rmitz
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Posts posted by rmitz
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I bought some ATSG for the first time in many years. It was down ~50% from the high.
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GIVE ME ALL THE MONEY.
Agreed. Same situation - mortgage, car payment, refi'd student loans, and any other loan i can get below 4%. We have the entire world to invest in, and the hurdle is 4%.
Well, you won't go broke doing this, but when we actually hit a serious downturn, I can say from experience that it really feels shitty to be in the situation with your equity decimated and all these loans hanging over your head. It does work out in the long term (assuming you haven't done something really catastrophic on your investments) but it doesn't feel good at all.
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2016: 45%
over 10 years: 15.9%
My large legacy ATSG position wags the dog this year. I haven't done much for a while now and all new funds are invested conservatively due to lack of time.
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Gotta post on this due to all the negativity. I certainly have had some issues over time with IB but they are by far my favorite broker. All of my personally managed large accounts are there. Their main drawback is that they have been working in certain spaces and are not focusing on a lot of these deep interface issues. Also they do not handle niche account types because their philosophy is so heavily tilted towards automation.
Over time they will support more and more, and we've already seen this. The most recent example is them taking over IRA administration from their previous third-party advisor and hopefully allow better integrations over time. I love the smartphone two-factor authentication--they've finally gotten that working smoothly.
I've not had any trouble with configuring the reports interface to get done what I need to.
I've actually had good experiences with customer support in the past, but this definitely seems like another area for improvement.
I have had the annoyance with the IRA conversion as I do a yearly backdoor Roth IRA, which is much more painful than via other brokers. But while it's annoying it is straightforward. (If they would just let me keep open the traditional IRA as an empty stub account with no fees it'd be just fine).
I think a lot of it comes down to your particular needs and how much they've focused on those particular needs so far. I wouldn't open any small accounts there (<100k) for example, unless you're going to do a lot of trading.
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I got my last N mortgages through a single mortgage broker guy. I pretty much always took 30y no points no fees, which gives a bit higher rate, but then you refi again at no points no fees when rate drops .5 or more. So ended up at 3.5% and sitting there. Not sure if rates ever got to 3.0% 30y no points no fees. Perhaps I should ping the guy to check. ;)
Edit: I don't see rates at 3.0% right now. Should keep it in mind - maybe we'll drop there.
Jurgis - how were you able to get a mortgage with no fees? Appraisal, underwriting, title insurance, legal fees - all mandatory as far as I know. Would love to know your secret.
In reality they eat the fees so it’s effectively lowering the interest rate slightly.
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This whole thing about Coke is insane. Munger elaborated on this issue on the yahoo finance interview as well for those interested, look there.
It's not quite as insane as it looks. The difference is in that Coke had continued to push more, more more via advertising of all sorts, even when Americans drink vastly more than they really should anyway. There's no problem in Europe as far as I saw where you don't really have fountain beverages (or at least no free refills) and you often get a traditional 8oz serving. Here in the US, often 20oz is now a "small", 32 very common and even 64 available.
Should it be illegal? No, of course not, that's a straw man. There's really no issue with making it available in general.
I think a lot of this was incentivized by the emphasis on the # of 8 oz servings metric. Even Buffett used to tout this metric in the annual letters. This created vastly larger drinks in the US. It is entirely possible that with a different focus, economically Coke could make just as much if not more money with a higher price paid for fewer servings--I'm speculating on this point though.
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Per share investments exists in order to add back deferred taxes and float (and account for debt by deducting interest); it's a quickhand way to try to account for Berkshire's liabilities and get rid of the ones that historically have 0 or negative cost.
Just to add to your whole post, it’s probably not necessary to add back much in deferred taxes because the holding period is so long, which opens up many opportunities for essentially deferring the taxes indefinitely. Just look at what happened with the Gilette stock purchase. Gillette -> P&G -> Wholly owned Duracell - the capital gains ended up deferred indefinitely (I am not an expert but this might actually lead to a big book-value decrease—gotta ask an accountant). The US tax code is purposefully tilted in favor of those with long holding periods, especially very long ones (though the latter is much less obvious at first).
Another option that could happen under new management, would be directly spinning off the shares. The individual owners would become liable for the capital gains, but at least under current rules, this would be a significant savings. In addition, any individual can still keep holding, and eventually could pass on the stock at a stepped-up basis to their heirs, essentially tax-free (up to the estate exclusion). That’s without even getting into trusts and stuff like that.
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sleepydragon,
Numbers explanation of the 6.4%:
Berkshire Hathaway shareholder's equity per outstanding Class A equivalent common share end 2014 [uSD 146,186] X 1.064 ~
Berkshire Hathaway shareholder's equity per outstanding Class A equivalent common share end 2015 [uSD 155,501]
[Figures: Annual Report p. 34]
But what is the Total book value. Is it: 15.5 billion / 6.4% = 240billion?
Is so, the mktcap is 330 billion. It seems a much bigger gap than the per share numbers?
