randomep

Thanks that's an eye opener. College teachers teaching students how to trade? wow! I doubt many of them even know what is a PE ratio!

I doubt he'd disagree with you that there are exceptions. I think his point is that majority of companies are borrowing money to buy back expensive shares. When downturn comes they might be hit with double whammy: stock drops but they don't have money to buy back cheap shares and they have to pay interest on debt. +1 Clearly some companies maybe borrowing prudently. By and large however, these companies are acting irresponsibly and will face consequences down the road. My guess is 2-3 years. Can someone here give example(s) of companies with low returns borrowing at high rates to buyback shares? Of course not - any company paying nominally high interest rates in this environment is distressed and not in a position to use those funds for buybacks. The question is how the prices being paid for repurchases will look a few years out. If you borrow at 2% and buy stock at trading at 20x it's ostensibly brilliant and highly accretive. It doesn't mean it will prove so later - it might or might not. Cheap funding is a boon if the prices being paid are good. If cheap funding just drives prices higher, it might not be such a blessing. On average are we clearly at least into a grey area if not worse. Ok let me rephrase. Can someone give example(s) of companies where 1/PE - i is dangerously small. where i is the borrowing interest rate. In other words, what companies will be the first to blow up in 2-3 years when it does happens as the OP predicted.

I doubt he'd disagree with you that there are exceptions. I think his point is that majority of companies are borrowing money to buy back expensive shares. When downturn comes they might be hit with double whammy: stock drops but they don't have money to buy back cheap shares and they have to pay interest on debt. +1 Clearly some companies maybe borrowing prudently. By and large however, these companies are acting irresponsibly and will face consequences down the road. My guess is 2-3 years. Can someone here give example(s) of companies with low returns borrowing at high rates to buyback shares?

I have never seen a single mention of a company in poland. Does anyone have any investments in Poland? thanks

I agree, bubbles don't exactly repeat themselves. They rhyme maybe. We've been immunized against dot-com and housing. It will be something else next time. But for it to be of the dot-com or housing magnitude you have to see a significant number of average middle class folks around you all saying oh something is a sure thing without any fundemental basis. I think non-investor savvy people around us are the best tip-off for a bubble....

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/looking-up-old-annual-reports/msg219385/#msg219385

This is a value investing blog. So who do you think would be a better value investor?

NFL cost me $5! I had cable internet without TV for 80, then they offered me basic cable TV for $5 more. That has NFL, so what's the problem? The marginal cost of basic cable when you got internet is cheap no?

Etrade just informed me that my global trading account will not exist by July. I guess global trading isn't profitable for them. So they told me that I could hold my global equities in my regular US account. After talking to them twice they weren't very helpful. I am not sure about two things: 1. dividends, in a US account that is only denominated in US currency, does that mean every dividend is instantly converted to USD? 2. they say each overseas stock has a US equivalent; for example I own Tachibana (TYO:8159) which is also TBNAF on OTC. Does this relationship really exist for every overseas security? another example I guess is TSE:SEC <-> SVCTF ?

Seems like everyone understands the subject of the post but me. What do you mean? cut cable completely or just disable cable tv? If everyone disconnects the cable how do they get internet? I use cable for internet and then they convinced me to add tv for additional $5, $5/mon for football is worth it. The value for their internet is a bit high but it is a good value proposition.

Certainly, the aggressive chip-on-your shoulder attitude in other competitions is probably counter-productive in investing. I often remind myself of the guy Buffett mentioned (the name escapes me) who was one of Grahams disciples who made a killing in the 60's using leverage but was later wiped out. Buffett said something to the effect, he was in the rush, but why, we were all certain to get very rich. But I want to elaborate on the point I made in the other thread that helped to start this thread. I treat investing as a competition because there is an opponent in every trade. Each trade you do is a bet, and on the other side of the trade is someone taking the opposite bet. So some traits from competition may be helpful. For example, we all remember how painful 08 and 09 was. I was able to buy during that time because I was so pissed and exasperated that the market was going into the toilet. I was crying but also angry at the market sellers. So each purchase I made (which was difficult) I thought to myself I was punishing someone on the other side for panicking. So I don't necessarily want to be the best, I just want to beat the guy on the other side of the trade!

Yes you have the opportunity to do it open on crap like 74 every hand but you won't. The guys who bluff with 74 will do it infrequently. To do that you have to build a tight reputation over many many hands. Don't get me wrong, it takes skill, probably more than what I have. But it is just a small world, at the poker table everyone is folding looking bored most of the time. But I know they are watching everyone else trying to read the limited information on everyone else. Ok enough of chess or poker. Back to the topic, I like to always look at a spreadsheet of my aggragate holdings. That way I won't freak out and focus on one stock that lost say $20k. Everything evens out, I make $20k on one stock and lose it on another....... the law of large numbers works.

