Jurgis

My tariffs are bigger than yours!

I think the issue of cramming algebra to kids who are not interested in it is relatively minor in the education picture (although still important). The much bigger issue is teaching kids who have little to no background/motivation/parental supervision/parental role models/peer support/supporting environment/etc. skills that would allow them to make something productive from their lives. Possibly to ambivalent or even hostile kids. This is very hard to do and it's not surprising that even best intentions and programs don't work (like Bill Gates discovered). I think it depends on where you are at, which school district, and sometimes even the school. As was highlighted in the article link by LC, there are NUMEROUS children (and families & culture) who do not value education. Some might say that they are even hostile towards education. So why force them to do something they don't want/appreciate? Society is spending billions & Billions & BILLIONS on this. Why not make education voluntary? Promote it, work with community leaders, run PSA announcements like "Mr. T says Don't be a FOOL, STAY IN SCHOOL!". Let ANYBODY who wants an education in the system. Work to educate them to the best of their capability to learn. HOWEVER, the student has a duty to be reasonably well behaved, show up the vast majority of the time, attempt to do the work to the best of their ability, and so on. If they mis-behave or don't want to be there, that is fine. If a child mis-behaves, they are EITHER out of the system OR if the parent consents, they will be disciplined and if the behavior is bad enough, they are sent to remedial classes where they will dealt with appropriately. If the child & parents don't care, why should we? Why should burn precious capital in a futile gesture? Perhaps most importantly of all, why should we allow trouble makers to sabotage OTHER children's education? Change is desperately needed! What about the children who are mis-behaving because their home life is a catastrophe and their parents don't care about them or their education? What responsibility, if any, does society at large (via its government) have towards those children? Should public schools be, in part, an effort to try to help those children overcome the handicap of parents who don't care? Or should we just wash our hands of them? I'm no education expert, but I agree that more money probably won't help teach someone who doesn't want to learn. I believe it's in our best interest to make an effort because otherwise these future losers will be a drag on all of us, whether through crime or going on the dole or being charismatic enough to get a job & then being extremely crappy at it. It's like healthcare. A healthy, competent & motivated populace is better for all of us (in the US & the entire world). I also really think that elements of philosophy & psychology should weigh in as well in an attempt to try & get youngsters to understand the difference between reality & delusion so they don't grow up to be mouth breathing Fox news sheeple. Many will never get it but that's humanity. What Doo said. +1

I think the issue of cramming algebra to kids who are not interested in it is relatively minor in the education picture (although still important). The much bigger issue is teaching kids who have little to no background/motivation/parental supervision/parental role models/peer support/supporting environment/etc. skills that would allow them to make something productive from their lives. Possibly to ambivalent or even hostile kids. This is very hard to do and it's not surprising that even best intentions and programs don't work (like Bill Gates discovered).

From what I heard from friends, xenophobia even in engineering is still pretty high. My married-to-Japanese fluent-in-Japanese friend got interviews in some Japanese cos, but there were interviewers who were visibly uncomfortable with the foreign white man...

https://www.marketwatch.com/story/why-financial-education-wont-solve-the-15-trillion-student-loan-crisis-2019-06-27?mod=mw_latestnews

A bit apropos the US legal system discussion, I've just read the "You have the right to remain innocent" ( https://read.amazon.com/kp/embed?asin=B01DAD218W&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_GqxuDbGTPDB3D&tag=raimonwebsite-20 ). It's a short book which can be shortened to two sentences: 1. Do not talk to the police 2. Clearly request a lawyer and do not say anything until you get one. Two interesting parts: 1. Everyone is a criminal. Actually everyone is guilty of terrorism with chemical weapons. Just read the appropriate law (or the book). 2. Claiming the fifth is now pretty much treated as an evidence of guilt with Supreme Court precedent no less. ::) This is all limited to US. Your rights might differ in your/other countries. I'm not a lawyer.

Right. Just remember that even if you buy bond at par value, your downside can be 50% or more if either you won't keep the bond to maturity or it defaults or inflation destroys your terminal value. But sure, buying at 2x par adds to risk. I just omitted that since return calculations become more complex.

