RichardGibbons

Thanks for your response, muscleman. In terms of things you missed, Trump slashing the tax rate from 35% to 15% seems implausible to me--not easy at all. I'd compare it to trying to scale Everest naked. Nevertheless, I find it interesting to read about the reasons you like him, and I'm glad that someone actually feels passionately positive about a candidate in this election.

This is an interesting statement, because I think almost everyone I've heard from portrays this election as a choice between bad and worse. Out of curiosity, is there anyone on the board who is sincerely delighted with either Trump or Clinton being a nominee and thinks they'll do a great job as president? (And I don't mean from a libertarian perspective like "this candidate will do so badly at the job that they'll bring down the whole political system, and that'll be great!")

Thanks for the interesting discussion, wachtwoord. I think we've both made our best cases within the limitations of the time we were willing to put into an Internet thread. It was fun! :)

Nice post Perks. I agree that you've basically covered it, and covered it well.

Wachtwoord, it's not that I don't understand your points. It's that I think they're wrong, and I'm providing counterexamples to show why. I can understand why it bothers you though. When a counterexample proves that you wrong, you either have to modify your ideology or whine, and people almost never modify their ideology. I'm still curious about your evidence of "The vast majority of the social safety net money goes to people who contribute zero (at best) to society. So no they don't have jobs. Ever." Seriously. If you've got something, I'm really curious. (And if you have nothing, then.... Really? The core tenet of your beliefs, and you have nothing? Come on, you gotta have something. Please.) Sys, I think LC has largely got it, except that I also think it's like the problem in politics. For most issues, most people care a bit, but not that much, while the lobbyists care a lot about the issue. So, the lobbyist expend way more effort and mostly get their way, even if it's not what the vast majority wants. It's the same way with executive pay.

Do you have a source for that stat? I haven't seen anything to that effect ever, so I'm curious where you got it from. (Or is this just some "Look! They're all retirees and disabled veterans" deal?) I'm seriously curious about this.... The thing that I find interesting about this argument is that you almost certainly can't imagine living like that--doing nothing and having someone else take care of you. Neither can I. And I have a hard time believing anyone actually wants to live that sort of life. I think pretty well everyone wants to have a high standard of living, and I think I've never met someone who doesn't actually care. So I'm curious where all these lazy bums are hiding. If I could see these legions upon legions of people without ambition, I think it would be much easier for me to come around to your "let them starve" point of view. It's interesting to take this premise--that stuff is naturally divided up by skill--and see where it takes you. The median black household in the USA makes $35K a year, while the median white household makes about $60K. I assume in your world, that basically means that blacks are intrinsically less skilled? In my world, the most likely explanation is that it's the result of bad luck (much of that bad luck being the genetic lottery.) Exactly. Now you're starting to come around to my point of view! Your laissez-faire system wouldn't create these great outcomes. Let's go back to my first comment on this thread: You wouldn't have invested in it, and that's a terrible thing for society. Relying on capitalism to decide everything results in considerably non-optimal outcomes. Without this social program, we wouldn't have a new business creating goods that consumers want and providing jobs to people who make those goods, all of it increasing our standard of living. A total win!

Parasite definition: person who receives support, advantage, or the like, from another or others without giving any useful or proper return. The problem is that you aren't talking about edge cases. Poor people aren't edge cases--most of the poor are working or contributing to society. You really think that a bunch of poor people are sitting around home, watching TV? Almost everyone's trying to get ahead--the edge case is the person who isn't. To me, if you're raising kids well, you're certainly contributing a lot to society. Most of the poor have jobs. So I think maybe you consider poor people parasites not because they aren't contributing to society, but rather because they get support. The crux of the definition is whether the poor give any useful or proper return. You seem to assume because they're poor, they don't. That said, if you haven't given Sanjeev money for this board, then according to your definition you're a parasite (though I don't consider you one.) I was referring to this comment. I consider starving someone to death torture. I guess you just consider it murder? I didn't portray you as rich. I'm reasonably wealthy now (though not super wealthy), and one of the conditions leading to that wealth was the social safety net. If I didn't live in a country with a socialized medical system, it would have been irresponsible to start a business when a single adverse medical event could destroy my family. Because I knew that I was covered in the case of bad luck, I was able to start a company. So, I guess I was a parasite for several years. Then I paid the government millions in tax. Does that make me less of a parasite, or is it the case of "once a parasite, always a parasite"? Can I get my parasite label retroactively removed because I paid taxes that would more than pay for any costs I incurred? Do I still not deserve food, or do I get to eat now that I'm one of the people being stolen from, rather than one doing the stealing? (I think I must still be a parasite, because otherwise how do you justify starving to death people like JK Rowling when they're in the process of writing one of the most beloved series ever and becoming a billionaire? Man, figuring out the implications of your worldview is really confusing.)

