boilermaker75
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Posts posted by boilermaker75
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Robert Shiller's Nobel Knowledge
Yale University economics professor and Nobel laureate, Robert Shiller on the art of stock-picking and the complex psychology of investors
Wow, that is one nice faculty office. I can tell you my office at Purdue does not look like that!
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I don't want to add more fuel to this already inflated Social Media-infused bubble we are living under which reminds me so much of 1999, and that party didn't end so well as you guys might have remembered.
However, I want to share with you guys this article. It's a fascinating read:
The Brutal Ageism of Techhttp://www.newrepublic.com/article/117088/silicons-valleys-brutal-ageism
My least favorite quote of the entire article,
“Young people are just smarter”, Facebook CEO Mark Zuckerberg told an audience at Stanford back in 2007.After making computer chips for 15yrs in silicon valley, and just generally getting older, I have found there is no substitute for experience.
If you look closely at the world trend, I think you'll find the opposite phenomenon more accurate than what the article says. The world is harder and harder for young people to get ahead. They lack knowledge and experience and blue collar jobs are harder and harder to get and lower and lower paying. The established and experienced can get richer and more successful. The world favours the incumbent.
Not necessarily for businesses that emphasize innovation. Young people are "smarter" than older people in specific ways. Think back to when you were 16 and you read something that kept your brain buzzing until you internalized the new thought process. That sensitivity and cognitive agility lessens over time. Of course you pick up other attributes, but those young attributes are especially useful for mold breaking.
When I think back to my younger self I think, "how could I have been so naive?" Although I cannot think as fast, I sure feel I am a lot smarter.
Zuckerberg doesn't realize he had to be smart and stumble upon the right situation.
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We live in Indiana, but our daughter lives in the LA area. She turns 26 in May and her employer does not provide health insurance, so she is looking to purchase health coverage. We researched to find her two excellent doctors. They both told her they will not except any covered CA plans. We especially will keep one of them because he has been wonderful. Can any Californians lend insight in what is happening with health insurance and doctors in California and what we should do? Any recommendations for private insurance plans?
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I'm pretty cheap for most things, but not with others. I guess you could say my wife and I pick what is important to us and we're cheap about everything else. I live in a 3900 sqft house with a 3 story barn that is bigger than the house, we put in Viking, sub-zero appliances, marble counters, (not cheap), but my wife makes her own curtains, decorates with yard sale finds, some of our furniture is second hand and even a few pieces from IKEA. We grow a lot of our own food, we have a huge vegetable garden (45ft by 45ft), we have 18 chickens (we eat a lot of eggs), but we also spend a lot on things like grass fed beef, grass fed butter, pastured heritage breed pork, wild caught salmon, etc. We never go out to eat, I mean almost never. My kids ask to go out to eat as part of their birthday presents, because it's something they almost never get to do. If I eat lunch at all during the week, I pack it. I never even buy coffee outside the house. When we go away, we use the camper, so that we can stay cheaply and bring our own food. I drive older cars (a Hyundai and a Toyota), I've never owned anything like a BMW, Mercedes, Lexus, etc. Our main TV is still a 32" tube TV. I have computers that are close to state of the art, but I build them myself and upgrade them a component at a time. My wife is actually much cheaper than I am, and will keep me in line if I suggest buying some kind of electronic device or something. We have tracphones. My current phone I paid $149 for the phone and a year of minutes, my wife's phone was even cheaper it's a flip phone with no touch screen. If I ever did something stupid, like buying her roses for valentines day, I'd get holy-hell for it. I bought her a potted plant (tulips) and she was even happier when I told her I paid $4 for it.
Your wife is an angel!
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I was not aware of this book. Thanks for mentioning it. It is on my wish list.
I found the book "The Education of a Speculator" entertaining, but not of much use to value investors, lol.
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I have used Macs for over 25 years. Daily I use Word and Excel and have never had an issue, including exchanging files with people who use PCs.
