randomep

Well the fact that the interest is doubly taxed is a deterrent for one. The interest paid comes from taxed salary. Then when you retire and withdraw that interest money it is taxed again. Secondly if there isn't a meaningful interest rate it is like free money, money that has never been taxed free for you to spend.

The interest goes to the same place as the principle when it is repaid, to your account! nope I am not a professional....... so don't take my word for it

All the shipping companies. One I owned is GLBS. They've been saying rates are low because of a glut of new ships........ for the last 6yrs!

I bet, learn something everyday.

Cardboard, so you are saying it is market forces. Thinking down that path I think I have the answer that makes me less perplexed. The futures market acts like a low-pass filter on prices. i.e. it has a dampening effect on sudden changes in prices that the consumer sees. By consumers I mean the big buyers/wholesellers of oil not car drivers. So if a cartel chokes off supply consumers don't feel it, people who trade oil futures will. Once the choking starts, the market has enough time to create more supply. Once the lower price futures contracts runs out for the consumer, the new supply has come online which naturally counterbalances the choking by the cartel.

One thing I can't understand about oil prices. I hope someone here can give me a simple answer. Thanks in advance. The price of oil is determined by the price at the margins. So the top half dozen oil producing countries produce half the oil in the world. Why won't some of them that aren't scrupulous get together and just reduce their production a bit. Choking off production by say 1M barrel a day would jack up the price significantly right? I mean saudi arabia and I guess russia have very cheap production, so nearly all of their oil price per barrel is their profit. In the case of russia it either goes to the companies (which are in cohoots with the government) or it goes to government in the form of taxes. So even if their volume is cut by half if they can triple the price of oil from $45 to $135 they still come out with higher revenue and profit right? So I am just puzzled why don't Russia cooperate with OPEC or join them. Maybe there is something in the dynamics of market forces that I am not getting.......

Jurgis, what you mentioned is part of what I am saying. Some people can push inferior designs that are marketable when complete. But that's one send of the spectrum, at the other end the people pushing for something that have virtually no chance of ever flying. In my books the people at this end of the spectrum are fraudulent. They may in their heart disagree, but they are in denial. Like I said about the 1998-1999 craze, 95% (and that's probably underestimating) of the chip startups bought by the likes of cisco and nortel and the like did not contribute one dollar the acquirer's revenue. I sat in meetings and heard startups make perpostrous claims. That's fraud in my books. But hey they later became multi-millionaires. On of my underlying themes in this thread is that we shouldn't have the mentality that you can get to better solutions simply by throwing more money at a problem. Sometimes a company hiring one incremental employee will actually have the detremental result. I think business schools need to come up with better theory regarding this aspect of management. We need something like a Michael Porter to teach us better engineering management. The ramifications is not just oh ya technology progress is just a bit less efficient. It can have an effect on the national economy and national security. Look at F35 project. The F35 is a single engine stealth fighter for the US navy, marines and air force. The plane is just starting to go online after 15 years of development. The F15 was developed 3 years! One F35 key selling point was that it would use a common design to produce 3 versions of the plane for 3 branches of the military. It was supposed to have 75% commonality between the 3 versions. Ya right! It turned out to be 25% commonality and cost double original budget. It was such a cluster fock that the military brass had to go in and intervine before it got scrapped. At $200B over budget this plane can really affect US economy and national security if it fails. I see this kind of unified design idea from high level management in my work. But reality is it slows everyone down by causing one design in one project to affect another design somewhere else. When that happens you get bogged down because you unnessarily integerates multiple different designs! If I was an aircraft engineer at Lockheed I would've probably said in meetings: you guys are lying cos that's what higher ups want to hear. No fucking way you can get 75% commonality. I would've been fired as a consequence. But I would've felt great sitting unemployed at home when I am eventaully proven right and I know that I tried to save the country several hundred billion dollars. well said.....

