Myth465

What about the none Econ stuff. EPA, Scopes Trial, Medicare, Medicaid, ect. I think he ruined his article with the econ stuff, because that is and will always be highly debated but what are your thoughts on the other items relating to science, and social issues. AZ_Value - I agree and feel like the framing is off. Asking the American people what they want and what they are willing to pay for is a far better method. Like it or not I think people want their benefits, as a fiscal conservative I think we should make them pay for them. The issue is one party will always promise the world for free to win power. Its crazy, but I used to call myself a Conservative, and now that just feels like a dirty word. Munger inmo is just a wise old man and has nothing to do with the modern conservative party. The right has been dramatically redefined inmo. Basically Charles Barkley is correct regarding the Republican party.... bargainman I remember that post, and it was interesting, I too dont remember the name. The Republicans are the party of tax cuts, unfunded tax cuts inmo. The dems have a messaging problem and need to higher a Frank Lutz or something. They have lost the flag, defense, patriotism, and now fiscal conservatism to people who arent much better than them on any of these issues.

Here is an excellent article which I believe shows what the GOP stands for, also has a few thoughts on the overseas profits tax. http://www.washingtonpost.com/the-magical-world-of-voodoo-economists/2011/09/07/gIQARBiEIK_story.html The US is a decent example of a right wing government, but if this is successful it will be one big experiment which should be interesting. With that said, as a Liberal, I have no idea what the democrats are for. I give the GOP credit though for offering the American people a choice, though I think they are flawed because few people want to live in the world they want to create. At least I dont..... ----- The magical world of voodoo ‘economists’ Repeal the 20th century. Vote GOP. It’s not just the 21st century they want to turn the clock back on — health-care reform, global warming and the financial regulations passed in the wake of the recent financial crises and accounting scandals. These folks are actually talking about repealing the Clean Air Act, the Clean Water Act and the Environmental Protection Agency, created in 1970s. They’re talking about abolishing Medicare and Medicaid, which passed in the 1960s, and Social Security, created in the 1930s. They reject as thoroughly discredited all of Keynesian economics, including the efficacy of fiscal stimulus, preferring the budget-balancing economic policies that turned the 1929 stock market crash into the Great Depression. They also reject the efficacy of monetary stimulus to fight recession, and give the strong impression they wouldn’t mind abolishing the Federal Reserve and putting the country back on the gold standard. They refuse to embrace Darwin’s theory of evolution, which has been widely accepted since the Scopes Trial of the 1920s. One of them is even talking about repealing the 16th and 17th amendments to the Constitution, allowing for a federal income tax and the direct election of senators — landmarks of the Progressive Era. What’s next — repeal of quantum physics? ------ My favorite, though, is a proposal, backed by nearly all the candidates along with the U.S. Chamber of Commerce, to allow big corporations to bring home, at a greatly reduced tax rate, the more than $1 trillion in profits they have stashed away in foreign subsidiaries. “Repatriation,” as it is called, was tried during the “jobless recovery” of the Bush years, with the promise that it would create 500,000 jobs over two years as corporations reinvested the cash in their U.S. operations. According to the most definitive studies of what happened, however, most of the repatriated profits weren’t used to hire workers or invest in new plants and equipment. Instead, they were used to pay down debt or buy back stock. But fear not. In a new paper prepared for the chamber, Republican economist Douglas Holtz-Eakin argues that just because the money went to creditors and investors doesn’t mean it didn’t create jobs. After all, creditors and shareholders are people, too — people who will turn around and spend most of it, in the process increasing the overall demand for goods and services. As a result, Holtz-Eakin argues, a dollar of repatriated profit would have roughly the same impact on the economy as a dollar under the Obama stimulus plan, or in the case of $1 trillion in repatriated profit, about 3 million new jobs. It’s a lovely economic argument, and it might even be right. But for Republican presidential candidates, it presents a little problem. You can’t argue, at one moment, that putting $1 trillion of money in the hands of households and business failed to create even a single job, and at the next moment argue that putting an extra $1 trillion in repatriated profit into their hands will magically generate jobs for millions. It took a while, but even Richard Nixon came around to declaring himself a Keynesian. Maybe there is still hope for Perry and the gang.

My god you guys do make having a good time via alcohol very hard to do. I now know why Scandinavians drink and smoke so much when they go on vacation.

In a relative sense, I'd guess that the prime example of that would be your country, the most successful country in the history of the world. At least historically. As for the perceived over-stubborness of the republicans in congress, that story seems extremely biased to me. Shouldn't their parliamentary strength translate to a much better negotiatory position? The opinion that sacrifices should be made in an equal amount from both sides doesn't seem prudent if adhering to the democratic process is an end in itself. As a foreigner with libertarian leanings (no emotional stake in either party), that argument reeks of smugness to me. For many in the Tea / Republican party the new deal which has been intake for greater than 50 years is too liberal. They seek to dismantle it. I cant think of any modern nation without at least the new deal. Most are farther to the right. I cant think of a country that is based on Libertarian principles. The US has some basic bits of the well fare state which are essentially unpaid for. The right simple wants to dismantle these bits. As I said I cant think of any modern countries without these bits, that I would want to live in. Perhaps you can. We have been quite successful with low taxes and middle of the road benefits, but we can no longer grow our way out of the benefits and nor can we continue to put them on the charge card. We either have to pay via taxation for them or remove them inmo. Americans have to collectively make a choice inmo. The dems should have changed the rules when they had the chance especially regarding the fillibuster. I think the right has a right to abstain from governing. The left should frame it properly and take the case to the people. They have failed at that. I think the differences are too large, and things will be decided in the next election or they wont and this will continue. Personally I think thats a good thing, a definitive choice needs to be made.

