rkbabang

An interesting discussion. While I'm not on the level of many (most) on this board I have learned quite a lot from many of you over the years. My portfolio which historically has been around 8-20 positions, usually concentrated in the top 5-10 or so, is now basically in 2 companies. I've had 30%+ positions before: Fairfax recently, and in the past: Western Sizzlin, Steak and Shake, and the MIDD/OVEN situation (all of which worked out very well for me), but the rest of my portfolio was always fairly well diversified. This is by far the most concentrated I've ever been. I've got roughly 40% BAC class A warrants, 10% various BAC 2014 & 2015 calls, a small amount of class B warrants and BAC common. 34% Fairfax, and <5% positions in BRK-B, CMG, GOOG, HOTR, ISRG, MIL, MNGGF, SAFT, MKL. Most of those were larger positions which I sold all but a small amount to invest in BAC. Earlier this year I spend about a week reading the BAC A warrants discussion on this board from start to finish (I'd recommend doing that to anyone interested in BAC, there is a wealth of info and links to more info there) and that helped me with the decision to concentrate. I've been building my Fairfax position for years, it was already more than a third of my portfolio at the beginning of this year and it is the reason that I am down for the year right now after having a few years of pretty good returns (70.9% in 2009, 21.2% in 2010, 12.7% in 2011). In 2012 so far I'm down 15.2%.

Yes, some small percentage of companies are always going to want their own servers and won't want to build and maintain them themselves, this will be especially true in the short to medium term as many won't trust the cloud at first. But I think this is a business that will soon find itself in decline. You have large companies that will build and maintain their own stuff as they are starting to do now. For the ones that don't there will be some who (like Netflix) run entirely in the cloud and some who will be potential customers of Dell. Then you have mid-sized businesses who will find the cloud more and more attractive from a cost standpoint as Amazon and Google fight a price war for this commodity service. The number of these businesses who buy and maintain their own data-centers will decline as time goes on I think. Then you have small-sized businesses who will almost certainly take advantage of the cost savings of the cloud. Finally you have government, which doesn't need to worry about cost or being efficient in any way, so maybe Dell can hold on to these sales as well. I don't see Dell's business having a lot of room to grow long term. I of course could be wrong, but it will stop me from buying. I already own some DELL though my ownership in Fairfax, that is more than enough DELL exposure for me.

This is what scares me about Dell: http://www.wired.com/wiredenterprise/2012/11/amazon-google-secret-servers/ The big guys Amazon, Google, Microsoft, FB are all building their own servers and selling time on them to the little guys. Where does this leave Dell? It leaves them out. If you are already writing off the retail PC business as unprofitable this should be a big concern. Here are the relevant quotes from the article: " Amazon buys its server processors and memory directly from Intel, doing an end-run around middle men such as HP and Dell and other original equipment manufacturers, or OEMs." "The result is an enormous shadow market for servers and other data-center hardware that’s hidden from those who traditionally track hardware sales. Google goes straight to Asia. So does Facebook. And according to a former Quanta employee who spoke to Wired earlier this year, even Microsoft is purchasing data-center hardware straight from Asian companies that the average American has never heard of." "In short, the hardware landscape is changing in a big way. Earlier this year, Diane Bryant, the head of Intel’s data center group, told us that eight server makers now account for 75 percent of Intel’s server chip revenues — and one of those is Google. Just four years ago, three companies made up that 75 percent: Dell, HP, and IBM." "Amazon Web Services were remarkably cheap from the very beginning, and the prices continue to drop. This week, at its first AWS conference in Las Vegas, Amazon announced a 25 percent price cut on S3, its online storage service. Amazon is running its web operation in much the same way it runs its famous retail business. Ultimately, EC2 is just selling a commodity. So many others can sell the same thing. In order to make it work, you have to operate on very low financial margins. “Amazon, from our retail upbringings, has this background and this comfort and this skill in running high-volume, low-margin businesses,”" "Google and Amazon are giving the world an even easier — and cheaper — way of running their operations without the likes of HP and Dell. They provide virtual servers you can use from any web browser."

The software couldn't handle signed integers. It assumes an unsigned integer and thus -6 (0xFFFFFFFA in 32-bit 2s compliment) is interpreted as 4,294,967,290 contracts worth $460 trillion. Stockholm stock exchange paralyzed by order for -6 futures

The problem here is the same as the housing boom. Giving loans to everyone at low rates, and in this case with deferred interest and payments until 6 months after graduation in the case of government subsidized loans, simply causes prices to rise to make up the difference. Parents can pay $X so schools would have to charge X, but now parents can pay $X and kids can borrow $Y, so schools can charge $X+$Y. Like almost every government program, it certainly doesn't end up helping the people it purports to in the end.

There is no good reason to do it that way as opposed to some other way other than it is politically popular. In a market someone who wants a product or service pays for as much of it as he desires, no more no less. When you introduce violence into the equation things no longer need to make sense they just need to be popular enough that people find it easier/safer to comply rather than to rebel. If the same organization which is violently collecting the protection money can get ahold of its victims children starting at a young age for 15,000+ hours of "free education" over a period of 12-13 years in order to instill loyalty (patriotism) and obedience in them to continue the scam into the next generation, and the next, all the better.

