Myth465

I dont see housing coming back. A generation of Americans will not invest in the market and A generation will not invest in housing now. Maybe it stops going down but I dont see any easy or quick returns until things stabilize. The economist letters section had an interesting back and forth on this (listed below). Everyone is currently trying to kick out the legs from under housing (removing Fannie, Freddie, removing mortgage deductions, removing easy credit, ect). http://www.economist.com/node/18438228 In the slumps SIR – Your special report on property (March 5th) made scant reference to two important determinants of the American residential property market: the underlying demographic impacts on demand and supply, and the serious shortcomings of a fixed-rate mortgage market. While the demand function for first-time buyers is frequently analysed, the fact that Americans make their largest home purchase at the average age of 45 is rarely considered. Once one appreciates this fact, and that the apex of the baby boom was 1961, it should be no surprise that the peak year of inflation-adjusted home prices was 2006, after 15 years of increasing demand. The average age at which Americans make their largest home sale is 60. Since the number of Americans born in 1976 is almost 25% lower than the number born in 1961, and the bulk of aggregate property value is in the largest homes, it is therefore reasonable to assume there will be no demand and supply equilibrium in the American market until approximately 2021. Moreover, in addition to the 25% of homeowners with negative equity, a similar proportion have insufficient positive equity to refinance their high fixed-rate mortgages. Until home equity improves and/or a vibrant variable-rate market develops, there will be many reluctant homesellers. The outlook for homeowners is unavoidably grim. Fed funds will therefore probably remain very low until home prices rise materially. Meanwhile, those who borrow at 100 basis points over fed funds to buy attractively priced liquid securities will probably make out like bandits. Ian Ellis President MicroCapital Southport, Connecticut

Shane I think you are making this much harder then it needs to be. I owuld focus on the four filters that Buffett outlined.

I wouldnt own any super majors (they are liquating anyway). First the tax breaks must go and then we will see a windfall, but I think that would take a significant public backlash and prices above $150 for a long period of time. Getting rid of the subsidies so far hasnt worked well. $90 seems like the new $40. I think we will drift below $100 and everyone will chill out, then we will be hit with a super spike if and when the world economies gets past this soft spot.

I dont like Nuclear (too many unanswered questions) but realize that everything sucks in this situation. Nuclear (expensive without a price of carbon using full cost accounting, also not financially viable without Government backing) Coal (expensive with price of carbon using full cost accounting) Natural Gas (infrastructure issues which will require tons of reinvestment, also fracing problems) Renewables (expensive will require tons of investment) ------------- I would recommend a healthy debate with Americans tell them everything sucks pick your poison and more importantly pay for it (with regard to electric bills, health risk, and black swan risk). ------------- If I were God we would sort out this fracing issue and go with natural gas. Use government backed loans for the infrastructure and then highly invest in renewables to make them cheap. Perhaps put a floor on oil to fund all of this and give producers a number to shoot for. $30 oil followed by $150 oil, followed by $40 oil makes it tough to bring something new online.

Cummings and Steinberg each own 10% of the company. Were there more partners in the beginning? Or did they reduce their ownership over time? I believe they have been selling down throughout, but they also get options. I think they buy when cheap and sell when high. Also I think they bought whole companies vs. investing in partials. I would find a company, buy another company, and then trade with some of the excess capital, then buy another company - rinse and repeat.

Just do what the LUK guys did. Find a few partners. Shouldnt be too hard.

Never mind, taxes flow through which defeats the purpose. I guess the Berkshire / Ericopolgy model is the best one. Either that or take over a company with a pension plan (and manage that to compound wealth tax free). Distribution Policy Like mutual funds, closed end funds generally do not pay tax at the fund level on amounts distributed to investors. The taxation is said to 'pass through' to the shareholders. Thus, since capital gains vary unpredictably, that practice makes dividend payouts equally unpredictable. Consequently, some funds have instituted a managed distribution policy to make the distributions more stable. In those cases, the fund distributes a fixed percentage of its net assets regardless of its actual interest income and capital gains.

I would be down to start 1 in a few years. I plan to put away whatever I have and live off my salary at some point. Pretty much spend all I make while my investments compound (outside of an emergency fund). Holding close end shares where I knew the Manager or had input on the fund would be ideal. I will look into this when I need a bit more tax planning. Hopefully my gains continue to compound in my Roth vs. Taxable accounts.

No The Wash Sale Rule Top page in our explanation of the wash sale rule. The wash sale rule prevents you from claiming a loss on a sale of stock if you buy replacement stock within the 30 days before or after the sale. That sounds simple enough — but there are so many questions that arise in connection with the wash sale rule that we have all the articles listed below dealing with the subject. The first article, Wash Sales 101, provides the essentials and will also give you an idea what kind of details you'll find in the other articles. http://www.fairmark.com/capgain/wash/index.htm

Thats not a wash. But I think you we are missing something.

I am not a tax expert but whats to prevent this. http://www.gurufocus.com/news.php?id=126662 In 1990 when Ian took over the management of PAT, the company's funds were only £5.5 million, most of which was Ian’s own money. When he passed away in 2008, nearly 20 years later, the company’s funds had grown to £160 million. In spite of its successful growth still a modest sum for such a successful investor. Ian also overcame a problem most investment trusts and closed end funds have, of the shares always trading at a discount to their net asset value. Ian did this through share buybacks coupled to the issue of new shares when demand exceeded supply. This is by far not the norm in the investment trust world where a share price discount of 25% is normal and 40% not unusual. But in a world where asset management companies get paid on the amount of assets they manage, buying back shares, thus lowering the assets they manage just does not happen. ---- Seems like the perfect way to avoid taxes and compound wealth but also stay very liquid. I am sure 15 guys on this board could pull enough funds to take over a closed end fund and perhaps install a manager of choice. Thoughts?