I was debating whether I should continue discussion about engineering. Here I'll try to clarify some of my meaning. And I know I make generalizations using not the greatest choice of words. So don't take all that I have said too literally. I exaggerate a bit and that's mt way of ranting I guess. But regarding examples of making perception the goal. I think the best example is Elizabeth Holmes. She has had a cool college project for 12years now. Suppose she made financial gain including perks of 300k a year. That's about 2.4M in 12yrs after tax. And how did she do it? by getting investors to part with their money by claiming that she can do hundreds of blood tests with a nano vial. She has not shown concrete proof that she can do it and even if - that's a huge if - she does show proof future it is irrelevant. She already made $2.4M in salary. Pretty good for a nobody before she did this. Many engineers will perpetuate some belief as long as possible, and if they are shown to be total BS just move on to another job. Typically engineers are small fish and their new employers will not know of their bad reputations. Ok now back to your particular experience with Intel. Intel is a case in point. In 1976 Intel may have been what? 200 employees? Today there are probably 5000 doing your type of work today (I am not talking about fab stage or even back-end) I am just talking about design and implementation front-end. Say Intel at any given time is doing 50 chips, with 2 completing designs on each. The employees work on average 2 designs. That is still 100 employees per chip design. You can pin the blame on 2 people as in your case, but hardly with 100. Even if you can pick out 2 out of that 100, the other 98 can still hide. And I think about 90% of chip designs never become anything close to product. So the above example is only for 10% of cases. The people working on the other 90% must work hard also right? They don't know their product will get cancelled, or do they? Engineers are rarely idle so high level management will keep projects going months after they've be written off. As you get closer and closer to cancellation, more people can guess or know about it. What is their mentality when they know what they're working on is useless? And possible layoff is in the future? You don't work hard and honestly and you promise the world! Heck if it doesn't work management isn't going to get on your case anyway. You are just thinking about looking good so you don't get cut. Intel recently laid off 12000 folks. I know roughly which department got it. So you and I should ask ourselves, WTF were these 12000 people doing? Intel isn't exactly poor. They weren't doing the type of work you were doing that's for sure! Back in 1999 I heard a lowly engineering from Nortel tell me that Nortel was buying startups just to prop up the stock price, not because those startups did anything useful. I was shocked at the time but now I know he was right. If you were in one of those startups and you felt that, what is your attitude. What is the rational thing to do when becoming a millionaire hinges not on making a product let alone making sales but on perception. Chipmaking these days is not a very creative industry. A lot of it is execution and speed. So there can be entire departments whose jobs is to help designers improve the speed. Yet they actually do nothing useful! And they can make false claims because they aren't really related to the quality of the end product. And if I say they slow us down, they can deny it and say it is my fault or someone else's fault. I haven't given you concrete examples of BS in chip making but you can see how it can happen. I can give you very concrete examples but I don't really want to, its too upsetting, also I have to get back to work!

wasn't he Lance Armstrong's lawyer? ::) ::) ::) ::) ::) ::) ;D ;D ;D

Thanks! Ya I may have been a grunt in the chip making business too long. The grass is always greener on the other side of the fence. But back to the topic of theranos, I put my 2 cents in due in part to my experience working in startups. I have seen management elevate some persona to attract funding which pays the employees. Also the persona myth-making can itself also help attract and motivate employees. Look work for us, we are going to make you rich, and we are going to change the world cos we are brilliant.

ROFL. ;D ::) :D ;D OK, sorry man. You want the truth? Investing is way way way way way more away from truth than engineering is, was or will ever be. Engineering is at least measurable and actually measured in good organizations. Investing? Well, 99% if not more investors don't add any value. Even on this forum, I'd guess more than 50% of already 1%'ers don't add any value. Discussions here? The truth? LOL. It's all agendas and biases and p3n15 size and all that. Even the best investors just push their agenda and run their book. You see this is such a situation. I don't know if are to put it politely: just egging me on or if you truly don't get what I said. Best investors push the agenda? to who do I push my agenda? Personal investing is a solitary job, it is convincing yourself. If you push some BS agenda to yourself then its called denial. Maybe my explanation is just off, tell you what, save me the thought watch Big Short, and go to the part where the austic Michael Burry says in response to "are you being sarcastic", something to the effect "I don't know how to lie I don't know how to BS I don't know how to be sarcastic all I know is numbers....." Or go to the part where the Frontpoint team is introduced and how they in effect think everyone else is a moron and they are right and make money off being right. [edit] ok I fired off that response too soon, what I mean is: in investing your own money: you get paid if your bet is right (truthful whatever adjective you want) in engineering you make money convincing others you are right....... to a certain extent

