enoch01
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Posts posted by enoch01
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It's an economy with tailwinds: housing and autos. – Tepper.
Gio, that's the key quote, and it's something that people that read CalculatedRisk and follow those sectors know too well. And when he explodes to the commentators at some point, saying that the FED is really helping to get those sectors moving, he is stating the obvious if you forget philosophy and just read the data.
Regarding QE affecting valuations, probably Tepper is just talking his book. I just know that we, the Corner of Berkshire and Fairfax board, are finding really cheap stuff in several sectors that would benefit greatly from a reversion to the mean in housing and autos.
Sometimes is obvious.
And sometimes the obvious needs to be bolded :)
You invest whenever you find a stock that’s selling 1/3 less your estimate of intrinsic value. And you say: “I don’t care about the macro. I ignore the macro.” You ignore what I call “the temperature” of the market. Then you are kind of acting as if the world is always the same. And the desirability of making investments is always the same. But the world changes radically, and sometimes the investing world is highly hospitable, when prices are depressed, and sometimes it is very hostile, when prices are elevated. And, I guess what you are saying is “well, we just look at the micro, we look at one stock at the time, and we buy whenever they are cheap”, and I cannot argue with that. On the other hand, it is much easier to make money, when the world is depressed, because when it stops being depressed, it is like a compressed spring that comes back. So, if you buy a cheap stock, when the market is high… it’s a challenge! Because, if market being high is followed by a general decline in prices, then for you to make money in your cheap stock, you have to swim against the tide. If you buy when the market is low, and that lowness is going to be corrected by a general inflation, then you and your cheap stock have the tailwinds in your favour. So, I think it is unrealistic and, maybe, hubristic to say: “I don’t care what’s going on in the world, I know a cheap stock when I see one.” And, if you don’t follow the pendulum, and understand its cycle, then that implies you always invest as much money as aggressively. That doesn’t make any sense to me. I have been around too long to think that a good investment is always equally good all the times, regardless of the climate.
- Howard Marks
If the market being high is followed by a general decline in prices, do you still believe the rebound in the housing and auto sectors will be unaffected?
giofranchi
The Marks quote sounds great (I try not to miss what he writes), but then after you think about it for a while, it's really hard to know what to do with it. For example:
How high is the market? Too high? Which market?
What is a general decline in prices? Which prices? Prices of everything? Stocks? Houses and autos?
What does it mean to say "unaffected"?
Now I agree that, probably, it is easier to make money when you find a really cheap stock when the overall market happens to be cheap too.
So maybe you are recommending to wait for:
(1) A certain really cheap stock
(2) A cheap overall market
Both (1) and (2) = great returns
But what about:
Either (1) or (2) = good returns
There's nothing wrong with focusing on (1), and letting (2) be an extra kicker, especially when you haven't the foggiest idea when or if you will get (1) and (2) together.
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Any other tips? I'd like to read some more biographies next year. Names that come to mind: Thomas Jefferson, Albert Einstein, Richard Feynman, Keith Richards, Andre Agassi. For some reason I don't really care about Steve Jobs. HHhH is supposedly very good. And I like the title! Will probably pick that one up next. Would like to read some more fiction but the problem is that there are too many books to choose from.
I get a lot out of biographies. I find them helpful for developing those "mental models". For Thomas Jefferson I recommend American Sphinx, by Joseph Ellis. I haven't read anything on the others you mentioned.
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It's an economy with tailwinds: housing and autos. – Tepper.
Gio, that's the key quote, and it's something that people that read CalculatedRisk and follow those sectors know too well. And when he explodes to the commentators at some point, saying that the FED is really helping to get those sectors moving, he is stating the obvious if you forget philosophy and just read the data.
Regarding QE affecting valuations, probably Tepper is just talking his book. I just know that we, the Corner of Berkshire and Fairfax board, are finding really cheap stuff in several sectors that would benefit greatly from a reversion to the mean in housing and autos.
Sometimes is obvious.
And sometimes the obvious needs to be bolded :)
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The one I am currently looking at is FTP.TO.
A cash-burning seller of commodities where there isn't a clear supply shortage? I haven't been able to crack the Fortress Paper nut. I read the thread, but in the end I couldn't figure what it was worth. Lots of people are running away from the stock these days, so I guess it's worth keeping an eye on.
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Buffett calls in to ask Welch a question. Cheers!
http://video.cnbc.com/gallery/?video=3000127240&play=1
WEM lost his marbles or just trolling?
