jay21

Vish_ram - I apologize. I think I inaccurately summarized the author, but I believe the author to still be correct. no_free_lunch - I think calculated risk is great. I don't think I have seen too much on rentals from him however.

This chart was a little stunning to me: http://1.bp.blogspot.com/-vEs4Uy0Vf6I/U6cdCUMkOjI/AAAAAAAAfo0/I25uvslJdWM/s1600/SHelter+CPI.PNG Somehow, shelter has increased faster than the rate of inflation during one of the biggest housing slumps. It appears that rent has been driving this. What can be the cause other than zoning restrictions? Full link: http://soberlook.com/2014/06/rental-housing-shortage-is-americas.html

I thought this was just OK. Interesting to learn about Pixar, but I don't think I took too much away from the book. Most important take away was his focus on process and constant improvement.

Cat bond yields have dropped to about 4.7 percentage points more than benchmark interest rates, the lowest second-quarter level since 2005 and down from 6.57 percentage points a year ago, according to John Seo, managing principal at Fermat Capital Management LLC. The Westport, Connecticut-based firm oversees $4.5 billion, more than 90 percent of which is invested in cat bonds. "The hurricane does not know the rate that was charged for the hurricane policy, so it's not going to respond to how much you charge," Buffett said at the Edison Electric Institute's annual convention in Las Vegas on June 9. "And if you charge an inadequate premium, you will get creamed over time." http://finance.yahoo.com/news/buffett-warning-unheeded-catastrophe-bond-000919885.html I believe there is some sense in having these instruments, but anecdotally it appears like someone is going to get creamed (and I have a feeling it won't be Buffet).

I was reading a article and it raised an interesting question. What do you do with entitlements? Should you capitalize the future benefit as an asset today? Surely it affects saving decisions and if there were no entitlements, you would hope people would save more and their reported wealth would be higher. I wonder what the numbers would show if we adjusted the numbers to account for entitlements.

Related to inequality and the minimum wage: http://www.aei-ideas.org/2014/06/a-report-from-the-bakken-oil-fields-where-the-jobless-rate-is-0-9-and-walmart-is-paying-2-4-times-the-minimum-wage/ "In total, nearly one billion barrels of oil have now been produced in the Bakken oil fields, and all of that oil production and related activities have brought the unemployment rate in the Williston area down to below 1% in most months over the last three years." "1. Walmart pays wages that reflect the economic conditions in a local market based on the supply and demand realities of the local labor market. In other words, Walmart can’t really set wages independent of market forces and it’s really at the mercy of the market in every local community. If Walmart offered the minimum wage of $7.25 per hour in the Bakken area, it wouldn’t be able to staff its stores. 2. The fact that Walmart is paying almost 2.5 times the minimum wage in Williston, ND is evidence that a single, national minimum wage for every city, county, labor market in the country can’t possibly make sense. Even proponents of the minimum wage have to agree that a single national minimum can’t be optimal for every labor market in the country. In that case, they would logically have to support thousands of minimum wages tailored to thousands of local communities, or maybe even more logically agree that minimum wages are unworkable. 3. You probably won’t be hearing anybody calling for a $15 per hour “living wage” in North Dakota, since the entry level wages at Walmarts there are already above that. 4. The energy sector is the strongest sector of the US economy, and is bringing wealth, prosperity, and high-paying jobs to places like western North Dakota and south-central and western Texas."

Their blog is fantastic: http://houseofdebt.org/

My pedestrian perspective: The negative rate is only on reserves held at the ECB, not depositors. The negative rate will most likely push banks to lend to each other rather than storing reserves at the ECB. I do not think this policy will do much. Imo, additional capital needs to be added by someone (either private or ECB). I would like to see some initiatives in the ABS world and I would also like to see more aggressive debt plans, either mods or charge offs. As bad as the FC moratorium is here, I think we dealt with bad debts as a whole way better than Europe. I have not spent too much time on Europe so someone please point out any flaws above. Thanks.

I do not think Snowball is that great, especially as an investment book. However, the one thing I did get out of it is how many personal relationships Warren has with top CEOs. It made me rethink how well I can possibly know someone just through internet research and how much of an informational advantage other investors have over management assessments. It also makes me think I should have swung harder on JPM during the Whale fiasco given Warren's seal of approval on Jamie compounded with the fact he knew him since the 90s. It was probably a bigger vote of confidence than I realized.