I dont think so. If the statement looks real then ...... Also I am guessing you have a none big 4 auditor and the auditor didnt know you from a can of paint early on. The bigger you are they more they trust you, I mean who would of that Madoff would have fake accounts he is working with billions would be what most would be thinking. Also I think his audit firm was a small shop in a strip mall. I doubt there was a real audit, he probably just paid some guy. I think that was one of the things that tipped off the guy who kept bugging the SEC.

I dont think it should go through. But who knows. It will kill competition inmo. Sprint should buy TMobile, and we should have the big 3 with a few regionals.

If I was buying today it would be DT. Sprint and Deutsche Telekom had been holding on and off discussions about a stock transaction that would give the Bonn- based company a major stake in the combined entity, the people said. AT&T, the second-biggest U.S. wireless provider, clinched the deal by paying about $25 billion in cash for T-Mobile USA and offering a $3 billion breakup fee, according to the people. The next step will be clearing regulatory hurdles. --- This CEO seems very sharp and gets a 10% stack should it all work out. I wonder if the fee includes regulatory hurdles.

http://www.bloomberg.com/news/2011-03-20/at-t-agrees-to-buy-deutsche-telekom-s-t-mobile-usa-unit-for-39-billion.html Seems like a wooper of a deal. Thoughts. ---- The T-Mobile deal may give AT&T a way to boost earnings because of the money the companies would save by combining their operations. The companies’ estimate that they could have $40 billion in synergies is a realistic assessment, said Jonathan Chaplin, an analyst with Credit Suisse Group AG. “Phenomenal deal if it happens,” Chaplin wrote in a research note today. “Huge upside for AT&T; DT getting a great price; however, we believe regulatory risk is enormous.” In the last five years, the median deal price for a telecommunications company has been 4.5 times earnings before interest taxes depreciation and amortization, according to Bloomberg data. Deutsche Telekom said the purchase price is multiple of 7.1 times 2010 adjusted EBITDA. ---- Seems rich and the synergies seem high. I dont know how they get this through with the new market share numbers. Either way DT is getting a great deal, no one disputes that.

Glad to see someone gets it. People are funny. If you insult the Republicans only, they'll get mad. If you insult the Democrats only, they'll get mad. If you insult both, everyone remains happy. Especially when both of them lack fiscal sanity. Your point is correct, but in this case both suck on this issue.

Glad to see someone gets it.

Very interesting thanks for the detail. I wonder what will happen in 50 years.

I think you all are discussing 2 very different topics. Where 1 invests and where 1 chooses to live have really nothing to do with each other inmo.

I think prices are low enough to warrant buying to live in. But its not time to start a partnership based on rolling up houses and renting them out (a few in my family have done this). I like being mobile and am happy to pay rent for the optionaility of being able to move every few years. As someone looking to buy housing based solely from an investment perspective. Stocks look cheaper. I would rather own ROIC leaps. Massive cheap leverage, and no phone calls ;D

I dont see an undeniable steal and I live in Houston which is home to some of the cheapest realty in the US. Price to rent, and yield based on rents is inmo the best way to value a home.

90% to stocks. 0% to cash. Typically 10% cash. Ben Grahams world was different then mine, I also dont use an abacus lol. Also I am 28, which is probably the main reason, and bonds yields are terrible also. Though many people with significant net worths still do all stocks, but have some high dividend payers. I have almost bought convertible bonds, all of them have worked out quite well. Too bad I didnt own.

I think the two situations are fundamentally different. This situation will likely retard / impair whatever projected uranium growth was predicted. Hearings will be had, old plants shuttered, and new plants put off in Democratic places. Things will continue and nuclear will have a future. But that future will be lessened inmo. Very different then oil which will be drilled come hell or high water. Oil sold off just as significantly as uranium. China can do what they want, but you will loose an election trying to build nuke plants in Japan, Germany, probably most of Europe, and soon possibly the US. India will also likely be a political issue. I am not saying its rationale, but it is what it is. +1 for demand in China - ??? for none dictator / command economies. Seems like crappy odds, or a long long long long long long term bet on ... I would and did just buy oil / gas reserves. Its selling for $100 while trading at prices when oil was $60, with mid east unrest, and increased demand to supplement nuclear power. I know nothing about uranium though and already feel like I understand oil though. ATPG is speculative (its what I bought), but Petrobank is retardedly cheap with safe reserves and potential gamechanger technology. I cleaned up during Horizon, but this my friend is no salad oil situation inmo. Money will be made due to lose money inmo. Mobius - http://www.gurufocus.com/news.php?id=126389 Rogers - http://www.gurufocus.com/news.php?id=126388

What I hope I am doing. http://adventuresincapitalism.com/post/2011/03/17/WOW!.aspx

Perhaps my perspective is off. I just dont watch CNN or Fox or whatever the hell else is on. Charlie Rose is always relatively calm and so is Amy Goodman. The Economist is also quite calm as well. Thats where 95% of my news comes from. If you are gonna panic about something this is it. Beats Charlie Sheen lol.