KinAlberta
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Posts posted by KinAlberta
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Best of luck!!!
Today, my best friend (since we were 5 yrs old) who has long had crohns is now fighting cancer in his lungs. He's never smoked but had kidney cancer which after being given the all clear, returned in his lung.
I chalk it up to a horrible domino effect of colitis, then crohns, massive amounts of drugs, multiple surgeries, multiple stresses, loss of a good job (where he was highly respected) and life slowly approaching poverty due to LTD insurance that doesn't protect him from inflation...
I think Buffett's quote below could be modified to include: equally worthy but unable to work hard citizens. (Through no known fault of theirs, society still seems to punish them):
"A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention."
- "How Inflation Swindles the Equity Investor", Warren E. Buffett, Fortune May 1977
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I seem to recall what you are talking about. Googled Buffett and asinine for some numb'ed down mind of mine reason.
Maybe something here will bring you closer to it:
https://valuebin.wordpress.com/2011/01/27/warren-buffett-on-investing-small-sums-of-money/
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Brk - about a quarter century now. Return? - It's been ok - bought it thinking that if it did better than a GIC return I'd be happy. I've been happy.
Held some other positions, like FFH, Cdn banks, etc. for a long periods too. Finally parted with last of FFH just last year (so maybe close to 20 yrs on a few shares). Bailed on long term positions in banks (TD etc.) by the summer of 2008 and never went directly - foolish me. (Bought back via low performing more diversified products like ETFs, dividend funds and a closed end bank fund and now out of them all for several years now. )
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Here's a couple Zacks generated stories on shares I owned in the early 2000s and periodically check in on. Eight days and a few pennies movement in the stock and no other operational news that I could see yet Zacks flips back and forth... just like my post here - it's all more clutter. :-)
Absolute Software (ALSWF) Cut to “Sell” at Zacks Investment Research
Posted by Lucas Kauffman on Mar 24th, 2017
Absolute Software (NASDAQ:ALSWF) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Friday.
Absolute Software (ALSWF) Upgraded at Zacks Investment Research
Posted by Joanna Charbonneau on Mar 16th, 2017
Absolute Software (NASDAQ:ALSWF) from a sell rating to a hold rating in a research report sent to investors on Monday morning.
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Let me provide a real world illustration of what I'm talking about. Canada's M1 over the last 10 years from 2005-2015 has doubled.
https://fred.stlouisfed.org/graph/?g=d4Co
Why? Did the real economy produce twice as much? Canadian GDP grew 32% over this period. Why such a huge increase? Can anyone explain the necessity of this and does no one think this is linked to what is going on in Canadian housing?
The Canadian housing bubble has been greatly enabled by the fact that banks can increase the supply of credit at will without any need whatsoever to attract corresponding loanable funds by increasing interest rates. Banks take no responsibility for interest rates and the B of C takes no responsibility for the money supply. This is how we can arrive at the absurd situation observed in Canada where interest rates managed to decrease even as the demand for mortgage loans grew!
I'll ask one question: where did the money come from that Canadian banks used to fund the massive increase in mortgage debt? My claim is that Canadian banks basically created this money out of nothing. This is the problem.
"My claim is that Canadian banks basically created this money out of nothing."
Don't confuse the banking system with individual banks when it comes to money creation. The old; loans beget deposits which beget loans which beget deposits... Also, I can't recall what has happened over the years to the reserve ratios in terms of expanding and contracting money supply.
However, any buying of banks' crap holdings at a "mark to maturity price" (as was discussed in the depths of the 2008/09 crisis) by the central banks raises a lot of questions in my mind about gifting value to the banks - aka money creation.
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Again some minimizing the impact of higher taxes... Has to be a positive and favour investment in Canada, right? Are these guys truly investors?
What about the U.S., Belgium? How many businesses and business people have left France to go next door because of this mantra of "let`s punish the rich!"?
Unreal!
