).

The problem is that this doesn't work even for trivial examples. It's as practical as the communists saying that the best economic system is everyone working to the best of their abilities and sharing the output of their labor. (Unfortunately, I agree with your argument that someone is eventually likely to cause widespread destruction.)

Thanks for the response, wachtwoord. I think it answers my question very well. I suspected that was the answer, but I was still curious.

You're right--railing was the wrong word. Sorry. It's because I'm reading a book by Guy Gavriel Kay, so I naturally become flowery. Overly, in this case. It's hard to understand your position because, if you a deep evil being committed against someone and have the ability to prevent it, and yet choose not to, then you are complicit in the evil, and I believe that most people recognize that. There actually isn't that much to discuss, simply because the case is so clear-cut (which I think was the point of that case). One thing I was thinking about last night is this core belief and how it negatively impacts the communication of the libertarian message. (I'm going to take at face value that you guys actually want a libertarian state, and aren't simply espousing libertarian beliefs because it's fun to complain about taxes.) One seems to need to have these sort of core beliefs to be a libertarian. But, to a great majority, some of these core beliefs are abhorrent (ignoring a child rapes) or impractical to the point of ridiculousness in the real world (taxation is theft, government exertion of force is almost always unethical), or inconsistent (people shouldn't hurt other people, but regulations that stop people from polluting shared resources are bad). So then, if you're trying to persuade someone that libertarian ways are good, but you don't see any problem with ignoring a child rape, you're probably going to have a hard time persuading them that libertarianism is good, simply because child rape is so abhorrent. In other words, your core beliefs essentially make it hard to persuade anyone to agree with you politically. It puts you on par with the communists--passionate about their cause, consistent in their beliefs, and utterly unable to convince anyone because of the impracticality in the real world. So your options seem to be persuade people as children (akin to organized religion), or deviate from your core beliefs enough to be able to make reasonable arguments (which most libertarians I've met don't seem to want to do.) Neither one of these possibilities seems promising, but maybe there's a third option I'm missing? It is interesting, because I think there's a lot to like about libertarianism, and people who believe in the free market should be naturally receptive to it. But, if I look at myself, maybe the difference is that libertarians believe in the free market because of ideology, while I believe in the free market because of evidence that it works (and would be willing to abandon free markets if something better came along (and in fact do abandon free markets in medicine where better options have been proven). I guess from my perspective, this is a pretty good outcome--the world gets to learn the libertarian ideas that work, and ignore the ones that are goofy. But looking at it from a libertarian perspective, it would be frustrating, being unable to convince people of the rightness of libertarian ideas because the core beliefs prevent that. I'm curious if you guys (wachtword, rkbabang, onyx) have a perspective on this. (For you, is it as simple as believing your beliefs are so clearly correct that everyone should be persuaded by your arguments, so my point about problems persuading people doesn't make any sense at all?)

Yeah, I think this is a great example supporting your first post in the thread. You've basically proven your point, but if libertarians accept that there is a moral imperative to save kids from being raped, then huge part of their core beliefs come crashing down around their ears. Thus, we get wachtwoord and rkbabang railing against your straightforward argument, just as the comic suggests they will. Very elegantly done, Liberty.

Don't worry about it. The MLS chart actually disproves Frank's point. The only reason it looks like SFH have gone up more than apartments is because the scale is linear rather than logarithmic. That always makes the higher line on the chart look steeper when in percentage terms, it isn't. If you look at the numbers, two storey SFHs start at $355K and end at $960, an increase of 270%. Apartments start at $150K, and end at about $425K, an increase of 283%.

I agree that the degree is far less important than the person, though I think it's more than simply social signalling. My interview questions focus on some stuff people have learnt in school not because I care if they went to school, but rather because I know that if they don't understand how to apply concepts like computational complexity, the odds of them being awesome at a programming job is low. I think the Ben Graham stuff is part of evolution. It's easier to be revolutionary if you have a strong grasp of the ideas of others. Or at least that's my experience. I'd be surprised if a huge portion of the people here lie about their returns because it seems pointless and rather stupid. Instead, I think it's selection bias--there are a bunch of people on the forum, and the vast majority of the ones who want to talk about their returns are the ones who have outperformed. Jurgis has been quite open about when he's had subpar results, but I think he's exceptional in his intellectual honesty. I'm not sure about the extent the lemming thing may be true or not, or whether this forum would be better or worse than anything else. I feel like the length of the threads on things like SHLD and VRX are more representative of the controversy of those companies than the board's interest. Since this is a value board, and value's been underperforming for a while, I'd expect that, in the last few years, bad returns are more likely on this board than a growth board, but I don't think that's necessarily representative of long term performance. It is certainly an interesting question.

It's because with an engineering degree, you can build cool stuff like robots. QED. You place way too much emphasis on disparaging the conventional as if unreasoned unorthodoxy is something to be proud of.

Yes, there is. It's called bankruptcy. Yes they are--their student loans aren't dischargeable in bankruptcy. IMO, they should allow student loans to be dischargeable. The result would be fewer student loans since lenders would have to care a bit more about creditworthiness. But I think it's probably a good thing if people are unable to borrow hundreds of thousands of dollars to get degrees in 16th Century Austrian literature.