Packer those are some good points and something I hadnt considered, thanks for sharing.

Obama was dealt a crap hand, and is also dealing with a crap teammate. By consistently caving though he has pissed off his base and gotten nothing in return. I would have preferred if he stood his ground and took the message to the people saying this is what I am for, give me people I can work with to get it done. Instead he caves and no one is happy with the situation. No one is happy with healthcare, the stimulus, or most of anything else he has done. Looking at polls and seeking common ground where there is no common ground is a hopeless strategy. The country politically is torn between right and left leaning ideas. They want the taxation of the right, and the benefits of the left. Mixing and matching is what is bankrupting this country. Left works quite well (see Sweden), right may work well though I cant think of a place with right leaning ideals, and middle of the road looks something like Austrialia. Having the benefits without paying for them or the worst of both worlds wont work. Its why I prefer a liberal or a conservative, vs a guy who is whatever you want him to be. Stacking a position and leveling with the people is a better strat inmo. Being pragmatic is great, but one should have some core principals inmo.

I feel like this is a bad trend.....

Ya I tend to look at EV vs CF or EBITDA. I dont mind levered companies, but feel they should trade at a discount. An undercapitalized capital structure allows one to sleep quite peacefully. With that said most of my companies are highly levered. The market gives these things away in times of stress. If you can take it then its a not a bad deal. With dealing with leverage I find its best to focus on the business model, and also the debt schedule. I prefer debt that is 5 years out, and a pretty safe business model.

Very good post, thanks for the reminder. This too shall pass...

Exciting stuff, hopefully you guys can come up with some good questions.

Europe is annoying as hell. This is going on for far too long. Its a tough decision, but the options remain the same. Get closer or pull apart.... I just hope they make a decision.

And so goes the thread to freedom, liberty, and glorious gold....

LOL, I plan on stealing this one. Wading into a church preaching about Islam is inmo at best a waste of time. But carry on.....

Thats a good point. I have never seen a ZARA commercial.

care to share what your google search was? How about the obvious one "Margin of Safety pdf", I googled it and the first two hits had links to the book in a pdf format. Did you try searching at all? LOL Margin of safety is easily the best value investing book inmo. This and Pabrais book.

Here you go http://tech.fortune.cnn.com/2011/08/31/why-would-hp-make-more-touchpads-to-sell-at-a-loss/?iid=HP_LN

Great idea. Could we perhaps sticky a recommendations thread in that forum. It seems to come up over and over again and having a running thread of recommended books would be nice.

I am pretty sure they had the parts already ordered and just want to clear WIP inventory for something. Also a little positive press never hurts...

Not to me, sears has been the most boring company to watch.

LOL

Great post.

Oil and gas is very cheap. Discounting like $65 to $75 oil with Brent at $110. Its a bet on a none recession though and global growth..... Anything levered is cheap (SD, ATPG, RJET, PNCL, MERC). Anything in a turn type situation or which features unpredictable / slightly declining cash flows is cheap (Primus Telecom, FTR). FTR is very cheap and features a 10% yield it should run with rates staying low for 2 years. Best buy and Western Digital are also cheap.

I am not Munger -- far from it -- but here are my thoughts anyway. Dick Bove has to be the most manic-depressive analyst I have ever listened to. He seems to switch from "Sell everything!" to "Buy the banks, they are dirt cheap" with great rapidity. Also, he has made some truly horrendous calls in the past, while the financial crisis was unfolding. So for me personally, Dick Bove's endorsement means very little. Also, his recent refrain that "banks are cheap because they are selling below book value and book value is all cash" doesn't make sense to me. Why would the liquidation value of a bank be equal to or more than the book value just because it has a lot of cash on the balance sheet? The remaining assets could still be worth a lot less in liquidation than indicated on the balance sheet. Why not keep it simple and say that most banks are cheap in comparison to normalized earnings and they can get to normalized earnings without diluting shareholders significantly? If this is not true, having a lot of cash on the books is not going to help shareholders. This is my mistake. I thought Munger quoted Bove in the bank capital thread, but it was actually another guy. I think everyone agrees Bove is an idiot at worst, and a guy who twist whichever way the wind is blowing at best. I think banks are cheap, but most things are cheap at this point. Trash and leverage is very cheap and will run first and run hard. Banks are outside of my circle of confidence so I move on, you cant win em all, but many of the guys investing in banks here will win...

My comment was related to some people who seem to think wading into crap thrown up by the market and hoping / preying for the best is value investing. That my friend is contrarian investing. Same same, but different.

This is what it is to me. There are many ways to find 50c dollars (special situations, net-nets, GARP, forced selling of debt and illiquid securities) but that's all it is at the end of the day. This applies to everything: stocks, bonds, derivatives, cars, coins, antiques, currencies, etc. You try to figure out what a reasonable value is for something and then pay only half of that value as to include a margin of safety. You then resell that something at the original reasonable value. I agree. My new allocation strategy though is based on only investing in situations with maximum upside and holding large amounts of cash. It will take me some time to get there, but I look forward to transitioning my portfolio.