ubuy2wron

While our resources are finite our imagination and our creativity are not. If we ever get to the point where our resources are no longer capable of sustaining a desireable existance I believe science and technology will allow us to populate other worlds and create new methods of utilizing existing resources. 500 years ago we had a wood based energy system it changed to coal then petroleum I can imagine easily developments in solar technology which make a solar powered future easily attainable, our coal and petroleum based energy systems are really solar based any way but it is highly inefficient to require 100 million years to pass to turn solar energy into something we can use. The present world that we live in would be considered a wonderland for the vast majority of earths inhabitants as little as 100 years ago, I have no doubt that the future will hold similar marvelous developments which will make daily existance for our species to be a desireable thing . I worry far more about nuclear weapons and large comets than I do about neo Malthusian issues, we are the species who are best at adapting and have the largest brain slow gradual changes we can deal with quite nicely thankyou.

"Acquire rental retirement properties in various countries." I believe that purchasing a residential real estate property in the US is the the biggest no brainer available to an investor today. To get a mid teen return on an equity portfolio for the next decade its going to take a lot of smarts and a little bit of luck to generate the same return on a vacation home in some of the hard hit mkts is only going to take a reasonable tennant if you avail your self of the cheap financing available.

http://en.wikipedia.org/wiki/Diwali

Packer I think you are confusing Schadenfreude with Sadism.

Packer are you certain? You mentioned natural disasters do you remember the media coverage of Rita or the earth quake and tsunami in Japan. It seems a large percentage of media viewers are irresitibly addicted to consuming content about others misfortune.

I think it has some application in a economy which is relatively closed and has little or no population growth, think Japan, but very little in a more open economy with steady population growth, think USA

that's not what Buffett did. He stopped buying stocks when there were no values left. Subtle difference. He pretty much stated that if he was managing $10m a year he could ring up 50% appreciation year after year. He "worked" hard though. All he did was look for value in individual securities. I don't believe he spent a lot of time reading academic dissertations on why the market should be selling 30% cheaper. If you have less than $100m to invest there are plenty of situations that make sense today. But reading Hussman will keep you from "looking" for them. I always believe Buffett does things then gives you a reason why he does things. but it may not be the primary reason. I really believe he didn't want to do a partnership anymore and knew, even then, that investing in a corporate structure, with stealth leverage is the best vehicle. He could have kept the partnership going by investing in workouts and arbirtrage. But he took that moment in time when there wasn't as much to do, because there were not as many values, to transition to investing out of a C corp and owning entire businesses. Buffett makes market calls at extremes. Notice if anything he thinks stocks are cheap. His last market call was in 2008 I believe right before stocks got way cheaper. Had you bought when he made his call, and suffered a large decline, you'd be way ahead today, even after the 15% haircut from the top in 2011. I believe that Warren changed to the corporate structure for a number of reasons. The number one reason I believe was because it created permant capital to invest as long as you have control no one can redeem you they can only sell shares and if they do so in a silly matter you can buy those shares. 2 I believe that he knew not everyone would follow him into BRK and he realised that the fewer that did the better off he was. I also believe he understood the advantage of having a currency namely BRK shares which he could use to make investments if it was to his advantage. Finaly I think since his favorite holding period was for ever, this allowed a much more tax efficient structure for him if he choose not to sell his shares which he never has.

A lot has been said on this and other threads about the politics of envy. It has been said that the Democratic Party is in fact an expression of this and that point probably has some merit. At the same time very little has been said about an emotion which is the very opposite of envy the Germans have a word for it is Schadenfreude http://en.wikipedia.org/wiki/Schadenfreude . It would seem to me that many Republican conservatives express this emotion in its extreme forms. For some of the wealthy it is not enough that they have achieved wealth others have to suffer on a relative basis for them to experience satisfaction. Because it is even less of a desireable trait than envy noone will admit that they experience this emotion however every news organization will give extensive coverage to what ever awfull tragedy the world may be experiencing at any moment because they know it attracts the most viewers/readers so the pervasiveness of this emotion? is simply unargueable.

Nothing prevents it from happening over and over the system without regulation and goverment intervention is inherently unstable. The history of capitalist economies until the post WW2 period was marked with frequent panics and depressions. The period since the end of WW2 has been the longest period of no depression in the history of the Western World yet many here think that we need the catharsis of economic extremes to unleash the forces of creative destruction.

