KJP

Alabama law isn't as draconian as has been suggested. The Alabama corporation law says that the corporation is subject to a "penalty of an amount not to exceed 10%" of the value of the shareholder's shares. Ala. Code § 10A-2-16.02©. [Full text quoted below.] This language has been interpreted to give courts discretion on the amount of penalty to award. See Sewell v. Bank of Wedowee, 918 F.2d 152, 154 (11th Cir. 1990) ("[T]he legislature intended that a penalty be mandated, but intended that the amount awarded be discretionary."). Alabama Code § 10A-2-16.02© © Any officer or agent who, or a corporation which, without reasonable cause, shall refuse to allow any shareholder, or his or her agent or attorney so to examine and make copies of and extracts from its books, papers, records of account, minutes and record of shareholders, for any proper purpose, shall be liable to the shareholder for a penalty of an amount not to exceed 10 percent of the value of the shares owned by the shareholder, in addition to any other damages or remedy afforded him or her by law. It shall be a defense to an action brought to collect the penalty specified in this section that the person suing therefor within the two years next preceding the demand has sold or offered for sale any list of shareholders of the corporation, or any other corporation or knowingly has aided or abetted any person in procuring any list of shareholders, or improperly has used any information secured through any prior examination of the books, papers, records of account, minutes or record of shareholders, or was not acting in good faith or for a proper purpose in making this demand.

A fund that doesn't charge a management fee, but only a performance fee is IMO not ideal. Without regular income there is a strong incentive to try to get performance fees, whatever the cost. Better to blow-up trying to get to high-water mark, than getting stuck with zero income. A good reason to ask how much of the manager's personal wealth is currently invested in the fund.

Interesting ideas. What are the sales taxes where you live? It would be very difficult to keep your cost of ownership (I assume you're excluding insurance from your $100-$200/month number) so low if you're turning over your car every two years in a state with high sales taxes.

Are you in the US?

You seem to be asking whether, so long as the multiple the stock market applies to a given metric stays the same, changes in the stock price will be proportional to changes in that metric. The answer, of course, is "yes," because, by assuming a static multiple, you have assumed that the stock price can always be calculated by the following equation: y=Z(x), where y is the stock price, x is whatever metric you're using, and Z is a constant, i.e., your hypothetical static multiple.

The ABA is a guild. Low bar passage rates are not a concern. I assume most of the third- and four-tier law schools are surviving on student loans that at largely guaranteed by the federal government and essentially non-dischargeable in bankruptcy. If you got rid of those financial subsidies, those schools likely could not survive in their current form, which probably would be a good thing. There is a tremendous need for lawyers to help low income people in criminal law, immigration, family law, etc. But it is extremely difficult to have that kind of practice when you have $150,000 in school debt. Ideally, there would be alternative types of legal education, such as a shortened, two-year program that provided extensive practical training and was taught by practicing lawyers who had no research/publishing obligations. But as a guild, the ABA has no interest in pursuing that path, and state legislatures are dominated by lawyers, so I wouldn't expect any legislative initiatives along those lines anytime soon.

At its dot.com bubble peak, Microsoft traded around 65x EBIT ($620 billion market cap - $40 billion net cash and investments)/($9 billion operating income after accounting for SBC). [Numbers are from 6/30/00 annual report] Today, Google trades around 21x EBIT ($580 billion market cap - $80 billion net cash and investments)/($24 billion operating income, includes SBC). I understand the belief that 21x EBIT is too much to pay, but is it really comparable to 65x EBIT?

I suspect very high, but it's also very hard to track down the failures and interview them.

Thanks for sharing what you learned. When you say "leverage was not used," I assume you mean at the personal portfolio level. But was leverage "used" in the sense that they invested in levered equities? Putting aside the financials for a moment, were the companies these people invested in significantly levered? And were the financial investments through warrants or common stock?

It's not just concentration, but concentration + leverage. In this case, levered equities.

You are correct that some active decision must be made. But if you believe your decision-making with respect to equity investments is poor and destroys value, one reasonable approach would be to attempt to minimize your decision-making as much possible by selecting a very broad, vanilla index fund to capture as much of the benefits of diversification as possible and a purely mechanical method of adding and selling, e.g., 10% of paycheck each month goes into XYZ Global Index Fund. No further decision-making; no attempt to assess valuation or anything else.

