Gardener
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Posts posted by Gardener
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StubbleJumper, thank you for your information.
Could you perhaps tell me why a Chinese person seeking to 'lock-in' his wealth in Canada can buy RE valued at > 1 mio, but needs to lease a car? Is there a difference in legislation, or is this just personal preference? Another reason?
Just trying to understand the phenomenon.
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* For those who do not live in Canada, over the past 10 to 20 years we have had an astounding inflow of money from China, and an inflow of Chinese people who effectively purchase a 10-year Canadian residency permit as a means of managing the risk of being rich in a less than democratic country. There is a demonstrable tendency to buy a large house in Vancouver or Toronto and move the wife and kids (ie, international students) there, as well as some of their money, while the husband continues to do business in China. While most of their assets are stuck in China, some of these folks are crazy rich and there is a considerable issue within the community of keeping up with the Joneses (er, I mean keeping up with the Chans). One or more high end cars is a must, irrespective of whether there is adequate cash in their Canadian bank account.
Do you have some more information on why the Chinese are favouring Canada? In particular why Canada (as opposed to other countries) and what happened before the 10-20 years you mention in your post.
(Not really familiar with this phenomenon)
Thanks
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I love technological progress, but also think these estimates are way off...
You often see forecasts being interpolated from previous smartphone adoption, but the smartphone was totally different in my opinion. First time I say an iPhone I was like "damn, can you do all of this with this thing". You have a camera, an ipod, a notebook, a internet device, ...., and o-yeah a phone all in once. If you compared the price of all these things combined, a smartphone is one heck of a deal. THAT imo is the reason why smartphones were so quickly dispersed across society.
Even if tomorrow they sell a autonomous driving vehicle, I won't buy it since I already drive a vehicle and the added value of autonomous driving doesn't convince me to buy a new car...
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At the risk of asking something dumb, why would anyone give $400 mio dollars to a university? There must be a reason besides vanity, no? ???
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I think pretty everyone know about the reliability difference.
How come the German and American auto companies don't try to improve reliability? Their management just don't care?
Different engineering philosophies
German: precision, handling, styling heritage. they don't see upkeep as some tremendous failure -its part the course for the handling and precision they trumpet.
Japanese: reliability, efficiency above all else.
I would also describe it as a difference in engineering philosophy.
Here in Europe, we don't see distance the same way an American would see it. The distances we do are generally way, way shorter. I would assume that an American sees 200 miles as a distance that can be easily covered, while a Belgian is travelling across his entire country doing that. In general, we tend to drive a lot less, therefore putting less miles on our cars.
If you sell a car in Belgium, anything above 125.000 miles is already considered to be 'hard to sell' and most people assume that by the time it reaches that distance, it is to be written off completely. I would be surprised that the average Belgian puts more than 7000 miles per year on his car. In general cars that reach that mileage are 15 years old or something (just a guess).
German manufacturers put less weight on durability over a large amount of distance, because the main market for selling the cars doesn't put as high of a premium on that aspect.
G.
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Luck is effects without observable causes. Science can't define since it can't be measured.
Not sure if I am following you on this one. Being born with an IQ of 2 std deviations above the mean for instance is for the most part based on pure 'genepool'-luck. So you have luck (the good genes), and you have an observable cause of your above average investment performance for instance (the IQ). To take a stupid example, I would be very, very, very (did I say very?) surpised to see even one of the great investors among us with an IQ below the mean. They were all for the most part born with that IQ. I see no flaw in that reasoning, and so there is no reason for me that luck could not be observed scientifically (being IQ an obvious one).
Maybe just misunderstanding your point though...
G.
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Anybody have an opinion on the consequences for the global financial system if this bubble deflates? From what I seem to read following a quick search on google, the impact does not seem to be that large from a global viewpoint... Is this true or are they just downplaying the consequences of a correction?
Apologies in advance if I missed something in the thread, or if the question has already been answered before...
G
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If you go all the way to the bottom of the page in the interwebs browers on your iPhone, you should be able to click "Mobile version" on the right of the screen.
That should normally do the trick...
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Listened to it this morning on my way to work... Not that it's really important but from what I understand his technique of 'mastering' blackjack was based on the game where they only use one stack of cards as opposed to multiple now?
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I only shudder to think how his wife is going to react to them having to eat KGS of BBQ meal worms....
Laughed so hard at this ;D
As a dog owner I've become fascinated by the lengths pet owners will go to assure their pet is receiving high quality food. I wonder if your friend could pivot his business into a high end, no fillers, no preservatives, high protein dog food or food supplement for dogs. I'm sure there are pet owners who would buy it if you told them the worm based protein is hormone and antibiotic free.This actually doesn't seem such a bad idea to me, but there already must be something out there like this, no?
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Might be a book that I will put on the list. Thanks.
Anyone perhaps knows where the money for their first takeover came from?
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It's also a question of having enough cash on hand to make a meaningful purchase right after the dip.
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Over the last 15 years, average venture capital returns have been below public market returns.