Capital gains only arise because someone has taken a fair amount of risk to earn them. There is no guarantee and a wipe-out is always possible. The current tax structure made sense with interest being the highest taxed, then Canadian dividends (to favour Canadian investment vs other dividends), then capital gains. It really goes after the risk/reward chart when you think about it.
If you increase taxes on capital gains, then you add a cost to the equation or reduce reward. There is no way around it while the risk to earn said gains remains the same. And it does apply to bonds too since a capital gain only arise when you buy bonds under par (risky) or if interest rates go in your direction.
Cardboard
"Capital gains only arise because someone has taken a fair amount of risk to earn them."
Maybe. Based on the "risk/return dogma, best read the thoughts of the guy that in looking at his returns must have taken more risk than near anyone else on the planet:
A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention - Warren Buffett
Some material things make my life more enjoyable; many, however, would not. I like having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.
My wealth has come from a combination of living in America, some lucky genes, and compound interest. Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.) My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious.
The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1% of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs. My pledge starts us down that course. - Warren Buffett
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Folks talking about cap gains in Europe need to understand the system better. Belgium and Luxembourg is ZERO% capital gains for managing personal investments and capital gains. Netherlands is 1/3 of 4% per year flat rate or 1.3% (comes out to far less than regular cap gains taxes). UK and Ireland are ZERO% for non-domiciled residents which is probably anyone who isn't British or Irish by birth. Switzerland is also very very low if not zero. France is 50 to 65% off sale for holding shares 2 years (or 8 years at the higher rate) or more (easy for most investors) so effectively like 15 to 20% at the top rate. There are countless other examples like this. Even the most socialist countries realize over-taxing capital is a big no-no. Probably Canada didn't get the memo, which is scary. And the Bill Morneau who keeps talking to the G20 about soaking the rich (making over $150,000 US is considered rich) and how we must make the upper middle class pay more, while the world is reducing taxes or has several reasonable exemptions like long-term stock holdings, does not inspire confidence. As they say, socialism is great until you run out of other people's money - or those with the money reach the tipping point and decide to just leave.
Low taxes on the rich are often predicated on the assumption that the economy that generated the returns, and very likely assisted in generating those returns, will eventually see some benefit. However, if you keep people's taxes really low and they accumulate a lot of wealth, and then pack up and leave in retirement, the tax jurisdiction basically lost its opportunity.
I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It is like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die." - Buffett
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While now in retirement, I hope he keeps offering up his opinions:
FEBRUARY 13, 2017
Bob Rodriguez: Trump Might Be Acting; Huge Financial Crisis Still Looming
The legendary money manager, recently retired, is as candid as ever in an interview with ThinkAdvisor
"...
In 2009, you said that if nothing was done about the fiscal situation, we’d be facing a huge crisis with total debt outstanding of about $20 trillion to $24 trillion by 2018. Still think so?
Well, we’re at $20 trillion right now; and by the time the presidential election of 2020 occurs, current budget estimates say the U.S. debt is going to be at least $23 trillion — without anything that Trump does. Over the next five to 10 years, if deficits continue to rise and the debt continues to expand, will that lead to the 4% GDP growth that he envisions? I think it’s a low-odds outcome. This is a ticking time bomb.
The president says he wants to spend money on upgrading the nation’s infrastructure. If he does, how can he keep the deficit down?
If you don’t have sufficient money in your family budget, you make choices about what you’re going to spend and not spend on. That’s what’s going to happen [regarding the U.S. deficit]. If not, the debt will explode beyond what it already is.
What’s your take on the Federal Reserve?
I wouldn’t give [chair] Janet Yellen the responsibility of managing a hot dog stand! She’s as clueless as [chairs Ben Bernanke and Alan Greenspan] were. With the Fed’s insane monetary policy and distortion of the financial system for the last eight years, they haven’t accomplished any real economic growth.
What have they done?
Repression of interest rates has helped the budget in the sense that it’s keeping rates low and has driven the financial markets. But it’s going to end with many unintended consequences. Is this a sustainable outcome as you’re quadrupling the debt of the United States? The odds are..."
Additional cross-references:
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No not at all. That's not the point though.
