LC

This is why PE alone is not an indicator of over- or under- valued. in this case, buying @ 20x would've been a great investment. i am sick of hearing, it trades at 20x earnings therefore its overvalued.

I'm all for uncovering the shadier side of Berkshire, but can anyone explain the following to me: Did they have a gun to this business's head? Why just, you know, not buy the shitty policy?

Just an incredible athlete and human. Not to say he was perfect but admirable in many aspects. What a competitor, and entertainer! A rare breed that could do both!

Hasn't anyone seen Zorba the Greek?

The problem is a lot of people don't have to discipline to, say, eat 2000 calories of cake and cola and then call it quits for the day. Those foods are usually low-fiber, low-satiety, addictive (taste wise), and provide an insulin spike followed by a crash...these factors strongly encourage over-consumption.

Thanks for the heads up. Where do you get market prices for these sorts of things? I have a few comics and tons of basketball cards I would love to turn into capital :)

Brings up a good point: the quality of journalism is on a constant decline. I spoke with an ex-Sequioa analyst about 8 months ago. He said, "do you know who sequoia hires (as analysts)? journalists." And i'm sure it's not just them. So with some exceptions perhaps, the brightest guys in that market are getting snatched up by funds, and the public readership is left with the rest.

Hey Scott, anything new going on in your life? Post some of whats been going thru your head recently. :)

What? His net worth is 10+ Billion. Not gifted enough in business or economics?

I thought that the U.S. VP had one job. To be there in case the President kicks the bucket. To have a ticket with a 70 year old candidate and a 74 year old vp seems a little non sensical. no? When the president eats the souls of children, why do we even need a VP?

Isn't Bernie polling better vs Trump than Hillary? I'll probably vote third party again, but if I had to vote for one of the remaining main party candidates it'd probably be Bernie. I've always been right-leaning/independent, but the dude is one of the few politicians I've seen with integrity and I generally like the guy even if I disagree with his math/economics/entitlement stances. A Republican Congress would prevent him from doing much of the economic damage that I'm concerned he might do and I'd rather stand up for a politician who is trustworthy and has integrity than any of these other liars who might have better plans, but can't be trusted to actually follow through with anything they say. The problem with this election is that Trump is a caricature of the Republican party and Hillary seems increasingly likely to be a criminal. How did it come to this where we have to choose between a cartoon character and criminal for the highest office in the country? My thought exactly. Last I heard Sanders polls better vs. Trump than Hillary, but it looks like he won't get the nomination.

Clinton sadly. Was a Bernie supporter but no chance there. I want 0.0000% chance of Donald Trump running my country. So I'll take "Shillary Clinton". The real shame is that the Democratic party is disgusting in how its treating Sanders and my vote for Shillary will just entrench that behavior further. But Trump is just SO BAD.

FYI some entertaining gossip: http://berkshirehathawayfraud.blogspot.com/?m=1

The IRS cuts deals all the time. I just watched the documentary on Scientology. The scientologists pretty much bullied the IRS into cutting a deal with them. And that was the 90s. Imagine decades earlier.

I wouldn't be surprised either, but I'm sure he's made the right moves to ensure any of this stuff will never see the light of day, if true. Then again this is all just drama and entertainment for me...I already think he's hypocritical on bigger issues than paying taxes.

just fyi in the US: ~480k smoking-related deaths/year ~300k obesity-related deaths/year

My issue is that they love taking ownership of the benefits you mention, but do not take ownership of the associated problems.

Absolutely. The issue is not coke or sugar, but intellectual honesty. The argument WB/CM make publicly is IMHO hypocritical and intellectually disingenuous. Discussing it not only exercises our collective critical thinking but also the halo effect around famous investors. Would've saved me money in ZINC, that's for sure. I don't care if Brk invests in coke, tobacco, coal, or payday loans to crack dealers as long as they are honest and open about the business including all the costs and externalities.

Kind of. Owning KO doesn't make them hypocritical. Owning KO and saying, "well the problems it causes customers are totally their fault and not ours, therefore don't blame us!", is hypocritical when they know full well they are enabling those customers using a variety of means.