The only issue I have ever run into is with Powerpoint. Sometimes when I send someone a PowerPoint somethings don't work quite right on a PC. But it has been so minor I can't even recall the details to tell you.
And if you ever need to run software that only works on a PC you can go the parallels route.
Once you switch to a Mac you will never go back!
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Absolutely great article. I especially like the being born at the right time. Another example is the oldies circuit playing stadium shows: the Who, Stones, Neil Young, Eagles, clapton etc. all from 65 to 73 years old.
I think the plethora of "information" has added to inefficiencies. The London whale episode is the perfect example. JPM got hammered down at the time far worse than the actual losses were going to be making a perfect buying spot. This is repeated over and over. Bad earnings are a classic example as well. The internet, cheap trading and lightening fast trading have all contributed to make the markets more short term reactive. The prepared mind can be ready for these very regular over reactions.
I love these opportunities when quality companies get hammered after a slight earnings miss.
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No drought here in Indiana. The snow is coming down as I type!
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2- I wouldn't want to own any market maker, but wouldn't you rather own IBKR over Knight?
*I'm a Thomas Peterrfy fan. He has some good commentary on the current market structure. Peterffy's career has been about creating value. He was a pioneer in automating market making via computers. And on the brokerage side, he is definitely creating value. Interactive Brokers is clearly more efficient than other retail brokerages. For example, they don't call you with a human being whenever there is a corporate action; everything is done online. And they send you very little mail.
I concur about IB. I don't believe I have ever received actual mail from IB. Maybe I am just not remembering something coming when I first opened my account. But definitely nothing for years.
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"Outside of Fairfax and Berkshire, we won't be talking about any of our holdings going forward...you'll have to watch filings or be a partner. ;D "
Cardboard
WHO IS SANJEEV?
The Dude, AKA the big Lebowski
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I hope I make it to 90 and look as good as Charlie with as sharp a wit! My great-grandmother is 96, but her body is rapidly failing. Her mind is all there, sharp as 30 years ago, but the body is deteriorating. At least another 10 years of good health Charlie! Cheers!
Sanjeev,
Make sure you exercise everyday. Include strength training and stretching. Try to get up to an hour a day of such physical activity, which I do. It has done wonders keeping me fit and feeling young. I am 60 and I can still do kicks (Tae Kwon Do) over my head.
Boiler
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I teach electrical engineering, specifically semiconductor devices and electromagnetic fields. I also spend half my time doing university administration.
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Most of the web sites I use have been mentioned, but I don't think this one has,
http://finviz.com/screener.ashx?v=111&f=fa_pfcf_low,geo_usa&ft=2&o=company
a good free screener
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Happy and prosperous New Year to all!
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Merry Christmas, Happy New Year, and Happy Holidays to all!
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I'm 60, but I feel like I did when I was 30. I have always worked out an hour every day.
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That doesn't make sense. Tires are a consumable. Even in third-world countries you need to replace the tires eventually, and here we replace them all the time. So that cannot be true.
I can't find the quote now, but I recall that the illustration was replacing every current car with a fuel/energy efficient one. We don't have the resources to merely make the tires for 1 billion cars, much less the car itself. It was also in reference to a growing middle class in emerging countries that would want a vehicle. The resources may not be there if they want to replicate the nature and number of vehicle ownership in developed countries.
All that may be wrong of course. I also remember, possibly from the same book, that if everyone in China wanted an extra teaspoon of rice oil, it would exceed current worldwide supply by 100%.
Sounds like something I have read in a Jared Diamond book.
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I don't think it is possible to exclude the chance of another "black swan" type of event, such as
the man-made mega-cat that Buffett writes about below:
http://berkshirehathaway.com/qtrly/web1101.html
That letter was necessary because Berkshire did not know the extent of liabilities at General Re before acquisition in 1998. Berkshire is careful to write policies that limit their super-cat losses to acceptable amounts. As long as Berkshire doesn't again unknowingly acquire super-cat liabilities they will be ok.