Do you have a source for this? I was trying to find accurate numbers on average VC returns over the last 15 years but couldn't find anything for the average returns. I could only find returns for the outliers like Sequoia and AA, with numbers all over the place depending on how you mark their returns (http://a16z.com/2016/09/01/marks-offmark/).
From The Economist, 22th of October:
"This July, in an update of a previous study*, business-school professors at the Universities of Chicago, Oxford and Virginia found that, although in recent years buy-out funds had not done much better than stockmarket averages, those raised between 1984 and 2005 had outperformed the S&P 500, or its equivalent benchmarks in Europe, by three to four percentage points annually after fees. That is a lot. Ludovic Phalippou, also of Oxford, is more sceptical; he argues that when you control for the size and type of asset the funds invest in, their long-term results have never looked better than market-tracking indices. That said, getting the same size and type of assets by other means is not easy.
The average return, disputed as it may be, does not tell the whole story. Studies find some evidence that private-equity managers who do well with one fund have been able to replicate their success (though again the effect seems to have decreased in the past decade). The biggest inducement to invest may simply be a lack of alternatives. Private equity’s current appeal rests not on whether it can repeat the absolute returns achieved in the past (which for the big firms were often said to be in excess of 20% annually) but on whether it has a plausible chance of doing better than today’s lacklustre alternatives. This is a particular issue for pension funds, which often need to earn 7% or 8% to meet their obligations."
And the study to which they refer in case anybody is interested:
http://www.investmentcouncil.org/app/uploads/ssrn-id2597259.pdf
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Thanks for sharing the blog; going through all of them while riding the bike to work and like them very much!
I enjoyed the podcast with John Koch a lot. From going to Harvard & working at BCG to plunging into (craft) brewing sure would have looked like a weird choice at that time!
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Hey all:
In addition to getting rid of compulsory education and shutting down a LOT of schools. I would do the following:
A). Schools would open up maybe an hour before classes begin. Breakfast would be served for a vastly discounted price. Something like $.25.
B). Students would get pens, paper, pencils, books, book bag. Everything basic that they would need.
C). Lunches would be served at vastly discounted prices...again, something like $.25
D). The library & cafeteria would be open AFTER classes end, maybe till like 7-8 pm. Snacks or light dinners would be offered at discounted prices.
E). Students could do their homework in the library.
F). The gym might also be open so that students could exercise.
Food would actually be tasty, hearty, and somewhat nutritious.
With this accomplished, students would have almost everything needed & provided to get a basic education.
While nobody would have attend school, it would be encouraged.
While in school, discipline would be brutal & strict. Students are going to know who is in charge. School is primarily a place for LEARNING, not warehousing criminals till the graduate to the prison system.
If a student is kicked out, they have to wait 1 year to get back in. Students that were outside the system and now decide that they want back in should also be encouraged.
An education should hopefully be for everyone...but only if they actually want it.
Another good idea. The difference in terms of academic achievement between students born in a family that acknowledges the benefits of education vs. a family that doesn't already begins very early. For example, you see children/students getting a room that is quiet and comfortable for learning, vs. children/students that are not getting this luxury. Already at this stage a difference in academic performance could begin to appear. That's why I would always oppose the idea of homework at a very young age, unless the children/students have a common place where they would all stay and learn together (talking about a young age here).
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As a kid I always loved to learn, read through encyclopedia's, read ahead if there was anything interesting in the textbooks. Yet I loathed school. I thought then and still think it was a waste of my time. It was the slow pace dictated by the poorest performers coupled with the fact that forcing a 6-12 year old to sit still for most of 7 hours straight is pretty dumb. I certainly learned a lot, but I could of learned a lot more, or learned just as much in a third the time. It would have been tough back then in the 80's to tailor things to my needs and abilities. They did the best they could with what they had.
Fast forward a few decades and not much has changed, like most government institutions there is no incentive to adapt new technology at anywhere near the pace of private enterprise.
I would privatize schools with a voucher system. Competition is a good thing and I trust parents to know best how to measure performance and choose the right schools. There are of course parents who could care less, and sadly it is difficult to help those kids, but I believe best practices would flow to even the worst schools.
I believe the technology is available to teach each kid at their own pace, in their own learning style, with stories and examples that resonate with them. We need to move past the one sized fits all education system. It should be highly individualized much of the learning would be khan academy style or via recorded lectures. A recorded lecture from an outstanding teacher beats a live lecture from a poor one, and the youngest generation learns all sorts of stuff from instructional videos on youtube as it is.
Lastly we should put a little more focus on our best and brightest. We will get much further by helping the top quartile reach their potential then by helping the bottom quartile reach theirs. I think if you broke it down you would discover that more money and teaching resources are poured into the lowest quartile.
I like the idea of making education voluntary. I'd hate to see any kid drop out, but also realize a kid who doesn't want to be there and whose family doesn't value education can truly slow down the learning of a whole class.
Agreed. I think a voucher system would be very effective in putting a reward on innovation in school. Today a school doesn't have enough incentive to challenge the status quo.
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The only Libertarian candidate: Rand Paul.
Free markets are good for the market.
Source? I'd say there's a reasonable argument that 2008 was a contradictory indicator depending on your interpretation of events.
