RichardGibbons

I get it. If you are a feminist, and your spouse cheats, you must immediately and irrevocably divorce your spouse because feminism is all about who sleeps with whom. Judgement and rational thought are absolutely forbidden to feminists. Feminists should never decide for themselves what sort of life they want to lead. Rather, they have to always follow feminist ideals (as interpreted and dictated by a man) because doing otherwise would be hypocritical. What's more, if you're a feminist, the ideals of feminism must be the most important issue to you, to the exclusion of everything else you might care about. Feminism is everything--compromise and thought are off the table! Got it.

Thanks APG. I think I get where you're coming from, and your beliefs seem consistent. Basically as I said--you got yours and screw everyone else, because they deserve what they get, good or bad. That baby growing up with an absent dad and a drug-addicted mother, who can't find work as an adult because nobody cared enough to buy her an education, deserves to die at 20 from a heroin overdose. If that baby wanted to survive, she would have sold apples or herself in the streets when she was four to pay for healthy food and her own education. Stupid, irresponsible baby. Die, baby, die! Justice, yeah! It's not how I'd want to live, but I understand the appeal. If you believe that in life, people mostly get what they deserve, then Libertarianism totally make sense. This might be the key difference between Libertarians and me, and I never realized it before. It's pretty interesting to me that possibly the only difference between your political beliefs and mine may be in our differing interpretations of the causes of variance in life. (Basically, I think life is more random than you do.... I'd guess something like 80% of major life outcomes are attributable to luck.) So, thanks for that insight. What's more, if you're serious that sort of unconstrained, me-first, tax-free lifestyle, you should totally check out Mogadishu. Though it might be slipping away a bit from your Libertarian paradise, it may still be the closest thing we have right now. Could be a nice place to raise a family....

I'm trying to understand the way you're resolving your cognitive dissonance. Are you basically saying: 1. Requiring healthcare for people increases demand. 2. Increased demand increases prices. 3. Therefore you need more government intervention to keep prices low (or a reversal of the policy) 4. Therefore you should ignore the evidence that most developed countries with a single payer system have better healthcare outcomes with much lower costs. My logic says such a thing cannot exist. Or are you just saying, "I don't give a damn about the costs of the system, or how well it works, and about people who die through no fault of their own, because my freedom to do whatever the heck I want is more important than anything. I don't care who gets screwed in the process because if they were screwed it was probably their fault anyway." To me, this second argument makes sense. It's perfectly rational and consistent to say nobody else matters. (That said, I'd much prefer to live in a society where people don't believe this. I think kindness generally makes for happier people, and I think there's value in minimizing the variance arising from the genetic lottery.) To add something actually interesting to this discussion, I suspect that the explanation for why single payer system is better for healthcare (and not, say, food), is because consumers cannot reasonably evaluate quality in the healthcare system (and, in emergency situations, often would never have the opportunity.) Plus they don't have the expertise or motivation (if the HMO is picking up the tab) to evaluate price. Since effective markets rely on the price discovery and feedback on quality by consumers, it means that the market is broken, and the government actually does a better job. (I guess another key factor is that USA is litigious, which I imagine boosts costs dramatically.) The interesting thing is that I imagine if there were a way to better communicate pricing and quality information to consumers, it might be possible to create a private market that is vastly superior to a single payer system. It just doesn't exist now.

LOL, look at American healthcare costs compared to countries with single payer systems--America has the same outcomes but is way more expensive. On the other hand, I can see your point.... Why bother examining evidence if it doesn't support your ideology?

Thanks for the detailed answer. This is what I do too, except that I pretty well only do bullish bets these days, because it seems very hard to win large amounts with puts.

If you believe this, does this mean that you're constantly short LEAPS straddles on a bunch of indices? (I believe excluding friction, a widely diversified application of LEAPS--long or short--will be break-even on average.)

Aren't you a libertarian? If so, this is a pretty interesting perspective, that an increase in taxes is desirable to make things more fair.