Neither - it was a wickedly funny takedown of (presumed) self-interested fear-mongering.
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New York Attorney General fires his water pistol.
Here we go
Yup. There goes several days / couple weeks of earnings.
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I'm not a particularly huge fan of Ellison, but he is a remarkably interesting fellow. Cheers!
Well, this is Larry Ellison you are talking about. Maybe he asked around and found out that the then-largest line of credit for an individual was $3 Billion or whatever, and then decided he needed to win at "largest credit lines".
The Anschutz is interesting though...
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Harry Dent is not a credible economist in my eyes.I still have his book' The next great bubble boom' where he predicted Dow will touch 36,000 in 2006-2010.
I think he writes about extremes to capture people's attention but I do not rate him as good forecaster or a good economist.
Anyone who has done the exact opposite of what Dent has recommended the past 12 years probably has made boatloads of money.
Look at this list:
The Great Crash Ahead (2011)
The Great Depression Ahead (2009)
The Next Great Bubble Boom (2006)
The Roaring 2000s Investor (1999)
The Roaring 2000s (1998)
The Great Jobs Ahead (1995)
The Great Boom Ahead (1993)
Our Power to Predict (1989)
If his next book is giddy and bullish, sell.
I really don’t care about Mr. Dent or his forecasting track record. All his article is pointing at are the 3D (debt, demographics, and deleveraging) that also Mr. Rosenberg always refer to (or Mr. Shilling). It is not who is talking, but what he is saying. Do you think that QE will effectively fight and solve the 3D? Like Packer rightly pointed out it did in Sweden during the 1930s? Fine! Then we will have inflation. But I don’t care who will be right and who will be proven wrong. I only care about ideas, and if I understand and agree with them, or vice versa.
giofranchi
Sorry, my point was only tangential: Harry Dent is a fantastic contrary indicator.
Over the short run, I haven't the foggiest idea what QE will do. Over the long run, printing money is correlated with unpleasant things. Maybe 2 of those D's will be traded for other unpleasantness.
I'm thinking a basket short of "accurate QE opinions" would do well in the future.
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Harry Dent is not a credible economist in my eyes.I still have his book' The next great bubble boom' where he predicted Dow will touch 36,000 in 2006-2010.
I think he writes about extremes to capture people's attention but I do not rate him as good forecaster or a good economist.
Anyone who has done the exact opposite of what Dent has recommended the past 12 years probably has made boatloads of money.
Look at this list:
The Great Crash Ahead (2011)
The Great Depression Ahead (2009)
The Next Great Bubble Boom (2006)
The Roaring 2000s Investor (1999)
The Roaring 2000s (1998)
The Great Jobs Ahead (1995)
The Great Boom Ahead (1993)
Our Power to Predict (1989)
If his next book is giddy and bullish, sell.
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+17% YTD
This thread makes me nervous...
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Is the obsessive interest in unprovable topics irrelevant to value investing such as the I miss this guy thread a sign of an inflated market with few good values to be found?
+1 Maybe so! ;D
Another big crash and maybe we'll snap out of it!
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Can you provide an example that would show the difference between a moral violation in a God paradigm versus a no-God paradigm? I'm looking for some method of discrimination that doesn't rely upon being true by definition.
A moral violation in a no-God paradigm? I've been arguing this conditional: if God does not exist, there are no necessarily true moral propositions. Well, I still think that is true. As near as I can tell, you agree.
My confusion is that you aren't arguing the conditional.
Sorry, I didn't see you disagree with it anywhere, so I didn't know you expected me to argue for it. Do you disagree with it?
You simply state is as a tautology. Obviously, we can come up with many tautologies, but it would be a trivial exercise without some method to identify it in reality, in other words to find reasons that one concept is more likely than alternatives.Let's ignore the word "morality" because we are getting stuck in language. Please identify how we would distinguish the two universes, God and No-God, when someone commits something that may be considered wrong. There must be a non-trivial difference, as opposed to simply stating that God exists in one, and therefore in that one a wrong is immoral.
Hm - unfortunately I don't see any difference between this question and the one I answered earlier ("Can you provide an example that would show the difference between a moral violation in a God paradigm versus a no-God paradigm?"), so I don't think there's any more progress to be made between us. So let's table it.
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Can you provide an example that would show the difference between a moral violation in a God paradigm versus a no-God paradigm? I'm looking for some method of discrimination that doesn't rely upon being true by definition.
A moral violation in a no-God paradigm? I've been arguing this conditional: if God does not exist, there are no necessarily true moral propositions. Well, I still think that is true. As near as I can tell, you agree.
