rb

If you're looking to buy and hold for a long time, then you're generally looking for companies and industries that are unlikely to face a lot of disruption and hopefully have some wind at their backs. Off the top of my head I'd say medical devices is one of those. JNJ has been mentioned here. It's a giant, but also pure plays are good cos. Zimmer BioMet and Smith & Nephew would be candidates. Jet power travel is also a good space. Here you have Rolls Royce, GE, United Technologies, and Safran. They're generally more (a lot more?) than jet travel and they're all at least a little hairy. In financials BoNY Mellon is like an infrastructure company for the financial markets. Also, pump companies tend to be really good bets. FlowServe and Weir Group are 2 good examples. Though lately these companies get whipped around pretty good by what's going on in the oil sector.

Thank you John for the kind words and the flattery. I'm glad i was able to add some value. That's why most of us are here. But it's still nice to hear when people find something useful. Now a few thoughts. That formula is meant to attach a discount to the face value of flat liability at a point in time. It's not dynamic, i.e. it doesn't account for float growth. It can be made dynamic fairly easily by building a DDM sort of model around it for float. Mario, while I think that BRK has a good story I don't know if it's as good as you think. t going down is not good. Also r went up which is also not good. c went up which is good. But with c it's a little more complicated. c can be positively correlated or negatively correlated with the investment portfolio. Furthermore, over time c is negatively correlated with underwriting profit. So while higher c is always good for float discount it's a lot more tricky when it comes to overall valuation. Context is key here. The investor, I think your framework is flawed. You don't get to do what you want with the float and I think that 8% is really optimistic for return on float. There are regulations around what insurance companies can do with float - see Berkshire's huge bond portfolio --that's not an accident. Also you don't get to have fun with the float for 50 years. You pay it out and have to try to raise new one. There are thousands of people each day asking for their float money back from Berkshire. What you say about float being a superior type of liability is true. I would account for that by adjusting c higher. But I would be careful about the size of the adjustment. Keep in mind. The vast majority of companies did not have a problem refinancing themselves in 2008. Berkshire wouldn't have had a problem either. The fact is just that Berkshire wasn't and still isn't very levered up.

You can always go straight to the source: https://www.ivey.uwo.ca/bengrahaminvesting/resources/videos/ They're all there.

Maybe I don't understand your point. But I would totally buy insurance from Buffett. Actually I'm working on a venture right now and one of the things we're trying to solve is how do we buy insurance from Berkshire Hathaway.

The target for immigration in Canada has long been 1% of population. Some years it's a bit more, some years a bit less. But this is nothing new.

Well there's a couple of things. For one they're journalists, so they're job is more to report rather than do math. Then there are different levels of media organizations. For a lot of them to be called a media organization is a real stretch. Then there are others which are just bast. Then you have a few good ones and everything on the spectrum in between. You mentioned Business Insider. That is a churn shop. They just put out as many articles as they can. They pay their writers like crap. What kind of excellence do you expect from a place like that? When they do happen to have some competent people they bolt for greened pastures when they become available - see Joe Weisenthal. But I doubt that you would have the same complaints against say the Financial Times.

As far as I know there is no such regulatory items with airlines as with the shipping industry and there likely won't be. Firstly there's no need. As carriers transition to the new generation of planes they would have improved their emissions. There's nothing more they can do past that point. Why would you regulate the impossible? Secondly, the economics of the two industries are vastly different. Both want to cut costs. Airlines use aviation fuel. For them cutting costs means using less fuel and being as efficient as possible. So the economics incentivize lower emissions. Ships use bunker fuel which is really nasty stuff. Just switching to diesel would reduce emissions by a lot. But bunker is cheaper than diesel. So the economics of shipping incentivize higher emissions. That's why you see regulation in the case of shipping but not airlines. Because the airlines will do it on their own.