Other noteworthy points are: A thread often becomes long because an idea is controversial Well-known companies (often large caps) tend to have longer threads than obscure companies (often small caps), because everyone knows the company and can have an opinion We are more likely to notice an underperformer with a big thread than an underperformer with a small thread

So true! If Magnus Carlsen is so good at chess, then why does he bother reading about new variations in chess openings? If LeBron thinks he's so good, why does he waste his time going to practices? If Buffett's such a good leader, why did he spend years at Toastmasters? If Sergey Brin has such a great search engine, why's he wasting Google's resources optimizing it? Fools, all of them!

For me, living in Vancouver, I'd buy a detached home when the cost to buy that detached home is negligible relative to my net worth. So, I'd treat it like buying a luxury car--a depreciating asset I'd buy for fun, but expect to lose significant amounts of money on. (Alternatively, I'd buy it when the math made sense, but that looks unlikely from here.)

Exactly. How can you not understand, LC? It's very simple. In rkbabang's Libertarian nirvana, might makes right. Really, it's not much different than college students who believe that Marxism is the solution to everything. The thing that amuses me about these discussions is that the people espousing these ideas don't recognize that they'd likely be among the first victims of such a system. It reminds me of this guy, who says that rape should be legal on private property. Does he think that if that happened, he wouldn't be one of the first ones targeted?

I don't actually see why this is scummy (and I tend to have very strong opinions about real estate). As long as the agent wasn't representing the original seller, I don't see the problem. Like, once the deal is signed, the original seller has got what they want, and the buyer has all the risk. Would it still be scummy if the market dropped, and the agent sold the assignment for a $200,000 loss rather than a $200,000 gain? Is it scummy if a market maker in the stock market buys shares for you for $10, and then sells them 30 seconds later for $10.10? I don't see any real difference. I think that this issue is simply media-created outrage over something that's actually ethical (and kind of stupid for the agent to do.) The people want to blame someone for the ridiculous Vancouver housing prices, so would prefer to blame agents rather than the stupid people buying houses that they can't actually afford, the Bank of Canada trying to keep the bubble economy alive by pumping debt into the system through low interest rates, and CMHC lubricating the system by pushing a healthy dose of moral hazard onto the banks.

Fair point, and really what matters the most for this investment.

So to summarize, your argument is basically: 1. They made suboptimal decisions in the past as a result of deferred tax liability, such as not selling Coke when it was grossly overvalued. But I'll ignore that and assume that it'll never cause them to make sub-optimal decisions. Umm, again. 2. Though they've sold long-held positions in the past, such as Fannie Mae, I'll assume that they'll never sell these long-held positions and realize the tax liability, but just keep getting dividends. 3. Therefore it's rational for me not to discount the value of Berkshire based on DTL. I don't think Berkshire should be discounted by the full DTL, but as far as I'm concerned, saying that a Berkshire with billions in DTL, and Berkshire with no DTL that is otherwise identical should be worth the same amount is really irrational.

Here are some of my thoughts. I have no idea if they would work, but I agree with your general premise that it is likely that the education system could have significantly better outcomes that it does now. So, it seems like there could be significant value in experimentation.

I'm curious. Where does the Tragedy of the Commons fit into this world view? Does it just not exist as far as you're concerned? Or is it a new idea to you? Something else?

In general, I think it's a bad strategy to risk what you need in the hope of gaining something you don't need.

I'm a Canadian who uses the yearly average for currency conversions to calculate values for taxes. The strange thing I'm finding this year is that, with any stocks that I've bought this year and are roughly flat, it makes sense to sell them in December and buy them back in January. This will likely result in an average cost basis for tax purposes of about 10% higher than it would be if I just held, and thereby eventually reduce my taxes. I think it's pretty unusual it happens to this extent. You really need a big currency move near the end of the year to make it worthwhile playing such games.

Vancouver single family homes are already up far more than this chart in roughly half the time period. That said, they could go up more.