Wow Tim we agree on some thing perhaps I am wrong.... just jidding.

For every baby boomer selling to pay for living expensives there is someone else in the world on the other side of the equation purchasing because they need to grow capital for some reason. I think demographics can help in what companies you choose to invest but not when to invest.

This is an interesting discussion however there is no correct answer but the debate is still worth while. It seems that investing in an over valued market can still be a worth while endeavor. It is a market of stocks as well as a stock market. Waiting for an undervalued mkt using for instance Mr Schillers criteria means that you pretty much sat out the mkt for the last 12 years with the exception of the brief period of time in 2009 when it ventured briefly into under valued territory. I on the other hand managed to find enough value situations since Jan 1 2000 to compound my dough @ 14% on an unlevered basis. The only change I make in my investment style is I am willing to hold more cash when mkts appear expensive and I am more willing to use leverage when mkts appear truely cheap.

I also think this is a genious idea in fact I have mentioned this as a solution for some of the US problems. Does any one here think it will fly because if it does I want to sell my Vancouver home quick cuz it sure will kill our market which has been kept afloat because of immigration.

Who cares wether BRK would have failed or not. Does any rational person think that having all of the large institutions fail would be a good thing for anyone other than perhaps a very small slice of the 1%. Academics talk and write about creative destruction in their ivory towers yet in the real world were we live the consequences are real not theory.Democracy and capitalism have created more good than any other systems of human organization. Government has to protect its citizens from the externalities caused by capitalists chasing profit. Do you think their would be an unpolluted water body in the US if their did not exist so called BIG BAD government. It is a hoary old economic conundrum "the tragedy of the commons" whenever you have resources which are public in nature you have misuse.

I do not think the true entreprenuer spends a whole lot of time thinking about his marginal tax rate when he sells his company they are too busy building their business. The chronic complainers about taxes are usually also complaining about uncertainty and regulation the real wealth creators just do not care. Do you think when face book was in its infancy anyone said oh no I just will not bother because the tax rates on capital gains is too high. There exists a ton of incentives in the current tax code for investors and the wealthy. What America needs is more Warrens and Steve Jobs and reducing the tax rate will not create more of these rare birds. Liberalizing immigration for the investor class might and also help sell some of those foreclosed homes at the same time. In Canada lottery winnings are tax free in the US they are fully taxed I will bet that there exists a higher participation of lottery players in the US than Canada on a per capita basis. Tax rates matter they just do not matter that much.

I do not understand why Warren pays ANY personal income tax, is he not giving away almost 1 billion of BRK every year.

The problem with the economy is not a lack of capital, if capital was short interest rates would not be at zero. The problem is a lack of consumption, Warren gets it, not sure that others do. The other thing the economy is missing are a few more classic risk takers in the form of Mr Buffett Mr Jobs, and that fellow from Texas Mike Dell. I saw him interviewed on CNBC this AM and he matter factly described how he was transforming his company acquiring new business and growing his company. When questioned about the political climate he refused to raise to the bait. The next time I hear a business leader complaining about uncertainty or regulation or government policy I think I will throw my remote at my TV, my own personal stimulous effort ,as I think I will be replacing a TV every half hour. The real leaders do not bitch and moan they quietly go about making their business better. I am sure there is a Dell thread here somewhere, I know I will own some before the year is out.

Our society has problems, but our treatment of the poor is not at the top of the list. Tim I agree with you, it is our treatment of the wealthy that I think is at the top of our societies problems.

Do we get fireworks tomorrow.

Southern and LIBERALS keep being frustrated by consrvatives wanting to institute policies that have been tried before and failed. The dark ages was a wonderful period of no big government. Dickensonian England was a wonderful period of no taxation and no government services. Has there ever been a tax that the wealthy have not fought against tooth and nail ?