As a meta comment, this sort of discussion makes me wonder about the impact of Fox News. I'm concerned that because there's no real debate on Fox, right wingers and libertarians are losing the ability to understand what sorts of arguments are strong and what arguments are weak. This could result in them having problems creating strong cases espousing their positions. (e.g. Libertarians are right that taxes are extortion. But jumping up and down and yelling about thieves isn't going to persuade many people). One potential result could be a block of die-hard conservatives who are unable to convince others that their positions are reasonable, simply because they don't have skills to argue it effectively. This could lead to a disproportionate degree of rule by left-wing governments, and the rise of people like Bernie Sanders. To me, this is quite problematic. I think the center is the best place to be, combining the power of capitalistic economic incentives with rules reducing inequality to improve the quality of life for everyone, and reduce the chance of the rich being killed by the poor. But if the right are unable to argue their positions effectively, I'm worried we'll actually end up with a socialist like Sanders calling the shots to everyone's detriment. I don't know the solution to this, but I'm hoping that the rise of Trump will be a wake-up call that convinces the broader right-wing to return to rational arguments rather than black-and-white ideology.

LOL, by definition? Earning money is the only definition of contributing? So, for instance, you'd view a stay at home mom raising a family as a parasite? A Walmart employee living below the poverty line isn't contributing? A doctor volunteering for Doctors without Borders is a parasite? So no, I don't admit this is factual. Kind of twisted, I think. That said, you've also said that we should torture thieves to death. So, I guess your view of the world is pretty skewed. The most amusing thing in this discussion is that StahleyP, Jurgis and I almost don't need to say anything to refute your reasoning. You almost do it yourself. I think perhaps your next argument should be that we should exterminate all kids because they're nothing but leeches.

Yeah, it's all greed! The laid-off autoworker without health insurance who doesn't want to die when his appendix ruptures! Greedy lazy bum! The single mother working two full-time jobs who wants enough time to see her children and raise them right. Greedy mother! The baby of a crack whore who wants adequate nutritious food and a loving household so they don't end up stunted and mentally unstable. Greedy baby! You're right. It's all about greed. Especially that baby. How horrific that someone might stop you from buying your fourth Ferrari just to give a stupid kid food. If she wants food, she should buy it herself. Fixed that for you.

Yep, you read it right. Based on data comparing both countries and states, outcomes for things like health, mental health, drug abuse, and violence both the rich and the poor are worse in rich countries with greater degrees of inequality. That said, I imagine that it's optimal to have some degree of inequality, and I think most people believe this. The idea that people will magically do something just because it's in their best interest is silly. If you really believe this, why do we have any drug users at all? Workaholics? People who stay with abusive spouses?

No. Inequality causes envy. The reason one would want to reduce inequality is because life is better for everyone, even the rich, with more equality. And, if inequality gets too high, the poor sometimes rise up and kill the rich. Thus, there's value in discussing how to design the world optimally to reduce the horrible outcomes resulting from bad luck. That say, since you are a libertarian, you're going to have a really hard time contributing something useful a conversation that isn't based around your "might makes right" ideology.

Of course, since we're just talking about terminology, everyone's right--one can define "value investing" any way one likes. Your last statement pretty much sums it up, Buffett admitted he drifted away from BG and more towards Fisher and Munger. So his definition of value has changed. I agree that Buffett moved away from Ben Graham toward Fisher and Munger, but I don't think that implies that his definition of value has changed to assign value to growth. Heck, contrary to your implication, Ben Graham assigned value to growth. His 1962 formula for the intrinsic value of a stock was EPS * (8.5+2*(growth rate)). (To me, that transition from Graham to Munger was mostly a recognition of the incredible power of a long-term moat.) Do you have any evidence that Buffett ever thought that growth shouldn't be taken into account when valuing stocks? I suspect there is no such evidence, but I'd find it really interesting if evidence does exist. To me, ignoring growth is a terrible idea. I think one should spend a huge amount of effort looking for companies with competitive advantages that enable them to grow for a long time, and then try to buy them cheaply. Richard

Interesting perspective. I think ignoring growth in value investing is a bad idea because growth often has a huge impact on the value, particularly long-term value. Buffett's perspective in his 1992 letter seems to match my perspective (his italics, not mine): Of course, since we're just talking about terminology, everyone's right--one can define "value investing" any way one likes.

Well, I was going to use a more sophisticated argument, but based on your reasoning thus far, I figured you wouldn't understand it. Economics means that we produce as much energy as is efficient to use. We produce where the supply curve intersect with the demand curve, and if we produce anywhere where these curves don't intersect, we are producing non-economically. However, there are huge negative externalities in oil production, such as the destruction of farmland, acidification of the oceans, extinction of organisms that can't handle the environmental changes, and death of people through wars and famine resulting from global warming. Thus, while the benefits are taken into account in the supply and demand curves, the negative externalities aren't. Thus, the reason people often focus on the bad things (i.e. negative externalities), rather than the good things is that the good things are already in the price of the commodity. If there were more good things that could be done efficiently by burning more oil, they would already be done. This fact means your argument makes no sense. Or, to put it another way to be more comprehensible to you: Eating is good, but overeating adds no extra value--it actually adds negative value. It's really that simple.

