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I like Capital Trust which is selling at a discount to NAV, has an asset management firm, has loads of NOLs and Sam Zell as chairman. I can see Zell putting some real estate assets into CT to take advantage of the NOLs. Zell did the same thing with Covanta. Packer

CA and NY are both very high everything tax. The rate may be lower but the properties are worth more so the state/munis still raise lots of money. My only point is the states with alot of taxes do not necessarily have more/better services much of that difference goes to higher paid state employees and re-distributive transfer payments. In my mind it becomes a problem when basic services are not being provided to fund higly paid employees, transfer payments and other nice to have projects. California is the perfect example and the Feds are also heading that way. One question you need to ask is pubic service service or time to get overpaid because your employer is a not informed monopolist? Packer

High redistribution is high tax rates to overpay for services and benefits and thus the state has to skimp on baisc services they are expected to provide. I do not know why the state is going to fund the white elephant train system when the basic roads in parts of the state are in disrepair. Just because you pay high taxes does not mean they are being effectively used and the effective use needs to be highlighted and monitored. Michael Lewis also has a good description of what happens when towns overpay for services just look at San Jose and Vallejo. Packer

It has been my observation lately that states that have high re-distribution (California) some common services like roads are worse than in states that have less re-distribution (Arizona & Texas). If anyone has driven in the Calif/Ariz/Nev region you know what I mean. Packer

From a tax perspective you want to donate high priced shares because you get a bigger deduction. Packer

For those of you that use IRR how do you normalize the market return for your IRR? Lets say you have a big inflow at the bottom of the market and your IRR is greater than your simple rate of return how do you develop a market benchmark for your IRR to account for the inflow at the bottom of the market? Packer

Isn't the ability to have no effect a function of having a trade/capital surplus? Once this reverses as the countries age, they will have to get funds from abroad to provide funds for the promised benefits. The US is able to do it with a deficit because it is a reserve currnecy and more trusted than the alternatives. There must be a limitation on the system you have described or it would be a perpetual money machine and the Europeans would have done this also. Packer

I think Japan will run into a problem when it has to issue large amounts of yen bonds to foreigners (which it hasn't had to due to high savings rate amongst the working population). At that point they are at the mercy of the markets. That is the situation in Europe, they have to issue bonds to foreigners to provide for spending. The US is somewhere between Europe and Japan. What may hit Japan is demographic but it may be blunted if they can invest thier capital wisely to offset the decline in population. If older folks can stay productive and continue to save and pay into the system they are fine. If they want to collect and live on the golf course then they will have a problem. Packer

One point he leaves out is the debt isssue which could destroy the economy pretty quickly. A good portion of the growth was created via debt (similar to the US/Europe) so the debtholders (primarily citiznes) will be the ones hurt once the debt burden blows up. The failure has been deferred via borrowing but not eliminated. Packer

I think you have to seperate fields where in general more effort will result in better performance (car sales) and those where external factors (uncontrollable events) money management performance. That is why letting go the bottom 10% in a field like car sales will produce better results than in money management perfromance. Packer

Up 8.5% this year. Last few weeks pulled me into positive territory. Fully invested all year. How do you calculate IRR versus total return? Packer

The key is to find folks that are willing to make concentrated non consensus contrarian bets. This is hard to find in mutual funds as they are dealing with larger amounts of money (thus larger more well researched stocks), have diversification rules, the buy/sell decisions can be determined by flow of funds and some of the picks can become value concensuses. If you want to get average returns, they are great tool but above average returns are much harder due to above mentioned constraints. The key for me is to examine the undelying holdings and see if the thesis is sound and if the holding is truly disliked. You can compare put/call volatility to get some sense of the consensus. If you find stocks with higher put volatility than call volatilty that is a start. Also having a value discipline is important. The most you can hope for from these funds is beat by 5% and if you are going to spend the time and effort to do this much research going a step further to individual stocks is not that much more research and you can control the buy/sell timing. Just some thoughts. Packer

I do not jest. If this guy were the head of any company in company or organization he would gone long ago. Just compare his results to ideologically similar folks like Bill Clinton and you can see how short he falls versus a skilled leader. This blame the other guy strategy is like a CEO blaming everything else but his own failings for underperformance. I am surprised how many chances this guy has been given and he has blown most of them. I think his main issue is that he makes his decisions as though there is no opposition which is understandable given his experience in Illinois. He did not have to compromise and compromise was a sign of weakness. However, to run the US comprise is a strength. His partisan rhetoric also welcomes an equally extreme opposition rhetoric. As a supporter of his policies aren't you disappointed in his lack of skill? I agree that the Repubs have been giving him a hard time but that is what the opposition is suppose to do. His reaction, fight then give in is his weakness and he has done nothing to change that. So his strategy is to make folks feel sorry for him. This only works a few times. The most common alternative is to develop relationships with the opposition which he has not. Ronald Reagan's first few weeks in office was doing just that. Calling the opposition folks and developing a relationship with them. Unless Obama does something similar it will be a disaster. The time to develop relationships is not in the heat of a battle that is the time you call on previously developed relationships to forge compromises. I just do not know how he can answer the question better than Romney that he has worked together with others who think different than him. Packer

