randomep

I am not sure what types of books you are talking about. For books more than 20yrs old typically you can find it used online for less than $10 including shipping. For example, one up on wall street by Lynch. For newer books ya I find the library the best bet. And I'd own them for like 1/2 yr because I just keep renewing them online. The problem with that is as an person working on investing all the time you need books as a reference, you need to be able to access it on demand. Also I joined Amazon unlimited 30 day trial with the intent of cancelling in 30 days. And if I really have to, then ya I do put up the $10 cost and buy it on kindle.

Merket, this is very confusing. I think you mean: (4) People in (3) who are you willing to share their story.

LOL. Maybe you guys can ask him how can he lead a fairly stress free life while running one of the largest companies in USA and periodically running into near-death corporate situations (Washington Post strike in 70s, SEC investigation in 70s, Salomon Brothers debacle, Gen Re debacle, Net Jets debacle, death of all the "made in America" brands he bought, Lubrizol and Sokol, etc.). I would have killed myself multiple times during his career. "Stress free" my a** ??? ::) :-X :'( :o Just wanted to +1 this. He's responsible for 100k+ jobs and gazillions of dollars. Every word he says is measured on a golden scale. Really, if you think he's living a relaxed, stress-free life: you are utterly, utterly wrong and have probably never been in a position that's even remotely similar to his one. Well, I think there is good stress and bad stress. For example, too much stress can literally give you grey hairs, give you nightmares, cause you to be in a bad mood all day. But some stress I believe is useful for life. Otherwise, we'd get sit on the couch and get fat, and subconciously probably live in such a way so we die earlier. Buffett has a fulfilling life, he has a reason to get up every morning, that's his key to longevity.

I have the same card. We probably don't get the service that other AmEx cardholders get, because we don't pay an annual fee. Same here and my impression of amex has changed after I got it. It can't be that prestigous if I can get one! :)

Thanks LC for the info, helps me understand. As for evil/morals about Buffett. Why should it matter? We are all here to get ideas on how to make money right? I personally feel he is hypocritical to tell the rich to all pay more taxes and he goes to such lengths to avoid it running Brk. He had a GF and a wife openly for much of his life. His son is going to be the chairman of the board when he passes also reeks of nepotism. But hey all the power to him, in fact all these skills and privileges makes me envious. I care about his ethics only to the extent of whether I can trust what he does (as an investor) and what he says (as a disciple). I feel he has a lot of integrity. I would give him my money to manage in his partenership at 25 because I know I can trust him. He won't run away with my money. And he will act as the best possible fiduciary for me. He has brought the world of value investing to the masses. When he makes an opinion, I feel he mostly doesn't have an agenda, he is giving advice for the listener's own good. He is the antidote to Jim Cramer and the likes and CNBC. that's his greatest contribution to the world in my opinion.

And on a slightly different topic. I read in the other thread that he has been able to use Brk and its insurance arm as a vehicle to invest in common stocks with favourable tax treatment. Is that so? so it means as an insurance company the capital gains tax is lower than for a normal C corporation?

Thanks, just read his letters, very impressive.

Obviously the guy has an agenda, so it seems the debate on that one would be pretty easy. I've learned enormously from Buffett's writings over the years, but don't really care what BRK invests in these days, what his political leanings are, or how he leads his personal life. For most of us on the board, I think the best way to learn from Buffett are to study his early investments and try to internalize his writings over the years. He's often said he would be investing in a dramatically different manner if dealing with a smaller pool of capital (as most of us are), so I personally don't spend any time following BRK or its holdings; rather periodically revisit some of his writings and look at what led him to make substantial bets on relatively obscure situations. I know most of that's sacrilegious to this board, but I'm firmly in the camp of finding an edge, and for me having a smaller pool of capital provides an edge in being able to position a concentrated portfolio of micro/small caps that larger investors can't access. I'm fairly confident Buffett would agree. This is what I feel about Buffett too. I feel he IS a genius. If we know his IQ it is probably qualifies in the technical definition. However he is not GOD. He has maybe 300 companies in the world he can invest in size. And even then he cannot put 30% of Brk's equity in it. But we little guys have 60,000 stocks to choose from and we can concentrate 30% of our net worth in any of them.

ADW - Andrew Peller, wine, canada CMH - combined motor holdings, car retail, south africa

Well the author seems to be fitting negative arguments into each aspect of michael porters model. I am not saying I don't agree with the author. But it just seems so much simpler than the article. The article says there are 30 new airlines a year. That's the crux of the issue. All these new entrants put pressure on returns. Basically, airlines are very easy to start because the capex is portable. All you need is to find some used airplane and fly it to your base airport. Get a few gates and viola you have a business. In brick and mortar businesses you cannot move your capex as easily. That's always been my explanation for the airline business.

