rb

Well first off it's not like the bank systems were that good in the past. I remember one day when Nortel earning were out I ended 3 times my position in a different stock because the Nortel's volume overwhelmed TD's systems and they stopped sending out trade confirmations. I lost a lot of money that day because of this. Fortunately there is a simple solution to all of this: Interactive Brokers.

Love it. I'll steal that! ;D

I'm sorry it's not semantics. Labour and capital are completely different things. Money does not represent earnings. Your last paragraph is both wrong and confusing. Why would output not change? Why would resources be left idle? That doesn't happen. Furthermore why would an increase in productivity lead to a decreasing rate of change in output? That's not how it goes. An increase in productivity leads to both and increase in output and lower rates.

Sorry, but not true at all. First of all, there's no such thing as human capital. That's just a term invested by HR departments. It's labour and it's a completely different thing. Second, interest rates are the cost of money. It can be related to the cost of capital, but not always so you want to be careful about that. Third, if you're thinking about productivity, an increase in productivity will lead to lower interest rates.

I would be careful with all of this. I don't think much (if any) of bitcoin. But it has a history of big spikes and big crashes and then bigger spikes. Whatever, if people want to play with their 1s and 0s they can go ahead. When it comes to stocks, a 2% drop in the S&P does not a bubble pop make. I agree that pretty much every company appears to be overvalued. However some of this was also true in 1997. That didn't prevent the market to have a crazy ride into 99/00. Only time will tell. But I think we have some interesting times ahead of us.

Like I said in a previous post, they don't need to buy/hold T bills but they need to buy some type of capital asset of yours. It's not easy to explain/understand this stuff without econ concepts but I'll give it a shot. I saying this I'm not trying to be arrogant but because I'm afraid I'm going to do a poor job at explaining it. If need be, please feel free to ask follow up question. I'll do my best to answer them. Ok here we go. Think of it like this. The reason that you have a trade surplus with me is because I consumed more than I produced. You supplied the goods I consumed in excess of my production. My production is my income. So I've spent more than I made. For our transactions to happen you either have to extend me credit or I have to dip into my savings to pay you - this means I have to hand you over a capital asset of mine. So if you run a trade deficit with me you have to accumulate my capital whether in terms of real assets or my debt. You don't have a choice. To make this more complicated this ties into another macro aspect which is that the real source of trade surpluses is the savings rate. Basically the reason why you have a trade surplus with me is because you consumed less than you've produced and sold me the rest. This means you have positive savings because your production is your income and consumption your expenditure. This is also why you can lend me money to buy your goods. You're lending me your savings. I hope this makes sense.

The idea here is that your foreign creditors do not have a choice in selling your bonds or not lend you money. In the past it you may have heard things like "oh what if china decides to not led the US money anymore". Basically China doesn't have a choice. They NEED to hold US bonds because they've ran trade surpluses with the US. It's the same thing with Japan. Japan didn't finance their debt domestically by accident. Japan HAD to finance their debt domestically because for the most part they were running trade surpluses. This wasn't a problem for them because the Japanese have high savings and generally low propensities to consume. In the US the numbers are large. But I don't think they'll have problems financing the deficit domestically. The situation is different from Japan. Americans have a high propensity to consume. But the deficits mainly come from tax policies that favor the rich which have low marginal propensities to consume. So you can picture it like this: the federal government gives a $100 tax cut to some guy who doesn't need anything. The government deficit goes up by $100. Then the guy uses his extra $100 to buy a government bond and that finances the deficit. So there won't really be a problem to finance the deficit domestically. The real problem comes when deficit financing has to compete with consumption and investment that's when yields have to spike. But then the government can also raise taxes which lowers the deficit. Those can also lower consumption and eliminate the competition. Look at it this way, you will be hard pressed to find a government debt crisis in a country with a functioning economy that borrows in its own currency.

That is not really correct. Why not? For a whole host of reasons capital flows are a reverse of trade flows. Country A has T bills because it ran a trade surplus with the US the you had reverse capital flow. That money went back to the US and bought T-bills. Country A can trade their T-bills to country B with which they run a trade deficit. But then country B has to hold the T-bills. Either way someone will hold those T-bills. But country A cannot choose to use the trade surplus to invest in their own country. That surplus MUST be invested back in the US one way or another. What can be different is the type of investment country A makes into the US. They don't need to hold T-bills. They can do FDI (like building factories in the US), they can put it in stocks, property, etc. They just choose to have a lot of bonds: T-bills and mortgage bonds.