Ok back to being OT, I played (or lived for) chess when I was a kid. As an adult I put similar skills into poker. But in the end I realize.... I suck. If I devoted my life to chess, memorizing opening theory, studying the games of the best, maybe I could become master level, so what. It is like an IQ, memorization, concentration test. And poker, really poker is a game of maximizing minute odd advantages, and to win against good players it requires waiting maybe hundreds of hands to get an opportunity for an advantage...... in other words, chess and poker are boring. Investing is much more interesting to me, the parameters are almost limitless, not like 52 cards or 64 squares. Also, it is not a zero sum game. Collectively, the whole field makes money!

bought ATH:EUPIC a week or two ago

OK one mechanics questions. In the event of a Grexit would Greece simply say that a euro is worth N Drachmas on day of exit and convert all their sovergn debts to Drachmas in the same ratio? If so that would be ugly....

nono you don't understand, these are MY brokers. I use discount brokers cos I want to deal with machines, but when my accounts go over the 100k threshold, it is like clockwork they'll call me and try to manage my finances....

Maybe people are just greedy hoarders? :D http://a248.e.akamai.net/origin-cdn.volusion.com/u47ok.bmqn6/v/vspfiles/photos/LP-413-2.jpg ;) What do you guys say when you get the phone call from your discount brokers hawking something? They ask me what is my financial plan, thinking they are setting me up for their pitch. And my answer is always: no plan really, except to enjoy it like playing poker. Oh that sure shuts them up! People play poker to get some kind of rush, so I invest. And the object of the game is to die with the most money or toys.....

I think the original poster was asking if defaulting automatically means Greece is disqualified from using euro as its currency.

NO there are many articles about that. In fact I read the present Greek finance minister 3yrs ago said something to the effect we'll just default and stick it to Germany and stay in the union..... There is no legal framework for seceeding from the eurozone just like there was no way to leave the union in 1860, funny you'd think they would've thought of that......

I rather violently disagree. Frank(lira/deutchmark/etc.) conversion to euros was orderly conversion where nobody expected the converted value to drop through the floor. This is completely not applicable to grexit. That may be so..... but I'd still like to know, I just asked anyone who was around with money at that time to describe the financial mechanics. if comparing them is like comparing apples to oranges then I wont compare the two, just want to how the historical context..... If you want to compare apples to oranges... OK, so I know about 2.5mln people who just converted from Litas to Euro in Lithuania. What exactly you want to know??? ;D Edit: note that litas was pegged to Euro before the conversion. If you want unpegged conversion, hmm, I don't know if any country did unpegged conversion to Euro. I think they all pegged before converting. That's one question. But ya I guess first step to joining is always peg the local currency. So effectively the European Central bank is offering to convert all of the local currency to euros? Now that I think of it ya it is very straight forward compared to the reverse direction! Last question: how do you know 2.5mln people :)

How can the country function exactly? They run a 10% trade deficit, if they print drachmas and abandon the euro and renege on their debts, then the drachma will drop like a stone outside Greece. And you have doomsday.

I rather violently disagree. Frank(lira/deutchmark/etc.) conversion to euros was orderly conversion where nobody expected the converted value to drop through the floor. This is completely not applicable to grexit. That may be so..... but I'd still like to know, I just asked anyone who was around with money at that time to describe the financial mechanics. if comparing them is like comparing apples to oranges then I wont compare the two, just want to how the historical context.....

That's exactly what I was wondering. And I have scoured all over for sources but could find none. I did ask a coworker who had a mortgage on a property in france in the 90's. I live in US. He did say that his contract was written in both francs and euros. So it say this much is your debt in francs and in euros. He used to pay that in francs and then in euros after the switch. So I don't know the answer to your question but I think it is best to understand the situation in the 90's when they switched into euros first. Anyway does anyone have any anecdotal experiences? Please share.

Exactly this. It's natural to be a little worried when the sums become bigger, but keep in mind that it's always been and always will be a percentage of your savings anyway -- regardless of whether it's $1,000 (out of $10,000) or $100,000 (out of $1,000,000). Right and returns are just percentages regardless of how much your principle is. Numerous times I have heard people say something like oh seaboard is $4000 it is expensive. I cannot fathom what is their logic.......

Hi all, I am going through old copies of moody's manuals and on the income statement, there is an entry "Times Chg Earned", anyone know what that stands for ? thanks in advance