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The point is that we should not spend alot of resources on speculative outcomes with low probabilities of occurring when you can spend the money on higher return for investment activities. Global warming is happening but the question is there an cost effective action we can take versus the other malodies that effect man on earth. Cool It by Bjorn Lomborg provides the best cost/benefit I have seen. If there are others who provide an alternative framework it would be interesting to examine. Packer

One item that is relevant and seldom discussed is lifestyle and quality of life differences between wealthy and not so wealthy folks. Converging this should be the goal & I think it has gotten better and will continue to converge over time because technology is making goods and services cheaper. I am sure John Rockefeller would rather be a middle class person today than the richest man in the world in the 19th century based upon these metrics. Packer

The Great Wave documents four of these cycles going back to 1200. What is interesting about the gold standard is that as a result of better mining techniques in the 1800s the gold supply increased 5x from 1820 to 1860 yet prices declined by about 30% over that period. What this tells me is that deflation is a caused by excess capital that created in boom and not destroyed by war, famine or epidemic. What the book chronicles is the historical waves of capital creation as shown by excess food supplies, goods and services and the technological innovation which creates these surpluses offset by war, famine and epidemic which destroys capital created in the previous creation period. The main difference today is the war, famine and epidemic portion of the cycle has been reduced so you have excess capital being created around the world. What is offsetting price declines is the fiat money being printed so nominal deflation is avoided. Packer

I think you framing of interest rate changes is missing something. What is important is not the absolute changes in rates but the relative change. Values will double if rates go from 12% to 6% or 3% to 1.5%. The other thing about interest rates is they do not mean revert they go up and down over long period of times in waves. The current cycle began in 1980 so it is 36 years old. The last two long term cycles were about 80 years in duration. The Victorian deflation ran from 1820 to 1900 and the Great Reflation from 1900 to 1980. These are described in The Great Wave. So we are about half way through this cycle so comparing PEs now to 1980 is comparing apples & oranges as the interest rates environment is completely different. As to increased demand I think that what is missed is where will the wealthy savings go? Will it go to bonds that yield 1 or 2% or stocks that yield more? I think stocks. As to corporate tax rates in most studies I have seen the effective rates range from 25 to 30% averaging around 27%. So I think the drop will be 10%+. As to retiring the Navy, I would not put a massive cut back on overseas deployment as out of the range of possibility & a resulting decline in the defense budget. I think these are some of the reasons Fairfax has become more bullish. You are correct that valuation is high compared to history since 1980 but the underlying assumption is you are expecting interest rates to be the same to make the comparison valid. I do not think the 1980s interest rates will return for a long time so I use the ERP to gauge equity valuations versus P/Es which include both interest rate and ERP forecasts. Packer

If you can forecast interest rates better than the marker all the power to ya. I know I cannot. The ERP is valuation metric that measures the relative pricing of stocks & bonds independent of interest rates. Stocks are worth more with lower interest rates and one way to see if stocks are overvalued in comparison to bonds is to use the ERP. In addition, the tax reduction benefits will more than offset any decline in "peak" margins. For example, if US rates are reduced from 40% to 25%, like other OECD countries, it implies an increase in AT margins by 25%. Also there will be increased demand from high tax bracket due to tax cuts and foreign cash repatriation. Packer

Also in Reagan's time interest rates were at 12.4% & the ERP 5.1% per Damodaran vs. today interest rates at 2.3% and the ERP 6.1%. The average ERP is around 4%. So if we get back to the average ERP you have an upside of 15.9/11.9 or 33%. This does not factor in lower tax rates a real fundamental cash flow impact. Packer

There is a middle position that the climate change has always happened and will happen in the future & why spend good tax money subsidizing an industry if it is economically viable? The opposition is not against the technology but subsidization using taxpayer money. The subsidy is also paying out cash versus just paying less tax in the case of other alternatives. Packer

If you save it where do you think it goes? Stock market & real estate. This is what happened under Reagan. Also I think you are going to have the momentum of bond investors who are losing money switching to stocks like what happened in 2013. This may be in part why FFH lowered the hedges to 50%. Packer

Buffett may change about his assessment, I do not know. I am sure he was not thrilled by the election of Reagan but he dealt with it & profited from it by not making it effect his approach to the market. If Buffett really thought Trump was the second coming of Hilter (as some espoused) he would have sold his stocks but he did not. A key attribute of a successful investor is changing his mind when the circumstances change. If Trump does little or none of what his critics say, I think it would be wise to change your view on him. Part of the issue here is most of the media believed there own propaganda and are becoming de-hyponotised but it will take awhile. When you see headlines from Bloomberg & others in the MSM that acknowledge that Trump has some good policies and not rehashing what they have been espousing for months, then we will have a more information from a more unbiased source. Packer