There are four that stand out and almost in order of how I would recommend them: 1. Intelligent Investor - a disposition check, not a great learning tool 2. Value Investing by Greenwald - three great valuation frameworks 3. You Can Be a Stock Market Genius - excellent way to think about how to develop ideas 4. Margin of Safety - what made it all click Intelligent Investor is only there for Margin of Safety and Mr. Market.

While I like your sentiment and agree to a certain extent, I think there are differences in utility of certain ranges of wealth. One of the driving goals for me is to have the ability to retire early so the difference between 500k and 5m is very big.

Can you walk through an example? How do you pay for our house with tax-free income (other than mortgage deduction)? Isn't principal, maintenance, property taxes, etc paid with after tax dollars?

MKL won't have to worry about the size issue for quite some time. Look at where they invest their money. It's pretty easy to see where they are going to be investing for the next 5 years and none of those investment opportunities are illiquid or small. BRK is more diversified and bigger. It's much tougher to think about them and where they will be reinvesting 5 to 10 years from now. Only thing I can think of is utilities will be a greater proportion of net worth.

http://www.bloombergview.com/articles/2014-05-19/the-truth-about-auto-sales

What's the probability of extremists/Ukrainians damaging Russian gas pipelines? If it's meaningful, what effect would this have?

This was hilarious to me: MUNGER: I think the economy might work a little better if the corporate tax rate was low. But I think it would be a mistake for American corporations to get really low taxes. BUFFETT: And when you talk about the tax rate being lower, you're not talking aggregate corporate tax rates being lower; you're just talking about evening out the rate, right? MUNGER: Yes. I would like a consistent rate that everybody paid. BECKY: Something more like Simpson-Bowles was talking about, getting rid of a lot of the — MUNGER: Something more like Latvia. BECKY: Latvia? BUFFETT: Nobody knows what the hell Latvia means —

I posted this quote up above that twacowfca was alluding to: I don't think that these deals are that attractive on a stand alone basis. I am not entirely sure what the effect is once the assets are part of BRK, in terms of taxes, regulations on capital structure, capital allocation, etc. I think that best case these assets earn 12% ROE then you get some extra return from lower taxes, then you have the ability to lever the holding co, and finally it allows your insurance cos to hold more equities and less fixed income. The net effect might make these investments really attractive for BRK, but tbh it's the deals I like the least because I know it makes 20% ROEs unattainable. Nothing wrong with a safe low teen number though.

From Morningstar's live blog: "Buffett has clearly considered buying Kansas City Southern but "the math doesn't make sense." But BNSF is "constantly thinking about Mexico""

Here is the link http://blogs.wsj.com/moneybeat/2014/05/03/live-blog-the-2014-berkshire-hathaway-annual-meeting/

Here you go: http://www.sec.gov/Archives/edgar/data/1581146/000114036114008080/xslForm13F_X01/form13fInfoTable.xml

If you start voting no to executive comp, does the company start having recruiting problems as people would prefer to go to companies whose largest shareholders were not actively voting no?

The economics change due to changes in the market. It all comes down to pricing. I would expect that niche markets/risks and large risks would have the tendency to be mispriced the most as in the case of the former the market is limited to specialized small insurers and in the latter to gigantic insurers e.g. BRK and AIG.

I also stopped reading halfway through. Maybe the good part is the second half? It wasn't bad, I just didn't feel he was saying much other than "JPM is a good business, it'll continue to be a good business, because we'll keep going with our long term strategy, but we'll also adapt, because we're good, etc, etc". I can see how the well read and well informed might think it was nothing special, but I thought it did a great job giving a high level overview of the banking industry today in terms of regulation, QE, global growth, etc.

I think that you should consider the psychological costs as well. Hypothetically, let's say I confidently identified a situation that would double by 2012 in 2007. In 2009, the position was halved and I now expect a 4x. Will I be able to move my money out of that idea and recognize a 50% loss to move it into an idea that would go up by 6x by 2012? I think if you can easily handle the psychological effects of being fully invested than it might make sense. I haven't been around long enough to test myself psychologically yet so IDK if I can. I feel more comfortable holding cash as I think I will be more prepared for a decline and will deploy cash rather than panic sell.

I still like the old outsiders: LUK, BRK, MKL, and Malone FRMO is one I keep revisiting and haven't pulled the trigger yet.