rmitz
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Posts posted by rmitz
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The jobs being eliminated are those of people with low to average IQ, and no redeeming graces like people skills or iron-clad honesty. That population group is fast becoming unemployable in developed economies and most of them will have to live on welfare.
Automatisation is also putting strong pressure on the middle. Salaries are shrinking there.
Of course the counterpart is that very high IQ, creative people never had it so good at making a living. This is being felt in academia. The best scientists used to be people with well-rounded intelligences, very good at research but with plenty of other intellectual abilities. It was obvious they could have succeeded in many other fields apart from science. Think, for instance, of Carl Sagan. What you see arriving now, more and more often, are terminal Aspergers with a zealot's mindframe (you have to be highly ideologized to resist the call of the "dark side"). It is quite revealing that the new Cosmos had to be done by a guy who is very good at science outreach, but who is not a brilliant scientist. There are very few people left with a whole brain.
You could have many of the discussions in this forum (about books, history, etc.) with scientists in the 60's, people who have plenty of interests. It is almost impossible to have them with postdocs or young assistant professors. Don't get me wrong, they are very smart and good at what they do. But most of them have not read a book outside of their particular scientific area in their entire lives. That produces tunnel-vision and solidifies paradigms. Many of those people won't recognise the next scientific revolution even if chews off their asses. The younger ones are even worse.
How many scientists do you know personally? I know plenty of young scientists, and disagree with you completely. You’re creating an exaggerated caricature here. Sagan wasn’t a brilliant scientist either. Some of this is just an increase in specialization, not “Aspergers” or anything else. That’s not to say that your caricature doesn’t or can’t exist, as it certainly does. But the politics involved in being a scientist do not lend themselves well to the kind of people you describe, either.
I think there are waves of focus in particular sub-fields, then counter waves where people bring together scientists in different fields to collaborate and work together. That’s just how it goes.
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Thanks for the suggestions. I have feedly on my iphone and I have gotten used to it. I guess I'll try it on the Mac at home as well.
On the Mac and iOS devices, I use Reeder exclusively. I use it with FeedWrangler, but I believe it can interface to Feedly.
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Wow, Prasad must be peeved to rant at midnight! :))
Parsad is absolutely right, and in this case, WEB is also in the wrong ... consider he admitted during the KO compensation debacle that in his many years on 17 Boards he never ONCE saw a compensation plan NOT approved ... I felt sick when I heard this ... makes me admire Richard Kinder all the more
It’s really quite simple. Buffett is a flawed human being like all of us. Less in some areas, perhaps more in others. You can’t fight every single battle all the time—that is just a recipe for burn out.
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Munger always said Invert.
So wanted to start a new thread to focus on the worst capital allocation ever as a way to dissect investment mistakes.
My pick. Time Warner/AOL Merger.
A decade ago, America Online merged with Time Warner in a deal valued at a stunning $350 billion
Munger isn’t dead yet. And it was a great deal from AOL’s perspective. :)
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My kids are 9 and 11 so further along the path than yours, we still have some time to save but college expenses have gone from being an abstract concept to a current concern...
I have Coverdell accounts for the kids but the contribution limits are not very hgih. They used to be $500/year per kid but are now $2000/year per kid. This is across all contributors, so if you and your in-laws each chip in $1000 per kid then it's maxed out. With expected college costs in the $100-250k range per kid, this seems like a laughably low limit. BTW these contributions aren't tax deductible like an IRA but the gains are tax free. This is one of the few tax breaks you'll get with college savings plans. The good news is that you have a lot of freedom how to invest this money basically any fund / brokerage / etc.
I also have Coverdell accounts for the kids, and they're nice. Would be nice to have a higher contribution limit of course. They're great if you can hit it like Eric. :) If opened at birth and you have reasonable returns you can still pay for a decent chunk out of it. There are also interesting rollover rules for the accounts that would be really complex to take advantage of, but there's potential there.