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Berkshire is the reinsurer of choice because of their ability to fulfill all its commitments under conditions of extreme adversity. For this they can charge higher premiums. Also many policies are not activated by the first super-cat that meets the policy terms, but cover a second, third or fourth event. Some policies are triggered by only a specific event, like a hurricane.
Berskhire is probably the largest writer of reinsurance in the world.
A super-cat policy pays off usually if two things occur, specific losses over a threshold and aggregate losses for the industry above a certain level.
Berkshire prices super-cat expecting to pay out 90% of the premiums. If they write $1 billion in premiums the result could be $1 billion in profits in a year with no super-cats to $2 billion in loss in a year where they have to pay out totally on commitments.
In the 1994 letter to shareholders’, “All things considered, we believe our worst-case insurance loss from a super-cat is now about $600 million after-tax, an amount that would slightly exceed BRK’s annual earnings from other sources.”
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"Are you saying the RE is a negative for MCD from WEB's perspective?"
yes, ROE of real estate is not good.
Buffett owned McDonald´s probably when there was a lot of growth ahead.
From the 1998 letter to shareholders, "In particular, my decision to sell McDonald's was a very big mistake."
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Interesting. I bought XOM in 2010 for $59 then sold a little more than a year ago for $88. Unlike the market in general it hasn't done much in the last year. It doesn't look undervalued to me right now the way it did in 2010. I'd rather own BRK than follow him back into XOM.
After seeing XOM was the secret stock, I took a quick look this morning and it does seem expensive. An enterprise value of $392B with a TTM FCF of $12.6B. Capital expenditures seem to eat a lot of the operating earnings each year. FCF was $40B in 2008, but the highest it has been since then was $24.4B in 2011.
I'm sure it will be a home run for Buffett, but I don't know why.
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I cover the stock for my firm - Buffett must've seen my recent report rating it a buy with a 16% projected 5y IRR :)
XOM is the Berkshire of big oil - not a care in the world for quarterly results, focus on the extreme long term and high roc, minimal debt and laser-like capital allocation.
I've long wondered why BRK hasn't owned this. Not sure why WEB wasn't buying in 2010 when it was below $60....not much has changed since then save the share count.
Also have wondered why BRK doesn't have MCD has a top holding. Perhaps just a matter of time.
I agree about MCD. It is a long-term holding for me.
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Seems show (prestige) is important .... only she cant pay for it .....
Not the brightest .... will not move to a better locale, because bank of dad will not fund it (closet brat?) ...
Cant declare bankruptcy.... so marrying out is the next highest & best use of depreciating age & looks ....
Optimal if hubby is a rain-making sugar daddy, with the good taste to croak out within 5-10 years ?
Expensive to terminate early.
High risk, low return.
If you're really so inclined, just buy a good hooker ....
or set her up as a madam!
Reminded me of Charlie Sheen's response to the judge who was sentencing him for using a prostitute as to why a man like him would pay for sex. Sheen's response was, "I don't pay them for sex, I pay them to leave."
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We have Comcast and we also hate them. But we do pay less than most everyone else, probably about 70% of what everyone else pays. About once a year our bill pops back up to what everyone elses' is. My wife calls Comcast and asks for customer retention. She says we are going to stop their service and switch to directTV unless they can do something. So far, for several years in a row, they have given us a one year special deal. This year they even threw in 3 months of free HBO, which we didn't have. We just had to cancel the HBO after three months so that we would not start being charged for it.
California Obamacare plans
in General Discussion
Posted
She does not qualify for a subsidy.
The issue is we researched to find her top doctors and these top doctors will not accept Obamacare. There is a huge spread in competency of physicians. You know what they call the medical student that finishes last in his/her class? Doctor.
Also top hospitals, where you would want to go with some life-threatening situations, are opting out of Obamacare,
http://health.usnews.com/health-news/hospital-of-tomorrow/articles/2013/10/30/top-hospitals-opt-out-of-obamacare
Or they are like Cedars-Sinai Medical Center and have only one company in their respective networks