Myth465

This is not a very useful response. Childish name calling is the reason why our political system / discourse is in the tatters. Luckily this inst the 70s and socialist doesn't quite have the ring to it is used to. Doesn't Buffett receive the bulk of his actual income from Dividends in his personal portfolio. Doesnt he pay a lower tax rate than his secretary. Arent his Berkshire gains unrealized thus not subject to taxation. Buffett will never pay taxes on these holdings, he has choosen to donate them to a charity thus avoiding taxation. You can compound wealth in the same manor and your unrealized gains will continue to compound tax free. We are talking about income not wealth. ---- If you want these tax cuts. What taxes do you want raised? Let me guess, anything that doesnt effect you. What expenditures do you want cut. Let me guess anything you dont really use or care for. Lets raise taxes on the middle and see what cash strapped Joe and Jane six pack cut from their budgets to pay said taxes. Then lets see the paradox of thrift rip waves through Corporate income statements and balance sheets. Then let me know if your Corporate dividends arent cut. Let me guess cutting these taxes will simply trickle down and the economy will take off. Again why should you live off your dividend income at 15% while Joe and Jane 6 pack pay 25% on their earned income. Thats the question. But alas its easier to talk about the principles of double taxation and call me an anti free market comi socialist. Everyone wants a tax break. I understand where you guys are coming from but lets cut the bullshit and just call it what it is. Greed, its not a bad thing. You cant have a market without it and fear. ---- The Government is letting fair too much Corporate / Personal tax slip through the cracks. Im for simplifying the code and lowering the rates on the Corporate and Personal side for that matter. I still want a progressive tax and I dont think investment income should receive a lower rate. Most of the budget shortfall is due to the fall in the economy. If this is done then I would also like to see actual enforcement of the Corporate Tax code. Tell the IRS Director he can hire who ever he wants, but the US Government must get a 50% return on incremental costs. Revenues are down, expenses are up. I dont think there is much in the budget you can honestly cut without all hell breaking loss. If you care about the future of the country then all options need to be on the table. Taxes need to go up, military and entitlements need to be rationally cut. Americans need to make decisions instead of having thier pie and eating it too. Even the great conservative savior that Repulicans have a permanent hard on for (Reagan) raised taxes 6 times. When my money aint covering my expenses. I cut spending and try to get a raise.

1. Im not joking. I agree with Buffett on this and look forward to paying my fair share when / if the time comes. 2. Very few Corporations pay that top tax rate. The richest man in the world said there is a taxation war going on and his side is winning. Do you really think he was joking. Or does the buck stop at investment advice. Given all that I would be for cutting the corporate rate, removing some loop poles, simplifying the whole thing, and increasing collection efforts and enforcement. http://www.taxfoundation.org/news/show/23561.html http://www.smartmoney.com/investing/economy/high-corporate-tax-rate-is-misleading-22463/ ----- Everyone wants balanced budgets but no one wants to pay. The middle class is tapped out, someone is going to have to step up to the plate. Double taxes be damned, we are all double, triple, and quadruple taxed via all types of ways. Payroll, Income, State, Local, Federal, Sales, Fees, Assessment, Property, ect. Who said income was only meant to be taxed once. Yes I know Stalin is smiling in heaven and the world will fall apart because the rich who keep the country going will all move to China, but it is what it is. Buybacks were the rage when the rates decreased. My guess is life will continue and a few portfolio allocations will change. Thats about it. http://www.bankinvestmentconsultant.com/news/quinnipiac-hnw-wfcg-2666476-1.html Investment income shouldn't in my opinion be taxed at lower rates than earned income. A subsequent study released last week indicated that over the past half-century, America’s wealthiest taxpayers have seen their tax outlays, as a share of income, drop by as much as two-thirds, while taxes for middle-class Americans have stayed the same at the federal level and increased slightly at the state level. The group that commissioned the study, Wealth for the Common Good, is an organization comprised of high-net worth individuals and business leaders. “What we found was that after a half a century of Presidents talking about tax cuts and tax reforms that the middle class pay the same as they did in 1960 whereas the richest one percent pay half of what they in 1960. And the richest 400 households pay two thirds less,” said Chuck Collins, an author of the report, co-founder of Wealth for the Common Good, and a senior scholar at the Institute for Policy Studies. According to the study, if the top 400 wealthiest Americans paid 51% in just 2007, they alone would have paid $48 billion. Indeed, Bush-era tax cuts for the wealthy have cost the Treasury more than $700 billion, with all of these billions added directly to the national debt. Retaining the tax cuts will cost the country $826 billion over the next decade.

These tax cuts have done nothing but wrecked the financial budget and enriched a few investors such as ourselves. They need to expire.

Another great presentation by Ken Peaks. http://www.contango.com/investor/events.htm

His argument on short selling is shared by many including Buffett. (I remember hearing he almost went bankrupt shorting a stock when he was young, it could have been someone else though). This is one of my favorite quotes from last year - Sardar Biglari - "We buy from pessimists and sell to optimists." That is value investing.

