rmitz
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Posts posted by rmitz
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Many value investors think (and thought at the time) that Buffett should have sold KO more than a decade ago when it was obviously above full value. There were plenty of things better, and there was no logical justification to hold it.
And indeed, I believe WB has said that not selling at the time was a mistake. Even given the capital gains taxes as a result. Not that he would have been able to unload the whole position anyway.
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I am a bit confused as what is the difference between both examples? They both returned 30% in 2010 either though capital gains or dividends. It will be significantly difficult for scenario #1 to outperform scenario #2 over the long term especially since KO is able to increase it's dividend 7-10% YoY over the long term.
Scenario #1
You have a portfolio that returned 30% in 2010
Scenario #2
I am holding KO with a dividend yield based on initial cost of 30% in 2010
Well, no. Since your KO has a much higher value now than your initial cost, it is appropriate to calculate your dividend yield against the value of that money today. So the opportunity cost of holding is much higher. Taxes are the one thing that can change this calculation, but you still have to start based on current values.
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I believe Buffett is much smarter than given credit, and he is interested in self preservation. Look at Egypt for how this will play off if people perceive they arent getting a fair shake. I have said it before, financial Darwinism will quickly be followed by actual Darwinism.
How do you like Australia's riots in the streets so far? Oh, they don't have them because they follow a wise path.
The rich have it better over there than the rich here:
1) No gift taxes
2) No estate taxes
3) No property tax on primary residence no matter how extravagant
4) No taxes on dividends from Australian corporations if already taxed at corporate level
I mean, that's pretty much the dream wish that would make any Republican sit up and take notice in Washington DC
In return the rich gave up:
$15 minimum wage
lots of social benefits
Take care of the little guys and they'll leave your fortune alone.
I was thinking about how they afforded it, then I remembered about the military.
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ATSG?
Yep Hete should be on the phone with DHL redefining the terms of the note which amortizes, to allow buybacks . I would like to see all FCF going to a buyback, screw new planes at these prices.
I've been adding slightly (and had been adding at somewhat higher levels), had to sell some other holdings to do so. I doubt they'd be able to buy back enough to make a difference but it would be nice to have the opportunity.
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Is there a dollar amount limit to what they will buy back.
Will they keep on buying till it reaches 1.1 BV and start buying back again if it drops less than 1.1 BV
It is indefinite and has no cap on dollar amount or shares retired. It appears permanent and will continue under Ted and Todd and whoever is CEO at BRK.
Yeah, it seems to be putting a floor on the stock. They probably will never be able to buy a particularly significant amount (though I hope they can). At the specified brain-dead value it's simply a brain-dead simple investment for them to increase value, which can be accomplished relatively mechanically with minimal effort over time.
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I wasn't even talking about Obama. I actually agree that Obama has not been a strong leader, but honestly the Republicans are not interested in ANY sort of compromise. It's their way or the highway.
I'm not that bright when it comes to politics. I keep seeing this notion that "the Republicans are not interested in ANY sort of compromise."
In what sort of compromise are they not interested?
What proposed compromise have they turned down?
Wasn't the debt ceiling raised by many trillions of dollars?
I want to try to understand what people mean when they say this.
I honestly don't like discussing politics, but the specific point I was referring to is the absolute refusal to consider potential future tax increases as part of a package -- this is irresponsible governing. Of course, it's also in line with their goals, so it makes perfect sense.
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He's playing the game as the rules currently exist. Why on earth would you handicap yourself to make a point?
Why??? Because his campaign for President was based on bringing the country together. Ending partisanship. Overcoming the rancor. Compromise. Doing whats right. "Change" you can believe in.
In all these things Obama has been an utter failure.
I wasn't even talking about Obama. I actually agree that Obama has not been a strong leader, but honestly the Republicans are not interested in ANY sort of compromise. It's their way or the highway.
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My admiration for Buffett is declining by the day. I liked him so much more when he stayed away from the media and politics. Another thing that Buffett does not impress me with is this lack of leading by the example on the taxation debate. Tough to have credibility when you have spent your life avoiding them.
He's playing the game as the rules currently exist. Why on earth would you handicap yourself to make a point? That's like people choosing to not eat meat just because of factory farms or something like that--though in that case it might be healthier for you, it effects no change whatsoever. One person doing something voluntarily isn't going to change anything.
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INTC has a lower moat than CSCO? ??? INTC has a very decent moat imo.
There is "some" moat in Dell, but do you really need it at its current valuations? How do you value the ownership management at Dell with 15% of shares owned by M. Dell? Most others lack that and that is reflected in worser acquisitions (MSFT, GOOG), serious share dilution with options (CSCO), ... Dell isn't empire building and in it for the quick buck, pursuing higher margin business as we speak.
With MSFT & INTC you get decent moat with reasonable upside, with DELL and maybe others (I have no opinion on them) you get a neglectable moat (probably almost none) but possibly more upside. Just my opinion of course.
Intel's moat can be eroded very quickly if they stop (or stumble in) innovating. They certainly have had to spend effort in fighting off threats. MSFT--not at all. One could argue they spent a long time coasting (or even going backwards) and they're still doing just fine. This is not to say that MSFT is a lock, but they're going to be making money for many years yet.
Cisco is a bit trickier. They have a decent moat because of the numbers of people out there who manage them who know nothing but cisco, as well as the overall installed base, but since they do not have the numbers MSFT does in terms of actual users, these could change more rapidly. Thing is, you gain benefits from having a relatively homogeneous environment in a business, so moving from Cisco to something else has to be done in pretty large chunks, and that entails risk.
