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rmitz

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Posts posted by rmitz

  1. Harry, You fancy yourself a teacher.  Why dont you pay attention to what some of your audience are saying, instead of getting so defensive about it.  Your style turns alot of people off.  I am not the only one.  Alot of board members have stopped engaging you at all due to your abrasive take no prisoners attitude. 

     

    You talk so much about learning but refuse to learn anything yourself.

     

    Thats the last you will hear from me on this topic.

     

    You really should start your own board or rejuvenate your blog.

     

    You clearly haven't read the outpouring of support I've had on this thread and on the "Best Insurance" thread. Why not learn to speak for yourself and not pretend to speak for others?

     

    Harry, that's because most people who agree with you but think that your style sucks just keep silent at this point.  Talk about confirmation bias.

  2. As total number spent on R&D, Apple spends much more, as they have over 4x the revenue of RIMM. With revenue approaching 90 Billion, Apple is spending well over 2 BILLION a year on R&D!

     

    Right, this is a huge point.  MSFT is a bit different in that they've been investing desperately trying to throw stuff at the wall to see if it sticks.  Apple has a pretty disciplined approach, but they still have a huge amount of money to work with so the absolute numbers are still quite large. Done properly, there's a huge scale advantage.  If you can get your organizational culture to work right...there are huge advantages to being big.

  3. At this point I am looking to sell some physical silver, but I don't know places around here that will give me anything close to spot. Silver and gold are no longer currencies, so it is pretty painful to convert them.

  4. And defining $250k as rich is a ridiculous statement.  You lose a lot of street cred with me on that.  If I made 250k one year out of 10 but spent it all, does that mean I am rich?

     

    It is true that the tax system is biased on the calendar year adjustment.  I could envision better systems, but it's what we have for now.  Now, I wouldn't say that 250k should be taxed the same as 1M.  That is the opposite of what I said.  However, I think it is obvious that I am making the assumption most people do:  250k/yr as a *regular* amount. I was responding to your soundbite with a soundbite.

     

    Increase freedom and responsibility.  I think we all know what that means.  I could love my life just fine with much more limited government services.  Here is what I see as necessary - police, fire dept, infrastructure, military to protect borders, courts, food water and air regulators.  

     

    I actually do agree with this point in the abstract., but I think it actually gets more complicated to actually define a system, let alone roll something out.

     

    I know this doesn't capture everything but the government wants their hand in your pocket for everything and provides little in return.  As a second generation American I see all the money my family and I have paid in and what is returned and it is downright disgusting.  

     

    Personally I'm in generation 1.5, and I look around and see some of the opposite.  I also want to see more money spent on infrastructure. I don't see having clean running water, safe food, restaurants, roads everywhere (even if they are beat up) as "little".  The reason for any sort of redistribution of wealth scheme is based on randomness.  First, make the assumption that you could be born anywhere in the country, as anyone.  Now, design a tax system and a government.

  5. Stop ridiculous housing subsidies that drive up prices for first time home owners and the poor

    Stop burning food

    Stop defending the world for free

    Stop subsidizing the world with pharmaceuticals

    Stop trapping capital a and jobs overseas

    Stop taxing the crap out of the "rich" making 250,000 and develop a real AMT that taxes those earning over 10 million a flat 35 percent

     

    Sorry, 250k is rich.  If it's not rich where you are, that's a choice.  The government isn't responsible for your spending choices.  The AMT needs real reform.  Flat taxes are not the answer.  We have computers now--a completely continuous function is the way to do graduated income taxes.

     

    Stop the ridiculous sarbanes oxley

     

    Reform, not repeal.  We also need glass-steagall back.

     

    Stop education subsidies for college that drive up prices

     

    Yes and no.  It's not like universities are rolling in dough.  Salaries for stellar administrators often just meet industry averages, and sometimes not even then.

     

    Stop any government employee from retiring at 40 with an 80,000 annual pension

    Stop social security because it is ineffective and inefficient

    Stop Medicare as it will ruin the country

     

    Not having universal healthcare is a huge burden on business in this country.  Dealing with a variety of different insurance companies is a complete pain in the ass.  Most people are satisfied with their healthcare in this country either because they don't use it or they don't know any better.  People here cry about "waitlists", but when you have to wait 3+ months to see a specialist, I don't see much of a difference.

     

    Start focusing on freedom and responsibility

     

    Sure.  What does this mean, though?  It's easy to put out platitudes.

     

    Start Importing sugar from Brazil

    Start an energy policy with nat gas at the core

    Start subsidizing 6'4" blonde males with cash

     

    I'd prefer a slightly different selection here...

     

    Start a balanced budget amendment beginning soon (2014).  You can only spend what you raised the year before.  No exceptions.

    Start Putting Fannie Mae and barbie frank in runoff ( yes barbie frank)

     

    A completely balanced budget is too primitive.  There are legitimate times when you need to spend somewhat more; these times need to be balanced by running surpluses at other times.  Now, how do you legislate that?

  6. Creating wealth, though, is not a zero sum game and as someone gets wealthy they are also benefiting others in tandem. You don't get to take what you don't give.