Just like how liberals stopped caring about war or civil rights the moment he was sworn into office. I don't like either party, but the Obama worship I see almost everywhere is both astonishing and troubling. One of my libertarian friends asked me recently to think about the liberals I know and ask myself is there any abuse, any abuse at all, that would be unacceptable if done by Obama? And for the life of me I can't think of anything. At first I said "short of loading people into cattle cars and bringing them to the camps to be gassed, nothing." But then again, if Obama smiles into the camera and calls them terrorists, even that I fear would be a-okay. As megalomanical as Obama is, I don't think even he realizes the true extent of his power. If he did....my god... The world has never had a God-King in an age of nuclear weapons before.

Yes I am against a graduated income tax as well. 50+% of Americans pay no federal income tax yet they vote. This is completely wrong. There should be no tax brackets. Just one standard deduction which is the accepted poverty line. You deduct that amount from your income (income, dividends, capital gains) and pay x%. End of story, no deductions or tax breaks for anyone except the extreme poor who are below the standard deduction and thus pay no tax. The entire U.S. tax code should be repealed and replaced with one paragraph. Also no withholding. Make people see the money they pay, so they think about whether or not they are getting their money's worth.

Yes in the long run something will need to be done about so-called "entitlements" too, but right now cutting food stamps isn't going to get us anywhere if we are spending $900+ Billion (and growing) on our military adventurism. That is something that could be cut drastically and immediately, as there is no one storming our beaches at the moment. It is called "defense" spending after all, it should be for "defense". If I get a list of ex-cons in a nearby city, grab my gun, and start hunting them down one by one on the basis that they may someday be a threat to me, no one would say I was acting in "defense". When I shoot one in the middle of the night while he's climbing my staircase wearing a mask that is a different story all together and takes much less time and resources to prepare for and accomplish. Our "defense" budget should be a tiny fraction of what it is. If it was cut in half, then in half again, it would still be largest defense budget in the world. We have 80 Million armed civilians and a ton of nuclear weapons what country would be insane enough to attack the United States even if we didn't have the largest defense spending? It is insanity to the extreme. And it will bankrupt us long before entitlements do. Not to mention cause death, destruction and utter chaos in the world, making things like terrorism more likely, not less, for generations to come. If you kill one person and you don't also kill his entire family, you will have problems for generations. This is the reason the mob (the other group of violent criminals who force their victims, in geographic areas in which they claim, to pay protection money) sometimes does just that. The U.S. is creating life long enemies by the thousands every year and the current president, who's first campaign was anti-war, has stepped up the killing since he was first elected. The next biggest budget items are healthcare and social security and, just like the military, neither one will even be mentioned by the political class, (unless it is promises of more, more, more), so the conservatives pick on the food stamp ladies and the liberals pick on "the rich". Not that anyone should get something for nothing or (if there is going to be taxation) anyone should get away without paying an equal percentage, but those things are the least of the problems.

The Tea Party started out with the extreme anti-government types (like myself) then came the Ron Paul people (who are pretty close to being of the same mind, although still think politics can solve problems), next came the religious nuts who took it over, and due to their numbers, took it mainstream making it a Republican thing. The same type of thing happened with the "occupy" movement. It started with the extreme anti-government/anti-corporate left, but was then co-opted by the Elizabeth Warren's of the world which brought in the mainstream left-wing and making it a Democrat thing. Two cases of the mainstream parties seeing which direction the parade is heading then getting out in front and pretending to lead it. Unfortunately this happens before the public even hears about it or knows what is going on. It works every time.

Yes, it seems a Republican can never cut a budget, and a Democrat can never end a war.

I'm sorry, but both the liberals and conservatives are completely out to lunch on this issue. Liberals think that raising taxes on the rich will solve our problems and conservatives think that cutting a few social programs will solve everything. But in both cases the numbers don't add up. Both sides need to admit this, but neither ever will. The elephant in the room is the defense spending. Moral issues about bombing poor innocent people overseas and trying to create a world-wide empire aside, the U.S. just can't afford it. The very same thing brought down Rome and will bring down the United States. Don't talk to me about raising taxes a few $Billion here or there nor about cutting big bird or some poor woman's food stamps when we are spending $trillions trying to rule the world. Sorry but both sides are full of Shi...ugh... crap. It needed to be said, because nothing else really matters.

Oh boy. I couldn't dissagree more. Maybe he wasn't the perfect father or husband, but who is? There are certainly worse. Much worse. The good one does by creating wealth on such a massive scale overwhelms almost any petty fault one has. If Hitler was good to his family would that cancel out the evil he did for society as a whole? Would it even matter in the least? The same is true the other way around. Even if he was the worst most abusive father/husband on the planet (which he most certainly was not) he would still have changed the lives of countless people for the better. I wouldn't respect him as much if I knew he beat his kids to within an inch of their lives or sexually abused them or something, but he didn't do such things (as far as I know). You don't give the man credit for the astronomical amount of wealth he has created. And I am not talking about his own. The wealth that has gone to others dwarfs the amount he has kept for himself. And even most that which he built for himself will be donated to help others in the end. He has done a net good for humanity far exceeding every king, dictator, prince, and elected official that has ever lived all put together. Yet it is to these very thieves and parasites that he writes op-eds about giving more money and power to. :(

+1 Yes all of that and more! I just wish he'd leave politics to the scum that inhabit that unfortunate area of life. There is no good to be done there.

