rkbabang

I agree with this 100%. Too many people stand in front of that archer, seeing the tension on the bow getting ever tighter, saying that they aren't worried at all because they haven't seen an arrow in the air. Now imagine that this bow isn't being held by a human archer at all but by a machine where one human can pull the string back as far as he wants, but has no control over when it is fired. The firing is determined by an impossibly complex system involving trillions of variables that no one fully understands. It isn't a great place to be standing indeed.

I agree with everything you said. Regarding the bolded, I agree there are vested interests in selling gold investment products, but I think that is secondary to this criticism being 100% politically motivated - the usual "Evil government (and Obama) is debasing the dollar and inflating us into poverty!". There are two sides to this, of course. Obama probably knows less about inflation than we do or the people you are talking about. Like all presidents he's basically a figurehead to look good in front of a camera and say a lot of nothings to the public. The point Zarley made about the velocity of money is a good one. The fact is that having a huge increase in the amount of money available means that the potential for the velocity to rapidly increase is now there. The effects on prices don't have to be (and usually aren't) immediate and aren't always obvious (for example in an otherwise deflationary environment). Imagine a company issuing a significant number of shares to grant to management. If the stock is still increasing in value that doesn't mean the issuing of those shares had no effect on the price. The other side of the spectrum from the gold bugs and the Obama is evil crowd are the people who believe that those in charge of the money supply are omniscience with a superhuman ability to manage a system with trillions of variables, where in reality such a system is impossible for anyone to manage and any messing around with the inputs to such a system that does occur will have unpredictable results in the long run. This is something which this crowd refuses to admit or believe.

Not really true. WEB is contributing to the obesity epidemic with his KO investment and as more studies come out and more people (as well as governments) recognize this, I think you will start seeing the first signs of evaporation in the coke moat in the coming decade. I'm not worried about the future of steak houses.

This is why I like the definition of inflation as the increase in the money supply. That is something that can be measured, known, and agreed upon. It is impossible to quantify the "rise in prices". It just begs the question "the price of what?". Prices of somethings will always be decreasing and prices of other things will be increasing. The price of an item depends on so many other things other than the amount of money in circulation, that it is impossible to calculate the component of the price due to the money supply and not due to changes is supply, demand, quality, technology, availability of components needed for manufacture, weather, transportation, competing products, and a million other variables. I'm not sure how valuable doing a "CPI" calculation is, because this calculation is dependent on which goods go into the basket and which goods are excluded. And once you do the calculation, it can't be known which variables are responsible for the change in price. So when you have this number, what do you really know?

And the annual average temperature there is well below zero centigrade, about the same as atop Mount Washington, Maine, the windiest place in the world, and one of the coldest. Does the tenant pay the utilities? This could be a good investment if they bought property near a bottom. Did they? But there may be agency risk, political risk etc. Mt Washington is in New Hampshire.

Even though BAC is my largest holding, I do my banking with a small local credit union. Triangle Credit Union. I agree with your observations that you can find better deals at credit unions than at the big banks.

I agree. Tesla and Solar City aside, oil is going to be with us for a long time and the price will only increase (long term). This is more of a "hmm that's interesting" than a "WTF?" purchase. I think it will work out well. It's not like he's buying a failed handset maker or a textile mill in New Bedford or something.

After seeing XOM was the secret stock, I took a quick look this morning and it does seem expensive. An enterprise value of $392B with a TTM FCF of $12.6B. Capital expenditures seem to eat a lot of the operating earnings each year. FCF was $40B in 2008, but the highest it has been since then was $24.4B in 2011. I'm sure it will be a home run for Buffett, but I don't know why. I understand why he would want to own XOM, I'm just not sure why he is buying it now. He's getting a great company at a fair price, I'd rather see him get a great company at a great price. But then again, in 20 years it won't matter if BRK bought it at $60 or $100, it will be still be a great investment. I may own some amount of BRK for 20 years, but I don't usually hold my other stocks very long. Once they are fairly valued I start looking elsewhere. I suppose it is different if you are managing many $Billions.

Interesting. I bought XOM in 2010 for $59 then sold a little more than a year ago for $88. Unlike the market in general it hasn't done much in the last year. It doesn't look undervalued to me right now the way it did in 2010. I'd rather own BRK than follow him back into XOM.

Not this Ford. Archie was a lot of things, but he wasn't on crack.

Ahh, democracy. You've got to love it. So few people can even run their own lives very well, yet feel perfectly empowered with the "right" to choose who will run yours. In Toronto this is who they choose. 39 Breathtaking Photos of North America's Most Photogenic Mayor

A good book to read is Nassim Taleb's Antifragile, he goes into a lot of detail on why most attempts to stabilize complex mega-variable systems end in disaster.