How do any of us know if we going to be better off? I do not know. Most folks knew the way things are today are not working so they voted for change. Fortunately, in the US, the federal government has limited power versus other countries. Also if you look at the way Trump works is he paces with the extreme (to get them on board) & then moderates as any good negotiator. Look at immigration as a example. At first it was self-deportation then build a wall and return the criminals. Now it is build a wall with a big door to allow who we want in versus a free for all and deal with immigration once the wall is built. This is a model I think for resolving many issues. Historically, IMO the Dems always had an ace in the hole, it was their compassion. In this election for reasons I do not understand they threw compassion out the window and tried win by being as mean or meaner than the other side. Love and compassion will defeat hate not hate back. The party of compassion became the party of intolerance & hate if you did not believe like they did. This IMO is why Trump won evangelicals by such a large margin. If you are derided and mocked versus being listen to & understood by the same group of people in power you develop an affinity. O'bama when he made the statement about the vet at the Clinton rally the other day was the first time I saw the ace in the hole compassion at work in this campaign for the Dems. Trump made an effort to reach out to minorities in the inner city, he went to Flint. Romney and McCain did not do this. Hillary did not reach out to any of her opponents or groups who voted in large numbers for Trump instead relying on demographics to win. This is surprising as this what her husband did so well. Packer

As to team builders I would rather have a guy that can change folks when appropriate then one who holds unto the same team no matter what, that is the cause of corruption. The retention of Debbie Wasserman Schultz is an example. Both of these folks have paranoid personalities but if the you have to fall back on the false Nazi analogy then you are on a lower level than Trump with his conspiracy theories. Clinton had the opportunity to keep this on the issues but she chose to get in the gutter with Trump on conspiracy theories and innuendos but maybe that is her personality. I just think that whoever wins is going to have a terrible time governing & has a high probability of impeachment given their paranoia. This may be a Pyrrhic victory for the winner here. This is a great board because like most conversations amongst friends the conversation is to try to understand the others point of view not to bash someone because they have a different point of view. Frank Luntz had a great piece on 60 minutes about how since he started in the 1990s the lack of wanting to understand the other side has declined. He gave the example with Bush v Gore, in post election focus groups folks would wait until the person was done speaking versus speaking over folks which is quite common in focus groups today. I think we are different. If we come to our conversation with an attitude of discovery we may actual learn something. I know I have. Packer

I heard a great add-on to the Trump wall analogy that is we will build a wall with a door to let in those we want to let in. This BTW is what the rest of the world does (only lets in who they want in a controlled fashion vs. a free for all). As you have noticed the solutions have evolved to more practical solutions over time and have gotten folks involved versus the made in Washington/think tank solutions foisted upon folks by Clinton et al. You are right about the Dems they think there enemies are the 50% of US citizens that are deplorable for not thinking like them. As to the next President being a brain surgeon, I would rather have one who knows how put together a great team versus one who knows how put together a corrupt team whose focus is more CYA than doing what is right. Some of the smartest presidents, Carter for example, have been some of the worst because they thought they knew what to do. Just my 2c. Packer

Does it have to identical to movements of the past to call it what it is? Do we need have to wait for the Trump Shirts before we say something? Is it so far fetched that we may get Trump goons in the future? He's already recruiting poll watchers to go to "certain areas". The usual creepy characters seem to have answered the call. https://www.washingtonpost.com/news/post-nation/wp/2016/10/27/militia-group-calls-on-members-to-patrol-polls-on-election-day/ I think we need to wait for evidence. At this point Trump has a loud mouth with no goons. Hillary has more goons at her disposal that she has never dismissed like the Black Panthers who are poll watchers from the her side & she is so secretive versus the public Trump you would not know until it is too late, like Hitler and Mussolini. So you have the loud mouth you can see coming & in the end is a pragmatist in the end versus the stealthy person playing pay for play & thinking she is above the law. Which would you choose? BTW using the same type of login with Clinton she would be looting the government for her personal gain. Packer

The real question you need to ask can you deal with a guy who lets you know upfront what his initial point is and in the end it will be negotiated or do you want someone who tell you what you want to hear and after the deal is done you find out that there is something in there if you knew you would not make the deal. In terms of all the ethics and other discussions I think they both are pretty bad each in there own way that is why there are so many undecided close to 13% going into election day. They both are bullies. One is explicit about it & the other is more refined. I would rather deal with the explicit one versus dealing with more refined deceiver. Packer

Those who compare Trump to Hitler & Mussolini really do not know history & are playing off a superficial knowledge of it. Trump is more akin to those who have a large mouth but not much to back it up with. Hitler & Mussolini had bands of thugs around them that would suppress the opposition. I see no evidence of this other than protesters paid by others to cause trouble. Also both men were great at inciting others to do there bullying for them a trait Hillary is better at the Trump. The other major difference is Trump changes his positions to the mainstream over time. Immigration is an example. Going from mass deportation to deporting the criminals, securing the border then dealing with amnesty. Another characteristic of both men is they did the worst is secret and covered up the truth with lies. Now this is Hillary's specialty and different than Turmp who lets the good and the bad all hang out there. Packer

