Jurgis

Even if session times out, I don't lose the message. I just have to hit "Post" again. This is on Firefox on PC with ABP if anyone cares.

I think that directors are overpaid in general for the amount of work they do. It is related to the other recent thread here about proxy voting and management being overpaid. I don't vote against directors' fees in proxies. It's just so prevalent that BRK might be the only company not paying directors a middle class salary for attending 5 meetings a year. I can understand why boards don't do anything to rock the management boat. If I was paid $100K to sit and do nothing, I might shut up and not ask questions either. Of course, nobody would want me on the board. 8) (OT: I was on a board of a non-profit. Hated it. 8) ) I have no opinion about Ben Watsa and his compensation in particular.

OT Like Buffett, for example. ;D I never bought a stock because it paid or did not pay dividends. Not planning to do this in the future either. There was a thread about this a while back. Buffett does not pay dividends but his holdings do, and he seems to insist on it. Note much of what he's done recently is preferred issues that generate a lot of income. I don't want to hog the thread. I agree that some prefs and fixed income securities are attractive investments and I do buy them on yield (to maturity usually, though there are exceptions). But I don't buy them for income and I don't buy common stocks for yield. I am also not trying to say that people are wrong if they do. I just don't agree with your generalization. :) Another comment on this: Perhaps. I don't have disdain for them. I just don't care. :) On other forums though, there is a huge influx of people into divvie payers. So much so that I am afraid of a bubble in divvie stocks. They were great investments in 2009-2010, but I wonder if now they are getting overvalued even more than general market. I did not do a non-anecdotal study though. Best

OT Like Buffett, for example. ;D I never bought a stock because it paid or did not pay dividends. Not planning to do this in the future either.

Tests are for rats! 8) ;D :P So: http://www.humanmetrics.com/hr/JTypesResult.aspx?EI=-67&SN=-12&TF=-25&JP=33 result: INFJ Introvert(67%) iNtuitive(12%) Feeling(25%) Judging(33%) You have distinct preference of Introversion over Extraversion (67%) You have slight preference of Intuition over Sensing (12%) You have moderate preference of Feeling over Thinking (25%) You have moderate preference of Judging over Perceiving (33%) But: http://16personalities.com result: ESTP-T (every single one is opposite to the above) Mind Extraverted 12% - Introverted Energy - Intuitive - Observant 36% - Nature - Thinking 10% - Feeling - Tactics - Judging - Prospecting 6% - Identity - Assertive - Turbulent 31% I answered everything the way I thought about it. I did not try to game the results. LOLZ. ;D As the 16personalities.com result says: "There are no rules". There is no spoon either. 8)

Ah, but once you start talking about CEO salary as relative to company's net income, you can justify huge payouts like most of the Wall Street does. I don't think this is justified even for high performers like Dimon. Honestly, nobody needs a salary of more than $1M a year (and I am being generous here). They might want it or might think they deserve it, but they don't really need it. Of course, there are numerous people who are fine with paying jockeys multimillions in salary or hedgie fees. Though in reality indifference rules: institutions vote for status quo. I've seen some super egregious payouts voted down, but most are not. And it's rather funny to see $20M payout cut down to $10M after vote. "Oh noes, we did not think 10M mattered to anyone, what's the difference."

I always vote the proxies. For most companies, I vote against the executive compensation and against the compensation committee of the board. There are exceptions. BRK and FFH are obvious ones, but there are some more. FRMO. MKL is so so. Don't remember other names of the top of my head. MSFT was exception when Bill Gates was CEO. No longer. What do you guys do with great performers? E.g. Buffett said that he'd pay even more to Jamie Dimon at Berkshire implying that he earns every cent he gets. His compensation is still egregious. I vote against, but what you guys think? I was thinking about this, but this limits the number of investable companies too much for me. :)