I hope not. Anything would be better than a guy who does not understand compromise and how the US system works. Another 4 years of this lack of leadership will be a killer. Give someone else a shot who has a better chance at compromise. Packer

We did the same exercize earlier this year and were able to add some non index funds like Sequoia, Longleaf, Third Ave, Fairholme, Harboe Intl and the Wellington sector funds. We had Vanguard as our administrator so we already had alot of index products. Packer

It is an educated guess but how much of you money do you spend on guesses if the cost is very high. I don't spend much. (I will spend alot if I think the payoff is high and achievable.) If the insurance is cheap you buy alot of it but at this point the insurance (the proposed schemes) is very expensive and has questionable efficacy. We should and will adopt the low cost insurance policies. It depends upon what you mean by approximately right, I mean are they willing to bet that there will be more hurricances and other extraploative phenomema over the next 50 years or are there other factors beyind global warming that have bigger impact on the outcome. I also think that extrapolative science has a behavior aspect to it that not many people want to acknowledge. I think the latter but time will tell. Packer

The only problem with your analogy is that we do not know that we will die from global warming. It is an educated guess. I would like to see how many scientists would be willing to bet there salaries for 10 years on there outcome. I doubt very few would with their own money but want others to pay for this with OPM. Below is the latest on a reasonable approach to global warming: http://online.wsj.com/article/SB10001424052970203413304577086361984880468.html?mod=WSJ_Opinion_LEADTop Packer

He hasn't but the changes referenced in the Wikipedia article appear small and I wonder how they got accurate measurements before the Industrial Age. It appears on the surface to be extrapolation of data over a short period of measurable time 1990 to 2010 to a longer time period of time. I think the bigger question raised is spending money on CO2 pollution the best way to improve life on earth for its inhabitants? In his book he has many more cost effective alternatives to spend money on before global warming in terms of measurable cost and benefit. Hopefully, someone will come up with a cost effective solution to CO2 pollution and maybe it will be solar but paying bleeding edge prices for technology has historically been a poor investment unless you need for other purposes (ie defense intelligence's use of satellites, etc.) Packer

You are making a big assumption that the military costs are for oil. I would say that there is more than oil that we are spending are military $s for. If that was the case, why can't/don't we get Europe/China/Japan and others dependent upon oil to share the cost with us? They would surely pay if they thought it was worth the price. I would say that the health care costs from pollution are primarly due to non-hdryocarbon pollution and the cost to clean up global warming are very high for very little beneift (see Cool It and other studies). Just some thoughts. Packer

The are going to continue to maximize the value of the estate and liquidate the assets. There was a plan at one time to start an assset management firm as a follow-on to Lehman but the plan was rejected by the debt holders. Packer

If the cost solar was obviously so cheap without a subsidy it would win hands down. But that is not the case. You would have more than Buffett funding this and you would not have to artifically create demand by legislating % renewable for electricity. Is the whole decline in the share price of the solar cell industry by the market a fluke caused by subsidy for O&G? I find that a stretch. It is more likely a bubble subsidized by the gov't like the internet/railroads. O&G profitabilty may be enhanced by these subsidies but the underlying economics is not negative like it is for solar today. You may have an argument about pollution but the interesting point about the Exxon forecast is energy demand is going to stabalize in the developed world and with efficiency and conservation we should be able to reduce pollution in the developed world. As for green house pollution, in my mind if it is a cause the current costs to remedy it way outweight the benefits. This may change in the future though. If solar does get cheaper in few years, then the money spent on subsidies and % renewable standards is an expensive way to get there. How much did Spain gain by subsidizing solar when they are going broke? The other intersting point is that these solar subsidies are primarily for the rich and highly educated who in my mind do not need another subsidy. The O&G subsidy at least helps the "blue collar" workers as the extraction and transportation process requires more of thier labor over time. Packer

The constituency is the whole solar industry and the environmental lobby as they would not be produced at such a scale if not for the subsidies. When you are dependent upon a subsidy for your profits you lobby hard. I would not be surprised if they hold more sway over the politians than the O&G industry as more of their profits and support is dependent upon them. Packer

I think without the direct subsidies solar is still uncompetive. The article seems to imply that without the direct subsidy, the project would not have been done and there will be very few future porjects. In addition, solar and wind have a huge subsidy that O&G do not in the renewable standards that have been adpoted. These standards are a tax on power users to subsidize solar and other renewables. Unfortunately, as the Exxon forecast mentions, the energy needs of the developed world will be flat to down and the developing world will be up and the developed world are the ones who can afford the subsidies. Without the subsidies, which many parts of the developed world is now questioning due its costs and thier high debt levels (Spain, US, etc.), solar may have to take step back and develop a competitive product before wide spread implementation. Packer

The other issue is that if this is new growth area funded by debt you may end up like the railroads in the early 1800s and the fiber networks in the 1990s/2000s where the growth happens pushes down prices and causes many of the players to go into BK due to not being able to cover the interest expenses. In those cases, the best time to enter is after the Chap 11 if the plan looks viable. Packer

A big difference is rule of law in Canada and relationship based system in Grece. If Canada has debt problem it will be more akin to Sweden and Scandanavian cultures than Greece as the former has rule of the law and the later relationship. Just some observations. Packer