So here's the thing, it's not just me who thinks people en masse aren't capable of making the best choices for themselves, it's Warren and Charlie who say that. And then, they own and sell a product designed to take further advantage of that. But then they say it's up to the individual, and don't mention that they are kind of enabling the behavior? It seems hypocritical to me. Frankly I have no problem with them owning KO or the company selling the product. I would have no problems if they owned Altria either. Just save the holier-than-thou act while doing so. Also, you can very well label KO as worse than most others. There is no taste memory of Coke, as designed. Most foods are self-limiting. Your stomach gets full. You get sick of the taste. With Coke I can drink and drink and drink it all day and not get physically sick of it.

But then don't most companies market most products in ways to trick you into spending more or consuming more than you would otherwise? That's the goal of every company. Personal responsibility should be exercised here. You shouldn't blame anyone but yourself for not eating right. Yes but most CPG products haven't caused the health problems coca cola has. Nobody is developing diabetes from buying $8 razor blades from gillette or $4 on crest or colgate toothpaste. Personal responsibility only goes so far. At what point is the seller partly responsible as well? Crackheads should exercise personal responsibility too, no problem legalizing crack I presume? New parents and homebuyers should have independently tested lumber liquidator flooring for formaldehyde levels. Let em sell that stuff, screw the kids crawling around on it, their parents should have exercised personal responsibility. To clarify, I have no issue with selling this stuff. My issue is the hypocritical moral high ground you can pretend to have while doing so. Just come out and say, "We're selling this stuff to all of the human race, many of whom lack self control and will most likely develop health problems over time, which society will bear. In the meantime we're going to make a lot of money for our shareholders. And we're OK with that."

A can of coke has 40g of sugar...here's the easy visualization: http://4.bp.blogspot.com/-OmlMothduYY/Ty5IKpW78hI/AAAAAAAABP0/g-kCIa4uFaI/s1600/DSC_0563 In terms of portion control, two apples (or 4 oranges) have the same amount of sugar as a can of coke, but they also have a ton of fiber which satiates you, slows your metabolism, and enforces portion control on a biological/reflexive/subconscious level. Plus Coke has no taste memory so you don't get "sick" of the flavor. It's a product designed to eliminate portion control. Here's where my gripe is: You have these two guys (Buffett and Munger) who talk constantly about psychological biases, how humans are generally poor at making rational decisions and exercising self-control. But then they back a product which is designed to eliminate human's reflexive portion control, knowing full well most people suck at self-control/rational decision making?

I made it clear I didn't like Buffett's answer, and I've pointed his hypocritical views on this forum in the past - so no hero worship here. The difference between cigarettes and soda is that it's nearly impossible to enjoy smoking in moderation without getting addicted. Also, even moderate consumption of tobacco is bad for you whereas the same isn't necessarily true of coke. Note that I have nothing against investing in tobacco but just saying the risk:benefit ratio is different and this is why Buffett may be against it. Almost ANY food and drink is bad for you in excess, including fruits and vegetables. Some more so than others and some should be consumed more moderately than others. If you think it's wrong to invest in "pleasure" than why stop with KO? To continue with the air travel argument - you say business and efficiency benefits. Ok, but not all forms of air travel are for business or productivity. How about flying for pleasure (vacation)? Nearly all food investments should be off the radar for Berkshire if you want to apply his tobacco logic to everything. And why stop there? How about the bottlers, shippers, and aluminum producers who all facilitate in consumption? All soda consumption cannot be painted with the same brush. A healthy athlete having a can every now and then is different than a 250 lb. obese man with type 2 diabetes having 3 cans a day. Or to use the airline example - someone with a history of deep vein thrombosis should be more careful flying than the average person. I mean, let's be real. Smoking 5 cigs daily, cancer is coming your way. Drinking 5 cans of coke daily, leaves u obese with diabetes. Eating 5 tomatoes daily is gonna make most people healthier. So I get what ur sayin that cigs are worse than soda, but soda is waaaay worse than fruits and veggies. Buffett ain't shilling kale and quinoa here.

Very cool post. Thanks for sharing your strategy...

They would never answer a question like this in a revealing way but I wish someone would ask what the least ethical (investment/business related) thing they ever did was, and what their thinking was at the time, and how they view it looking back. I mean, nobody is perfect but I'm certainly curious what skeletons are hidden in their closets.