ubuy2wron
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Posts posted by ubuy2wron
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My cash position dropped 8% today. I bought TOL, BAC, AAPL HSE_T and some more yellow media debt and an levered ETF for the tsx60, most money I have put to work in a single day in a long time. I also closed some equity hedges I had on. Today looked like an outside day to me and I was set up for it.
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Tim, "that is not the cause of the fiscal problems we face" The cause is pretty simple for a long period of time govt has run deficits while a certain sector of society has benefited hugely. The poor had nothing and still have nothing and we are telling them that they can expect more of the same except that perhaps they will not be getting any govt assistance when they retire. The middle class had something but have lost a lot and the top 1-5 percent have garnered the lions share of the wealth that was created. I am part of that 1-5 percent prolly right in the middle of that cohort. The over all liabilities of the nation in relation to its present wealth is clearly too high we are in agreement on that, how to bring it back into balance is where we disagree. I am for the few who have benefited greatly to share a larger part of the cost of bringing it back into balance you do not.
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Yup thats pretty much how the machine works. David Stockmans book, The Triumph of Politics lays it out at length. The Republicans are much better at politics.Recommended reading for anyone who actually wants to understand which limitations and incentives the political process favours, instead of just throwing dirt on people with different values: http://www.foreignpolicy.com/articles/2011/09/14/a_dictators_handbook_for_the_president?page=0,0
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At the end of WW2 the US debt to GNP was approximately where we are right now. Income taxes for 20 plus years were MUCH higher than they are now. Europe was destroyed as was Japan and good portions of the far east. With govt. debt at horrendous levels and income taxes at levels which would give any of us night mares America experienced a 20 year explosion in growth. I refuse to accept that America can not continue to thrive and prosper. Open up immigration especially the right kind , if you are educated and have some dough wellcome. solves the foreclosure crises. Stop the illegal immigration problem which reduces the unemployment rate immediately and also improve govt revenues because illegal immigrants mostly work in the cash economy . Tell China that its time to join the world. The single biggest road block in the world right now is the Chinese refusing to allow their currency to rise. Interest rates would immediately rise before you do that you must let every underwater homeowner who is current to either refinance at current rates with recourse terms or hand in their keys. Reduce the corporate tax rate so companies do not have the same incentive to play the international tax arbitration scheme but insist that dollars overseas are returned to shareholders who mostly reside in America. Introduce a national VAT tax and use half of the dough for bridges roads schools hospitals and half for deficit reduction.
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Wow I can not believe he wrote that. I find myself agreeing with him something I almost never do.In explaining the problem facing the economy to the general public, Blodget does a very good job in this article. I'm surprised but have to give him credit -- he "gets it"... Although -- not sure I agree with his "solution," I'm more in the Buffett camp, believing that any new fiscal and/or monetary policy initiatives would have little to no sustainable positive impact.
http://www.businessinsider.com/how-to-fix-the-economy-2011-10
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Tim ",instead of hating the rich , the poor and middle class should be thankful for them" First of all Tim this statement and atitude is at the core of what irks me about the so called conservatives position. First of all the poor and middle class do not hate the rich and second in an ideal capitalist system where there is a fair exchange why should labor be thankfull to capital? Should not both sides of the capital labor divide be equally thank full. Enlightened capitalists understand that it is THEY who should be thankfull not their hardworking employees.I think its the wrong question. Conservatives simple hate higher taxes, Buffett is just cannon fodder.
I'll readily admit I am a conservative. I don't inherently hate higher taxes, but I do hate wasteful spending and the knee jerk reaction by many to call for higher taxes whenever there is a deficit, when what we need first is a thorough review of current spending to see if it is effective. Only then should higher taxes be proposed.
Dionne says in his article:
"He has forced a national conversation on (1) the bias of the tax system against labor; (2) the fact that, in comparison with middle- or upper-middle-class people, the really wealthy pay a remarkably low percentage of their income in taxes; and (3) the deeply regressive nature of the payroll tax."
I would argue that these three points are not so obvious. (1) I think their is a stronger case that the tax system is more biased against capital (through a corporate tax and then dividend tax) than it is against labor. (2) The IRS statistics show that the wealthy pay a higher effective income tax rate than the middle or upper middle class. (3) What really annoys me is seeing the regressive nature of the payroll tax as a negative. Of course it is. It was designed that way and should be if it is going to be viewed as a "retirement plan." The Social Security system has actually been slowly tweeked to be progressive in recent years (meaning that it is designed for the poor make out the best in the system, although what actually happens is different due to life expectancy).
