rukawa

Huh? I would think press freedom and free speech advocates would have to reevaluate their views. Its obvious that banning coverage of school shootings would enormously reduce their frequency.

All QE is, is bond buying. That's it. In theory it could be inflationary, if banks were to use their increased reserves (cash) to make more loans. BUT they are not doing that. Anyways the constraint banks face is NOT reserves. Banks are constrained by regulations like Basel which require them to hold a certain amount of equity. The amount of equity they hold is determined by the risk-weights applied to bank assets. Government bonds have a zero risk weight. Right now banks are in fact cutting back on many activities due to stiffer regulation. So you aren't getting any inflation from an increased credit supply. The real effect of QE is not inflation of good/services....its asset inflation. And the most over inflated asset is treasury bonds. The effect of regulation is very interesting here! Banks are being incentivized to hold more government debt. But market-making has in fact been discouraged. So the liquidity for treasury bond is reduced. Its an asset many institutional investors own but its they will have a lot of trouble exiting the trade. The greatest havoc will be in the treasury market.

No. People who retire spend, but don't work. They draw down savings and spend their pensions. This reduces labour supply much more than it reduces consumption. For instance a person making $100000 retires with pension of $20000. Lets say they spend $100000 when they were working and now spend $20000 in retirement. Retirement has reduced consumption by $80000 but reduced production by $100000. These assumptions of course are very conservative because typically people save money pre-retirement and spend down savings post retirement. Baby boomers are not being replaced by new workers. This labour supply is going down. You can already see this occurring in the labour participation rate. Right now unemployment is 5.1. Wages will start rising. I expect profit margins will shrink and when they can't shrink any more inflation will start.

I think they are investing hundreds of millions of dollars based on the idea that the US is in a Great Depression scenario which I think is wrong. You don't get much deflation from a consumer credit crisis. Because you can't fire your wife. You get deflation from business/financial credit crisis. During both the Great Depression and the Japanese credit crisis it was businesses that held huge debts. The deflation during the Great Depression was due to bank failures and businesses firing workers and lowering prices. This was explained competely by Irving Fisher. This is completely different than the current situation because the Fed bailed out the banks and the businesses were not heavily in debt to begin with. So you were never going to get huge deflation. Plus the retirement of the baby boomers is an inflationary tailwind. The whole thesis never made sense.

In the time of Keynes there were few public goods and government was small. There was huge positive utility associated with government spending. In the present world government is huge and bureaucracy overbearing. The Keynesian logic is reversed. There are now huge economic benefits to reducing regulation. In the case of Greece there benefits are ridiculously large. See the following articles: http://www.macleans.ca/economy/economicanalysis/stupid-rules-are-sinking-the-greek-economy/ http://www.theglobeandmail.com/news/world/the-roots-of-the-greek-tragedy-bloated-bureaucracy-and-tax-evasion/article582943/ - you need a license to serve coffee!? - shareholders have to provide chest x-rays and stool samples - building a resort took 10 years and 6000!!! signatures from bureaucrats. - 4.3 million workers of which 1 million are public sector workers Structural reform is the only solution to the problems Greece faces. But austerity need not accompany structural reform.

Ya I didn't buy this. Just started looking into it 3 days ago and wanted to do some more research before pulling the trigger. I have decided that I need to rub my nose in this one. How did you discover this, Sculpin?

I have read this book and its ridiculously brilliant. The crazy thing about this book is the number of different times I see the strategies in the book in real life. Also there are are large number of extremely useful tips. Chapters of the book have been reviewed here: https://valueprax.wordpress.com/tag/profitability/ and here http://www.creditbubblestocks.com/2015/06/review-of-art-of-profitability-by.html

I have never understood why nuclear fusion research is so absolutely stupid. We spend 27 billion on a single idea that doesn't even work that well. But we had NO reason to believe it would work well because it had never been tried before. Wouldn't it make a lot more sense to spend 50 million on 400 different ideas? Or a billion on 20 ideas. I think we would have gotten a lot further. But of course as others have pointed out we don't need nuclear fusion. Nuclear fission is already very feasible.

http://www.bloomberg.com/news/articles/2015-05-04/gundlach-sees-puerto-rico-like-mortgages-in-2008-crisis The pension obligation bonds look pretty attractive.

Labour participation rate has gone down by 3% since 2007. 1.7% of this is due to the Baby Boomers retiring. The labour participation rate will continue to decline. http://www.voxeu.org/article/decline-labour-force-participation-us China's will soon be experiencing a labour shortage. The mass migration of rural workers to urban areas is basically done. In addition the result of the one child policy means less young people to replace older workers. http://www.ft.com/intl/cms/s/0/211df974-ee47-11e4-98f9-00144feab7de.html#axzz3ZPncqbZI My view is that the share of income going to labour is going to increase throughout the world and profit margins will shrink. We are at the point of peak profit margins.

I completed the CFA. Its useful if you have no finance knowledge and you want to understand basics about the financial industry. But the cost of the degree is huge and the benefit is poor. I would say its most useful if you are planning on becoming an analyst or portfolio manager. I once called Francis Chou he recommended it if you want to manage money. It will destroy your summers and it will be super frustrating if you don't pass a level.

Cut maybe 1 year ago. My current setup is Roku + Netflix + Amazon Instant Video + Usenet downloading.

I would argue that you should be a politician. Basically all Buffett has done is found a really inefficient and incredibly difficult way to tax people and use the resulting taxes to fund health care, foreign aid etc. The same thing Buffett did is accomplished much more effectively by taxing people and funding things through government. One Deng Xiaoping is equivalent to a thousand Warren Buffett's.

