MG2014

I feel, as with everything Charlie says, it's a little more nuanced. BNSF is an asset heavy business that works. I wonder if he's making a similar point to Buffett's old story about the textile business showing high IRR equipment upgrade projects, only to find out that the competitors thought the same thing about their own projects and competed any potential gains away. Similarly, if I'm renting out a crane and the guy down the street purchased the latest and greatest crane to rent out, I'm going to have to take my year's income + the depreciated crane to buy a new crane or else I'll lose all my business to his crane. I'm not really sure if that's how it actually works though

Micron is in an oligopoly with very low chances of new entrants, but is it more of a 'construction equipment' type business? 2012 2013 2014 2015 2016 2017 2018 2019 Capex/Ebitda 104% 57% 49% 72% 181% 48% 45% 77% Depreciation/Ebitda 131% 83% 39% 47% 93% 39% 24% 42%

Thanks. Buffett has talked about maintenance capital being much larger than depreciation for BNSF. Why is this not the same as "all the profit sitting in the yard"? Is it because it is only a limited period of high investment (upgrade cycle), with and the rest of the time requiring less capital?

AGM 2008: Yeah. I think there’s one metric that catches a lot of people. We tend to prefer the business which drowns in cash. It just makes so much money that the main — one of the main — principles of owning it is you have all this cash coming in. There are other businesses, like the construction equipment business of my old friend John Anderson. And he used to say about his business “You work hard all year, and at the end of the year there’s your profit sitting in the yard. AGM 2003: Yeah. And if you take a business that is a good business, but not a fabulous business, they tend to fall into two categories. One is the business where the whole reported profit just sits there in surplus cash at the end of the year. And you can take it out of the business and the business will do just as well without it as it would if it stayed in the business. The second business is one that reports the 12 percent on capital but there’s never any cash. It reminds me of the used construction equipment business of my old friend, John Anderson. And he used to say, “In my business, every year you make a profit, and there it is, sitting in the yard.” And there are an awful lot of businesses like that, where just to keep going, to stay in place, there’s never any cash. If it's earning 12% return on capital, is he saying most of those earnings go to debt service and not to the equity holder? Is he saying something about maintenance capital requirements needing to be higher than depreciation so no free cash available? Is it something around a constant upgrade cycle for construction equipment because of the competitive low-barriers nature? I guess I don't understand how the construction equipment business actually works

Any thoughts on how to get a mortgage without buying an actual home? Or said differently, how do you get non recourse debt at current interest rates, at something crazy like 4x your equity (80℅ LTV) without having to buy property?

Two hour commutes aren't unheard of in the south. I also think you're putting too much weight on the people at the other location. I'm not sure how long you worked with them in the past, but although they may seem great now, you might eventually realize that it's just as screwed up over there. It sounds like you don't particularly like your current coworkers, would you be happier if you simply went to another hospital in the area that didn't require you to move?

Another release from sageworks showing the least profitable private businesses. The most profitable article was posted earlier. http://www.forbes.com/sites/sageworks/2014/08/31/the-least-profitable-businesses-in-the-u-s/ Does anyone know any other sources for similar research? It would be interesting to compare their findings, get a more comprehensive list, etc.

Do you guys use any resources for finding out how much your favorite hedge fund managers have in AUM and and how much of that is in cash? Aside from pulling the information from different articles and interviews. It'd be valuable to get some insight on how the pros are viewing the equities market as a whole.

That's my goal too, but have you thought about SEPP or a ROTH IRA convesion ladder?

Would you choose ROTH if you were younger and expected your salary to go up a bit? Or if you just had a bad feeling about taxes in the future? This picture makes a good case for ROTH. We're pretty low on the tax curve, historically: http://www.ritholtz.com/blog/wp-content/uploads/2011/04/US-tax-rates.png There was another post where someone would do Traditional 401k, roll it over into a Traditional IRA when they could, and then roll that over into a ROTH IRA as they pleased, which let them control how much taxable income they'd have for that year.

Oh yea, I definitely take advantage of the employer match, but let's go with your example. You can still contribute 17500-10000=7500 more to the 401k if you want. Do you choose to contribute the the 17500 into the 401k or just the 10k and invest that extra 7500 in your taxable account if you expect to do much better than the market?

Hi all A lot of you expect to do better than the market over the span of your careers thru your personal investments, and can at the same time afford to contribute up to the 401k max limit of 17500. Do you choose to contribute the max to get the tax break but settle for market returns in your 401k account (due to the limited funds to choose from) or do you choose to contribute only up to your employer match, take the tax hit on the remainder, and expect to do better than the market+tax_hit if you invest the remainder in your personal taxable account? In my example, if I expect my 401k to make 7%, I would personally need to get 12%, assuming a capital gains tax of 18% every year, for my personal investments to start surpassing my 401k (making 7% pre-tax) after 20 years. This is assuming I'll stay with my employer forever and not have the option to roll it over into another IRA. My employer also doesn't allow in-service rollovers or a brokerage window option.