Via the Earned Income Tax Credit the poor actually receive their Social Security contributions back. How is that fair? Does the poor have a right to get something for nothing? It is not an inherent right, or a matter of fairness. It is the generosity of the wealthy. To see a right in what is really a gift is sad. To argue that the middle class is getting shortchanged is ridiculous as well. The middle class (and I am one) are still net beneficiaries in our society. Instead of hating the rich, the poor and middle class should be thankful for them.
The other thing that gets to me is this constant harping about waste in govt. Tim the private sector especialy big widely held corporations piss away so much of the shareholders money that it makes one want to cry. Most career civil servants understand that the best way to end your career is to be accused of profligacy.Plus we have a huge problem with govt accounting every one on both sides of the debate are freaking out about the size of the debt and deficit. If the government spends a billion dollars building a dike to prevent or control flooding the govt accounts do not even recognize this as an asset. Thousands in fact millions of individuals may benefit from this govt expenditure and there is no present method for the private sector to provide this good or service. Tim it was big govt action in Sept. of 2008 and the months that followed that saved our asses. They bailed out the banks forced the Merill merger. Without that action you would have gone to your ATM and the money would have been gone. Everyone benefited now everyone has to pay the poor and the middle class can not pay any more and should not have to their slice of the pie has been getting steadily smaller for 30 years and right now the pie aint getting any bigger. So lets focus are collective efforts on how to make the pie bigger instead of arguing how we should distribute the pie. Capital does not need more incentives. Warren has found lots of ways to deploy capital under the present incentive scheme.The poor and the middle class are about to receive an awfull screwing over. Do you think most employees of defined benefit plans are aware of how under funded their pension plans are do you think the avg. baby boomer is even aware that Rick Perry is right the social security system has been run like a ponzi scheme. They thought the money would be there the rich were smart enough to figure out that it would not be or indifferent because it just did not matter to them they were just too busy getting richer. Christie in New Jersey has been doing a pretty good job of delivering the news to the voters and govt employess of the bad news some one has to now deliver the news to the moneyed class .
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Yes Yes Yes however I still want to be able to get my dough at the ATM if Lehman fails.I agree Carl. To me this is the main problem we have as a society right now: there is not enough capitalism.
The nature of capitalism is that the competent people take the business or the market share of the incompetents. The incompetents become bankrupt and hopefully they learn a lesson. This how the system should cleanse itself. However, if there is a systematic bailout support (i.e. no failure possible), you reward incompetency. The idiotic banks that lent to Greece or corrupt states/municipalities should take a haircut; they just haven't done their homework... So you delay the cyclical cleansing and then you end up in a situation like now where the overall economy might fall pretty badly.
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I am of the opinion that baring a financial collapse in Europe any recession is going to look a lot like the recovery. When the world is awash in liquidity and no one is allowed to fail the lows are higher and the highs are lower. Think Japan but without the insane security prices to work through.
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Ok I am guessing you are not in favor of the Buffett rule and you also take umbrage with his commentary about corrupt congressmen , what part of the debate are you adding to by calling the poster silly and democrats ignorant. Democracy and politics are just systems to get the other guy to pay for stuff and the rich have been winning this battle since the Reagan was in the White house. What sends shivers up MY spine is the where this is all heading if reasonable men and women are not listened to because I can imagine it will not be a very nice place.That there is a "national conversation" is testimony to the efficacy of the constant brainwash that moneyed interests and their favorite corruptees (republican congressmen) hammer on the public. Something as evident, simple and logical (though very mild ) as the "Buffett Rule" should be immediately accepted not discussed. Fortunately the generally naive public is no dupe on this one as the polls show.
Don't be silly. If it was evident it wouldn't be discussed. Your personal moral axioms are not universal. For democrats many people seem remarkably ignorant of how democratic discourse and decision-making works. Repeating how evil and stupid everyone who values things differently is won't help. Insisting that an issue shouldn't even be discussed is so authoritarian it sends shivers down my spine.