"Ann Randists" lost the election? You are going to have to explain this one to me. While I don't consider myself a "Randist" she was dead wrong on a number of important things, I will admit to being heavily influenced by her in my younger years (her first name is Ayn btw). Reading her fiction then non-fiction works set me on the path to where I am at today. And I have never won an election. I actually thought O-bomb-ya was the lesser of two evils in this past one. Seeing the war mongers that the other guy was surrounding himself with scared the hell out of me. If I were to lower myself and add my support to the legitimacy of the leviathan by casting a ballot it would have been for Obama not Romney. Luckily I am still free to register my dessent by staying home.

I should also add that unlike those who many/most people come close to worshiping in DC, he is a good man who has done great things. He's created more jobs, built more wealth for more people, and helped more people than any politician ever has, or ever could. And if he could have paid a zero percent tax rate his entire life he could have done even more. It is sad that he appears to not realize this. He is humble to a fault. I guess if that is the worse you can say about someone, that isn't too bad a thing.

Supposed someone gave little to nothing to charity yet constantly wrote articles about how people should not only give more, but be forced to give more. I'd call him a hypocrite. To be taken seriously he should lead by example and give more of his wealth to the feds. No I don't expect him to do so, because deep down he knows as well as anyone that it is money down the toilet and that giving to actual charities which actually at least try to do good for humanity is a much better use of his hard earned money than feeding the Bush/Obama war machine. And in his younger years he correctly knew that the best thing he could do for society is reinvest it and build wealth. Again his actions speak much louder than his words. Reducing the government deficit is not a solution to the problem. Congress will simply spend even more. More programs to start, more countries to bomb, more graft to distribute. More money = more power. You are just kidding yourself.

As I say every time he writes on this topic. If the federal treasury is the best use of his money, why has he not given them more over the years? Why has he not left his entire fortune to it? He does not put his money where his mouth is on this issue. Actions speak louder than words. He knows, as well as you and I know, that if the deadly force was taken out of the equation, (i.e. no one was forced to pay the U.S. government, but could choose to do so) there would be no U. S. Government. If this is an organization so many people claim to love and think does so much good, how could that be?

I agree. This is why I sold all of my KO in 2010. I know Coke makes other products besides soda, and the stock is up since I sold, but sugary soda (and even worse the diet crap) is its bread and butter. I just didn't feel comfortable owning it any longer. I've sold most of my BRK as well. I think when the public opinion on sugar turns sour, it will happen quickly and KO will be one of the largest casualties. KO won't go out of business or go bankrupt or anything, but its stock will tank. Might be a good buy when that happens.

I've been eating a low carb paleo diet for the last 2 years, so I definitely haven't had any in that time. But looking at that list of products I'm not sure I've had a Hostess product in the last 10 years or more. I remember most of them from when I was a kid though. I used to love ring dings and funny bones. I've never been a fan of twinkies. --Eric

I've always wondered why index funds don't take some time to buy or sell when there is an index change. Do they really have to do it the same day? You aren't accurately representing the market value of the companies in your index if you are forcing a large change in the market value yourself. Index funds are supposed to mirror the market not cause large swings in stock prices. If they bought or sold over 2 weeks or a month whenever there was a change it would soften the effects.

It's back down to $345 now.

I bought FRFHF at $345.87 this morning. I only bought 50 shares because that is all the cash I had available in the account and I already have so much FRFHF already. My portfolio basically amounts to positions in 2 companies now. FRFHF and BAC (common, warrants & options). Other than that I only have a handful of 1-3% positions which is basically just my watch list. I've never been this concentrated before.

IB is way cheaper than $7/trade. Flat rate is $1/trade and if you go for variable pricing it can be even cheaper if you are willing to provide liquidity. According to this : http://individuals.interactivebrokers.com/en/p.php?f=commission Their "flat rate" is $0.005 per share with a $1 minimum. So for 200 shares or under it would be $1. If you traded 1400 shares it would be $7. If you traded over 1400 shares it would be more. This would usually save me money, although I recently bought 20000 shares of something and Fidelity charged me $7.95 for the trade. IB would have charged me $100 using the flat rate.

Why not use a bank for banking and stay with Scottrade for brokerage (if your happy with them)? I use Fidelity ($7.95/trade) and I do my banking at a local credit union. It takes me about a day to transfer money between accounts electronically. I've actually been looking into switching to Interactive Brokers because the costs of trading options is so much lower than Fidelity charges me now. And even stocks, their flat rate option is $0.005/share. You would pay $7 or less for any transaction of 1400 shares or less. It depends on how many shares you tend to trade I guess.