You are right about our system. Despite its flaws & attempts to manipulate public opinion on average the best answer is arrived at despite as Churchill said about Americans that we will try everything else before arriving at the best answer. I think social media has enhanced this. I think past Presidents probably did alot that could be covered up that today cannot & this transition is painful for those who were used to spinning things. I think for the most part folks have caught onto the spin and are rebelling against it. Packer

I have a friend who has seen Hillary in action in the pay for play. He works for a federal agency & had caught some Swiss bankers in money laundering & had them in custody in the US. Clinton comes in & tells the agency employees to leave. Next thing you know the bankers are free and a donation to the Clinton Foundation appeared from these folks. I have to believe this is not just one instance as this is how HRC bullies and encourages others to bully on her behalf. Do you think this person who has bullied in the US gov't for years and got away with it is the right person to be the President? Or a guy who has made bullying remarks that are mainly bluster? Packer

I think $1 million may be steep. If we use Nate's number of $18k per year until 65 (it may be lower once kids are off the plan) then Fidelity has a study that shows medical costs from Medicare eligibility to death is about $240k for a couple. To get to a $1 million you need to in retirement for 42 years, age 23. Packer

The biggest issue here is they both are probably the worst both party's have to offer and somehow the system that gave us these losers needs adjustments. When your best argument is the other guy/gal is crazy there is something wrong. I am not sure if the winner will be winner for long as we will be seeing many impeachment attempts (probably with legitimacy). I think if there was choice dump these losers & start again, it would win in a landslide. I am going to spend my time & effort on something more fruitful then this disaster. Packer

I think the key here is to find a cheap decent operating business then figure out what is causing the "cheapness" & determine if that reason can go away. In some cases like a declining industry cannot be fixed but in the case of a poor management team or neglect the problem can be fixed. The question then is when & at what cost. Japan or Korea are the only places today I see businesses like these but they may become more common in the US if more brokers no longer trade non SEC filing firms. Packer

I find the rationale that Hillary is being taken out of context is only being applied to her and not Trump also. Trump will say it in front of everyone else unpolished in contrast to Clinton who says it in e-mails and says in public a polished version of the subject. Folks appear to think what Trump says is the final answer rather than a part of the conversation. I am sympathetic to this approach because this is the way I think and reason. I have made mistakes in judgement and changed my thoughts on subjects in front of CoBF members. I do not have polished theses that are bulletproof. Examples of this is the Muslims ban to the extreme vetting of immigrants and forcing all illegal immigrants to leave to removing the felons. Folks using Trump's anchor as his final position vs. a starting point. You also have to remember that Clinton & the Democrats are experts at identity politics using it to divide and in the process creating "enemies" that are treating you unfairly versus trying to find solutions to all of our problems. I think this creating "enemies" is closer to Hilter and other despots than anything Trump has done (not said) to date. Unfortunately all this leaves as a result is more hurt and insulted people that someone else has to deal with. Trump is the first Republican in awhile to use identity politics to the same extent as the Democrats,an approach I disagree with BTW. I also have an aversion to being manipulated and from what I see most of the manipulation is coming from Clinton not Trump even to the extent that Clinton can dodge accountability by discrediting the source. Are not any of the Clinton supporters concerned about how she is being enabled to divert attention from the content of what she said to the source & no one is holding her accountable? This is setting up a dangerous pattern where she can say & do what she wants as long as leaker is our "enemy". I truly believe with her attitude and approach she will be baited by Putin et. al and get us into a war. Trump may say outrageous things (part of his Hollywood persona) and do much less. Clinton will think crazy things say them in e-mails act on them and say much less. I would rather have the guy that says too much and does less than the other way around. Packer

Interesting perspective: Packer

One way to look at it is at what time will the cash either be used for a cash flow generating, distributed or included as a part of a transaction. (I am assuming that since you said excess cash that the cash will not be used to cover losses.) Depending upon when you think these events will occur a discount for cash is applicable. If the company has a history of holding onto excess cash & has no intention to distribute then a 30% discount is not unheard of but it really depends upon the situation. Packer

There appears to be a lot of judgement calls in each situation. If you look at the Clinton vs. Gates foundations, management is allocated to program for Clinton & G&A for Gates. I can see a moderate amount of allocation but the % for the Clinton foundation is huge. This looks like aggressive accounting versus conservative accounting in financial reporting. Packer

This is an eye opener on charities & the watchdog organizations. You read the comments from them and they say 88% goes to program & then you look at the details of program allocation of expenses and it includes all kinds of stuff that doesn't appear program unless your program is to train and administer the foundation (travel, conferences, salaries of officers). Contrast that to the Bill & Melinda Gates Foundation. They have about 90% in program also but all of the admin expense is not in program but in admin. Packer