I don't really view spending time on evaluating investments to be a burden or lost cost. I enjoy reading, consider investing a partial hobby as well as a job; it's something I like. Because you derive independent enjoyment from investing, it makes sense that forming a belief about whether you can beat the market is less relevant to you. For people who do not believe they can be the market, this would be either irrelevant or a good thing. By hypothesis, their security selection and portfolio weighting decisions (i.e., deviations from the index) destroy value rather than create it, so gaining knowledge likely won't help them. But if your point is that you cannot avoid some active decision-making because you must pick an index, I would suggest the broadest, most vanilla equity or bond index fund you can find, rather than any exotic index.

This is very much true as well. Beating the index is a very popular topic on CoBF. In real life not so much. People don't really care if their investments beat the index. Mostly they just want their money to be safe and earn a decent/good return. You really find out how much people don't care about beating indexes the moment when you see a client and you tell him that he's down 15% but he should be happy because he's beat the index by 500 basis points. If people's overarching goal in investing is to beat the S&P500 or whatever then no one would buy any bonds. It's also true that investors obsessed with beating indexes will probably fail to do so. Just go out there, do your best, do good work and stop worrying about the index so much. Unless you have no opportunity cost to your time or derive independent enjoyment from the act of investment research, it makes sense to care about whether you are likely to beat an index. If you can't, why bother to do "good work" on investments? Wouldn't it be better to do no work, put your money in an index fund, and spend you're time on something else?

I would add that they have an investor base (or enough personal wealth) that allows them to act that way. You can be a fantastic investor, but if you have an investor base that demands, for example, very low volatility, you likely will struggle.

Your model doesn't take into account who it is that is trying to "beat the index" and the issues that they specifically face. 1) People who pay a fee to have their money managed by third parties: They face the missive headwind of management fees; they also may be indirectly exposed to the "professional money manager issues" 2) Professional money managers: Career risk counsels against deviating too far from the index; size and liquidity limit investable universe; investor base places limits on the amount of volatility that can be experienced; varying styles across time may not be permitted by investors seeking specific factor exposure; also usually look at performance after fees or costs; random variance in the timing (e.g., a strategy/investor who would be successful over 20 years never gets the chance because s/he underperforms over the first three years, whereas someone who gets lucky in the first three can hang around a long time because time-weighted returns can still look, even if their dollar-weighted returns are below average). 3) People who manage their own money and whose portfolio size does not create significant limits: Time and effort; sticking to a strategy, even one that has been shown to work over long periods, is psychologically difficult. So, both the OP's hypothesis and Hielko's hypothesis may be correct. The OP may be correct for most people in most situations. Hielko may be correct for small subsets of the groups above. For example, Hielko's hypothesis may be correct for the (likely very small subset) of (3) that is both willing to put in the time and effort and has the temperament to stick to a proven strategy. Hielko's blog suggests he may be in that small subset. Most people, however (me included), likely overestimate their chances of being in that subset. Put another way, the hypothesis depends on the population you're looking at, just as the validity of the hypothesis "It's easy to not smoke" depends on whether the population you're looking at currently smokes.

Threads like this always show how different people's perspectives can be. Everyone seems to agree about what happened: Buffett had an awkward business issue, and he dealt with it, in part, by trying to distract people with a joke whose punchline relies on the background societal belief that women who are open about their sexual desires are whores. I would think it's fairly obvious that telling jokes like that reinforces the background societal belief, and if you think that such a societal norm is wrong, then using the joke in the manner Buffett did would be wrong. Not a hanging offense, but simply a wrong that is worth commenting on. This seems pretty straightforward to me, yet from another perspective it's apparently "mental gymnastics" and "ageist."