+1 thanks! I almost never get any kudos here, which is ok. But in my posts on OTHER threads, not this one, what kinda irks me is that my posts almost never get responses, positive or negative. I think I focus on getting at the truth too much. And I jump on thoughts that are contrarian. I work in tech and after many years I have come to the shocking realization that truth doesn't really matter a lot of the time in terms of getting recognition and reward. I have sat in meetings where - to make a simple analogy - people basically conclude that 1+1=3. I often listen to people tell me such ridiculous things that I wonder, are you lying to me and you know that your lying to me, or are you that stupid. I used to think the former, but later I think it is probably the latter. And today.... well today I realize they don't really know which and they don't care cos it don't matter!!! If you can convince people designing on computers that 1+1=3 then that is the truth. If you build a plane with one wing longer than the other that's fine until you try to fly it and wonder why it plows into the hill. By that time however, the culprit is so far removed and forgotten that he is doing just fine and happy, hell he is probably promoted to VP! You can see where I am leading to, EH spent 11 years working on this blood vial thing that you can hold in your hand. During which time she got medals, recognized on major business publications, and $600M in funding. But all that she did is to convince people that she had this wonderful device that will solve one of our big problems. And I see no publicly convincing evidence of progress in 11 years! We sent a man to the moon in just 7! My opinion is that she would have kept at it for another 10-20 years if they keep funding her. That's exactly what I saw in those meetings mentioned earlier. To some people, R&D is not the means to an end, it is the end. This is why my heart has checked out of engineering, though it still pays the bills. I want to put my heart more into VALUE investing because I feel the results are more inline with truth. That's why there are so man acclaimed books like Charlies Almanac, Irrational Exuberance, the Most Important Thing. I think the theme of all of them is that we have to stop our innate habit of groupthink and looking for confirmation from others. anyway, that's my 2cents, and my OPINIONs my facts may be wrong and are probably wrong

Anytime I can reference Cabin in the Woods, it's a good day. +1 this is so left field! Where the hell you find this shit!

At this point I wonder.... what did Holmes get out of it? Her 15min of fame? I would have more respect for her if she at least embezzled $5M or so into buying her a nice mansion or she has some gold bars buried in her back yard. If she didn't then it is totally a waste of close to a $1B cash. I guess we can't expect a rationale explanation. It takes a sociopath to carry on a charade for close to 11yrs.

hi all, I have heard that the IRS frowns on corporations that keeps too much retained earnings. For a small (S?) corporation a reasonable amount is $150k after which the government will charge a tax on retained earnings. What about public corporations? I am particularly concerned about some of my microcaps which have zero debt and are piling up retained earnings. I wonder if they are forced eventually to distribute it due to the IRS rule. Can anyone conform or shed light on either case? thanks

Looks like you need to be more patient, patientCheetah :)

KCLI - regular buybacks and a tender offer retired about 10% of shares last year

With Trump this is just the begining, he'll go after that man, and his family too!

Well "fraud" is such a strong word. My image of fraud is some company tossing the blood specimen into the garbage and randomly generating a result. I doubt anyone here suggests they are doing that. However, I do believe that $9B just went poof. I doubt any other company would want their technology or patents. I definitely believe they cannot make a profit, now the question is, what can the investors recover from the hundreds of millions that they've invested. I imagine background to this story is probably similar to the big short. Who chose this startup for investment? Someone who says I don't take the risk in this (like Wing Chau in the movie). Who paid for the investment? Maybe some pension fund in California or Germany. (Lipperman always answers some dumb bank in Germany is taking the other side of the trade). They are the product of the push for alternative investments and yield. When there is such a supply of easy money, they will attract smart people pretending to be the next Steve jobs like flies to sh*t. Steve jobs had to prove himself toiling in a garage in Palo Alto. Now to get hundreds of millions of dollars you don't have to have a proven product, you just have to do a sell job. So the game changes from showing substance to who has the greatest appearance of substance. In this environment, such investors will definitely suffer with below average yield. This cycles repeats over and over.

I would think for the average person the best thing to do is have a HELOC ready and use it in the event of a crash to go on a shopping spree.

I have heard some libertarian and other free-market views on this forum. The thing I like to point out is that over the planet of 6B people and 5000 yrs of history, lots of things have been tried. If you want no government we have that today, in Liberia, Somalia/Ertria(sp?). Those countries have no taxation and no laws. We have also tried blind free markets w/o much government intervention with Greenspan/Summers and the gang. Theory is great but in practice we see that people w/o regulation would skirt the law and break the law, which is unfair and benefits almost no one. Don't forget the lesson. Most countries are gravetating towards democracy because it is the best middle ground. People are pissed today but they don't know what they want. When you listen to Trump you realize he actually stands for very little except rudeness in politics which I guess appeals to many. If a politician says go left, well lots of countries have been stagnant going that route. If a politician says go right, well look at 2008. Middle ground seems to please no one but we gravetate towards it.

huh???? The purpose of leverage is to increase your balance sheet so you can make more income. But borrowing from your 401k is moving it from one place in your balance sheet to another? And of course there is the double taxation issue. The only advantage to borrowing from 401k is to invest in things you cannot invest in your 401k. But there is just such a high cost.

I recall either in the Big Short or The Greatest Trade Ever, he felt bearish in 2001-2003 period when he made big gains. He said it didn't matter he was still picking great stocks.

Jurgis, why did you pull your "Bring it on" post

If someone believes you and acts on it, you could get sued by the SEC!