Yes but the fact that things are never equal is really really important! In addition, context matters a lot! I doubt that you ever use such a generalized approach when you look at stocks All true. But ask yourself, has the fed been acting more like BRK (almost never issuing stock, only on a rare occasion to make a large accreditive acquisition) or more like some penny stock company run by a scam artist? I'd argue that they've acted as expected. BRK's job is to increase economic earnings power on a per share basis. The fed's job is the dual mandate, and they use CPI (targeted around 2%) and unemployment (targeted at 5%). It is your job to trade accordingly. If you wish to buy gold and ammo, or stocks and housing, or long or short the USD, that is a personal choice... but the fed has been pretty crystal clear about what they will do. It hardly seems like a scam to me. An older person on a fixed income doesn't have a lot of those choices. I think its main (only?) job, if it has a job at all, should be to protect the value of the dollar. A dollar today is worth less than what five cents was worth the day the fed was created. Inflation, the way it is used by the government is just a tax on savings. Since they are never up front about this, your average person has no idea what they are doing or why, compared with other forms of tax increases. In this sense it is a scam.

Can't I have a third option? :) Sure. Of course the truth is always somewhere in the middle, but I believe it is much closer to one extreme than the other.

Yes but the fact that things are never equal is really really important! In addition, context matters a lot! I doubt that you ever use such a generalized approach when you look at stocks All true. But ask yourself, has the fed been acting more like BRK (almost never issuing stock, only on a rare occasion to make a large accreditive acquisition) or more like some penny stock company run by a scam artist?

If you define inflation, the way the Austrian economist do, as an increase in the money supply, then there is no question that there has been a lot of inflation. And while it is impossible to calculate exactly how much this has led to an increase in prices, due to the impossibility of calculating the effects of productivity changes, technology changes, consumer behavior changes, supply and demand changes, etc. It is easy to know that it does have some effect and that all else being equal (even if they never are) prices would be lower in its absence. Consider what happens in general to the price of a stock when a company issues a lot of shares vs. when it buys them back.

Global Income Inequality by the Numbers: In History and Now "The period between 1988 and 2008 witnessed the first decline in global income inequality since the Industrial Revolution..."

Universities With the Largest Financial Endowments Harvard Salaries by the Numbers

+1 I was going to write almost exactly what you did. I wouldn't leave my wife if she wanted to go back to school and accumulate debt, but if I was single I'd steer clear of that situation. There is no need to saddle yourself with someone elses baggage.

It isn't about "worth" or "respect". I respect janitors, but they usually don't make 100K/yr. I don't respect many professional athletes yet they make much. What is a teacher worth? Just like with any other job, you are worth whatever the market will pay for your skills.

Not to argue that too much money is spent on foreign entanglements (as it is)...BUT there is a LOT more money spent on education in this country than is spent on the military. Think about all the property taxes, all the lottery money, all the private tuition, all the student loans going towards education, and you will see that it is MORE than what is spent on the military. It is an easy number to miss, as most of the money is spent at the city and county level and is very dispersed. As for national defense, almost all of that is spent by the federal government, not states, counties or cities. I agree, which is why I put that first and listed the military as an after-thought. The entire house of cards rests on the mistaken notions that government (i.e. violence) is somehow necessary to educate children, protect us from crime, protect us from foreign invasion, print money, build roads, and fight fires. In that order. Education is the biggest by far.

That is awesome. Many times when I suggest to people that schooling is too important to be left to government they come back with things like "the poor kids won't get as good an education as the wealthier kids". Where as the way it is now, poor kids get little to no education at all, and with a few exceptions the wealthier a district is the better the educational opportunities there are available to the kids. Under the current system you and I get to send kids to top notch schools, while poor kids get sent to these hell holes where they don't learn anything and their lives are in danger everyday just being there. The rich, middle class, and poor alike would all be better off than now if the government just stayed out of it altogether, with the rich and upper middle class benefiting the least, because they already do quite well.

A sugar and grain based diet. A better question would be how can you be that poor and not be obese?

I will add, that every community may handle things differently. I could see the parents in my town starting a non-profit org to keep the current schools, which are excellent (Forbes recently rated them #2 in the country) open. Other communities you might have a lot of home schooling and a few private schools of all costs. The only reason you don't see low cost private schools now is because there is no demand for them. You pay a ton of taxes whether you send your kid to public school or not, so only the rich can also pay for private schools. Therefore the only private schools that can exist in this environment cater to the wealthy.

Every unionized "business" with a government backed monopoly operates this way. I spent a summer as a splice technician for NYNEX when I was in college. Anything goes and anything is acceptable...except doing your job well, doing your job quickly, or being honest about the number of hours you worked. You really want a "solution" to this? 1) Close every public school in the US. 2) Immediately reduce the property taxes, income taxes, sales taxes, and any other taxes which went to paying for the public school system. 3) Do nothing else, and see what the market comes up with. 3.5) It would help tremendously to get rid of taxes that currently support the United States foreign empire/wars to help people pay for the education of their children on the free market.