Well pollution is going to increase due to more flights. But, the new generation of planes is more fuel efficient: ligter planes due to composite material use and more efficient engines. This will lower the emissions not by regulation but by circumstance. The existing airline flee is quite old and newer, more efficient planes, lower fuel costs. Once the airlines transition to the new generation of planes you have a jump to lower emissions. Then it stays there because the equipment has a 30 year life span. So you have a positive factor and a negative factor. I'd say that the end result will be a decrease in emissions in the near term as airlines renew their fleets and then a steady increase in emissions as growth of the industry takes over. Then in the long term you end up with higher emissions as higher use overcomes technological improvement.

I disagree with a lot of the tech stuff. I know lots of value investors that invest in tech and do it very smartly. They're not chasing FAANGS or anything like that. But a few years back (maybe like 5) companies like Google, Microsoft and Cisco were screaming value buys by almost any measure. Now there are investors that style themselves as value that don't buy tech. They do that because Warren Buffett said something about tech 20 years ago. That may just mean they're not very good. Listening and emulating WB is not a bad place to start. But you're supposed to start from there, learn some more, evolve and do what works for you. WB himself is the great evolver. He is the great disciple of Ben Graham. But what he's built is not at all Graham-esque

As far as I understand Berkshire's thesis it's around capacity and competition. What's happened is that there was a big round of mergers in the airline industry. After all of this consolidation these mega airlines cut a whole bunch of capacity. The big 4 control about 75% of capacity. This is quite similar to what happened with the railways and as we know that turned out to be very profitable. The other side is competition. Historically any asshole with a pilot license and aviator glasses could get a plane and start an airline. Once they did that of course they went after the most profitable routes and made all the profit go away. But now the plane makers have HUGE backlogs and they're locked up by the big boys. So if pilot Dan wants a plane, that's a long, long time away. So this takes pretty good care of the possible competition. All in all it's actually a really good thesis. But I still can't bring myself to invest. This industry has been so horrible for so long and there were so many "this time is different" and it turned out not to be that I'd rather pass on the profit than get involved with it.

That would truly be a sight to be seen. That locomotive would have to have a big, huge, giant battery.

Well, Duh! Of course the Fed is happy to raise rates if it can. Also, while 2% is just a number. It's actually not so random. It was set at 2 because of a lot of pushback from conservatives. Which are/were? hard money types. Economists wanted a higher number. In reality 3% should work better. We may even get away with 4%.

That means `that Sanjeev has a 1 in 84 quadrillion chance of some free advertising. Yea, it's small. But it still has positive NPV ;D

The problem with the European banks is that they're crap and full of risk. The white collar crime sprinkled on top is not as much of an issue. Even with the huge fines that the EU likes to slap. It wouldn't be much of an issue. But the banks aren't earning well on their assets. Europe is over banked, there's huge competition that will keep margins low. Then there is the risk. I don't like owning banks in countries with huge household debt. That's pretty much a disaster waiting to happen. So that group of countries takes out Ireland, UK, Sweden, Denmark. Germany doesn't have large household debt but doesn't really have banks to buy either. France is actually good. Italy doesn't have huge household debt but the country is a basket case. That brings us to the next issue. Systemic risk. Banks in Europe is very intertwined and you have very large Pan European banks. Let's say that the Italian government does something stupid which kneecaps Unicredit. SocGen, through no fault of their own, is in the crapper before the end of the day. How can you invest in such an environment?

I'd say it's been going on for a while. At least 6 months. I'd get an email notification that a reply has been posted and can see the post in the email. When I click on the thread, the post is not there. We're talking seconds here. It doesn't appear later. I thought there may be an issue on my side and didn't follow up. But last night I had some time and decided to go for it and do a check with other board members. For what it's worth, I didn't block or mute anyone or anything so that wouldn't be a reason why I didn't see past posts.

The times that I've caught it happening, and it must have been at least 20-30 times, it happened really fast. As in I got the email and the post was gone by the time I clicked on the link. I don't think that people would delete a post withing seconds after posting especially posts that looked like they may have taken a bit to write. Furthermore, most of the posts I've seen disappear didn't have the kind of content that would make the poster regret writing it.