Tax avoidance is a useful goal its evasion thats problematic and for now we need all the jobs we can get. Lol. Looks like Rabbit has a good answer, honestly I hope to share in your complaints / problems in a few years. For now they dont apply to me.

Seems like you want tax law designed specially for your purposes. Which is fair enough. You can give $13,000 a year to each kid each year tax free for your entire life per spouse but don't want to. That's $26,000 each year per kid. There are a million ways around the rule. All sorts of loopholes and trust structures available, the one thing you cant do is control the assets until the day you die and then give 1 lump sum. You basically want a loop pole put in because you don't want your kids to know about the money, and you want a way out should your kids turn into annoying brats or idiots. Far enough, but that's a hard law to customize / anticipate. As far as the resources spent to avoid taxes, that's the nature of taxes. When I did taxes the first thing my trainer told me is a man will spend $10,000 to save $5,000 in taxes. The only way to get rid of this waste is to get rid of the taxes (I know some of you guys will say a flat tax, but answer this question in 1 sentence - What is income, and what are expenses - Half the tax code answers this and the other half is exceptions, exclusions, and incentives). Laws are made and then we use them to our advantage. Why do people sell loses in December and buy back 30 days later in Jan. Why are entire transactions booked in retardedly complex ways, to avoid taxes or move around laws. No matter what number you set someone will think its too low or there arent the proper exemptions. At $10,000,000 and 5 families. Those 5 families will be up in arms. I agree with the spirit of the law. Even if families loose the money at some point, I dont think they deserve 100% of it in the first place.

Mistakes which were sold - Pinnacle Airlines, Harvest Natural Resources, Crypto, Delta. Berkshire is better than holding Cash is his argument, when he has excess cash in his funds he holds Berkshire. Just about everyone on this board dances in and out of FFH as it hits and then quickly drops below intrinsic value. I think Horsehead hit intrinsic value but I dont follow it. I dont know what happened with Cresud or Sears. Having something going to zero is making a mistake. Nothing more he thought he was buying Delta for more then it was worth and was wrong. Trading a stock at 90% of IV and buying something else below 50% is value investing. Buffett said he has done the same, selling 50% of IV to buy 25% of IV. Selling and buying something later when the facts change or your rationale changes on it is value investing too. Bruce Berkowitz did the same on Berkshire and he would be considered one of the most successful value investors in the last 10 years. I think you are confusing value investing with buy and hold investing.

The law wasnt meant to take into account kids. For most people being taxed on amounts that exceed $3.5 million or $7 million is a nice problem to have. You get to exclude $3.5 million or $7 million and leave it to who every you want. After that the rest is taxed at an appropriate rate. Uncles, Cousins, Cats, Brothers, and Kids arent taken into account. I know you dont feel rich with $3.5 million and I wouldnt either but the fact of the matter is you would be. We can argue about the appropriate cut off. But I think its a good thing for our society. http://www.taxpolicycenter.org/briefing-book/key-elements/estate/who.cfm # TPC estimates that 14,900 individuals dying in 2009 will leave estates large enough to require filing an estate tax return (gross estates under $3.5 million need not file a return in 2009). After allowing for deductions and credits, 5,500 estates will owe tax. Three-quarters of these taxable estates will come from the top ten percent of income earners and over one-third will come from the top one percent (see table). Very few people pay this tax and if you do. Then you are very lucky from a societal standpoint inmo. Winston Churchill argued that estate taxes are “a certain corrective against the development of a race of idle rich”. The tax hit 5500 people last year. I just don't see it as the scruge that is destroying our capitalist society that some paint it to be.

I havent seen him dart out of positions and then back in. With the exception of Berkshire. He seems to imulate the value investor of yester year. More Buffett Partnership and less Munger. I like this quote from Pabrai. Monish Pabrai - "Plan A is always to buy the Coke and Moody's of the world at 50% off. If you buy these type of businesses at that discount and it takes 2-3 years to trade at intrinsic value, you'll do very well. Intrinsic value will be much higher in 2 to 3 years. So 50 cents may be worth $1.30 or $1.40. This is always Plan A. But plan A is virtually impossible to execute across the entire portfolio because they are so very very rare. (Work Horse Positions) When plan A fails, we go to plan B. Plan B is to buy at half off, regardless of business quality (as long as you're pretty sure intrinsic value is very unlikely to decline). Most of Pabrai Funds investments over the years have been Plan B. " (Value Holdings).

I think you are looking at the Inheritance tax in a very one sided way. I plan to die with some cash and would prefer to live in a society where obscene wealth isnt simply passed down over hundreds of years.

Whats the fee look like at IB for foreign shares, i may have to move to them at some point.