The 529 plans have changed somewhat over time. It used to be that they were good only for colleges in your state, then that changed so you can use them in other states. They have expanded the investment options, it used to be only a savings accounts and now there are various stock and bond options. In Virginia where I live there is still a "prepaid" option where you can basically buy semesters of college today for presumably less than they'd cost when your kid is going to school, but the kid has to go to school in Virginia. They also have a plan where the money is invested 90%+ in stocks when the kid is little and the balance shifts to 10% stocks and 90% bonds as they get near college age. This sounds interesting on paper but with interest rates near zero I don't want any bond exposure over the long term, but that's just me. Bottom line is that you need to read up on the details. I get a break from my state (not federal) tax for 529 contributions up to $4000/kid, my Virginia income tax rate is around 4-5% so this isn't a huge break but at least it's something.
I really don't like the investment options so I've stayed away from the 529 plans.
I also have UTMA/UGMA accounts for the kids which I set up before I really understood them. Basically the money is in their name / SSN and there is a small tax break, basically the first $1000 or so of income/gains in the account is tax free and the next $1000 or so is taxed at the kid's rate (presumably the minimum rate of 15%). Not sure about those amounts today. However to get this tax break the kid has to file their own tax return. Depending on how you do that the costs associated with doing the tax return can largely offset the savings, for example you might pay $150 tax on $1000 but if you spend $100 to do the tax return you've only saved $50 and went through a lot of hassle. And if you think about it this tax break becomes relatively meaningless once the accounts get up to around $20k, i.e. if you have an account of $20k that has a 10% return or $2k, that is the extent of your tax break, if the account is $50k then the tax break is almost meaningless.
This is mostly true, though filing the taxes can be done very simply and cheaply if you're under that 2k limit, and you don't file taxes at all if you're under 1k (talking about capital gains only). I also use these accounts but for a different reason--this is for money that I truly consider "theirs"-gifts from others, work income, etc. I also use it as a teaching opportunity, so I match their savings elections, depending on age we talk about the account and how it works, investments, compounding, etc. I don't consider it savings for college at all, and I don't really contribute the accounts directly other than as noted.
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It's also important to note that what the directors said is not really substantially different to what Buffett and Munger have said previously. Media just wants to spin it differently.
Isn't he a dumb dumb?
Far from it. Obviously he's not his father...who is? But he's been on a number of boards, runs his own farming business, is a published author and photographer, and has met all of his father's friends over the years...not to mention probably learned a thing or two.
For people who think Berkshire will be the same after Buffett, it just can't be. The primary capital allocator will be gone, and they will rationally decide whether to reinvest all of the cash flow or distribute it in some fashion. By distributing it, it simply reduces the number of mistakes that can happen. Cheers!
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Samsung Note 10.1 2014 is a great device for reading and taking notes. The screen resolution is better than ipad and it has an active digitizer, which helps in accurate note taking. (The older Note 10.1 had poor resolution). It also has an SD card slot which can be used for memory expansion upto 16GB. There's a bit of learning curve in getting used to the pen, because it has many features.
http://www.amazon.com/Samsung-Galaxy-Note-10-1-White/dp/B00F3SOJ88
I've actually been thinking about the new Galaxy Note 12 for this purpose. And I say that as a die-hard Apple user. I am annoyed with not having a real digitizer on the ipad for my scribbles.
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I don't know if this is "cheap", but once I have sold my current apartment, I don't think I will ever own property again. Reason? Over the long term, I target 12% + from my portfolio. Why own property when (long term) it can't return much more than nominal GDP plus a bit. In the UK, as of last week, a married couple can invest £30k tax free, it was around £22k.
Thoughts? Does anyone else have this attitude.
If you get no extra utility from owning a home, then yes, that's the right decision for you. My home is not an investment.
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My #1 stock return ever was/is with ATSG. It's about 40x in 5 years, though it really was at that level a couple years ago, so it was better than that. The key to the investment was seeing that with a careful analysis of the bankruptcy (which seemed as if it was a strong possibility at the time) it was still worth maybe 5x what it was trading for (20 cents to $1--actually, I think it was more like $1.20). Then they avoided bankruptcy and everything else was gravy.