Not to get sucked down into this argument, but I find it hard to blame 2008 on a free market when you're talking about the most regulated industry in the world and where government sponsored agencies, like FNMA and Freddie Mac, were also involved....
Not to say that greed, which is present in free markets, didn't play a factor, but you're really stretching here....
Agreed, when talking 2008 people often name greed as the sole reason why it all went the way it went. The "greed" of the mortgage lenders and the investment bankers that sold the securities were part of the problem. But an often overlooked cause of the crisis was the interference of the government in the mortgage market. The government wanted to make it easier for low-income/less-priviliged citizens to purchase real estate. Agencies Fannie Mae and Freddie Mac had to have a minimum percentage of totale mortgage acquisitions for these categories. The agencies were partly allowed to do this by buying mortgage-backed securities issued against sub-prime mortgages.
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I would be interested to know if the interview has taken place and where a copy could be found?
Thanks.
+1.
+1
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There are much higher returns in purchasing, owning, operating private businesses than investing in the stock market. The main surprise to me when attending Berkshire and Fairfax meetings is how many people just want to talk about stock market investing as opposed to owning and operating actual businesses outright.
Not sure if it is laziness, ignorance, hubris or fear but never understood why more value investors don't practice the value investing and management principles in investing and operating private businesses.
Cevian,
Do you speak from experience? Can you elaborate?
The only "experience" I have pertaining to this is a friend of mine has looked at private businesses and has not come across anything even remotely interesting. As he digs into the businesses he has found numerous issues regarding mismanagement, accounting issues, employee issues.
Thanks,
AtlCDore
Could it be that most private businesses that are truly exceptionally profitable are NOT up for sale...passed down through the family OR owned by the managers? Maybe if for some reason they are up for sale, they are "private" sales? Somebody is already lined up to buy it?
I've seen a lot of stuff for sale through business brokers. Most of the time the businesses are JUNK. Some of the better ones have you wind up buying a job. The ones that are pretty good are priced so high as to not make sense...
The other extreme that I have witnessed myself is that the former owners think they have a pot of gold in their hands... Impossible to negotiate in that case.
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A used Lenovo Thinkpad for about just below $250 after my other laptop broke down on me. Very satisfied so far.
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Thanks for the share,
Always great to see Jamie Dimon give a speech. He is really a great speaker!
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I'm definitely going to see this movie, absolutely enjoyed the book. Curious to see how they will turn something boring (for most people) into a film that can entertain people!
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Read the book a couple of years ago and liked it. Should be fun to watch the movie ;-)
Rent vs Buy Decision
in General Discussion
Posted
I'm going to have to disagree with you to be honest since I am also Belgian and thus can relate to what a quirky system the government has put in place in Belgium. You definitely don't always lose 10% (ignoring the redecorating costs):
For example, say half a year ago I bought a "modest house" (this is really a term that the Belgian government uses but the law is changing as we speak), this means that I pay 5% tax when I buy the house.
So let's say I decide to pay EUR 200.000 for a "modest house" => totals EUR 10.000 in tax that I have to pay the government to buy the property. For these kind of house you pay nearly 0% recurring, yearly taxes (let's say EUR 500 per year).
If I take out a loan to finance this building, I and a partner (for a maximum of 2 persons) get a tax advantage that equals a little over 900 per year for the first 10 years (so EUR 1800 in total per year or EUR 18000 for ten years). After these 10 years, the advantage drops to about EUR 650 per year for some time longer (decided by a rule which is a bit too long to explain here). Let's say you can get this discount for another 10 years. That's EUR 13000 in tax advantage. So a total of EUR 21000 in less taxes paid over 20 years for a loan taken out by 2 people living in a house. Renters don't get none of these tax advantages in Belgium.
Fastforward 20 years later. You sell the house to buy another bigger house. The amount of tax you don't have to pay again on the new house is capped at EUR 12.500 since you already bought a house in the past and paid taxes on that old house. So for the next house, you don't have to pay the EUR 10.000 again which you already paid (under old rules I think they didn't correct this for inflation but I believe from now on they will). The added value that you get when selling the house is exempt from taxes since you lived in it yourself. I constantly see small houses being flipped when they are in effect paying zero taxes, on the contrary they are being subsidized by the government for doing so...
So in effect, you bought a house, lived in it and paid 0 taxes (apart from a small, recurring, yearly tax). On the contrary, you received EUR 21000 in less taxes paid. Here in Belgium the tax advantage the government gives you actually reconciles with the cost you incur on your mortgage so in effect they are just handing out free money to leverage and buy a house.
* number are a bit of because didn't feel like looking them up in detail but really not by much
The house vs. appartment phenomenon you talk about is in large effect because of a very strange taxation system in Belgium called "kadastraal inkomen". It in effect states how much taxes you pay on a piece of real estate, regardless of how much rent you actually receive. It is completely outdated. It makes a lot more sense (not in all cases but in a lot) to rent out an appartment than it is to rent out a house (especially a new house like you are renting), hence elevated prices for appartments, "modest houses", ...