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Interesting I'd say, in light of the earlier Imprimis article I posted about the lack of mobility in the US compared to Canada.
GMO’s Grantham Goes Buffett on Taxes, Trump, & Inequality | Institutional Investor
...Over the past 10 years, co-founder Jeremy Grantham has come to believe that corporations are choosing short-term profits over the financial health of their employees. “Nowhere was this better demonstrated than in their dispensing with the jewel in the crown of the old social contract, the defined benefit plan,” Grantham wrote to clients. Many of them, it’s worth noting, are defined benefit plans. “This was done on the stated grounds of unaffordability” even as corporate profits hit highs. Workers had been surprisingly inured to the increasing power of big corporations until, he continued, the election in which they chose Trump over Hillary Clinton. ...
http://m.institutionalinvestor.com/Article.aspx?ArticleId=3657117
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Three Ways Warren Buffett Is Not A Typical Billionaire
JAN 31, 2017
1. His home:
2. His car:
3. His diet:
“In my entire lifetime everything that I spend will be quite a bit less than 1% of everything I make,” Buffett explains in the documentary. “The other 99%-plus will go to others because it has no utility to me, so it’s silly for me to not transfer that utility to people who can use it. It’s doing me no good.”
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Still, instead of holding cash, holding the market generates fairly stable dividends and that market position can be readily sold to purchase other specific assets as needed. What about the optionality of the market position plus it's higher probability of growth (in simplistic terms that is).
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Scott Adams teaches you about Trump's latest masterstroke, immigration.
http://blog.dilbert.com/post/156532225711/the-persuasion-filter-and-immigration
This was a good read. I've looked back over my adult life and now see that many of the things I hitherto viewed as "big mistakes" were really instances of me being a master negotiator. I'm going to call Tony Schwartz and see if he'd be interested in another ghostwriting gig.
I don't support Trump but I respect that there are a lot of intelligent people who do. I simply fail to see how his supporters continue to pretend that his mistakes are actually "masterstrokes" of strategy. He is an intentionally ill-informed contrarian who makes decisions quickly and without much detailed analysis. This leads to big mistakes and they should be viewed as such, however good the intentions may be.
Incidentally: Whenever I imagine Steve Bannon whispering in Trump's ear I think of Wormtongue from Lord of the Rings. Which begs the question.... who is Saruman?
I didn't vote.
Just wanted to comment that his decisions could turn out to be both big mistakes - or big wins. Randomness does that and I suspect that a whole lot of highly informed, carefully strategized decisions still go off the rails and turn into huge mistakes. (It's a bit like trying to beat the S&P500 over time. Almost no one does it successfully. Life is just too complex and interactive.)
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A couple years ago I was astounded to learn that most social work is very much "rescue" orientated too. Apparently any service intervention that lasts more than six months is unusual.
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You say it wasn't a terrorist attack but a hate crime. I always get so confused on the semantics of all this. Sounds to me like the guy tried to kill a whole lot more than the six he did kill.
According to this article terrorism now has to be aimed at an entire nation.
Recognize the Difference Between Terrorism and Hate Crimes
By Frederick M. Lawrence • 06/14/16
http://observer.com/2016/06/recognize-the-difference-between-terrorism-and-hate-crimes/
However, the Oxford dictionarydoesn't set that broad of a standard:
"The unlawful use of violence and intimidation, especially against civilians, in the pursuit of political aims:
‘the fight against terrorism’
‘international terrorism’ "
https://en.oxforddictionaries.com/definition/terrorism
Definitions of terrorism
https://en.wikipedia.org/wiki/Definitions_of_terrorism
When is a Hate Crime not a Hate Crime? When it’s a Terrorist Act…
18TH JUNE 2015 BY JOEL DAVIDGE
https://www.scenesofreason.com/hate-crime-vs-terrorism/
It always seems like splitting hairs to me but I know the intent really does matter, though, if a hate crime strikes terror into a group, I'd probably label it it terrorism.