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Had Berkshire's book value collapsed in 2007/08/09 in line with the value of the S&P, Buffett would have beat the S&P over the past 5 years.
So should we want a mea culpa for a book value that didn't collapse during a time of extreme market stress and therefore didn't rebound?
I agree with you, but what you wrote there really should have been in the content of the letter. There's nothing magical about 5 years, but explaining a change clearly is always a good idea.
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Oh, OK. Even so, consulting rates are usually only about 30% or so higher than salaried rates, from my understanding. So $100/hr is probably a "good" consulting rate for the majority of software engineers. I'm talking about an independent person doing consulting. If you're a part of a "brand-name" consulting shop, you can get billed at a higher rate, but you're not getting that rate into your pocket.
If you're only 30% above what you'd be making at a job, you're basically making the same amount. A rule of thumb we use for benefits is add 1/3 onto base salary. Then you have to consider work pipeline, stability, etc. If you aren't at least 50-100% above what you'd make at a regular salaried job, you're not really compensating for the risks.
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Across many documents, I have run into some rare issues with the Mac version of Office, though the newest version is much better. Assuming you don't need to use Exchange/Outlook, you'll be fine. Also, if you actually do need to use windows, I'd recommend VMWare Fusion over Parallels, much better in my experience.
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Could she be the next CEO of berkshire ?
Maybe at some point.
But in the next 5 years, absolutely not. She has very little experience and is just getting her feet wet. Maybe I am reading too much into things, but in one article they stated she likes to listen and ask questions rather than be a focal point during meetings. IMO, I interpret this as she does not have the experience or knowledge yet to be the leader. I can't imagine her running a meeting with Rose, Ajit, Tedd and Todd, etc. I'd also like the next CEO to have some history of capital allocation, whether through investments or tuck-ins or insurance or something else.
If she keeps excelling and makes the most out of the opportunities she has (which it sounds like she is), I could see it happening in 10 or more years.
I agree with you in general, but specifically, listening and asking questions is a huge component of a CEO's job. A good one, anyway. Lots of good leaders lead not by being a focal point or celebrity but by managing the direction of the group in less direct ways.
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Personally, I don't think the best way is to ban specific things like the incandescent lightbulb. Instead we should set energy efficiency standards to move things forward, as can be seen with how cars progress when standards tighten and stagnate when standards also stagnate (sometimes for over a decade).
So I'd be more in favor or a standard that says "You have to produce X number of lumens per watt however you want, and every Y years you have to get Z% more efficient".
This is actually how the law is written. In the Energy Independence and Security Act of 2007:
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Personally, I wonder if whenever looking at increased efficiencies and cost savings, the government takes into account all the equipment and supplies it's new "bureau of lightbulb management" will require.
A lot of these green movement things are mere kabuki theater based on what I've read and are too little, too late. For example, if we had cars that were 100% energy efficient, we would be unable to take advantage of that since there isn't enough oil worldwide to simply make the tires!
That doesn't make sense. Tires are a consumable. Even in third-world countries you need to replace the tires eventually, and here we replace them all the time. So that cannot be true.
I don't know how true it is, but weren't incandescent bulbs made with planned obsolescence in mind? Like there are reports of some incandescent bulbs from circa WWII that still work.
Overall, it'll just end up costing me a little extra when they switch. I already use whatever cheap CFLs they have at Aldi's. I've bought the more expensive bulbs and the numbers just don't work if you don't use them for their entire useful life due to animals or humans destroying them. I use them for reptile lights now due to the heat production, and they are cheaper by a factor of 25-50 or so.
Indeed, Planned Obsolescence is a big issue. Generally speaking if people go about this by tossing old light bulbs instead of reusing them, we probably aren't saving energy, really. I'm guessing on that. I'm moving on to LEDs when possible because I've had issues with CFL failures long before they should have, not to mention the mercury content and such makes CFLs very dubious for the environment.