Debranding. I am not sure. Personally, I am probably very "non-brand" person: trying to buy stuff cheap, don't watch ads, don't use social media, ad blocking, etc. But... I'll go through concrete examples: - Cars. Bought Toyota Camry used last year. No, I did not do any research to see if Hyundai or whatever would be better/cheaper. I doubt I would have been able to make informed choice even if I did the research. So pretty much a brand buy. - Cat food - we buy some mainstream brands, some small "quality" brands. Both pretty much because the cats eat them. Can't choose something else and risk they don't like it... OK, so half brand. - TVs, Blu-ray players, appliances. Just buy cheapest with OK rating and looking good... But there is not much competition... You go to Lowes or Amazon or whatever and there's only Samsung/LG/Sony (TVs), Samsung/Bosch/GE appliances. It's brand - there are no "no brand" products. - Computers - just bought a gaming PC. Went to small custom company that assembles PCs. IMHO they did a crappy job. So... a great area for debranding, but small companies do crappy job... Big companies also do crappy job (see Dell, HP reviews)... So a wash between brands and no brands - Toothpaste. I buy generic mostly, wife can only use Colgate, don't even try anything else - Shampoo. I don't care. Wife can only use very select brands, otherwise her hair and scalp all get unhappy. So... I am not sure the debranding is accelerating. IMO there's still a lot of power in brands. Yes, I think some areas will see debranding, but some are getting more branded. E.g. Apple products in almost all areas are a brand incursion into no-brand or weak-brand areas. And BTW, I think I disagree with People want to do their own research and make their own decisions now, because it is no longer that hard to do. Yeah, people do it, I do it, but it's not easy. Reviews are all spread out, they are stacked by fakes, people complain more than post positive reviews (I've bought hard drives from Seagate and WD and they all get horrible reviews, since majority of reviews are from unhappy people). It's a mess. And it possibly takes more time (and time cost in money) to do research than to grab the brand and be done...

I don't think we disagree much. :) I might be more skeptical about security for even a high price - I think even for high price it's very tough to avoid holes - but overall I think we are on similar page. Edit/add: I think that a lot of high price security is through obscurity. There are very few bad guys who know z/OS, DB2, etc. to punch holes in them compared to LAMP or haha Windows.

Data security is important, but it seems that both companies and individuals are not willing to pay for it a lot. Of course, part of the issue is that paying a lot does not guarantee impregnability. Part of the issue is that security is really really hard. You can be super smart and think about everything and still if there's a hole in one of 10M software routines, bad guys can get in. Sure, I might be exaggerating a bit, but it's true. Or you have everything nice tight and secure, but then another part of the company sets a server that is naked on the internetz, it gets hosed in a minute and they get to your secure stuff from the inside. Yeah, sure, partition, don't reuse credentials, etc., but... I've tried to play this theme time and again with Symantec, Checkpoint, but without much success. IBM is trying to be security company for enterprises - this might be OK business for them if companies pay top bucks for their security consulting and IT buildout. It's not a pure play though.

Right, I was using a shorthand word "immortal" for "you won't die for very long unless your physical container and your backups get destroyed or subsequent upgrades make you not-really-you anymore and let's account for the thermal death of the universe somewhere too" 8)

Berkshire Annuals from 1955-1973 would be great... I guess I'll also ask for PM about the DB. :)

I was talking about this Solar system. I would give at most 70 years for organic bodies. (And I believe immortality will be here in ~50 8) ). So there's no rush to travel fast when you are non-organic and immortal. We don't really know what will be modus operandi of these beings anyway. (For sceptics, I am not 100% optimist. I see a binary future: there will be huge societal changes because of the above which may lead to pretty complete annihilation. But if we don't annihilate, then the "future's so bright we gotta wear shades". And don't forget: if you have kids, they are likely to be immortal. Or dead. Wish them luck. ;) )

I read through a section of Expectations Investing on Amazon and it does not jive with me and my approach to investing. It is possibly very good for others. I knew a guy who successfully used similar approach to investing I think. Anyway, this means that I won't read the whole book anytime soon. It's gonna go to a big pile of stuff that I'll read when I have the 48 hour days and can go over 1000 pages per day. ;) Thanks for the pointer anyway. 8)