On Hate Crime and Terrorism
On 22nd December 2015 by David Brax
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The terroristic aspects of hate crime
Hate crimes, like acts of terrorism, targets not only the immediate individual victims, but also the groups to which they are connected. The typical and often intended effect of both types of crimes is to strike fear in the group, and to remind them of their heightened risk of further victimization. The “secondary harm” of hate crimes is frequently recognized as the justification for penalty enhancements. Both are also typically expressive of certain attitudes and/or political ideals.
http://www.internationalhatestudies.com/on-hate-crime-and-terrorism/
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I keep hearing about this guy but what are his historical returns?
After big concentrated investments in RFP, SD, BBRY, and SHLD, I can't believe he's still in business.
Has SHLD actually been a dud?
Some investors have got the remains of SHLD, Seritage and $32 in other distributions according the Berkowitz. Not sure what that amounts to though
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"For those that are unfamiliar with Canada and see it as heavily left leaning..."
Your post highlights that even Alberta is heading towards heavily left leaning...
Cardboard
Or like the anti-free trade (anti-capitalism) shift Trump represents, maybe the world is just getting less ideological and more pragmatic or practical. Alberta's experiment only survived the good economic times and as soon as the the downside of economic markets hit, so did the realization that markets can create not only a whole lot of winners, but also a whole lot of losers.
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For those that are unfamiliar with Canada and see it as heavily left leaning, some more trivia: My province had a flat income tax, one of only a few in North America. Plus our province also has no provincial sales tax (just the 5% federal sales tax).
I used to agree with the flat tax but no longer agree with it and think the Conservative and NDP governments were wise to end it. The left leaning NDP has raised larger corporate taxes but also cut small business taxes. (Personally I'd work towards eliminating all direct corporate income taxes but the NDP was wise raising them in the current economic environment and within the current tax regime structure..)
Alberta budget: Goodbye flat tax! Province turns to progressive tax | Calgary Herald
..
One of the signature moves of former Tory premier Ralph Klein and provides political ammunition to his opponents as he prepares to call an early election.
While the NDP and Liberals have long called for the government to scrap the flat tax, NDP Leader Rachel Notley and interim Liberal Leader David Swann both said Thursday Prentice did not go far enough in the income tax changes. They believe he should have also raised corporate tax rates, which were left untouched.
“Jim Prentice is asking Albertans to pay much more for considerably less, and he’s putting that burden specifically on middle-income families, and he’s doing that so he can protect his backroom, boardroom buddies,” Notley told reporters.
Eight states had flat income taxes, not sure if they had zero state sales taxes
https://en.m.wikipedia.org/wiki/State_income_tax
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A different orientation:
Peace, order, and good government
In many Commonwealth jurisdictions, the phrase "peace, order, and good government" is an expression used in law to express the legitimate objects of legislative powers conferred by statute. The phrase appears in many Imperial Acts of Parliament and Letters Patent, most notably the constitutions of Canada, the Commonwealth of Australia and, formerly, New Zealand and South Africa. Contrast with "Life, Liberty and the pursuit of Happiness", a spiritually-similar phrase found in the United States Declaration of Independence.
https://en.m.wikipedia.org/wiki/Peace,_order,_and_good_government
A maturing colony being treated as such by the British Privy Council when it overruled Canada's own Supreme Court:
The British North America Act planted in Canada a living tree capable of growth and expansion within its natural limits. The object of the Act was to grant a Constitution to Canada. Like all written constitutions it has been subject to development through usage and convention...
Their Lordships do not conceive it to be the duty of this Board—it is certainly not their desire—to cut down the provisions of the Act by a narrow and technical construction, but rather to give it a large and liberal interpretation so that the Dominion to a great extent, but within certain fixed limits, may be mistress in her own house, as the provinces to a great extent, but within certain fixed limits, are mistresses in theirs." - Lord Sankey, 1929?