     

    Something I was thinking about lately is how planned obsolescence amounts to a kind of extra confiscation of wealth from the purchasers back to the product creators. The fact that the wealth that has been created has an artificial time limit on it seems...not fraudulent, but unethical at least.

  7. Easy to say when you are in the US. Some times shit sucks. Haiti was pretty bad. This looks pretty bad. I shrug most things off and believe people are overreacting but I wouldnt go to Tokyo right now or in the next year or so, and I am going to Nigeria for work in April. Trust me I dont spook easy, but the Government has no incentive to level with its folks and the US "Experts" are telling everyone its pretty bad.

     

    Reports are very mixed.  I know some people over there (including someone who just went back after the quake) and mostly I'm hearing that things are fine, though they are different from normal.  A lot of news reports seem to be sensationalized.  I am more worried about the new reports we're getting from our government that feel the situation is worse than the Japanese are claiming, and actual numbers seem to steadily be getting worse.  Personally I'm taking it as a time to pause and reflect.

  8. Sanjeev,

     

    Very disappointing indeed that they have so little in terms of robot help or other backup system to cool the plant down.

     

    What I also find truly disappointing is that no one in that company apparently spent anytime looking at the potential impact of a tsunami on that plant sitting by the ocean. A big wave basically flooded the diesel generators used to provide backup electricity. Risk analysis should have highlighted that easily and the solution is not that complicated (relocate diesel generators, provide water tight enclosure, look at other systems that could stop functioning with flooding, etc.)

     

    The tsunami hitting Thailand and other countries was on December 26, 2004!!! The warning signs were all there for a long time and no one took preventative action. It is probably no better in most countries.

     

    Cardboard

     

    I actually read that they did do this analysis, and that recommendation was actually made at some point, but it did not happen.  Unless I'm thinking of a different site, they had some planning for the tsunami, since the generators were behind the sea wall, but they trusted that the wall would not be breached.  A little bit of hubris with a dramatic effect.

  9. I am actually thinking that this might be the shock that ends the Japanese Malaise. 

     

    That is what people thought in aftermath of Kobe earthquake back in 1995.

     

    The scale here is not comparable.  And suppose it was and this doesn't do anything significant to their economy--then we aren't looking at some kind of economic cataclysm, either.  And as I said, nothing is certain.

  10. I am actually thinking that this might be the shock that ends the Japanese Malaise.  Rebuilding--if anyone can do that, and do it quickly, it's the Japanese.  It could be a massive economic injection.  Even the currency depreciation  from their monetary printing would probably be a good thing--their currency has been recently been high anyway.

     

    It is a testament to the Japanese preparation and engineering that a seismic event of this magnitude has been dealt with this well, though there are always some mistakes.

     

    Any loss of life is tragic, but life will continue.

  11. I agree with Myth, but it's true that if you're older you have different requirements, and might want to be slightly more conservative.  Personally, I feel comfortable just not being leveraged like I was the last time (I learned my lesson then).  If things go down 30% from here, I won't be sweating. I won't necessarily have as many bullets as the people with all the cash, but I'm comfortable with that too.  My cash position will be dictated by my ownership stakes coming close to full value and whether or not I can find places to put the money.  I may lean a bit more towards arbitrage situations, but I think that's about it.

  12. Interesting results from the poll.  There is no pattern to the results; no up or down trend; nothing approaching a normal distribution; no kurtosis.

     

    This implies that the information content of the board's wisdom on this subject is low, despite the investment acumen.

     

    I think people are also interpreting the question differently.  What you need for retirement at 70 is quite different from taking early retirement in your 30s.  If you're aiming to retire young, you can go back to work pretty easily if it looks like funds aren't keeping up.  You're also probably going to have some other sources of income.  Part-time consulting, a small business, etc.  All these factors have a dramatic effect on the amount of money you need.

  13. Nope.  That's not what I'm thinking of.  I'm thinking of something completely unrelated to Social Security.  I agree with what you say that monkeying around with Social Security to turn it into investment accounts is the wrong approach for the reasons you cited.

     

    I swear he proposed this, but perhaps I'm remembering incorrectly, but what I remember is that at some point he proposed a savings vehicle where we could make unlimited contributions at any time, it compounds tax-deferred, and we can withdraw money at any time.  Gains withdrawn would be taxed as income.  So, with no mistake, you only pay taxes when you intend to spend money.  Very simple to administer -- they already have a system for calculating how much of your withdrawal is actually gains versus return of capital... it's called the IRA account.  Very clean.

     

    People can't spend their money without paying tax, but only pay tax on what they intend to spend.  The benefit of tax deferral is that taxation doesn't get in the way of trading decisions, so you don't get inefficient allocations of capital merely for tax avoidance reasons.

     

    I looked up a bit, and Bush did propose a bunch of new deferred Roth-like accounts to replace the existing retirement accounts structure, but all of them had contribution limits.  I can't find information pertaining to an account with unlimited contribution limits.  That doesn't mean it didn't get discussed, though, seems like it would never make it through congress.