Your calculations makes no sense. Total book value is equal to total shareholders equity ex. non controlling interests [M USD 255,550][Annual Report p. 37]
The missing piece of his calculation is that 15.5B/6.4% = 240B, but that is the starting point for last year, so you re-add 15.5B, which matches your number.
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And there goes another thread.
Sorry. I sometimes forget that the government can solve all problems. Please continue.
Nobody said that. But apparently some people believe that any government involvement is evil.
Yes. It is like a cancer. "Just a little" involvement grows year by year until it overwhelms everything else. People like to say, we should reduce the cancer over here and have a little more cancer over there, or we need a different type of cancer, and proclaim that they are for small-cancer. I like to just come out and call it what it is and advocate cutting it out completely, saturating it with chemo or radiation, then watching closely to make sure it never comes back.
No.
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I use TaxAct to get an idea of what my taxes are going to be, and I seem to recall when playing around with it last year that the CSV export from IB worked quite well. TurboTax online might support that as well.
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More useful. You can borrow Buffett's farmland on an as needed basis.
I had to laugh at Starbucks today. A guys phone didn't complete the transaction and he had to do it all over again. I paid cash - still more efficient. And I have the added knowledge that I dont have to pay it off later.
Cash is so very handy for so many things. The only reason governments want to get rid of it is to get more control over taxation. I think it will be a hard sell in the US and any country with a value added tax. I like my debit and credit cards as well but still use cash daily. If you think about it, non-cash transactions have been with us for 60-70 years. They haven't managed to displace cash, yet. Right now my preference is for greenbacks rather than multicoloureds :-).
As mentioned before, how am I supposed to pay my girls, my dealer, and my ammo supplier?
If the apple pay with the watch actually worked (mainly that it hardly is usable anywhere I go, and even then NFC readers are not consistantly working) it would be more convenient. It’s…not near that. But in most cases it’s faster to use a swipe card than cash for me, between cashiers who aren’t that good with it anymore and trying to get the cash back in order in my wallet and so on.
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I have been researching the best way to save/invest for a child outside of a 529 plan. I plan on maxing out a 529 plan for my daughter but would like a way to invest money for her to use for a house downpayment/first car or preferably to just let sit and grow over her life time.
I was under the impression that a custodial account or guardian account was a good option but apparently after some research it isn't.
http://fairmark.com/custacct/regret1.htm
These accounts count more heavily against college financial aid, 4 times as much and the tax break limits are very low. There is also the often unappealing idea of giving a lot of money to an 18 year old and what they will spend it on.
It seems just having an account earmarked for a child and gifting either stock or cash from the account over time is the best way to go about this.
Has anyone done something similar and have any experience or thoughts?
Thanks
If you max the 529, you probably shouldn’t worry about not getting financial aid. There will be too much money for them to get any need-based aid anyway.
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Both time weighted and regular returns come out to 11.5% this year (USD). This is the only account where I invest without restrictions. This brings down my long term annualized return to about 13% since 2006.
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When an active shooter kills someone on campus it has an effect on 40,000 people. As evidence there were at least 10,000 people the evening of the shooting at that candle light vigil and the temperature was -10F. People who never knew the victim had to have counseling.
That’s because a car crash is an accident, and a shooting is terrorism.
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The only thing that will save Berkshire is the quality of their businesses over the long term after Buffett. I've seen too many succession horror stories to count on that. Perhaps it will be above average too, as are many things Berkshire does, but if it wasn't for Buffett's intelligence to allocate capital to high return enterprises and not just buy any old junk indiscriminately, I wouldn't think of putting much money into it with the investment leader at 85 years of age.
I think the biggest red flag for me would be if they put Carly Fiorina in charge.
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I am a bit tired of this double-tax nonsense. A C corp is a completely separate entity. You are entirely protected from its misdeeds in any way beyond the initial value of your investment. And this should cost nothing? The courts have ruled that corporations are basically people in most legal ways. (There are of course exceptions for very closely held companies, but the legal veil is also easier to pierce in these cases).
An argument that this is double-taxing requires you, in the end, to believe that all income taxes are wrong, since any passage of money from one entity to another counts as income to someone. Some people do believe this, but they are too short-sighted to see the consequences to society—or they just don’t care, because they believe they will be fine. Create enough societal instability and poof, all that money you have, is absoutely worthless.
Anyone can come up with dozens of anecdotes of how things have gone wrong, and while stories have a great deal of power due to the way the human brain works, that doesn’t tell reality. Only statistics do, and they tell a story of how we need to spend money on society in order to have a good one.
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The other consideration is that non-recourse mortgage debt is less prevalent in Canada, meaning that strategic defaults should be less of a problem. If you find yourself under-water on your house and choose to use the "jingle mail" strategy to try to just walk away from your problem, the banks can sue you for the shortfall and effectively seize certain types of your other assets and garnish your wages...
That’s really worked well in Spain in terms of their economy…
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You and rmitz are a couple of whiners.
Hopefully name calling is still grounds for being a jerk. Therefore it settles the argument and we can agree at least that adesigar was a jerk for name calling instead of listening to a dissenting opinion.