I like LUK, I think they were caught with their hands in their pockets during 2007 and 2008. They were out of cash, over levered, and farmed out funds to hedge funds which didn't do well in the downturn. They were forced to play defense at a time when the market was full of bargains. I cant fault them, I was in the same position for similar reasons. It looks like they made a great equity deal with the IBank though. I like the royalty income and the setup of both of the mining investments. I also like some of the other assets. The car dealer ships are doing well due to the land lease arrangement and I think the drilling company will actually work out well as long as all of the rigs are new. I would be a buyer but need a lower price.

I was reading the letter in an interest to understand LUK better and also read a short from 2008 on VIC. The short nailed LUK and was right on just about all fronts. Still working my way thru the letter. I dont understand the rational behind alot of the businesses they buy. Many of them such as timber and rigs are bought near the top of the market. I like the new deal with Berkshire, that should turn out to be profitable, but would also like if they sold off some of the smaller assets that they held. They should trim down like Loews and hold 4 - 8 solid business of scale and size and a few equity investments.

-Because it's nice politically to say you want people to own their own home. -Because this extra credit doesn't show up as new taxes. -Because it's well implemented in most people's head that it's better to be an owner then a renter. -Because home ownership encourages the velocity of money, therefore increasing government's revenues. -Because politicians have an outlook of maximum 4 years... -Because most people have an outlook of maximum 1 year... -Because most politicians loose focus of the social impact and concentrate on the popularity. Keep your cash on the side... it's going to be great to buy all those apartments at a PE of 5. I can wait longer then failing homeowners can. BeerBaron Sounds like you are calling for a double dip Beer Baron.

I would buy at around book value. The price right now is fine actually, depending on the quarter it should be below book. I would never pay 2x for an insurer but I believe these guys deserve a book value multiply between 1.5 - 2.0. They are making a great deal of money in this soft market and should do very well with a hard market. When off quarters feature combined ratios of 85% and regular disaster free quarters have ratios below 60% its hard to over pay. I would probably pay up to 1.2 currently. The next call will be interesting. They have some exposure to Chile which may send shares down and will elaborate on the buyback program. I would put this in the same category as FFH, FUR, or BRK when it was smaller. You buy on the dips and hold for the long term. I am trying to accumulate most of my shares in my Roth due to the large dividends which are paid.

I hold the pink sheet shares at think or swim. They are thinly traded but I have managed to buy when needed. Will be buying more in the next few months. I dont have much capital. About $100k total in assets so the pinks do fine for me. I havent bought a true foreign security but would probably look towards IB if needed.

http://investor.winthropreit.com/index.cfm Shareholders Letter for 2009

TWA you hold equal amounts of this and FFH as your largest 2 holdings? I like the warrants, especially after hearing a board members explanation. Allowing distributions prevents empire building, holding cash, and allows for high ROIC. I hold LRE in my Roth and look forward to when the dividends have completely paid back my principle or as the giant buybacks increase my holding position.

The non conventional stuff has an even higher decline rate. It should be interesting watching it all unfold. We need a crisis though to really bring supply and demand in line. I believe there is still too much capital drilling too many wells. Natural gas wells drilled in the large shale basins of the United States which have been the major source of new gas in recent years exhibit exceedingly high decline rates, many wells declining 65 percent in the first year.

Natural Gas is being priced like airline seats. The dumb competitors are drilling the prices into areas which make it hard to make money. Half the rig count is keeping supply and demand even which is scary. Its like the paradox of trift in reverse. Everyone knows drilling needs to stop for decent pricing but everyone is hoping that others will stop the drilling and is drilling for tax / cf reasons. I have moved away from it due to this and am actually a bit jealous of SandRidge. I wish I could have picked up in whole Arena for a similar price. Luckily these wells decline very quickly and the uses of natural gas in the future are growing - electric cars and vehicles. I think the buying time argument makes the most sense.

I just dont agree with Greenspan's ideology so its hard for me to see him in a positive light. He was also particularly inflexible, and his actions contradicted his ideologies.

Here is a good review of his performance. James Grant Discusses Greenspan's Performance at Fed: Video http://www.gurufocus.com/news.php?id=89353 Lol He is a guy in a business suit, nothing more. Alan Greenspan thinks what everyone else thinks but 1 fiscal quarter late.

In some way or another your money is always going to hang fairly close to his hands. Lol.

Greenspan admission in my opinion was worth alot. He basically said the ideology that guided him throughout his life was wrong. He told the person who was trying to regulate derivatives that he didn't even believe in regulating / policing fraud. He thought the market would handle that. He was saying his free market solves all ideology was wrong. That takes alot. In terms of the monetary policy who cares what he has to say. He is just another guy trying to kick the can and save his legacy. There were many ways to prevent aspects of the crisis and many causes for the crisis. His problem is a big chunk of the preventions passed through him and many of the causes were generated by him. No way to really pass the buck. The same can be said for Congress as well.