You don't see a problem with saying "The more we use, the more net benefit we get"? Horses can pull heavy stuff, and are a huge net benefit over life without horses. So, the more horses we have the more net benefit. It's really that simple. In the winter, having a wood stove is a huge net benefit over having no heating at all. Therefore, we should burn down our houses to maximize our heating. It's really that simple. Eating food has a huge net benefit over not eating food. Therefore, we should eat and eat and eat, and never stop eating. It's really that simple. Using explosions to clear away rock has a huge benefit compared to pickaxes. Therefore, we should use 100 megaton nukes to clear away rocks. It's really that simple.

The thing that I'm wondering about this conversation is how I should allow it to affect my perspective on people's judgement. For instance, it's very clear that neither Clinton nor Obama is a narcissist--anyone who spends any time at all listening to what either one says should realize this. So, when someone says, "Obama is a narcissist", how do you let that affect your evaluation of their judgement? Do you just say that "politics makes people think strange things", and not really judge their capacity for reasoning on it? Or do you basically say, "This person can't do even basic evaluations accurately when it comes to politics, therefore I shouldn't take much of what they say in other domains seriously either?" (And similarly, those people, if they are using the same criteria, shouldn't take anything I say seriously.) I've been thinking about this a bunch since this campaign started, just because usually there's a wide margin of reasonable opinions. But in this case, there isn't--the two candidates aren't even on the same page when it comes to reasonableness to be president. So I'm curious. To what extent to people think that we should discount the ability of others to reason when they clearly aren't doing so in such a major, high-profile instance?

My favorite gun stat that I just found.... The last gun death of a police officer in Greater Vancouver? 1987. Before that? 1974.

No. Your TFSA is considered an affiliated person. http://www.theglobeandmail.com/globe-investor/investor-education/your-tax-rrsp-questions-answered/article4083027/

I find the SPY to oil one interesting in how flat it mostly is. Like, in 2000, there was the big bubble popping, so the S&P 500 was responsible for the collapse there. And then more recently you can see oil crashing, responsible for the ratio spiking recently. But other than that, it's pretty flat between 2002 and 2014. I found the one I was interested in, the S&P 500 versus commodity index ratio. http://stocktwits.com/message/21305822 I wonder how you tell the difference between just the effects of bull/bear markets and actual inflation. Or maybe that's a stupid question, I'm not sure....

Why choose gold as the commodity to measure against? Why not choose the price of zinc, mangos, or pork bellies? Or, if you believe that commodities are the only true way to measure inflation, at least use a basket of commodities rather than just one? I suspect that this sort of S&P 500/gold ratio analysis is post-hoc reasoning meant to justify a particular point of view rather than an unbiased attempt to understand the world (not saying this of you, Graham. I'm saying this of whoever makes the charts.) In other words, if the chart had shown the S&P 500 ratio steadily increasing, I don't think anyone would have shown us the chart. For instance, there's this oil and S&P500 chart on the same website: http://www.macrotrends.net/1453/crude-oil-vs-the-s-p-500. But for some reason they don't include the ratio. That said, I suspect the CPI doesn't measure inflation accurately (because of chained CPI and quality adjustments). I'm just not a fan of using a single commodity to argue anything, even if the "gold is money" argument is very popular.

Nice one Nice once, Swimming. You say everything that I was thinking, but couldn't think of a way to write concisely.

This is exactly right. America has decided having tens of thousands of innocents die every year is worth it in order to continue to own guns. It's a reasonable decision--even in America the odds of you or someone else killing your kids with a gun is pretty low. So, if you really like guns, there's far less than a 1% chance of your kid being the one that gets sacrificed so you can keep your toys. I wouldn't make that trade-off because I like to reduce even the small chance of my kids suffering a bloody death, but I can see why others would decide it's worth the risk. LOL, do you actually believe this? That if the government went all tyrannical (heck, rkbabang might think they already are) guns will provide the means to stop them? Has there been a single time in the last 50 years where a bunch of Americans with guns decided to fight the US government and won? (Or is this more of a "this is a cool quote, so I don't really care if it actually would work in real life" thing.)

The funny thing here is that RB is coming down really hard on anyone using anecdotal data. Why? Because their data doesn't line up with his gut feel, which seems to be largely based on anecdotal data. His righteousness in the face of people sincerely trying to discuss his question is pretty amusing, considering....

Teranet numbers are calculated using linear extrapolation of "same house" price changes. In other words, it looks at a house that sold 2 years ago for $100K and is selling today for $140K, and assumes that the price went up 20K last year. CREA numbers are a true average, just dividing the sum of the sale prices of the houses by the number of sales. Thus, they are affected significantly by product mix. If one year, people only bought condos for an average price of $250K, and the next year they only bought houses for $1M, then--even if prices didn't actually change at all--CREA would say average prices went up 400%. This is a theoretical case, but in practice, it's also been true historically in Vancouver that product mix matters. (i.e. you can see the effects of several big sales in pulling up the average.) I think it's also worth noting that other real estate indices in BC created by the BCREA should be viewed with skepticism, since they aren't disclosing their methodology in any way that would allow an outside party to make sense of their numbers. So their indices should largely be viewed as a marketing number, not representing anything about the actual state of the real estate market.