At first look it seems that morality (meaning a general concept based on the assumption that all people have certain rights regardless of who they are, their race and their sex) is quite uncertain compared to religious regulation (also called [religious] morals for some strange reason). In practice, religious regulation is not that clear in itself and depends on specific people's interpretation. It's enough to just take Christianity as an example, there are plenty of variations out there with differences in regulation. Sometimes it depend on which Church you'd go to. Continue to add other religions and I'd say we'd be far better off relying on morality as defined in the first sentences.
(P.S the USA if composed of about 80% white, and religious distribution of all population is Protestant 51.3%, Roman Catholic 23.9%, Mormon 1.7%. I'll leave it at that).
Thanks for your response. These are some good points, as far as I understand you. I agree: it does seem to me that morality can be more uncertain than religious regulation, and that equating morality to religious regulation is really strange. Many times it's hard to answer the question: "what is it that I ought to do, or ought not to do?" As you say, we are uncertain about it. It's possible to learn in lots of ways: meditating, parents, trusted friends, prayer, solitary reflection, church, reading books, observing others, the list goes on and on.
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Can you provide an example that would show the difference between a moral violation in a God paradigm versus a no-God paradigm? I'm looking for some method of discrimination that doesn't rely upon being true by definition.
A moral violation in a no-God paradigm? I've been arguing this conditional: if God does not exist, there are no necessarily true moral propositions. Well, I still think that is true. As near as I can tell, you agree.
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Perhaps a better way to phrase my view is to figure out how Proposition I is not simply tautological. Let's agree with both propositions. Now what? What is the non-tautological distinction between the God paradigm and the subjective paradigm that makes the former objective? For example, you do something immoral in both paradigms. What's the non-tautological difference?
Since tautologies are true (necessarily so), I'm not sure it really matters, if all you were asking was how He could contribute to intrinsic morality.
But one possibility is to follow Robert Adams: "Any action is ethically wrong if and only if it is contrary to the commands of a loving God". If true, this grounds morality in God's nature itself.
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I thought that I did respond, but there is still a miscommunication. Even if we hold the Necessary Being proposition to be true, it still contributes nothing to the "intrinsic" nature of morality.
So I provided two conditions, which, when either of them are conjoined with the property of Necessary Being, contributes to intrinsic morality (ie, the concept that there are necessarily true moral propositions). Maybe there are other conditions as well, but I'll claim ignorance for now:
"(i) if He is the individual paradigm of what is right"
So if (i) is true, then pretty obviously God contributes, because He is the source, or the model, of what is right. I don't think you addressed (i).
"(ii) if He is the knower of what is right"
Now suppose He merely knows what is right. Then we are left with choosing between some Platonic forms for what is right, or considering what is right as concepts (and maybe there are other options, again I claim ignorance for now). I would argue against Platonic forms, and consider what is right as concepts, which cannot exist apart from a mind. Therefore, God contributes to their existence.
So that's a model of how, if we suppose God exists, He could contribute to intrinsic morality. Maybe there are other models.
It simply supplies a tautology: God is a necessary being, and his knowing of right is by definition right. Let's agree to agree with the tautology.
I agree, but I think you are only addressing (ii) here.
Why do we agree? You are still weighting that information with the tools you have. Your acceptance or rejection of the proposition is dependent upon the relative weights of various sensations that you experience when you consider it. To see why this remains a subjective experience, imagine that something is lost in translation between God's moral proclamations and your understanding. You are fully convinced that you are working in God's name, and, due to the misunderstanding, don't realize that you are doing something "immoral". What next? What happens that identifies the objective nature of morality, in the way that we identify objective nature in other matters?
Well first, "experiences" are subjective by definition: you may be reflecting on a belief, I may be having a pain, etc. There are no experiences without subjects. I've also never disagreed that an acceptance or rejection of a proposition is a subjective experience. But that is consistent with a proposition being necessarily true or not.
Beyond that, I'm not sure what you are getting at here. Someone could be argued out of a particular belief, etc. Again, that is all consistent with there being necessarily true moral propositions.
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Yes I think this is the right way to think about it. If there is no God, morality amounts to nothing more than social instincts, personal preference, biological influence, and the like. There is nothing intrinsically right or wrong - it's all a matter of perspective.
Even with God, the same would hold. God would simply overlay an additional punishment/reward scheme. You would still rely on social instincts, personal preference, et. al.