This is an interesting conversation. Some of the questions I've been thinking about--and I'm not directing these at anyone in particular--are: Did you originally consider investing in Fairfax because you believe that the Hamblin Watsa team are good investors who, in the insurance company structure, are likely to outperform the market over the long term? If so, do you now believe they aren't good? Or do you now think you can evaluate the odds of success of their approach significantly more accurately than they can, and you find their approach lacking? (i.e. are you a better investor than them?) How much does outcome-oriented thinking factor into your analysis? (i.e. are we sure Watsa's approach was likely to underperform, or is it more like he was the house playing craps, and a bunch of sevens came up in a row?) I'm pretty sure I'm a worse investor than them, particularly when you look at bonds, though their hedged equity investments have horrendously underperformed recently. I'm unclear about how much of their hedged equity results were foreseeable and likely versus bad luck (and if they were likely to underperform, was their record before these missteps just a bunch of good luck?) When I weight the probabilities, I'd guess that there's an above average chance Fairfax's future returns will outperform the market from here--their bond returns are awesome, and their equity returns were great for so long! But I'm not particularly confident in that assessment. One thing I am certain of is that they do provide diversification of thought in my portfolio. I almost always buy the types of stocks I like to buy. :) I will never mess around with deflation derivatives or credit default swaps. So, there's a reasonable chance Fairfax will zig when I zag, and to me, that has some value. So, I'll keep holding because of this combination of a) diversification of thought and b) my believe that there's still an above average chance that they'll outperform.

So I think there are a few issues. First, you actually need to be really confident in your strategy to do it. I can't remember how much TVIX theoretically would have gone up in 2008, but it was large, like 25 or 50 times. Second, at times like this, the contango becomes backwardization, so you'll be in the situation where you aren't only down 25 or 50 times, but you're also losing another 25% every month or so. Finally, at those times, you have the borrow risk and the borrowing fees to worry about. The fees could be at 100% a year at that time, and the risk might be that your short shares get called back, and you can't find another borrow, so are forced to close out your short position. So basically, you have to have balls of steel, and hope that you can maintain your borrow. (I did something like shorting a UVXY $60 LEAP call when UVXY was under $20. It wasn't pleasant when UVXY approached 60. I think I lost 5 times my small, experimental bet when I closed it out in the mid-50s, though I would have made money if I had held on.)

Ah, yes, that's where you went wrong.... Leave your silly and irrelevant facts at home. This is an ideological discussion. When the data doesn't support us, we'll make up new data. :)

OK, I get it. I, too, am worried that Bill Gates and the Koch brothers are underpaid. It's totally unfair to skew the equitable and just results of the genetic lottery. Wow, that's quite the statement about France. Just so I can see where you're coming from, which eight of these countries would you prefer to live in above France? Iraq: Hang out with ISIS South Sudan: Civil war, famine, high chance of genocide Sudan - 65% of citizens below the poverty line, frequent civil wars & genocide North Korea - Communist dictatorship, prison camps Somalia: The most unstable country on the entire planet, black market, warlords. But super-cool Pirates! Venezuela: Corrupt populist/socialist rule, 100% inflation rate, food shortages, violent crime Syria: Civil war, Sarin gas, and murderous religious folk Ivory Coast: Multiple civil wars, rape and murder! Chad: Most habitants live in abject poverty. Repeated coup attempts, Life expectancy below 50. Congo: Unstable, corrupt, civil wars killing over 5M people since 1998 Central African Republic: Ongoing fights between the government, Christians, and Muslims; ethnic and religious cleansing, and no safe drinking water Nigeria: No real rule of law, human trafficking etc. Laos: Single-party, corrupt Marxist republic Cambodia: Corrupt communist country with a history of mass killings ruled by an oppressive warlord Sierra Leone: Frequent civil wars, ebola outbreaks, and an average life expectancy of 46 Myanmar: Ethnic and religious fighting, frequent civil wars, military government Zimbabwe: Corrupt, human rights abuses, state expropriation of private companies, land redistribution I'm guessing maybe the pirates and warlords are on your list? They do make video games about such people, so I can see why someone might think they're kind of cool....

Yeah, I agree. I think the problem you elegantly expressed in your last paragraph will probably be one of the biggest economic challenges this century. I think there's a risk of things getting out of balance and ending up in a bad place (e.g. the poor rising up and killing all the rich, or the rich establishing enough power to permanently subjugate the poor.)

LOL. Asserting something like this doesn't make it true, except on Fox News. To what do you ascribe the reduced income inequality and greater economic mobility in welfare states relative to more purely capitalist countries? Correlation, not causation? :)