John, I'm not too concerned about Dalal's post or my ability to reply to it. i'm more concerned about whether there's a technical issue with the board that I should maybe report to Sanjeev. This is not the first time that I see something like this happening. I've started this thread to ascertain whether the problem may be on my end or not.

Yes, but i'm quite sure that he didn't remove it 20 seconds after he posted. Especially since the discussion wasn't going in that kind of direction.

Can someone take a look and see what's the last post on the Tesla thread? At this point I see mine as reply#2416. Does anyone see Dalal.Holding's post after mine? Thanks

I meant the money market, not the stock market. Edit: I don't think the equity markets will find much love from the Fed this time around if inflation is at or above target.

Not strange at all. The moment that they sell bonds, rates go up. It's just basic monetary economics. disagree. fede can only raise short term rates by fiat. to raise long term rates, they have to sell bonds. by only doing former they risk inverting yield curve. they should have done the latter first I'm sorry, they don't raise rates by fiat. They do it by altering the money supply. To increase money supply they buy bonds, to decrease it, they sell bonds. They make the announcement and then proceed to implement it. There's really nothing to disagree with. It's just how it's done. Otherwise the free market will tell the fed to shove it - metaphorically speaking.

Thank you for saying that. I was wondering if my understanding of the mechanisms were right. It kind of puts politicians in a tough position. They scream bloody murder about debt because it rings true with voters but in order to reduce $ supply, you gotta issue debt to remove dollars. Aren't higher taxes & lower spending another set of levers to pull? Doesn't less money get more choosy about where it goes? Short term pain for long term gain. I'd say that you have an idea but your understanding of the mechanisms is wrong. You're confusing monetary policy with fiscal policy. Politicians deal with fiscal policy. Issuing debt (fiscal policy) does not shrink money supply. What shrinks money supply is when the central bank sell debt that has already been issued (monetary policy) from their holdings. You're right central banks put politicians in a tough position. But I think again for the wrong reasons. Since you've touched on this let's dig a little in basic economics. I don't want this to get too political (general discussion board), but you have a good example with Donald Trump because he's so crude. It makes for a good teachable moment because it really highlights why the system is set up the way it is. So Trump is trashing the Led. Logically from his position it makes total sense to do that. Because at the basic level the interests of politicians and central bankers are diametrically opposed. When you get down to incentives, politicians' goals are to get re-elected. Central bankers' jobs is to manage the economy, especially the inflation. So we the economy is doing very well their job is to take away the punch bowl and slow things down so that things don't get out of control. Politicians don't like that, because it's easier to get re-elected when times are good and the economy is rolling. When the train derails, they can leave and let someone else deal with the wreck. This dynamic gets amplified when you have a high powered political position with term limits such as the presidency of the US. This is the whole basic logic and reasoning why western economies have designed the role of the central bank to be independent of politicians and political structures. That's why you hear so much about central bank independence. Politicians don't like it, but for the most part they've come to accept it. And it's really worked out quite well. Though I think we got lucky in a few spots.

Not strange at all. The moment that they sell bonds, rates go up. It's just basic monetary economics.

Firstly, there's nothing weird about raising rates and reversing bond buying. The way that central banks raise rates is not just by talking about it. They do it by tightening the money supply through open market operations. Namely selling bonds. So you should expect to see that. Your anecdotes are really just monetary policy at work. Slowing down economic activity. That's what it is supposed to do. It is a fairly blunt instrument and it affects different people in different ways. While certain banks won't go out and say it, they don't care much who it affects as long as it has effect: i.e. if the economy slows when they want it to slow or accelerate when they want it to accelerate. But housing is big in monetary policy transmission. Finally, your initial question: Should we ever have an inverted yield curve? Well, technically speaking, no. But for various reasons they've happened on occasion. And, while they're a leading indicator for a recession, the recession doesn't always come. The place where we are right now, possibly leaving a period of very low rates and entering a period of higher ones does pose a risk of an inverted curve. It's also one of those times when an inverted curve may not mean that much.

This is how you know that the economy has recovered. People have enough money to do dumb stuff with it again.