That is not really correct.

If the new CEO will need to get paid somewhere in the 20-70 million range it would not have a meaningful impact on Berkshire's profitability.

I think you are correct in the assumption that BRK managers are fairly compensated. BRK managers have long tenures. if they aren't compensated properly then why would they stay? Furthermore the initial assertion/premise is ridiculous. Why would an operating manager get compensated like a hedge fund manager? Does that happen anywhere except the proponent's weird imagination? Does Jamie Dimon get 2% of assets and 20% profit of JP Morgan? It's stupid. As for number 2, no compensation will not impact BRK in a meaningful way post Buffett.

Between the three of them they'll probably have 1 million policies covering 2-2.5 million people. It's a lot. Now for the what ifs. What if other companies join? Off the top of my head Wells Fargo, Coca-Cola (with it's bottlers), and American Express. If Wells joins all the majour banks will have to join as well. We're talking about a lot of people here.

I think it's brilliant and that it's gonna work. In addition while they claim it's non-profit, they're gonna make a whole bunch of money off of it.

Paul, do you trust any investment manager?

Mhdousa, thanks for cranking the numbers. Based on price and descriptions the other position could be Allergan. Price on 12/31 $163.58 per share.

+1 on what Eric said. Also I think the complexity name they're talking about is GE. If so what's with the secrecy? Do they really think they're gonna materially move the market for GE? In my view most of the time this stuff about secret positions and secret letters has more to do with the high opinion the managers have about themselves rather than the market.

I wouldn't say that the US dollar is particularly expensive right now. https://fred.stlouisfed.org/series/DTWEXM

+1. So what if their outperformance mostly came from holding Berkshire? Others had the chance to hold it and they didn't. Berkshire's own outperformance also comes from a small number of sources. Also returns of 2% over S&P is nothing to sneeze at.

Yep! :). One area I fully agree with Trump. I want to see a strong dollar ;D

Currencies are notoriously hard to price and I don't think anyone really can price them precisely. You have certain frameworks like PPP but it's a loose science. It's not like you can do a DCF. Euro is even harder cause you have all these different countries with their own bonds and fiscal policy rolled up into a currency. In regards to your logic on money flows, yes it has some laws in the sense that money doesn't flow as much as you think. Money tends to stay put. Let's say that I'm a German that likes those fat Treasury yields. So I sell my Bunds and go for Treasuries. But first I must exchange my euros for US dollars because Treasuries are USD denominated. Normally you get USD from an American so I do that, I get my Treasuries and I'm one happy Kraut. BUT... now some Yank has my Euros. They're actually pretty useless in his hand. He basically has 3 options: 1. Buy German bonds, 2. Buy a German export, 3. Economic investment - build a factory in Germany. As you can see in all 3 of those scenarios the money comes back to Germany - it actually doesn't really leave. Capital (ownership of stuff) has some flows and that is dictated by economic investment and trade which then influence interest and exchange rates not the other way around. I hope this makes sense. Now in the European union money can actually flow because they have the same currency. This causes German bonds to carry a safety premium. Say that I'm a Greek with savings. It's not very smart for me to keep those savings in Greek bonds or CDs because they're basically all crap and I may not get my money back. But it's really easy for me to buy Bunds because they're denominated in Euro and my savings are in Euro. This bids up the demand for Bunds and results in low yields. Btw this doesn't apply only to Germany but to other safe countries: France, Netherlands and the 2 Scandinavian that use Euros: Finland and Denmark. All have low yields. Edit: I took out something stupid I said about capital flows. German capital is going to the US because Germany has a trade surplus with the US.

Here's 13 2013_Q4_Sequoia.pdf

Here you go Sequoia_05-15.zip

I do agree that there will be regulation around this and I don't know the right comparison. But marijuana is a lot easier to grow than tobacco. If college students can do it when it's banned it ain't that hard.

I have 2005-2015

The one company that I consider serious in the cannabis space is CannTrust CNSX:TRST. It is partnered with Apotex - a large Canadian pharma. So it has access to money, scientists, facilities, basically a large range of resources. Both CannTrust and Apotex have been founded and are/were majority owned by Barry Sherman. I say "were" because a month ago he and his wife were found dead in their home. Police are treating them as suspicious deaths.