On the topic of academics, back 15yrs ago in grad school the stochastic department personel was in demand by finance industry because of the ability to do whatever they do with derivatives. My opinion is that their work was for the most part useless except to give the people pushing the buttons an air of authority: look we got phd's calculating this data. Same for Merton, Scholes at Long term capital....

Is that right? Well, I can't remove what I don't know. But I can sure remove what I know for sure. From now one, I will never say I am never sure of anything.

ya it was too hilarious

I noticed in the employment/training survey a few months back that some 50% of the membership were engineers. My observation is that engineers need to know everything, and experience discomfort with uncertainty. uccmal, I strongly disagree with that statement. Engineers (and I am one) have the task of making something work, they do that well. If something works well, their job is done, they don't stop and ponder, oh why does it work? my formula says its shouldn't! Case in point is flying, the wright brothers made planes that flew, yet to this day there is argument as to whether it is the shape of the wings that makes planes fly, but boeing and airbus keep cranking out better and better planes, because it doesn't matter what is the physics behind it! The people who have to understand everything are scientists and there it gets dangerous in investing, the best example is derivatives and the black-scholes formula. I think engineers make good investors because they have good understanding of probabilty, probability theory is requirement in all undergrad engineering courses

yadayda, I see your point. But it is based in a totally rational , efficient market. But we all know management often do not have the best interest of the shareholders in mind, or they may not be rational, or they may not see the value if they are an undervalued company. Case in point are the many japanese netnets, what wonders they would do for the stock price and earnings if they would buy back their shares with all their money. But instead they give out a puny 1-2% dividend and think that is enough.

Two scenarios both give investors a choice. With buybacks you can do nothing and keep re-purchase of shares in the company (at no tax cost) or you can sell shares in equivalent value to the amount of the buyback. With dividends you pay tax and you can choose to do nothing and thus keep your yield or you can use the dividend to buy more shares. Being in silicon valley I would prefer less investments by companies because I have seen the waste and destruction to the economy done by wasteful R&D. I would prefer the valley go back to the way of the 70's and 80's when ideas came from passion rather than now where it is more motivated by greed.

I've read about several people like him and they all have a few things in common. - they were cheap to a fault - they have longevity, lived to be 80+ - they invested consistently We all talk about getting several million for retirement say at 60. But going from 60 to 90 is where things really kick in. Just getting 11% return in the last 30yrs which is the s&p 500 TR return over that time, would mean you money goes up 23X ! So all he needed was 400k in 1985 at 60 to achieve this (provided he didn't draw cash from it, which is trait#1) So it isn't hard IF you have the 3 traits. So I assume he ha no inheritance, it is all selfmade.

hey gio, congrats..... although I have no idea how often 11% in a month occurs, I reckon quit often.....

hey I know, let's start a thread about our greatest one day portfolio gains!

I misread too. Actually, if I had to consider giving all my money to someone I'd give careful consideration to risk. It isn't just about who has the greatest chance of demolishing the index.

The key is having the knowledge and confidence that these people are exceptional a priori. If you feel that Einhorn is going to get like Buffett returns in the 80's then being rational, you have 10% or 20% or 50% invested with him? Or Mecham and Byun? if you could invest with them? Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL. I would add that it would be like trying to pick him at the age of 7... I respectfully disagree guys. Einhorn is in his late 40's, Kevin Byun is probably is in his 30's as is Mecham. If you took this approach with Buffett saying Berkshire was too big in the 80's you would have left A LOT of money on the table. Dshachory, the key is having the knowledge and confidence a priori. If you feel with confidence that Einhorn can get the 20% returns that Brk achieved throughout the 80's, then the rational thing would be to put 10% , 20% or 50% of your money with him. Are you doing that? Same for Byun and Mecham, if you could of course.

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

Which is really ironic for a value investing board. Some miners trading for less than cash, mines closing, extreme negative sentiment. I'm not interested in miners, that's firmly in my too hard pile, but I have owned gold in the past. I'm waiting for ~$800/oz to own it again. At $800, I'll buy some gold coins and put it in a safety deposit box! Anyone else do that? And wants to admit it?

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meiroy, I am really puzzled by what your saying "once everyone realizes how well the US economy is doing......" m Everyone is talking about how the US is the only market to invest right now! even my doctor...... if my doctor isn't a contrarian indicator I don't know what is..... I hate making macro calls, but I will say this, it wouldn't surprise me if the US stockmarket disappoints this year, Gundlach's talks reveal some very ominous signs: 1. US stock market has never gone up 7 yrs in a row, and we had 6 yrs of up markets 2. I think he said all the US job gains in the last six years is due to US oil revival........ I am very very concerned for the US