The thing I'm curious about is whether the electorate would see an increased inclusion rate as a good or a bad thing. The world, and the Liberals in particular, are certainly regressing to class-warfare rhetoric. So does the electorate overall buy into the argument that increasing taxes on savers and investors is good? (Essentially, "we spent so much on our overpriced house that we need to take money from anyone who actually invested their money prudently to pay for our retirement?")

Funny that the badness of increased capital gain inclusion rates didn't come to pass, making this thread moot. Still, I'll hold it against the Liberals for making everyone worried.

C#. As Joe says, I was assuming that the network latency is far greater than any in-machine slowness. It would surprise me if that weren't the case, but that's just a rule of thumb from my background in distributed computing rather than actually having any evidence.

Sure. I can talk about one of my failed ideas almost fits the theme of this board, auto-trading. As you probably know, Interactive Brokers has an Application Programmer's Interface (API). For those who aren't geeks, this means that it's easy to write your own program that can access the functionality of Interactive Brokers' trading application. Your program can, among other things, get real-time quotes and trade shares and options. Of course, this presents an almost irresistible temptation to create my own trading program, so that's what I did. I decided to focus on trading the leveraged and unleveraged volatility ETF & ETNs (TVIX, VXX etc.) My reasoning for selecting these guys was essentially that I needed stupidly high volatility to be profitable. I wasn't sure how real-time my real-time quotes actually were, but they were certainly far less real-time than the pros. Plus, I was going to be losing on the spread and the commission with every trade. So, I needed big moves to actually profit, and there was almost nothing in the market that was as volatile as the volatility ETFs. What's more, this was 2009 and 2010, so the volatility of volatility was still pretty high coming off the 2008 crash. So, I coded an application that initially would simply get real-time quotes and dump them into a database. I can't remember how long I did this for--probably only about nine months, nowhere near long enough to be confident of anything, but enough to be dangerous. :) Then, I created a simple day-trading trend following application. Essentially, it would enter a trade when the ETF had gone a certain amount in a particular direction (long if the trend was up, short if the trend was down). Then, it would close the position when the trend stopped, or at market close. It probably averaged two positions per day. According to the data, this seemed like a profitable strategy because these volatility EFTs would move slowly, then spasm dramatically in either direction. If you could get the beginning of that spasm, you could be profitable. I allowed my program to paper trade that for a while (another nice feature of Interactive Brokers), and it still seemed profitable. And then I tried it with real money. It mostly worked, for about six months. My position sizing was about $30K, and after about six months I was up $20K. However, there were some problems. Despite the computer turning around the "real-time quotes" almost instantly, my trades frequently didn't happen at the exact bid/ask that was quoted, particularly in cases where the spasm was really big and fast (think a 10% move in 30 seconds). Missing a big chunk of these spasms really hurt my returns. The profitability numbers were pretty interesting. Missing the start of these spasms cost me 50% of my theoretical returns. What's more, my theoretical returns were less than half of what they could be if I didn't have to worry about the spread (i.e. if instead I bought and sold at the mid-point of the bid/ask spread). And commission were taking another chunk, like 20% of my theoretical profits. In other words, the market maker was certainly making far more from my trading than me, and my broker was doing pretty well too. It's also worthwhile noting that trading in shares was more profitable than trading in the options, simply because the options effectively had bigger spreads and the moves to make options profitable needed to be larger. Thus, trading shares led to higher number of low-value wins, while option trading led to a lower number of high-value wins. Both strategies were profitable, but for my algorithm, share trading beat options trading. Then, as time passed and the market got farther away from 2008, volatility decreased, which also decreased the volatility of volatility. This was quite bad for me, since my program relied on the volatility ETFs being volatile to make money. My profits started to evaporate. Luckily, I had programmed pretty charts, so I knew what was going on, so I shut it down when I only had a profit of $10K. The final numbers were pretty funny. With my trades of about $30K each, I'd turned over something like $4-5 Million in shares, paid thousands of dollars in commissions, and ended up with a profit of $10K. From a mathematical perspective, it's hard to even know if my $10K profit on $4M in trades would be statistically significant. I suspect not. It was a fun game. Sitting around while my computer makes money for me has psychological appeal for me, despite the (reasonable) paranoia of something going wrong (i.e. my program or Interactive Brokers crashing when I'm short VIX right before a flash crash. My program never crashed, but it was a valid concern nevertheless.) So that's one story. I might share others later. I also have some stuff on my blog, though the political posts are likely too left-wing for your taste. My blog doesn't have a theme beyond things that interest me.

Agreed. The other factor is that government policies (i.e. stupidly low interest rates) have encouraged Canadians to take on massive amounts of debt and have discouraged savings and investment. Do they really think the best path for Canada is to further discourage savings? Do they really want to create a society where everyone is dependent on a government handout for their retirement? Seems like a terrible idea to me.

