twacowfca

a permanent resident of Australia may become a dual citizen by becoming an Australian citizen. Prior to 4 April 2002, Australian citizens who became citizens of another country lost their Australian citizenship automatically. http://www.citizenship.gov.au/current/dual_citizenship/ Just curious. Does the US allow dual citizenship?

I agree. Consider the fact that Soros hit a multi grand slam home run with his incredibly leveraged speculation against the British Pound relatively early in his career. Take that away, and his returns aren't so great. Or consider Bill Miller with his mediocre value investing portfolio that appeared to be superior in the 90's because he had a small number of tech bubble stocks like AOL in it. Look closely at the process WEB has used and the six sigma consistency of his results over a long lifetime of investing, and the sensible conclusion is that he is in a class by himself. :)

plus tons of cash? is this based on your reading of the behavior of the monetary base, or something else? for myself, i have to say i've never had a year where i've done more trading in & out of positions, & sometimes back in again. its partially been a result of the extreme volatility....but its also been a function of the macro landscape which i've been paying more attention to than ever before. long cash & 4 bond mutual funds ( a 1st for me, both the bonds & the mutual funds) and ffh, lre, wina, nrci, vrsk, kw, atri The monetary base has leveled off in recent months. Not bearish enough for us to buy puts which are pricey now, but somewhat bearish in that the gush of free money that supports the market has reached a limit because interest rates practically don't go below zero. Also the deleveraging in Europe can be contagious. Cash is king when markets melt down. What's happening now is a replay of the 1930's and 1940's, but with deflation moderated and eventually to be superseded by inflation, thanks to our fiscal and monetary authorities. Put most of our large cash pile into BRK. Couldn't resist the free perpetual put with an increasing strike price. That put would have cost about one third the price of the stock if any options writer had been willing to write it. :) It's interesting that after trading through unusual situations over the last three years, we are back to basics with almost all our funds in very good long term hands!

Yes, but with lots of debt that will have to be paid off in the not too distant futuure, is that FCF really free?

Interesting. Reprehensible if in fact they skimmed some of the oil from wells they managed. Also interesting that Bloomberg ran this story as a scoop based on old events, the latest of which came to light in 2008. Also interesting that the writers think the Feds should perhaps bring criminal charges against them for not exercising stronger control a few years ago over a French subsidiary even though that subsidiary now appears to be under better control. Could this be related to the fact that the Koch brothers support Texas Gov. Price as Christie may be about to throw his hat into the ring?

No sure what the rules are in Germany. Anyone from Europe knows? They built up their position through one or more large banks acting on their behalf. Their actions were concealed until they had the squeeze. This is legal in Germany, and possibly in other countries of the EU.

Or the short version: "There is a tide in the affairs of men which taken at the flood leads on to fortune." --WS. :) Guess where most of our cash pile has gone. A free perpetual put about the current price or higher with a strike price that increases with the likely to be growing BV/SH of BRK in most years going forward. It doesn't get any better than this. This is not a short term trade! What a "dividend" for shareholders!

I do not "greatly misunderstand" it. As an aside, has anyone in history managed to have a civil conversation by first insulting the position of the other? I vastly prefer a welfare system to what we have today, which is actually functionally the same as a welfare system except: 1) the rhetoric is different 2) everyone qualifies for it and the people who had the highest means to save ironically get the most income back from it. I say they are functionally the same because in both cases you have benefits being paid by tax dollars, not from a pension fund. Tweak the eligibility (only people who need it) and change the rhetoric but keep the taxes. What does that do for the finances of the country? Yet it still functions as a safety net. I'd say that's a success when you can greatly reduce the cost without undermining the most important aspect -- keeping the safety net. How can people complain after allowing the government (voted in) to run the finances this way for so long? A generation of people (the baby boomers) that enjoyed the booming years of the middle class is now expecting a struggling and smaller generation to support them directly through tax transfers, EVEN IF THEY DON'T NEED THE MONEY. I just think that something is basically wrong with this. I apologize for the insulting language in my first sentence. I'll withdraw it. I appreciate your thoughtful and insightful comments, and I agree that we should keep the discussion objective and collegial.

The US Social Security System wasn't set up as a welfare scheme, but as something with more dignity--a small pension for those who worked hard during their employment years, especially because most wage earners then were self employed or worked for employers who did not have retirement plans. A separate scheme, SSI, was later set up as a far less generous welfare plan. Then, for efficiency, Congress decided that SSI should also be administered by the Social Security System. Administration of these two systems by the same agency gives the impression that the Social Security System has morphed into a quasi welfare program. Lumping productive retired workers and their families together with needy people who have never had significant employment demeans those workers who paid into the system and are now getting a much lower return than they would receive under a private plan.