Eric, I deliberately avoided getting in a discussion on the actual topic. My comment was made to YOU specifically, as you have gotten overly agitated on this topic in the past. I wanted to speak up as someone who has been around here for a while.
I haven't said anything about what I believe or not, but I am not responding to just one specific message. Your opponents are not blameless, no.
Let's do better.
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I'm faced with a thorny Roth IRA Excess withdrawal/Re-characterization question and I'm hoping members on the board can help with walking me through the decision matrix
1) I typically wait till year after to deposit money into my Roth IRA
2) Recently, I executed a trade where I was forced to deposit capital into the Roth IRA because unsettled funds can't be used to buy options (puts for hedging purposes) in the same day
3) Let's assume that the balance was $100 in my Roth IRA and I think that the balance at year end may be substantially higher, say $150-200 (strictly hypothetical, but let's entertain the idea)
4) While I'm not at the $180k contribution limit yet, but it's highly likely that I will hit that this year. This will render my Roth contribution to be disallowed
My choices are a) Leave the contribution as is and wait till tax filing to determine whether I need to withdrawal the excess/re-characterize or if I can just leave the contribution as is or b) Withdrawal/re characterize today to avoid paying taxes on excess contribution. I'm leaning towards the withdrawal/re characterization in order to avoid additional taxes.
Any comments on the pros and cons of either option is greatly appreciated.
Anything to watch out for if I do make the withdrawal/re-characterization?
Differences between Withdrawal versus Re-characterization?
If I re-characterize, can I convert into a Roth if it turns out my income is below the $180k threshold?
Many thanks!!
Ran into something similar last year. Take the withdrawal, including any gains that can be traced to the deposited money. (as a percentage of the total based on the dates of the deposits and withdrawals). Pay income tax on the gains. I forget exactly where it got put on the 1040. If you have no other traditional IRAs, you can make a new traditional IRA, take no deductions for it, and roll it over into the Roth with no problem.
The backdoor Roth rollover is how I do all my deposits into our Roths now.
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Buffett neglected his children when they were young, then tried to buy their affection later. His relationship with Susie also deteriorated due to his lack of attention to her, which he only seemed to really notice when she was on her deathbed in the hospital. He was always focused on accumulating wealth rather than on his family life.
After all, he could have retired in the 1950's if he had wanted, and he actually planned on doing that early on, at first.
Thanks.
I would not evaluate the situation the way you did, but you might be right.
While I think this is accurate, one has to put it in the proper context of the time. Men weren't supposed to spend a lot of time with their kids. Being completely a man of leisure was and is weird. And he definitely felt the pain of Susie leaving, long before her death, just because this was patched over a bit doesn't make it less so.
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BTShine,
Thanks for your feedback. I was thinking that the potential customers are not actually, people who travel once every year to Omaha. I was thinking of those millions of consultants, who pass their hotel bills to the client, and they don't get anything out of it. If they choose to share their expensive rooms, they get 50% of the money for themselves.
It just my thinking, obviously. But reality could turn out to be different.
In the case where you’re passing on the cost to a client, reselling part of it as you’re describing here sounds like fraud.
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That the automated cars exist or they are common place? How automated? 6 years seems impressively short. What about all the folks like me who prefer cheap cars? I think the hardest part for automated cars is adapting to non-automated/connected cars already on the road. Once we get the 90's civics off the road then we will likely see some incredible innovation.
I would bet that they exist, are commercially available, and they are fully autonomous, at least in some cases. At least 50% of the time, the cars could provide people with an unassisted door-to-door travel experience.
I don’t know about commonplace, but that probably won’t take much longer. The car upgrade cycle hasn’t seen a significant feature upgrade in a very long time.
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Just curious, are capital gains taxed only at the federal level?
This chart: http://www.schwab.com/public/schwab/nn/articles/Taxes-Whats-New
shows that if you're in the $37,450 to $90,750 income bracket then the tax rate is at 25% for short-term capital gains. Are there any capital gains at the state level too? I live in California by the way.
I know that long-term capital gains are taxed at 15%. It's reduced to 5% for individuals in the lwoest two income brackets. Thanks!
Actually, long term gains are reduced to 0% for individuals in the lowest two income brackets. 15% for most and then 20% at the highest income bracket. Plus the 3.8% surtax if you’re over 200k (or 250k if married).
States usually tax capital gains of any type as ordinary income, but that can vary. I’m not aware of local taxes that tax capital gains but I’m sure that must happen somewhere.
You can’t just add the local + federal tax rates though, because the local/state taxes become a deduction on your federal taxes.
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We see, or we dont see. I never said impossible. I have seen some amazing technological advancements in my short life. I just dont think the technology is anywhere near reliable enough, and wont be for a long time. From my perspective, only you can win this bet, as there is always tomorrow. Kind of like making a bet on if there is an afterlife.
I'll bet on <6 years at this point.
Why product shortages?
in General Discussion
Posted
Dang, you pipped me on the medium link--I think the distinction between commercial and residential supply chains could be key here, and the fact that there may not be much headroom to trivially increase output...