I actually agree with you 100%. I think capitalism is great, and anyone who would want to do away with it hasn't really though about it much. I don't think the investment tax rates should be raised, and I don't support lowering the contribution amount in TFSAs (they should've changed RRSPs before mucking with TFSAs). I think unions have some positive attributes, but are a net negative by far. I agree that spending other people's money is insidious. I'm not happy with Trudeau--we suddenly have huge deficits, and it's unclear to me where that extra money is going (yeah, I should probably find out. :)). I probably would've voted Conservative last election if the leader had been anyone other that Harper, but I can't vote for someone who attacks science and evidence-based reasoning. I believe in single-payer healthcare because the real world seems show that it has the best balance between outcomes and costs (but I also recognize that the rest of the world is freeloading off of USA--because Americans are willing to grossly overpay for their healthcare relative to the rest of the world, treatments are developed that wouldn't otherwise be developed, benefiting everyone in the first world.) The main reason I show up as leftist here is because I'm always responding to someone on the right saying something is "obvious", when it's anything but. I'd probably never do another political post here if it weren't for people taking some unsupported ideological rhetoric and saying "It's as simple as that."

Because that does nothing to address the issues that wealth redistribution is trying to address. I suppose my red herring, equally invalid parallel counterargument is, "if you don't think you're getting value for you tax dollar in Canada, why do you move somewhere where you would get value for your tax dollars?"

I have a way to get a good answer. Hey Sanjeev, what drives you? :) I think both RB and Mephistopheles answers are good and true of me. I'll also give my own answer. For some people, doing one thing really well and making it as big as possible is fun. So, I'd put people like Watsa, Buffett, Ellison etc in this camp. They do what they do because it's fun, and what else would they do? I'm more of a generalist though. I've started multiple tech businesses and become a multimillionaire, but I'm not so wealthy that I don't need to think about what I buy. I still budget. However, instead of continuing to become ever wealthier, I've decided to do what I want instead. Essentially, the decision is, "would I be happier trying to get twice as much money or doing other stuff?" Since I'm a generalist, my answer is "other stuff". I have a bunch of ideas that I want to explore--new businesses, math problems, blogging, investing stuff, and programming challenges. Now that I'm financially independent, I'm exploring those ideas. Mostly recently, I've been writing novels. Writing is a terrible way to make money. I'd never have it as my primary focus if I weren't financial independent. But for some people it's fun, and I'm one of those people. So I'm publishing novels--my first one was The Battlefield Abductions. Eventually, I'll move on to something else. As an aside, one thing that the question seems to imply is that retirement is more fun than other things. But, I don't think that's actually the case. Really, doing nothing is boring. Seeking nothing but entertainment (video games, movies, beaches, theme parks, drugs) is equally boring. Creating and exploring interesting things is far more fun. So, I think the answer is usually that people will do whatever they enjoy. So, people who enjoy creating massive businesses will do that. Other people, like me, will explore ideas. For some of my other thoughts on financial independence, I did an AMA on reddit about the topic.

It really isn't as simple as that. Capitalism naturally results in winners becoming even bigger winners because it's easier to make money when you have money, and because competitive advantages mean the corporations that win today are far more likely to win tomorrow too, and because the genetic lottery means winners can be more skilled than losers. So, wealth naturally accumulates at the top end. What's more, growing the wealth isn't necessarily good for most people. Take society A with 100 people, with wealth of $1,000 distributed so the top 10 people get $40 each, the middle 50 get $10 each, and the bottom 30 get $3.30 each. Now, compare it to society B that has more wealth, $1,200, but distributed so the top person gets $1101, and the bottom 99 people get $1. Despite the greater wealth, Society B certainly isn't better of for the vast majority. What's more, the economy largely rides on the spending of the majority. If you give another dollar to the rich dude, he won't spend it, while the 99 people with $1 almost certainly will, driving the economy. Thus, there's a decent chance that the economy will actually be bigger if you redistribute the wealth to people who will actually spend it. Capitalism naturally skews toward society B, and the irony is that even the rich dude is worse off in that society, because things like hospitals, movie theatres, sports arenas etc. don't get built if the vast majority is at subsistence living. Thus, redistribution is good. All that said, I agree with your earlier point: To me, the current taxation levels for investment income make sense to me. One point people also haven't raised is that investment gains should be taxed at a lower level to take into account inflation. Like, why should I pay full tax on my investment gains when I'm simply trying to maintain the value of my money as the government deliberately causes inflation to make its value shrink? I'm being taxed on inflation, and that seems really wrong.

I made some changes to my portfolio with the assumption that yesterday was the last chance for a T+3 sale. Me too (well, I did it in February because I wasn't sure how much notice we'd have for budget day).

My bet is that it's too late. My reasoning is that the settlement date isn't 72 work hours, but rather three work days. Thus, the settlement date is Wednesday, not "Wednesday before the budget was read." If they didn't have this, then in theory, you could sell, say, a house, an hour after the budget was read, settle it immediately, and still pay the lower capital gains tax. Thus, I'd bet that anything that settles on the 22nd or later will be at the new inclusion rate.

Interesting results. Thanks cigar.