Things can change rather quickly as people anticipate the future. When people realize they are in a substantial inflationary milieu, they stop paying down debt because they realize future debt payments can be made with depreciated money. Then the worm turns and inflation accelerates as interest rates go through the roof when lenders realize they are playing a losing game. Inflation in the UK is running at 4.5% annual rate and 3.5% in US. This may moderate if the markets tank and we go into another recesion, but this looming recession may not happen or be brief because the loose money from the Fed is finally working it's way to M2. M2 has been expanding at double digit annual rates in recent months. If anyone thinks this won't eventually be inflationary, I've got a nice bridge in a large east coast city that person might be interested in buying. :)

That's funny. My autocorrect always changes your to you're !? :o

Marlin, did you happen to know Larry Burkett when you worked at NASA? He monitored the astronauts' vital signs and also was involved in other personal contact with them. He was monitoring them when the three astronauts burned up in the tragic capsule fire.

Stock market values, especially in real dollars can be just as much negatively impacted by substantial inflation as deflation. But during inflation, growth stocks are hit especially hard because the discount rate for future earnings increases greatly, making stocks without much distributable earnings relatively expensive to own, especially when bought using borrowed money.

I agree that WEB probably shorted out the risk of a specific stock, perhaps the stock of an acquirer in an acquisition for stock.

During the 2008 bank panic in the US, the US government quickly set up a scheme to insure money market accounts. Since then, there has been very little concern about this in the US. What's far more interesting is your question itself. You're from Europe, right? If so, your question may be a sign of the early stage of panic there. Is this possible? To answer your question: The FDIC insured account would be the more secure because the Federal government would have to default on every individual savings account in the country (most of the voters) for that insurance not to pay off.

Unfortunately, two of the three companies we like the best that account for most of our stockholdings have gone up in recent weeks. It's hard to buy on the dips if they don't dip. Therefore, we continue to sit on our large cash pile. There are worse problems than that. :)

plus tons of cash? is this based on your reading of the behavior of the monetary base, or something else? for myself, i have to say i've never had a year where i've done more trading in & out of positions, & sometimes back in again. its partially been a result of the extreme volatility....but its also been a function of the macro landscape which i've been paying more attention to than ever before. long cash & 4 bond mutual funds ( a 1st for me, both the bonds & the mutual funds) and ffh, lre, wina, nrci, vrsk, kw, atri The monetary base has leveled off in recent months. Not bearish enough for us to buy puts which are pricey now, but somewhat bearish in that the gush of free money that supports the market has reached a limit because interest rates practically don't go below zero. Also the deleveraging in Europe can be contagious. Cash is king when markets melt down. What's happening now is a replay of the 1930's and 1940's, but with deflation moderated and eventually to be superseded by inflation, thanks to our fiscal and monetary authorities.

When you come to the fork in the road--take it! -- Yogi Berra

That's my birthday! Beam me up Scotty. :)

You're very welcome. :) And thank you for complimenting the two cents worth I added to the nice summary by oec2000.

Float has the huge advantage in a down market that funding keeps coming as markets decline enabling bargain purchases when deleveraging from other sources of funds is causing forced sales.

LRE FFH (workout) Plus a ton of cash :)

Charlie, as a Pacific Coast Stock Exchange member also wasn't subject to automatic MTM margin calls. :)

To be more precise, do you know of any 'superinvestor' that used margin on a personal account (not float in a company or whatever) when they were young? I can think of many leveraged companies, but I'm drawing a blank when it comes to these investors borrowing in their name to invest. I'm sure some did, though.. I read The Davis Dynasty. It claims he used the "maximum" amount of margin. Yup. But he was a NYSE member, US Ambassador, and he wasn't apparently subject to the same automatic margin calls as retail investors were in the unpleasantness of 1973 1974. :)

At the top of page 84, it appears that the base case for normalized earnings is calculated based on a 15% return on tangible common equity. Tangible common equity as of Sept 2010 is listed as $114 billion. So that gives a normalized net income of $17 billion, or $1.70 per share. We bought a ton of BAC in March, 09 a little above the bottom and sold it a few months later for more than a double. Our back of the envelope calculations then were something close to the value above or a little higher. However, we may be approaching a time when their spreads are squeezed. Therefore, it may be sometime before their IV is reflected in the market. Their stock looks interesting for patient value investors. :)