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Maybe I'm not understanding, but if you are going to give away 100% anyway, does it matter if you compounded it all and then gave it away or gave away your whole life? Aren't we just choosing who benefits--people now or people later? Is there a big difference between now-people and later-people? I'm not sure I particularly care which time period of people I'm helping, but perhaps there is some reason for preference for now-people.
I guess you could argue affecting people now is better since they can influence more people, but isn't that similar to the lost-compounding of money that you have given away? (In other words, does the helping of people now help more over the long term than waiting and giving more away? That seems very hard to answer, and would dramatically depend on what you were giving to.)
Yes. In either case, you have compounding. You need to grow to a certain size before you can work on certain problems, at least with your own capital, but education, sanitation, etc, have real (and arguably huge) compounding effects. Easily in the multi-bagger territory, though any specific number I would pull out of thin air. They just don't flow back to you directly. Obviously, this is BillG's approach. Philanthropy can definitely be done poorly as well.
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So if I spend my life investing (current plan) and give the majority of what I have earned to charity since I will not spend most of it, is that good? That money that I am accumulating like a squirrel accumulates nuts, could it not be better used by someone else or society now vs in 10, 20 or 50 years?
Of course if I am a good investor, the rate of return will make the pile bigger overtime and may look like a fine endeavour but, again looking at point #1 and #2, it is someone else money that I am hoarding or society's money. That money could have been spent on some goods and make someone work right way. That is even if it was spent on some lavish spending. It could also have been reinvested in some new technology helping the human condition earlier which is now not possible since I am holding that capital.
It may sound like doing Robin Hood's work but, sometimes I wonder.
A very important observation. My personal inclination here is to not hold back on things you need or want, but with an eye to possibly paying more for things if they are manufactured in a way that supports people you want to support, ideally with better quality as well.
One of the things that rubs me wrong about the list of capital hoarders above is that having good clothes (i.e. not worn, without holes, stains, etc.) is not only a sign of respect for yourself, but also a sign of respect for others. I believe most of those folks came though the depression, thus were scarred in their mentality for reasonable consumption. Now, I don't believe consumption is a sustainable way for a society to live; given the level of automation, we simply don't need everybody working to supply a ludicrous amount of material goods, so there will have to be another solution eventually. I think the biggest hurdle to overcome is the viewpoint that people need to work to be valued to society; we simply do not need that many workers.
Regarding another point; if you live long enough, you don't have to be good at capital allocation to gather a lot of capital.
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I have given a lot of career advice in my time. Most things tend to fall into the same general categories. You have not been "asked" whether you will take this position, you have essentially been "told" to take it. Of course you have options. You don't have to take it as you haven't been ordered to, but there are ramifications for that choice.
+1
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We already have public schools for all, but we're concerned that many of our gifted children are underserved. So can we identify the gifted children pre-K and send them to special schools? I know we have tests that can identify gifted children. What is holding this up?
I'm not an expert (yet ... my kid is still in diapers) but that's more or less how it works here in NYC. And it's totally insane. But that might just be due to the sheer number of people living here.
Intelligence tests for kids pre-k are extremely non-predictive of eventual "giftedness". I don't have the article handy but there have been some studies on this recently. Locking kids into this pattern bbased on a static test very early is almost worse than doing nothing.
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Apparently they will not pay fees from margin, and yes I asked the same question about one share. Apparently they only liquidate full lots.
Well thanks for the info at least. Now I can try to prevent this ever happening to me.
I believe they do pay fees from margin, this really seems like a tripped bug in the system given that it was a near-zero balance or something. I mean, if you've got a margin, it is impossible to *not* pay fees from margin, and they certainly don't liquidate in those cases.
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This is our experience, cut cable eight years ago, at the time I told my wife she could buy whatever shows she wanted on iTunes up to $50 a month. Well, she never purchased a thing, we have NetFlix and Amazon Prime now, more than enough. We never flop down in front of the TV, it's a deliberate decision, there are many days the only time the TV comes on is for my oldest, he watches one kids show each morning on NetFlix.