This is the only case I know of where I fairly confident the stock will double within 1 year. And as a result I am establishing a huge position.

Because I think cable companies are going to turn into utilities. Dumb pipes. Consumers are not going to pay a lot for dumb pipes. And regulators won't let them extract wealth from content providers. For example, John Malone used to use TCI monopoly power to extract equity stakes in various television networks like BET. But how are you supposed to do that now when regulators are pushing concepts like Net Neutrality. The internet is what is driving this. On top of this I also think John Malone made the cable industry seem much better than it really is. He pushed analysts to focus on cash flow which makes little sense for cable companies where depreciation is a huge cost. He somehow got acquirers to buy his cable networks for much more than they were worth. And he exhorted a lot of upside from emerging cable networks when TCI was the only game in town. All those games are going to be much harder in the current environment that they were in the past. Maybe I'm wrong but I feel that a lot of people are essentially extrapolating what John Malone did in the past to the present. I know I was. Thus they look at someone like Drahi and all they see is John Malone. And I think that is a mistake.

I think that in the future cable will be worth a lot less than it is now. So I think using tonnes of cheap debt to buy up overpriced cable companies is basically like pressing the accelerator on a car when you know you are heading towards a dead-end. I don't think its smart. Maybe we are all a little too impressed by John Malone. He was pretty good at getting companies to overpay for acquiring his rolled-up cable assets. That trick might not work in the future.

Gazprom

In his Almanac Munger quotes some proverb about the virtue of ignoring your spouses faults after marriage. Munger says that he prefers an even stronger admonition which is to be fully aware of all your spouses faults and to love them anyways. In some sense the same idea can be applied to life. You can be pessimistic and yet love life and try hard all the same.

There are huge differences. Most people have friends, few people have a billion dollars. If you require a private jet to be happy then it will be more difficult for you to be happy than someone who doesn't. Yes or do harsh exercises, meditate on your death, turn down the temperature in your house etc. All of these were Stoic practices. The insight being that its easier to reduce your expectations than to fulfill them. On this we both agree. But money can be a fundamental driver of unhappiness. I would argue it easily becomes the case with people who are heavily in debt or have expensive tastes. I have seen many people who have more money than they need complain when their money didn't buy them what they wanted....they get an expensive Audi and complain that it required frequent repairs, or an HDTV and complain about plasma burnin because they bought it when plasmas costed $10000. Their expectations are higher because they spend more and they are disappointed when they don't get more. I would put it differently. Happiness comes from many things: freedom from worry, being liked and respected, romantic love, achievement, looking forward to future pleasure, having things go your way, being satisified with what you have. You have little control over many of these things. You do have some control over how you judge these things and the level of expectations you have for your life.

Yes it is. Frugality is very compatible with a good and rewarding life. Its only in this, the Age of Stupidity, that this even comes up as a question. To the extent that anyone has studied this question and many, many, many have, no one has concluded that the best way to make yourself happy or live a good life is to spend more money. If anything its quite the opposite in every spiritual and philosophical tradition I can think of. Its such a settled point that even philosophical opponents agree e.g. Stoics vs Epicureans The Hedonists (Epicurus) argued that friends, simple pleasures, knowledge would bring you happiness. But they also argued that you shouldn't eat expensive foods or enjoy luxuries because it would make it harder for you to be satisfied. The Stoics argued happiness could be obtained not by changing your external situation but instead by changing your thinking, hence the Epictetus quote: "Man is disturbed not by things, but by the views he takes of them". The one common denominator is that nobody advocates for material possessions or spending money. At best they advocate for not being too extreme in asceticism (Buddhist middle path). You can read the happiness research studies and I don't think any of them has argued for spending more money.

I would say yours is the interesting perspective. What's the book and can you elaborate.

No I wouldn't. If I cut one of my fingers off because I was an idiot, my solution would not be to cut off additional ones. The Greeks have a hugely dysfunctional and incredibly bureaucratic economic system which hasn' t been reformed in the slightest. They have just elected a communist party that wants to roll back the tiny reforms that were made. They are completely insane! They is unemployment is Greece precisely because of parties like Syriza. Syriza want to increase the size of Greece's public sector!!!! Its already a monstrosity. And their solution is to make it bigger?!? The Greek economy does not work unless it gets huge subsidies from Europe which it has been getting for a long time. What we are seeing now in Greece is not austerity. Its economic truth.

This is the worst and most stupid election outcome I could possibly imagine. Its insanely bad and the Greeks are insanely stupid. The Greeks have literally done nothing in terms of structural reform. And the guy they have elected is a lunatic who has just allied with another lunatic. The Greeks annoy me and I live in Canada. My government hasn't even given them any money. Imagine how much the Germans, Finns and others hate the Greeks. Nothing is going to settle down. This is going to get very very ugly.

I would value the pipeline at zero. The way I approach things that are hard to value is that I don't. I focus on the things that are easy to value and then I want to get the hard, intangible, difficult to value stuff for free. The way I view value investing is that your valuation is all about your down side. You want a valuation based on well understood things with a margin of safety that will protect your down side. The other stuff is all icing. If all you have is icing then I would stay away. That said I have seen Seth Klarman invest in situations like this. I have no clue how he does it. But I don't think he is thinking of the companies as going concerns. He is thinking from an acquirers point of view. You may get information on this if you look at the proxy statements when these types of companies are acquired. It will give you some idea of how the investment banks pitching these deals value the companies.

I prefer the existing Saudi regime to most alternatives that I can think of.