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To some extent isn't this the same discussion that could be had with respect to any of the other old tech guard such as CSCO, MSFT, INTC, HPQ (do they still count?), etc. They are all cheap on a quantitative basis and if the future looks anything like the past. But there does seem to be some risk that they are all value traps at this point.
To some extent, perhaps. The big differences is in the size of the moats. No one *needs* to buy Dell for much of anything. I would argue that people (businesses, more often) need Microsoft, and then to a lesser extent Cisco. The other two are more similar to Dell.
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Bringing them back onshore (legalizing them again) might just raise the overall tax revenue. After all, it's not like you can't have one today, you just have to have it offshore.
This is incorrect. Whether a corporation is onshore or offshore makes no difference.
http://www.irs.gov/businesses/small/article/0,,id=106572,00.html
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They're bulldozing houses now?
Next they'll throw money from helicopters..
If they are in that bad of shape, they aren't going to get any money out of it anyway. Cheaper to rebuild on the plot, and probably easier to sell that way. When houses are abandoned, they go bad pretty quickly, so this is not unexpected that a significant portion of the idle housing stock may simply disappear.
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When you see something like this you have to wonder if someone knows something we don't?
Agreed. On the other hand I have seen cases where companies go down significantly before results then come back with amazing results, so it's somewhat hard to tell.
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From what I've witnessed in America, all internet access providers have been deliberately slowing the flow of bandwidth and preventing innovation from the use of that available bandwidth, to flourish. Internet2 is just the opposite and that is what the U.S. needs.
What does this have to do with America in general? The government doesn't control those companies.
You seem to be talking about India and America as some big monolithic things. This is obviously inaccurate. And telecom is only one sector.
Here is an example of a great business that would be an excellent model for the Bells. If America had this company instead of AT&T or Verizon, we'd have a truly completely internet, not this greasy mess we have now.
Of course, we have a greasy mess in telecom because we were here first. Startup periods are always easier. Having abundant and cheap labor resources is a huge benefit for those other countries--in most cases they succeed in spite of rather than because of their overall structure. India especially, but China too.
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America is restricting innovation, India thrives on it!
U.S. Lobbyist pay off politicians to stifle progress and keep Americans trapped in 2 year contracts.
Hopefully Prem Watsa can assist Indian businesses, to show America how to advance and grow into the great internet brave new world.
Fairfax will also selectively incubate companies or build platform companies from scratch alongside partners—a strategy the firm follows in global markets
Cisco Anthem - Welcome to the Human Network
http://www.youtube.com/watch?v=hAdfYgEapT8
Are you seriously saying that India has fewer barriers to business? Maybe Kerala, but most places there have HUGE requirements in greasing the right palms and bureaucracy.
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It's driving with your head in the clouds.
I would like to be a little more forceful: "Its driving with your head up your ass." The video is as fine an example of hype as there is.
Yep. Add on top of that that the kids in the back would have been happier with something in their laps, like, say, an iPad (or even a xoom!)
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Same statement is true for every stock that trades someone always thinks its undervalued or they would not buy it the sellers motives are myriad but the buyer ALWAYS thinks it is undervalued.yes I know what you mean.
But, how about the times an ETF or index fund has to buy or sell-I would think they would buy or sell indisciminate to price + value.
Not to mention people getting carried away with momentum or emotions or trading charts...there are lots of people out there that don't ever consider what fundamental value might be.
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I have also seen companies buyback there stock overseas if they are trading on a foreign exchange.
I assumed that would be treated as a taxable repatriation. Otherwise, why aren't they all doing this? Company can then issue shares on the US exchange. Buy back on one, issue on the other. Repatriated cash. No, this must be taxable, that's too much of a scam.
My guess is that they'd have to hold the shares in the subsidiary and not cancel them.
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Someone mentioned that the company has been around for like 14 years or what have you...so was Enron. I have no stake in this one either way. It is way beyond my circle of competence.
This is true, but it does make it rather less likely for these specific china-based frauds.
I have no position and do not expect to have one. China is too difficult an environment for me.
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I think this is only for the cost of credit card processing for the amount of the tip.
i.e. if you get a $1.00 tip via credit card, then you only net $0.98 after the processing fee (on the tip amount only!) is deducted.
I've worked as wait staff in the past. I really don't think this is a big deal.
Ask yourself--why should the business subsidize the portion of the credit processing fee that would be attributed to the employee's tip?
Simple. The employee gets no say at all in whether or not they take credit cards.
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Could also be his kids were brats. We'll never know. Cheers!
Though this would also probably point out a parenting deficiency...
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For those of us who use RSS, every post is logged and permanent. So if anyone wanted specific comments they can be found if needed.
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I have INTC calls so I'm happy to see Apple now choosing to go with Intel chips for iMacs.
Other interesting news today -- RIM announcing that Microsoft BING will replace Google search and maps in Blackberry.
Oh, you mean iPads and other iStuff? I hadn't seen that yet. The main iMac/etc line has been intel for some time.
Though that doesn't make sense to me...unless they just mean that Intel manufacturing is going to make the Apple owned processor designs. They bought a lot of IP for that, and the manufacturing is a low-margin business so I wouldn't get too excited about profits there.
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I have INTC calls so I'm happy to see Apple now choosing to go with Intel chips for iMacs.
Other interesting news today -- RIM announcing that Microsoft BING will replace Google search and maps in Blackberry.
Eh? Macs have been on Intel for years now.
China to install more than 2,000 gold ATMs
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