In Canadian law, the living tree doctrine (French: théorie de l'arbre vivant) is a doctrine of constitutional interpretation that says that a constitution is organic and must be read in a broad and progressive manner so as to adapt it to the changing times.
https://en.m.wikipedia.org/wiki/Living_tree_doctrine
Bolding above is mine
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Surprise! We’re more conservative than Americans - The Globe and Mail
Excerpt:
Despite our cherished liberal Canadian values, our behaviour in family matters is a good deal more conservative than that of Americans. Our marriage rates are higher and our divorce rates are lower. Twenty-seven per cent of American children live in single-parent families. And the number of children born to unmarried mothers – especially to women in their 20s – is soaring. In 2010, 40.8 per cent of births in the U.S. were to unmarried women. That rate is growing fastest among the white lower-middle class – the very people who tend to vote Republican and loudly thump the tub for traditional family values.
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Hillsdale College Imprimis
Restoring America’s Economic Mobility
September 2016 • Volume 45, Number 9 • Frank Buckley
Frank Buckley
Author, The Way Back: Restoring the Promise of America
Excerpts:
So it is with Canada, a country that beats the U.S. hands down on economic mobility. Canada has the reputation of being more liberal than the U.S., but in reality it is more conservative because its liberal policies are written over a page of deep conservatism....
"There’s a top ten percent in Canada, of course, but its children are far more likely to descend into the middle or lower classes. There’s also a bottom ten percent, but its children are far more likely to rise to the top. The country of opportunity, the country we’ve imagined ourselves to be, isn’t dead—it moved to Canada, a country that ranks higher than the U.S. on measures of economic freedom. Yes, Canada has its much-vaunted Medicare system, but cross-border differences in health care don’t explain the mobility levels. And when you add it all up, America has a more generous welfare system than Canada or just about anywhere else. To explain
Canada’s higher mobility levels, one has to turn to differences in education systems, immigration laws, regulatory burdens, the rule of law, and corruption—on all of which counts, Canada is a more conservative country."
...With its more traditional legal system, Canada better respects the sanctity of contract and is less likely to weaken property rights with an American-style ...
The paradox is that Canadians employ conservative, free market means to achieve...
...
https://imprimis.hillsdale.edu/restoring-americas-economic-mobility/
Frank Buckley is a Foundation Professor at Scalia Law School at George Mason University..,
He is a senior editor of The American Spectator and the author of several books, including The Once and Future King: The Rise of Crown Government in America and The Way Back: Restoring the Promise of America
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You'll read that portfolios are hedged but you never know whether it's a perfect or imperfect hedge. Often it's far, far from a perfect hedge where a portfolio doesn't match the market but the hedge does. So some 'hedges' can generate lessor gains than that lost in the portfolio and other times more profit well above the value of the portfolio, but only if the right pricing/market conditions are met. Then those hedges have to be closed out and that's just one more variable. (Think of those doom and gloom people that buy loads gold and when things look rough, they hold it even tighter, riding it up and then back down. Same for cash rich companies that hold tight during time of maximum opportunity.)
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I believe I've posted here on the Corner before on this but, my other long standing curiosity is why Buffett builds cash and not a temporary but growing position in the S&P500 while he waits for opportunities.
So... He doesn't time the market but I would guess that the greatest values coincide in down markets and so the cash has greater 'optionality' plus simple value retention to an indexed position. Otherwise though, he misses S&P500 returns and dividends in up markets. So the benefit of having cash at the ready seems to indicate that he sees cash optionality during 'normal' to rising markets as greater than a diversified equity holding. (I'm ignoring all the other opportunities such as bonds, bolt-ones etc)
Anyway, is cash that powerful? I assume he sees (or more likely calculates) greater value between the two in cash in some probabilistic sense. Holding cash for an extended period vs just holding the market... Or of course returning cash to shareholders.
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Berkshire’s Decker Says Buffett Can Take His Time With Cash
by Noah Buhayar, January 18, 2017, Bloomberg
Libor rigging
in General Discussion
Posted
Interesting:
Libor: Bank of England implicated in secret recording
By Andy Verity
BBC economics correspondent
10 April 2017
http://www.bbc.com/news/business-39548313