Munger_Disciple

Another perspective FWIW:

I live in southern California. I think we live on different planets. As I mentioned in my earlier post, I see price increases in everything I use and buy but I am not an expert on macro economic issues. With that caveat, here is what I find where I live: Utility Bills: Yes! Electrical utility bills have gone up roughly 6% per year for the past decade. Similar increases in water bills. Real Estate Prices: Have you looked at them recently? I guess not. Skilled Labor: Hourly rates are up roughly 30% from 2019 (if you can find someone). Healthcare & Education: I guess we agree on this. It is BS that they are not captured in the CPI. BTW congrats for the 0% inflation on your planet.

TCC, Why do you think inflation in the big ticket items like utility bills, real estate costs, skilled labor, healthcare & education are transitory?

Just anecdotally, low inflation camp seems wrong to me. I live in CA and I see price increases everywhere including prices for goods I buy at Costco and I don't think the increases are transitory. For instance, how can increase in minimum wage be transitory? And we are also seeing big increases in skilled labor costs. Electrician charges $55 for trip cost and $85 per hour for work where I live. Plumbers routinely charge $100 per hour. These rates are much higher than what they were just 2-3 years ago. In addition, we have seen huge inflation over the last decade in anything government touches (in the US): healthcare, education, residential real estate, local utility bills, etc.

David Rosenberg has a very different take on inflation & interest rates. He thinks rates will continue to go down & the current inflation is temporary.

WSJ editorial board on the propublica article & the IRS: https://www.wsj.com/amp/articles/return-of-the-irs-scandal-11623191964

The propublica article is truly idiotic. The reporters use a flawed metric namely the ratio of income taxes paid in a period spanning a few years to increase in wealth of the individual during that period. It is conflating wealth with income. The right metric is (obviously) the ratio of income taxes paid to income earned. By this measure if someone owns a piece of land or a painting that produces no income, she is paying too little in taxes. What if wealth decreases in that period? It is not like that person doesn't need to pay taxes. She still has to pay income taxes during that period based on earned income. Looks like click-bait to me.

The latest op-ed piece by Bill Dudley: https://www.bloomberg.com/opinion/articles/2021-06-03/u-s-inflation-isn-t-scary-yet-but-it-could-be?srnd=premium

It seems to me that the Fed has succeeded in creating asset price inflation with very low interest rates and QE.

wabuffo, Your posts on the inner working of the Federal Reserve have been an excellent source of education for me. Please don't even think about thinking about not posting . MD

I thought Ron Olson's comments in the FT article are interesting: “Warren’s got a lot of life left. I want to underscore that,” Olson said. “Greg is our man at the moment. If it’s 10 years from now, who the hell knows.”

gfp, you rock! That is an awesome analysis of Greg's ownership. You are truly the go-to guy on Berkshire.

Buffett warned many times in his annual letters that insurance is not an easy business. And he pointed out that Berkshire's insurance businesses are very unique in many ways including an off-the-charts brilliant CEO Ajit Jain leading them. In fact Berkshire did poorly in reinsurance until Ajit took over and created tremendous value. It is surprising that Pabrai didn't heed Buffett's advice. Just because it worked for geniuses like Ajit and Warren, it doesn't mean it works for others.

Thanks DooDiligence!

I am still getting used to the new site. Have we lost the ability to modify/edit a previously posted message?

Page K-85 of the 10-K also shows the Apple position was worth $120.4B on Dec 31, 2020.

At 29th minute mark: "When the music is on you have to be dancing" Hmm.... who said almost the same thing in 2007-2008???

God help us if Chamath is viewed as the next Buffett.

Another article on Rentech: https://markets.businessinsider.com/news/stocks/jim-simons-renaissance-technologies-rentech-5-billion-client-redemptions-2021-2-1030055185 <i>RenTech's investors are pulling their money after the firm's international equities fund lost 19% in 2020, its institutional diversified alpha fund tumbled 32% over the same period, and its institutional diversified global equities fund slumped 31%. ....... In contrast, the firm's flagship Medallion fund - which is only open to owners, employees, and their families - gained 76% last year, Institutional Investor reported last month.</i>

https://www.bloomberg.com/news/articles/2021-02-08/renaissance-clients-pull-out-after-firm-s-rotten-run-of-results According to the article, outside funds performed poorly.

Thanks, this post made my day!

If SpaceX's Starlink succeeds (quite likely based on beta customer tests), VSAT consumer internet business is going to be in serious trouble. Low earth orbit (LEO) satellite constellation based internet is far superior to VSAT's system based on geo stationary satellite. Advantages of LEO include higher data rate, lower latency, lower jitter, lower rain fade losses, smaller dish, and easier installation of CPE. In addition, Blue Origin funded by Jeff Bezos is also working on putting up a LEO constellation. Musk & Bezos are the last guys on planet earth you want to compete with. I think Mr. Market is rightly discounting a significant impairment to Viasat's core business. VSAT is a value trap.

Looks like Jeff Graham had some interesting interactions with Rick Guerin:

Thanks wabuffo for such a lucid explanation of the interconnection between the treasury department and the fed. So it seems the only thing fed can do independently of the treasury dept is to set interest rate on bank reserves and treasuries and control what assets can the private sector can own. By purchasing MBS, treasuries, munis and corporate bonds, the fed is effectively taking them off the private sector hands, thus forcing the private sector into riskier assets to get any return.

wabuffo, By this do you mean that the Federal Reserve is a subsidiary of the US treasury? I thought the Fed set the interest rates (used to be ST only, now possibly the whole yield curve). -MD