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All of this exchange underlines the truth of the statement of derivatives and credit default swaps are financial instruments of mass distruction. Since most of the banks and other participants have opaque balance sheets such that even the internal risk managers can not fathom exactly the size and scope of their direct exposure the entire structure becomes a house of cards every time an AIG like entity becomes an important participant. As long as we have a system that is based on a heads I win tails society or the tax payer loses we will have more crises. I would like the roller coaster to stop thank you very much. No rational investor is going to lend 500000 to barber with spotty credit to buy a home he can not afford yet financial engineering made it all possible. You can not even consider the guys at AIG selling the CDS stupid if it had not been for the Lehman BK they may have come out the other side with a great trade and a huge bonus. And no one has had to give back any of the bonuses from the gravy years. Dick Fuld is still wealthy, Stanley Oneal from Merrill Lynch has at least 200 million
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I am pretty familiar with Hawaii real estate and very familiar with the developer AXB. I bought shares at 16.00 in 2009. This development will take twenty plus years to build out but it will eventually build out. They have been developing a similar project in Maui for more than 20 years called Wailea. The hawaii mkt takes huge swings both up and down and it is a VERY difficult mkt to develop in. AXB acquired most of their land over 100 years ago at paid less than 100 acre and still carrying it on the books at that price. I do not think that AXB is any great deal at this juncture in spite of what Ackman says. I do believe however that there are lots of good deals on individual properties in hawaii right now.
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Saw the movie Friday night I enjoyed it very much, my wife not so much, but then she hates baseball.
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From the info I have gleaned here and other places it appears that the cheapest in order are LUK BRK MSFT and FFH. What is a more interesting question is which has the largest margin of safety and which business has the best moat. On that basis I think the order is different.
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The Cdn banks have all been sued in class actions for forex spreads on RRSP transactions. The result is that banks are now charging much fairer spreads however anyone who is dealing with an investment dealer or bank knows that they have a thousand ways to pick your pocket and they invent new ways every day. I laughed when commentators referenced Bernankes twist operation as being hazerdous to banks profitability as if they could not offset the loss in spread with other revenue streams. Was it not last month that a major New York bank started to charge for deposits over 10 million. A banker basically takes the atitude that every time you do ANYTHING with Your money it is going to cost you.
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Let me have a shot. It appears that Europe is going to have a hard landing the appearance is based upon the fact that no one is going to stand up and say follow me boys and girls this is the way to salvation. The plan right now seems to be every country for itself as far as saving banks are concerned and we will all chip in to save the ECB which is bancrupt as well. Some banks are going to fail but depositers will be made whole not so sure about shareholders and creditors however. In that scenario which we can describe as the heck no we ain't going to print our way out of this mess some dough gets destroyed and real losses are incurred. Some of the gold which is on nations balance sheets might start finding itself onto the market I think this is just some people front running the banks selling cuz some of these countries are only going to be able to raise dough by selling gold or gold backed securities. If this is in fact the path then some of the gold bugs are going to be disappointed because they have been daring Bernanke to do QE3 and expecting the Europeans to do their very own version of the same. I believe the gold Dow ratio reached the 2nd highest monthly level it has reached in the last 100 years or so and I have said here more than once we do not get a sustainable bull mkt in equities as long as we have a bull mkt in precious metals. I was not short gold or silver on this self off but I thought that was where the greatest risk was. There is also a huge amount of trend following dough in the precious metal trade and well, you do not need an advanced charting designation to see that the trend is no longer left to right and inexorably upward.
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Moore, You have made statements about Tilsons and Tims performance. Tilson has just experienced a relatively short term underperformance. I recently read a piece adressing performance , if I recall correctly if you look at the historical performance of the top managers they almost to a man spent periods, sometimes extended periods, when their peformance was below mediocre. By the way ANY manager who beats his bogey after fees for a decade can not be described as mediocre.
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I may be wrong but I think the Sith Lords (LOL) are a pretty smart bunch. I think most of the dirty work is done by the hedgies which USED to have a connection with SAC. SAC may have an investment or Stevie may have an investment but it sure is not going to show up on any of SAC's trading records. "Ya we had some dough with ABC hedge fund but we had no knowledge on how the money was invested other than general strategy or reputation of the mgr". It is a pretty decent fire wall as long as every one keeps their mouth shut. Since a civil suit even a RICO action only has monetary penalties it is unlikely the circle of silence ever gets breached. It is all a bit dis heartening people have given Stevie dough because they were pretty sure he was cheating same was true for Madoff.
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Is it entirely possible that the drop in BRK valuation is a result of Buffett selling stock? It is comparable to the relative drop in valuation for MSFT, Mr Gates foundation is selling shares every day>If we have another crisis and BRK can deploy its capital, then we may be able to repeat but if none occurs then continued growth will be a challenge given BRK's size as it will be dependent upon its businesses
BRK has more than one engine to grow -
1. Operating businesses recover or EPS grows or widen the moat in their fields
2. Stock portfolio grows because the large caps recover
3. Buy businesses - tuck in acquisitions and/or new businesses altogether
In addition to this, BRK stock to book has dropped from the historic average of 1.6 to 1.05 - 1.1 range. It is very cheap given the quality of the businesses.