First of all: thanks for taking the time to explain this. Intuitively, this made no sense to me. Why should an instrument with half the "payout" be worth twice as much? But I guess I'm confusing the terms yield, coupon rate, and perhaps discount rate. I guess this would be similar to, or is in fact the same, as lowering the discount-rate in a present-value calculation? with a small enough discount-rate, the present value would be arbitrary large. I would probably be foolish to use that number to do any investing, though... But what is the definition of "a bond yielding 1%" here? Is the calculation: a $100 bond with a coupon rate of 1%, priced at $200, is priced to be yielding 0.5%? That kind of sounds like saying "I value this stock at twice <whatever price>, because I believe the p/e multiple should be twice as high". Which I guess is the same, since half the current discount-price means twice the price current price. Still... stocks can grow into their valuation (the e can increase), while the coupon rate cannot. Even if I get the math here (and please correct me on the above ramblings if not), not sure I get the sanity of it. I'm not saying it's sane, but there might be reasons why it's not completely insane either. thepupil gave some examples of why someone buys even negative yielding debt. Presumably if there's a choice of buying negative yielding debt and the debt yielding 0.5%, the buyer would buy the latter one (all else being equal of course - this is simplified example). All else being equal, you're likely to put money into a bank that pays you 0.1% rather than bank that pays you 0.01% even if neither 0.1% nor 0.01% are meaningful in terms of returns. Finally, assuming you knew that rates will go down to 0.25% in the future, you'd probably buy the bond that yielded 1% yesterday driving its price up 2x to 0.5% yield today. You might say "this is insane". But people who did it at 7% are laughing all the way to the bank. Then the people who did it at 4% are laughing all the way to the bank. And even people who did it at 2% are right so far. At some point the buyers will be wrong. But I doubt you or people on CoBF really know when this will happen and how. Still not saying this is very sane, but is it completely insane? I'll let others argue for and against. 8) Here's Bloomberg's argument of why this might be sane: https://www.bloomberg.com/news/articles/2019-08-08/the-non-weirdness-of-negative-interest-rates?srnd=businessweek-v2

So.... the bond itself "should" yield close to (actually less than) nothing. But when I (as a random person with no financial skill) look at my pension-savings, I see that this presumably super-safe investment is up 10% in a year. Is that part of the "bubble"-factor here? Let's say you have bond priced at 100 yielding 1%. Let's say you believe that this bond should be priced to yield 0.5% based on similar assets/whatever. What would be the price of the bond based on your expected yield assuming perpetual bond for simplicity? Yes, 200. What is the yield difference of such bond when the price goes from 180 to 190 (up approximately 5+%)? Yield at 180 is 0.55% Yield at 190 is 0.526% So for yield drop of 0.025%, the bond price goes up 5%. You can call it bubble or whatever, but that's the math. Clearly the math also applies in the other direction (what should be the price of the bond that currently is priced at 200 and yields 0.5% if you believe it should yield 1%? Yeah, 100.) It gets more complicated for non-perpetual bonds, but I hope you got the picture. 8)

Bond market indexing makes much less sense overall compared to stock market indexing.

Charlie finally started flying corporate. Or Warren visiting Charlie (hmm, I could make sad inferences... :-\ ).

IMO you are way overoptimistic. I'd bet about 2:1 that BRK will return less than 15% annual in coming 10 years. (Not an actual bet ) But hey I'll happily take that 15% if it comes. Good luck

So you magically get 15% annualized return even though all parts you mentioned grow way less than that. ::) With huge simplifications, BRK is trading at ~11.6x your 2018 CFFO and you expect it to trade at 35x your 2028 CFFO in 2028. ::)

IMO Sequoia is still not a bad choice for someone who wants to buy a mutual. Might even do better than BRK depending on how/when next crash develops. Barron's highlights some interesting mutual funds once in a while. I sometimes make a note, but since I don't buy mutuals, I'd have to dig through to find the names.

Wow he looks so old... ... ... and I'm not talking about Warren... :-\

I think I disagree with Damodaran. I think (especially tech) companies could invest way more into new businesses especially if they had reincarnated Steve Jobs as CEO. Clearly Alphabet does a fair share of it and could do even more. Other companies like Apple, Microsoft, Facebook, etc could also do a lot more. There are couple of issues though: - What is the expected ROI? I'm pretty sure you can throw way more money into quantum computing, VR/AR, new drug modelling, building even better AI systems for existing and new domains, self driving cars, space, etc. But expected return is possibly not that high (if positive). And shareholders would likely be even more unhappy about funding moonshots than share buybacks. - People on CoBF hate money losing unicorn startups/IPOs, but that's likely more accommodating platforms for spending tons of money on questionable ROI projects. Even there there is certain conservatism unicorns/IPOs nonwithstanding. It's much easier to get startup/VC/Masa/IPO funding for multi-billion customer facing or B2B software businesses than, for example, quantum computing or compact nuclear reactor. - At least on the tech side, there's likely labor shortage. We already know about escalating salaries. It's quite possible that if you wanted to make another A-class team or expand your A-class team size 2x-10x in any areas above, you would just not be able to hire people. Edit: also that Musk fellow; and that Bezos fellow. Give them money if you really think there are no areas to innovate or grow businesses in. If Damodaran's "reincarnated Steve Jobs the next CEO" really means "CEO who can find overlooked low hanging fruit (yeah that) that everyone else missed and develop it into high ROI trillion dollar business within couple years", then I agree that this is unlikely. Steve Jobs or no Steve Jobs paradigm shifting breakthroughs like PC, mobile phone, smart phone, electric car, self-driving car happen maybe once in a decade at best.

