scorpioncapital

It's for you not to be extremely skilled in investment selection (nothing wrong with that, being average works) and choosing a partner in the form of an investee that is equally unskilled. That's a sure way to lose money. Having a skilled partner or you being the skilled investor both work, but it doesn't work well when both players are average or worse, then the result is naturally average or worse.

If I ran a hedge fund I wouldn't ask any of these questions as they are largely irrelevant. I don't care if the guy or girl knows anything about money or finance, that can be easily taught. What I care about is the operating system in their head. For that, you have to ask questions about how the person thinks about problems, what is his/her ability to concentrate, partnership dynamics, what is their general approach and principles. Like Munger says, I want to know if the person has the right mental models to approach any problem in any field and that they don't suffer as much from the psychological and behavioural pitfalls that many people do.

Well, $18 million * 35% = $6.3 million tax savings. Let's say a 10-15% IRR, so $10 million capital will generate this amount in say 4-5 years, let's say 5. Interest rates likely to be 1-3% over this period so the value is pretty close to 5-6 million. Chop it in half if you're uncertain how or if it will be used and give it a value of say $2.5 million.

I'd do the same thing as the Greeks - take the money and run. If somebody gave you free money and it was a question of forgiving 50% vs 100%, why not go for taking off with all the money? You've already been painted as a "criminal" why not go all the way? You have to admit it was pretty stupid for the givers, regardless of how much fudging the takers were doing.

You go through problems, not around them...Does it matter when you own a business for years and years what the stock price may be here and there? You go through it - on the other side is a pretty nice pot of gold.

Summers is one of the most astute and intelligent people I've ever had the pleasure to hear speak. I always listen very carefully and weigh his opinions against my experience and understanding.

How come they don't translate their track record of predictions into a track record of investment results?

"All entities are fine, 77 trillion in networth - How would US Government transfer those assets to its own balance sheet without suspending the bill of rights?" Let's say $70 trillion in assets return just 2-3% (10 year treasuries?), that would cover the annual deficit of 1-2 trillion. The government has no wealth so obviously it comes from people through taxes, modifying contracts, the sale of public assets. Basically, all we need is a wealth tax of just 2% on all assets, which means people need to get maybe 4% to break even. But actually, the government is already doing this through inflation. Inflation at 2% is just that tax. So I think we'll be just fine over time.

You may want to look at this chart of US wealth: http://www.federalreserve.gov/releases/z1/current/z1r-5.pdf Something like over 100 trillion for all entities.

This article's conclusions I found extremely interesting why 2:1 leverage is actually a good thing for young investors: http://islandia.law.yale.edu/ayres/Life-Cycle%20Investing%20Working%20Paper.pdf I especially found the idea of LEAPS interesting. Consider the case where an investor receives a marginc all on stock. If they roll-over the remaining stake in 3 year LEAPS, they can now wait out a recovery, in 3 years they can buy back exactly the same amount they had leveraged 3 years before. If the depression continues or worsens, they can roll over the leaps. Given this logic, why not buy the deep in the money LEAPS initially, assuming the spread to market price is small AND the stock pays little to no dividends.

My tip for investing full time is to do it part time, and even better no-time. Inaction is brilliance (I know sounds kind of Zen). The way to do this is to practice what I call "constructive hypocrisy". It means that you do not actually do what you appear to do. Read, post, talk, but inside your head say this is all really for amusement and in no way will I act on these noises!

http://www.hks.harvard.edu/fs/rzeckhau/InvestinginUnknownandUnknowable.pdf

Sorry I meant 20% ROE with 30% debt vs 30% ROE with no debt.

After about 5 years, an unlevered company with a higher ROE will trump a levered company with a lower ROE, by a reasonable margin. A company with high ROE and some leverage will trump both. After 20 years, the difference between a 20% ROE and a 30% ROE is 3x as much money and even 30% debt won't come close to bridge the gap. You would need multiples of debt to equity and even then it's a close battle.

"The average price of an ounce of gold in 1980 was about $1,825 inflation adjusted dollars, while the single peak price was about $2,350 in 1980. At $1,900 per ounce, gold is now higher than the average 1980 inflation-adjusted price" A 30 year real return of zero, while the S&P500 went up something like 6x. No wonder many smart investors consider gold a foolish long term investment!

Only thing I'd add is it appears there are 16.5 million fully diluted shares for a total market cap of $55 million Israeli shekels which translates to 15 million US dollars, so it seems to trade around book value based on the bloomberg equity of $16 million USD.

I can't find Natural Resource Holdings filings on Magna (http://www.magna.isa.gov.il/Default.aspx?lang=en) anybody know why? Looks like an interesting investment and I want to buy in!

Are many juniors worth zero because they run out of cash before getting the minerals out of the ground or because they don't have the minerals they think they have?

Awesome find, Rick is one of my favorite value investors and think he is relatively unknown since his expertise is in resources but his track record, knowledge and wit put him right up there with Buffett in my mind.

It's a good argument. If not taxing dividends one corporation receives from another is standard policy, why is taxing dividends a corporation pays out to an individual taxpayer any different? After all, this is what Buffett argued in his op-ed, that he should be taxed more on the dividends he receives. But then, why not tax intra-corporate dividends too?

Another really good one, I'd say not very far behind IB is https://www.virtualbrokers.com/default.aspx

Interactive Brokers - unbeatable.

I wired funds to IB and it took exactly 2 hours to arrive at IB and that's from Canada to the US.

It's not so simple. The rich don't pay payroll taxes because they created their own social security. If you didn't create that security, why is it not fair to pay a tax that will give you something? Statistics show most people die with zero or negative net worth. Likewise, the rich pay an estate tax, with state taxes some estimates show that some mega-rich in some states would have to pay upward of 80% in taxes on their total wealth, whether upfront or on the backend. Of course, there are foundations, etc.. but that is giving away the money so doesn't count. If the US has a cash-flow issue I do agree to rebalance some taxes to the present but that would require reducing long term wealth taxes.

Actually some studies show that short sale bans can be effective during panics, I am for them! http://69.175.2.130/~finman/Publications/JAF/2011/Nguyen.pdf