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I do not need to understand the hows and whys of gravity to trust it effects. At its very root Ben Grahams methods are just a system to take advantage of human folly. Humans are hard wired to do stupid things.I don't find in the interview where Hayek said you could not have a good monetary system after leaving the gold standard.
You could say also that for micro analysis, everything is right in hindsight too. Because Value investing worked since the 1930s doesn't mean it will work in the future. We live in an uncertain world.
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If I was king for a day, I would augment Medicare with manditory lifetime Health savings accounts. Which would be structured much like RRSP's the problem with health care under any insurance based system wether it is a govt run monopoly or mkt based competitive scheme you are always spending some one elses dough and there is little incentive for the consumer to choose. Perhaps I will not choose to have a triple by pass at age 80 if I am spending my own dough.Over here in Quebec you can wait 12 hours in the emergency rooms. Some claim that it's because it's free and people with cold go to the doctor. Which is completely true, some proponents have been claiming to put a small fee on every doctor's visit to deter people from abusing it. I kinda agree with it but if you think about it waiting 12 hours will also deter me from abusing the free healthcare :)
BeerBaron
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The next big Mike Bury? type of opportunity will be to delve into these highly complex and unstable investmnet vehicles. Billions of these types of products are being sold monthly around the world. As some unfortunate investors discovered the returns on Bernie Madoff ponzi scheme were greater than the linked notes where Lehman was counter party.The article that precedes the Watsa Interview is very good as well. "Emerging Threat Funds".
Thanks for the link.
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Blodget has been non stop for the past few weeks with his BAC bashing he mostly has been quoting anonymous analysts. My favorite quote of the tool who seems to be the go guy if you want a negative slant on the banking industry was I never listen to anything Warren Buffet has to say. I do not think Blodget is being controversial to boost ratings I think he has not changed his spots one bit. Why do I think of Ediie Haskell when ever I see Mr. Blodget.
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If I believed what you believe that the fed would never reverse its QE actions I would be long gold as well but is it the best and saftest bet one could make under those circumstances?Ubuy, so now the argument shifts to, QE is printing money, and QE is inflationary, unless the fed sells back these securities when times get better to prevent inflationa nd does so with iscar blade like precision :)
You are fooling yourself sir, those securities will NEVER get sold back. It's never gonna happen.
Packer, I enjoyed the book very much and am familiar with this cycle, but you have to understand that in the end the fed will get it's inflation. We are going to see QE3, very shortly here.
Your comemnts relating to gold are disappointing, gold is not a commodity it is a currency or financial asset. I completely disagree with your assessment of what drives the price of gold, I suggest this essay for you sir:
http://mises.org/daily/3593/Does-Gold-Mining-Matter
If gold was a true commodity it sure as hell has never acted as one. In 2008 the price of all commodities collapsed while the price of gold went up.
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Ubuy, so now the argument shifts to, QE is printing money, and QE is inflationary, unless the fed sells back these securities when times get better to prevent inflationa nd does so with iscar blade like precision :)
You are fooling yourself sir, those securities will NEVER get sold back. It's never gonna happen.
Packer, I enjoyed the book very much and am familiar with this cycle, but you have to understand that in the end the fed will get it's inflation. We are going to see QE3, very shortly here.
Your comemnts relating to gold are disappointing, gold is not a commodity it is a currency or financial asset. I completely disagree with your assessment of what drives the price of gold, I suggest this essay for you sir:
http://mises.org/daily/3593/Does-Gold-Mining-Matter
If gold was a true commodity it sure as hell has never acted as one. In 2008 the price of all commodities collapsed while the price of gold went up.
Japan (again)
in General Discussion
Posted
That is pretty much how I see the future unfold. At some point in the next 24 months we are going to take out the high on the S&P and will have pretty clear sailing for at least a decade is my guess. This bull mkt started in March of 2009 we have at most 2 more years to coil the spring a little tighter and then we are off. Unless the world decides to do something really stupid like let all the banks fail in Europe or default on the US debt or have a messy revolution in China or start a MAJOR war somewhere.(The world can handle little scurmishes like the Viet Nam war or the Gulf wars, no problem ,apology to any of those conflicts vets.)