  14. That is funny!  I was also quite amused at the talk of Whole Foods in a Sears store!  I mean Whole Foods?  really?  I guess it makes sense in that it's SHLD's answer to Target and Walmart's "supermarket in a store"?  Kind of reminds me of was it la Quinta hotels? The famous Peter Lynch investment that decided to drop their hotel restaurant (hotel restaurants are almost always money losing parts of the business) in favor of providing space for a Dennys (I think it was Dennys).  Definitely an interesting move.  Lampert rarely talks about focus on giving customers the cheapest goods, always about delivering customer service, which makes me think Whole foods kind of fits into that strategy?  Will be interesting to see how it plays out...

     

    I don't think Whole Foods will be willing to colocate in Sears stores which are depressing, grimy experiences.  So that would require a ton of capital investment, which Lampert seems to be shying away from at this point.

     

    That said, if they did make the investment I think it would be huge for both companies.  Sadly, I don't have a Sears or K-Mart any closer than the existing whole foods, but...

  15. Txlaw - the argument of adding brackets is that it adds complexity.  If you still use a Tandy or Commodore 64, there may be some merit.

     

    Treating people earning 200k the same as 200m (same bracket) doesn't make sense to me.  You may as well go flat tax.

     

    Changing corporate tax policy is a must.  We can't have unfavorable wages AND unfavorable taxes.  Herein lies the exporting of jobs.

     

    I am adding nothing new, just retiring some points in my home office.

     

    Agreed, there's no reason not to have more brackets.

     

    1) We used to have WAAAAY more brackets and people dealt with it just fine.

    2) In today's day and age there's no reason just to use a simple graduated mathematical formula rather than brackets.  Make it a continuous function and people aren't going to work so hard to figure out when they should start hiding money and such.

     

    I don't think that's it.  He had the opportunity to get behind Bush's "personal savings account", but he spoke out against it rather (as I recall). 

     

    The personal savings account would have allowed us to compound our investments tax-deferred and our gains would only be taxed when we withdraw them for consumption.  Basically, similar to IRA accounts but without the restrictions on contributions and withdrawals.

     

    Wasn't this specifically about the social security money?  In which case, we've seen how that works out for people--it's a safety net, not a retirement fund.

     

    He might mean well, and he might not realize he does it, but he effectively says that the rich don't pay enough tax yet he has picked the very vehicle that best shelters himself from these taxes!  Conveniently, he neglects to speak out against what shelters his dividends and instead proposes to raise the tax on mine!  That's why he pisses me off -- there are many reasons why I admire him overall, but on this issue it's rather appalling.

     

    Berkshire pays a ton of taxes, at generally higher tax rates than many other companies.  They don't hide their taxes in offshore subsidiaries (though this is partially because they don't have much overseas, but that's a conscious decision.) If he had continued running hedge funds he'd probably have made far more money, albeit with far more stress.

     

  16. It is shocking that a money market option isn't available.  Anyway, the bond funds would have to be evaluated based on the duration of the bonds; if they're all short term or intermediate, loss of capital should be limited.  If we're talking a mix or long bonds, I would probably just go with the s&p 500, unless the international fund were in some very specific areas.

  17. Hell we agree on the solutions (they are obvious) but I wont give a man credit for lip service and screwing over teachers. Teachers dont make squat and deal with brats all day. They have earned their keep and deserve a full pension and crappy pay inmo or higher pay with a 401k. Cops and Firefighters deserve a full pension, but only after working till 55 or 60 or if injured in duty. That pension should be a rational amount and shouldnt have much to do with the last year of salary (no gaming).

     

    Good teachers are worth way, way more than they get paid.  The only change I would make is that crappy ones should not be protected by their unions.  I'd like to see a more merit-based pay scheme but it's pretty hard to do in an objective, equitable fashion.

  18. Henry Singleton?

     

    I second that.

     

    As for one of the best long term stock investor of our times, I would say Shelby C. Davis.

     

    As for one of the best conglomerate builder of our times, I would say Brian Joffe.

     

    The one thing that really surprised me about Shelby Davis was that he really used a ton of leverage.  If there had been a downturn towards the beginning of his investing career it could have been a very different story.

  19. Buffett has said there are only a few times in someone's investment career where it's fairly easy to determine if the market is priced very high or very low. Otherwise, it's not good to worry about it much. That's the stand I'm taking because I can't time it (usually).

     

    Agreed.  Also, I just thought we were all sick to death of talking about macro. :)

  20. Beyond the network effect, there are also switching costs. Facebook has your photos, profile info, interests, and (for many people now) your email. If you are under 25, FB is probably your primary means of day-to-day communication with other people. Think about what that means. For many users, leaving FB for a competitor would far more painful than switching banks. Losing access to FB would be like losing access to their phone.

     

    Switching costs, to me, will expose Facebook to antitrust scrutiny, especially after they go public.  Facebook is notorious already for doing "one way" imports of data without giving any good way of getting your information back out.  I haven't put anything in Facebook that I don't consider public information, and privacy issues will prevent me from ever doing so.  Even more scary is that your privacy is no longer in your control--your friends have the ability to expose massive amounts of your private information, so choose your friends carefully.

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