For sports doesn't everyone get over the air? We watch the Steelers on over the air, we have an antenna outside.
On advertisements, anytime I watch normal TV now I can't stand it, there are so many ads. My son who has essentially only known TV as Netflix gets bored. We'll be at a grandparents house and when a commercial comes on he thinks the show is over, he can't pay attention during them and gets up to do something else.
Not that it stopped us (we also have no cable and watch the Steelers OTA) but the Pirates aren't available OTA (or the Penguins, but I've never been a hockey fan). I imagine there are other situations like that. There are ways to work around it, but it's not quite as simple.
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This company is the largest in the US investment newsletter business - with revenues of several hundred million dollars a year:
Thanks. I thought Daily Reckoning was just a small business, run by a small team. Difficult to understand how they can earn several hundred million dollars a year and have 400 employees. Is it from advertising and/or subscriptions? Where did you get the "largest in the US" and revenue figure from?
That's only one of their many newsletters, they have all sorts of deals with other companies in terms of promotions and what not, as well. Those numbers seem high to me even so, but I suppose it's possible.
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Thanks to all who have voted so far! Only 3 days left.
It looks like we are going to have some turnover this quarter. Fiat and Glacier Media are more popular than Berkshire this time around!
Given how quickly valuations can change, I wonder if a small window might be more appropriate for voting, anyway.
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Exactly. Having a margin account and going on margin (i.e. a negative cash balance) are two different things! Just open a margin account but keep a positive (or zero) cash balance!
Thank you LC and wachtwoord. My only worry is what would happen if IB's real time margin algo went wrong and thought I would need real time liquidation, but I actually didn't even buy on margin?
Or what would happen if I mistakenly put in one more zero for the number of shares to buy, and caused a big margin call?
Perhaps I was just being too extreme and frightened myself.
Yes these things could happen. To take it to the extreme, the entire SIPC could shut down, our brokers could raid our accounts, and we'd all be left penniless. Obviously an extreme example, but this is a question of where your limit of reasonableness is. As far as I know, they are a pretty reputable broker.
For what it's worth, I have only seen margin calls happen towards the very end of the trading day. They seem to give float during the day, so you should have time to make any corrections for this kind of fat-fingered thing.
The inevitable automation of a large part of the job market & how to profit.
in General Discussion
Posted
Ah, good. Then I think we can have a good conversation about our differing experiences. I've been at Carnegie Mellon for 18 years, 16 working full time, and many of my friends here are faculty in the Computer Science department, which may be skewing my perceptions. Many others have gotten their PhDs (or BSs) and gone into industry. I don't see a huge difference in quality, in fact, some have gone back and forth.
That seems to me more a matter of time. There seems to be more pressure these days to produce research, and quickly, so that reduces time available for other activities. Hell, just having a family by itself can use up all the time outside the business day. So, since much of our education system has deemphasized breadth and these younger faculty have been on a sprint for their entire education lives and subsequent education career, that is a natural consequence. I posit that it will change as they get older.
I think that a household with two Professors--in the scientific fields--at a top university are still easily upper middle class. That doesn't mean they're in the 1%, and I don't know that they ever were. Housing is a red herring as that observation is true across most careers--housing has appreciated much faster than income, at least in high-demand areas, which may tie into the whole arc of education institutions itself.
There are some discontinuities in pay scales depending on what a particular institution focusses on. Some people may end up leaving the field since it's just so much easier to go into industry and make at least as much, if not more, money. So I agree that there is at least some sentimentality required, or at least a particular attraction to education. What I haven't seen, though, is that these people are zealots like you describe. Everyone I know could easily go into industry and be successful, and there's no particular lack of well-roundedness either.
Your anecdote is shocking to me, but I'm sure that crazy things have always happened.
I would not compare it to politics in the real political world, but in my discussions with folks, it does seem more than a match for corporate politics. There is the old joke that people fight harder when they're fighting over scraps...
So, in summary, I don't really have stats to back this up, but I wanted to write that my experience and observations have not matched yours.