I did not listen to the whole interview yet. I think I have listened to "Arithmetic, Population and Energy" some years ago. Is his point that a steady X% growth results in exponential (oh no, never use this word! 8) ) cumulative numbers? Like compounded interest for investor-types 8) on this forum? Sure, this is known. And people remember this once in a while. Use it. Or misuse it. :) E.g. Apple (oh no, never give Apple as example 8) ) can't grow at 20% growth for X amount of years, since it would exceed GP (global product). I think he says that economies can't grow forever at even 3% flat (after inflation), since at some point you run out of resources, etc. He's right in abstract. However, the growth is not flat; it will slow down. The population growth will stop at some time. It is possible - though not guaranteed - that economic growth will stop around that time. This would require a very different economic system perhaps to deal with perpetual "recession". Some comments though: - This won't come soon. Depending on existing GP growth, it could take another 20-50 years to get there (and I am taking the range out of my backside, so feel free to improve it via actual numbers). - This has the same fallacy as with Apple - Apple might not be able to grow 20% absolute for X years, but for shareholder what matters is that it returns 20% per share in those years. Similarly if economy stops growing in absolute, but GP-per-person keeps increasing (in some way of measuring), this still could be a happy society. :) Possibly even happier than current one. :) - We could find techno solutions to the "outgrowing the planet" and start outgrowing the Solar system. :) Anyway just some random thoughts. The future's so bright we gotta wear shades! 8)

I'll take a look. If I remember, I'll post here what I thought. :) Thanks.

Not only that. I find some stuff that he writes not interesting or useful to me. For example, the first article linked. My approach to my holding stock dropping 10+% would be quite different from what he talks about. In this particular case - unlike the second article - I don't see value in historical data and the way he presents it. It's good to hear that his writing is useful to you. I am not trying to dissuade you or anyone else from reading him. :) He presents historical data and models well sometimes. I just expressed my general attitude towards Mauboussin as a context to comments about the articles netnet linked to. Take care

Yes, I guess it's a bit unclear which denominator he used. :)

I don't particularly like Mauboussin. :) I found the first article not interesting or useful. I thought the second article was pretty interesting, since it puts quantitative foundation for the common active managers' complaint about 2014 being a tough year to beat the market. I still don't think this excuses underperformance, but it shows that indeed there were reasons it was tougher to outperform. The article also gives some numbers for other common views: that it's tougher to outperform in bull market compared to flat/bear. So overall I like this article. 8) However, it is also a good example why "I don't particularly like Mauboussin": it gives numeric insight, but it does not give actionable insight (for me ;) ). E.g. you can't really predict when market is going to rally and your opportunities for outperformance will be few, so you can't really pick your fight based on info he gives. I guess one could try to shift from indexing to picking stocks in market tops and after crashes and move back to indexing one year after crash or so when most of the 'easy opportunity' money is made. The timing is probably quite hard though.

Yes, that's what globalfinancepartners said: "He's talking about realized loss". This is somewhat less surprising with hold-forever good quality companies: they might underperform, but they hopefully don't lead to loss. It might be still surprising that he did not suffer realized losses during Graham cigar butt years, but I guess the valuations then were really attractive.

I've seen him say this more than once, but is this really true? Looking at http://www.berkshirehathaway.com/letters/2014ltr.pdf , 2008 shows 9.6% book value drop, 2001 shows 6.2% book value drop. Are these not related to portfolio drops? (I guess they might be operating business goodwill writedowns - 2001 could be GenRe, I'd have to look up...). Also didn't he have Washington Post drop over 50% as he was buying it and wasn't that a large part of his portfolio? It is still very surprising that he never suffered higher than 2% loss per year in his portfolio - if that's what he means. I don't think there's anyone else who has this kind of record... Ah. Gotcha. Makes sense. Thanks. :)

Wasn't See's Munger's idea? Wasn't Lubrizol Sokol's idea that he had to pitch to Buffett for quite a bit? Not to put down Buffett, but nobody lives in a vacuum. If the idea is not from screening and just reading 10Ks (which might be majority of his ideas, but I don't think they all are), it's partially "not his" idea. Maybe he means that inspiration might be from someone else, but analysis is his. I can see that. :)

;D Buffett's answer is good, but the questioner is overgeneralizing. :) There were tons of young people at DJCO annual and I assume the same is true for BRK, etc. Young people are not becoming more stupid.

I've seen him say this more than once, but is this really true? Looking at http://www.berkshirehathaway.com/letters/2014ltr.pdf , 2008 shows 9.6% book value drop, 2001 shows 6.2% book value drop. Are these not related to portfolio drops? (I guess they might be operating business goodwill writedowns - 2001 could be GenRe, I'd have to look up...). Also didn't he have Washington Post drop over 50% as he was buying it and wasn't that a large part of his portfolio? It is still very surprising that he never suffered higher than 2% loss per year in his portfolio - if that's what he means. I don't think there's anyone else who has this kind of record...

Read philosophicaleconomics links from http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/%27macro%27-musings/1000/