Go for 50%+ drop in 2020! 8)

Is it a first mover? We've been ordering cat food and cat litter from Amazon for ages... Amazon has some 1st-party availability issues, but for the things it carries the prices are a bit cheaper than Chewy and shipping is free with Prime (vs $49 spend to get free shipping with Chewy).

Man, I am moving to Pittsburgh tomorrow today. ... ... Never mind. But oddball had me there for a while. 8) ./bow

Alternatively, you can hire outside SV (if that's where you are located). But that comes with it's own set of issues, so possibly not worth discussing unless you are considering it.

That's not how it works and I believe you know that that's not how it works. You have to build your network, you have to sell your vision, you and your startup should be attractive to such people. It's not a supergeeks-on-demand service, especially since we pretty much know zero about you or your startup. In the best case you should have had eye on the people who are good/great way before (co?)founding the startup and reached out to them now that you have the startup. You possibly should have participated in local tech scene (which might be small or huge depending on your location - and you probably need to be smart/selective/etc. if you're in SV where everyone's in tech haha). Is this easy? No. A lot of startup founders don't do it. But those who do it, IMO have a huge advantage. If you hire using standard big-company methods, then yes, you are at disadvantage especially in tech upturn/tight labor market. In general: don't sell salary and equity; don't sell the foosball and beer (if anyone still sells that lol); sell the vision, sell the product, sell the team. Yes, there are bunch of people who will go and work for less if the the vision/product/team is very attractive. But it's gonna be harder if you have to cold sell them through ads/hiring agencies/etc. You could post your sales/hiring pitch here. Not sure that would yield something, but it probably won't hurt. Unless you are very much into stealth mode and you don't want to do that. Then you could send it privately to whoever. Good luck.

The point is that even if Germans made the wires mouse-safe, they would still have had no gas to run the tanks... And if they had the gas, mice would not have been an issue. So focusing on minor gotcha obscures the actual big failure. Maybe the point of the story should have been: figure out the real big issue instead of focusing on a possibly minor thing that obscures the big issue. Like he says in the essay: Is that the real issue? Or is the issue that the company did not save/backup their stuff and now they have to recreate the work of last X months? If it's the latter, then focusing on water pipes is bad approach since the real issue is having full offsite backups and that's what needs to be dealt with. Edit: in other words, although “Things that have never happened before happen all the time.” and you cannot expect them, maybe you should prepare adequately for things that happen all the time. Like bad supply chains or inadequate backups. 8) Edit 2: Although "A founder had a mental breakdown" might be unexpectable ::), this belongs to a class of startup employee related problems that are very common and happen all the time: a founder is an ass and can't work with others; a founder cannot lead for crap; a founder cannot work with co-founder; a founder cannot fire his friend; a founder cannot stop hiring his friends; etc. Or even if you narrow it down: "A founder had a burn out; A founder had a health issue". Might be a better way to look at these in toto. Although I can't say that they are easily solvable even if you treat them as quite likely to happen... :-\

My impression is that wide moat companies like MSFT, as well as Big Tobacco have actually done very well after being subject to intense regulatory scrutiny. Ditto for the Ma Bell breakup. I was wondering if anyone could think of any counterexamples.... I disagree about MSFT. MSFT has done well post-Ballmer, but during/post lawsuit they did not do well and clearly were hamstrung in competing/monopolizing/growing/etc. Of course, like most things in real-world, we cannot compare what-if scenarios: would MSFT owned mobile? would it have killed Apple instead of saving it? Would it have bought or killed Google? And so on. How about the complete ban of Google/Facebook/etc in China? There were a lot of arguments how Qualcomm was hamstrung by GSM cabal - not sure if you'd count this as regulation, since this was both politics and competitors... Ah, how about Huawei? :P

Regarding your observations: yes. 8) Regarding your question: IBM? Old Ma Bell? MSFT? DVA?? with some interpretation of "regulation" - Fannie/Freddie? Asbestos? Do you include deregulation too? ;) There are probably additional examples of moaty companies hit by safety regulation, compensation/labor regulations, gambling/alcohol/etc prohibition(s)/restrictions (although Big Tobacco presumably did not suffer much).

Buuttt it reads good.... ;D I know what you mean. I did not know facts about this particular story, but I've had other situations where my reaction was similar to yours. People present causal relationships and "explanations" as if 100% proven even if they don't have all facts or the situation is more complicated and/or if all the relevant info is not known or taken into account. But hey, it's the stories that sell or make a person writing them feel good/like an expert. Thanks for your post.