I'm not entirely sure what that second sentence means, but it doesn't seem like you disagreed with anything I said. Maybe you are just emphasizing the second half of the conditional?
Not at all. The existence/non-existence of a god has little to do with your interaction with "morality". You currently have a body, which experiences the world in a certain way. Now God exists. So what? What, specifically, are the factors that now make morality intrinsically anything?
I don't know all of the factors, but here's one: God is a Necessary Being. So (i) if He is the individual paradigm of what is right, or (ii) if He is the knower of what is right, those moral truths are invariable.
To clarify, let's say that God exists. Now let's say that aliens exist. There must be something unique about the existence of God that makes morality intrinsically right and wrong. Or perhaps the problem is with identifying what you mean by "intrinsically" right and wrong. Again, you have a body (and a soul? It doesn't make much difference), so you have constraints in your interaction with the universe.
1. What is the contribution of God's existence to intrinsic morality?
Like I said, here's one property that contributes: the fact that He is a Necessary Being.
2. What effect on your tools (body, mind, soul(?)) clarifies "intrinsic" vs. subjective morality?
You mean what clarifies for me whether morality is subjective or not? Lots of things: thinking about it for a while, discussing it with others, maybe my biology informs it (ie maybe we are hard-wired to think that), etc.
Thanks again for all this, but you still aren't denying my original conditional. Now I'm wondering - did you not intend to do so?
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Yes I think this is the right way to think about it. If there is no God, morality amounts to nothing more than social instincts, personal preference, biological influence, and the like. There is nothing intrinsically right or wrong - it's all a matter of perspective.
Even with God, the same would hold. God would simply overlay an additional punishment/reward scheme. You would still rely on social instincts, personal preference, et. al.
I'm not entirely sure what that second sentence means, but it doesn't seem like you disagreed with anything I said. Maybe you are just emphasizing the second half of the conditional?
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This is a good thread, and I'm commenting on it now only because Parsad recommended it in another thread.
It should be noted that there is no incompatibility with Christian theism and evolution. The conflict really arises only when metaphysical naturalism is conjoined with evolution. But neither application of the scientific method nor advances in scientific discovery advance us towards or away from metaphysical naturalism - you'll have to look elsewhere for that.
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So, I would assume that, in reality, there is not much difference in good and evil between Buffett and Madoff for you then?
No, for me, I am going to view them as good or evil from the context of my social unit.
Similarly, Bush is a good moral man to some Christians and to others (families of civilians bombed in Pakistan) he may be viewed as a cruel evil man.
Yes I think this is the right way to think about it. If there is no God, morality amounts to nothing more than social instincts, personal preference, biological influence, and the like. There is nothing intrinsically right or wrong - it's all a matter of perspective.
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Liberty and rk,
Maybe you guys didn't see my question, but what would make you believe in a deity? Eric, if you'd like to answer, I would appreciate that, too.
Same way that I believe in atoms and radio waves; reproducible, conclusive and falsifiable evidence.
You can't falsify the proposition that you are a brain in a vat, but I'm supposing you believe you are not a brain in a vat.
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Ohhh, I hope this turns into a religion thread! ;)
As for my own quest, I've slowly have moved from agnosticism to theism.
How does one determine good from evil if there is not something higher to distinguish them for us? For instance, how was Nazi Germany any better or worse than Mother Teresa?
The moral argument has a rich history. I recommend Kant's "Critique of Practical Reason", J.L. Mackie's "The Miracle of Theism", and Swinburne's "The Existence of God".
Now get thee away from this thread as quickly as possible :)
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What makes you say the cash will be spent on the shareholders vs being wasted trying to innovate within a shrinking business?
The shrinking business is their PC business -- so you must be talking about the PC business.
These past few years since Michael Dell came back... have they been spending the money on:
a) their PC business
b) growing a new non-PC business model
c) returning cash to shareholders
d) b and c
My answer is "d".
Do you disagree with my answer?
My worry is how quickly their [commodity] pc business (80% of revenue) is declining and how slowly the new non-PC business model is growing. Services have comprised ~1% more of their revenue for each of the last three years. So I think that they are headed in the right direction, but I have little confidence that the battleship will turn quickly enough, and in the meantime SG & A is increasing (something like $1.2B increase last year) to accommodate the new strategy. How do you get comfortable with the numbers?
A close response to that particular concern:
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That's a lot of bang for your buck.
Tepper
in General Discussion
Posted
I respect your thought process, and think you have reasonable conclusions. Oh, and I'm an engineer too! 8)