The 1 in 4 statistic is widely quoted but never substantiated. It implies every night when it likely refers to at one time during the year. It also implies malnourishment/starvation which is not a problem in our society. Obviously no one wants a child to be starving. If a child goes to bed hungry in this country (meaning they did not get any dinner) it is due to the failure of their guardians. There are significant resources (food stamps, school lunch programs, etc.) set up in order to make sure the poor are fed. For example in my city (rural) a family of four with an income of $41,000 or less qualifies for free school breakfast and lunch. Larger families qualify even more easily. A family of 6 with an income below $55,000 qualifies. Are there no work houses.... Tim do you know how much of the philosophy of Scrooge you are espousing. Who cares WHY the kids are going hungry you feed them first and then work on finding long term solutions. Paul Ryan thinks that Tiny Tims demise is just one of the unfortunate causalties of the noble crusade he is leading.

I do not think that is the only way for margins to collapse. I can think of two examples 1. Take PG. Many of its brand products sell at a premium price to more generic ones. If consumers are feeling poor, they can switch to non premium brands and margins would collapse at PG. This can occur at any company - actually more likely at other companies that do not have moats like PG. 2. Take Apple. Profit margins of iPhone, iPad etc are going to come down as rivals just catch up just enough in quality to erode margins. At some point say iPhone 12, the androids and windows phones of the world are going to be pretty close to iPhone to reduce the premium Apple was able to charge. No huge spending boom needed for either case. Vinod Take AAPL computer makers have had 30 years to come at AAPL their margins in that space are growing while every one else is facing declining margins. I bought AAPL for the ist time in 2002 because I realized the consumers for their products were rapid devotees. You could not get a MAC user to buy a PC well the cult has grown and now with Steves passing he is already taking on mythic popularity. Its becomming a religion. I aint worried about competition for a few years. There is some great commentary on AAPL on another thread, so I am only reiterating what was previously said, but.... The sentence I bolded is an EXTREMELY dangerous way to invest - the terminal value of a company is such a huge, huge portion of intrinsic value that it is absolutely imperative to have a view of what a company is going to look like in ten, 20 and 30 years. Just b/c one doesn't intend to hold something for ten years like Buffett, one must, if investing intelligently, be able to predict within reason what a company will look like in ten years. If Apple grows at 100% a year for ten years, then goes out of business, the stock will be toast (obviously that's extreme, but...). Even if consumers are in love with their products, in the long run, they have ZERO pricing power. Look at what prices are doing on their legacy products. In order to continue their financial performance, they have to continue coming up wtih products that are continuously at the top of their respective product categories, to the point where Apple can command the premium prices they do. As Greenwald says, competitors are eating away at the edges of Apple every single day - it is not a lock AT ALL that the iPhone will be the "it" phone five years from now....Sprint for example is absolutely nuts to sign up to purchase 30MM iPhones over the next four years. As Jonathan Chaplin of Credit Suisse said, four years ago the "it" phone was the Razor - can you imagine buying a Razor now? I think the question is how good is AAPL's moat. It is conceded that AAPL's and any gadgets moat is lesser than say KO or Burlington RR. The value of AAPL 10 years out is absolutely unknown this is why it has not a higher value today. You can even think of AAPL as a cigar butt investment.... but what a cigar.

I do not think that is the only way for margins to collapse. I can think of two examples 1. Take PG. Many of its brand products sell at a premium price to more generic ones. If consumers are feeling poor, they can switch to non premium brands and margins would collapse at PG. This can occur at any company - actually more likely at other companies that do not have moats like PG. 2. Take Apple. Profit margins of iPhone, iPad etc are going to come down as rivals just catch up just enough in quality to erode margins. At some point say iPhone 12, the androids and windows phones of the world are going to be pretty close to iPhone to reduce the premium Apple was able to charge. No huge spending boom needed for either case. Vinod Take AAPL computer makers have had 30 years to come at AAPL their margins in that space are growing while every one else is facing declining margins. I bought AAPL for the ist time in 2002 because I realized the consumers for their products were rapid devotees. You could not get a MAC user to buy a PC well the cult has grown and now with Steves passing he is already taking on mythic popularity. Its becomming a religion. I aint worried about competition for a few years.

Eric as long as pretty girls find men with money more interesting than men without I think the wealth creators will pile up the dough as quick as they can regardless of the marginal tax rate.

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? They basicaly underwrote the formation of the "grassroots" teaparty with former speaker Dick Army and have contributed to Perry, Christie, and my favorite wingnut Ms Bachman.