I'm sure you recognize the difference between a descriptive and a normative statement. "How the worlds works," I take it, relates to descriptive statements about how humans currently interact with each other, as opposed to normative statements about how they should interact with each other. Elsewhere on this thread, people have suggested that the first two sentences of the joke are descriptively accurate statements. I'm not going to wade into that. I'm looking at the punchline, the part that gets the laugh and makes the joke work as a joke: "And if she says yes, she’s no lady." That's not really a descriptive statement at all, is it? It's a normative one about how women should behave, isn't it? At end of the day, this isn't really news. As others have said, Buffett is from another time, he's done alot of good, and he shouldn't be crucified over this. But just as over the top are statements like "SJWs are ruining the world" because some people have the temerity to point out that this joke is pushing a normative view with which they disagree.

I'm curious: What is he "right" about?

Of course he's not endorsing rape. But take a look at the last sentence of that joke. What he's endorsing (and what he may or may not actually believe) is that women should be virginal and pure, while it's fine for men to carouse. And any women who doesn't at least act virginal and pure is a [pick your favorite slur]. That's the context. That's the societal backdrop that makes the joke work and which the joke reinforces. But it's people who point out that double standard who are "uptight" and "repressed"? Perhaps it's the men who complain about the criticism who are "uptight" about women's sexuality.

I'm not aware of decisions holding that a link to infringing material cannot constitute contributory infringement as a matter of law, even where the website owner knows about the link to the infringing material. Do you have any cites or links to other sources on which you are relying?

According to POTUS, "integrity" is an alt fact for losers. I for one fully support Wikileaks on Boston financiers. People above are doing god's Trump's libertarian work. The person who put this online is violating an agreement they made and that is wrong. But once it is online already, reading it doesn't violate any agreement, because if you are already an investor you have already read it, and if you are not you have made no secrecy agreement with anyone. By posting a link to copyrighted material, are you exposing the owner of this board to a claim of contributory copyright infringement?

I acknowledged and continue to acknowledge that there is room for vigorous debate and substantial disagreement about policy, and there are non-racist reasons for favoring many of Trump's policies. But Trump's rhetoric and reasoning is fundamentally racist. We saw another example of that this week with his "Bernhard Langer" story. Here's one account of the story, as told by Trump: "The witnesses described the story this way: Mr. Langer, a 59-year-old native of Bavaria, Germany — a winner of the Masters twice and of more than 100 events on major professional golf tours around the world — was standing in line at a polling place near his home in Florida on Election Day, the president explained, when an official informed Mr. Langer he would not be able to vote. Ahead of and behind Mr. Langer were voters who did not look as if they should be allowed to vote, Mr. Trump said, according to the staff members — but they were nonetheless permitted to cast provisional ballots. The president threw out the names of Latin American countries that the voters might have come from." Trump's long support of birtherism and the way he talk about "inner cities" are additional examples. Whether specific policies of Trump's are a good idea is a different question than whether the rhetoric and reasoning he employs is racist. I'm sure people disagree and hear different things when Trump speaks, just like people hear different things when the phrase "Black Lives Matter" is said.

You answered your own question -- bullies target people they perceive to be weak. It's also a very symbolic part of Trump's racial [and racist] political strategy that has proven successful, so far. This is nonsense. Maybe in some aspects for Trump I'd agree, but in relation to Mexico, its utterly absurd. The same could be said about Canada. The difference is you don't have record numbers of Canadians running over the border, joining gangs, committing crimes, and filling up your already over crowded prisons. Mexico is definitely a problem. Their entire country is run by cartels and their government is corrupt. It's in a lot of ways similar to Chicago. Another small, poor area I'm sure many think Trump is bullying. What I like about Trump is where he sees a problem, he gets on it right away and tries to fix it. What makes me nervous about Trump? His judgment, temper, and ultimately whether or not he is capable of solving all these problems. But at least now the problems are being dealt with. Your descriptions remind me of Trump's descriptions of "inner cities," another dog whistle phrase. They are exaggerated parodies that play on the deep-seated racial fears in this country. I'm sure you disagree and just think you're "keepin' it real" or "not PC." We'll agree to disagree.

There is a lot of room for reasoned debate about what is or is not necessary for border security, trade, etc. Part of Trump's political strategy, however, is to try to short-circuit that debate through both overt and "dog whistle" appeals to racism.

You answered your own question -- bullies target people they perceive to be weak. It's also a very symbolic part of Trump's racial [and racist] political strategy that has proven successful, so far.