scorpioncapital

I would rather wait for the thesis to materialize in fact first and then buy the short-term bonds yielding the higher interest rate.

"Who knows when they will ever pay tax again. " Never have and probably never will. It's a giant vacuum cleaner of operating losses which it then uses in other parts of its business. In the US, you can use capital gains against operating losses I think which makes it quite lucrative. LUK's philosophy is to turn junk into gold, inefficiency into money with a few large strategic investments forming the major pillars of this strategy. I have looked at all the standard alternatives, BAM, L, FFH, MKL, WTM, BRK, etc.. and LUK is in my opinion by a significant margin the best all around investment of the lot from a risk-return perspective. BRK is good but it can never get the returns you'll get from LUK due to size. This is one investment I'd put 100% of my net worth into (and I am not far off).

I hate to break the news to you but ELF has been at discount to book value for maybe 20+ years now. Do you really think the gap is going to close now??

the info I've got on cap gains comes from a larger accounting firm and this is what they said needs to be done, however I will qualify that and say this is for a corporation not an individual so that may be different.

Income is different than capital gains. Capital gain cost basis must be calculated using the date of purchase/sale exchange rates.

You realize the first method is probably completely illegal...

I notice there is almost no talk in this year's letter about the economy, inflation, or the stock market generally.

so basically we can say that IB is better for leveraged investors and not so good for big traders as commissions are more than some of the flat rate schemes of other brokerage firms.

I just got a letter from Honda to buy or lease a car for 0% interest for 60 months. Now that sounds like deflation to me.

I have problems with arguments based on history. Both Rogoff and Ferguson use history as their guide but in the end nobody knows exactly how this particular point in time will develop. History may rhyme but even that won't tell you what will happen in the stock market.

Evidence for success in business selection is not determined by the sum total of trades made. I'm not sure what "kind" of evidence he is talking about.

It's a good point. If I flip a coin 10 times and it comes up heads 9 times, it could certainly be luck. But if I flip it 500 times and it comes up heads 490 times, I'd be inclined to think the coin was rigged somehow. On the other hand, each one of those 500 decisions also rested upon the managers of those businesses making say a few smart decisions as well, so you have a total of maybe 5000 decisions going right.

It reminds me about the stories about Gauss, Newton and other scientists, their final papers were rigid and seemed like genius but their private work books were full of learning, trial and error, dead ends, etc.. It's like saying somebody practices every day to become truly great and then shows the world very rarely that greatness and there is not enough evidence. How can we know how much reading and hard work went into every "rare" investment decision?

In the article, he claims the evidence for Soros success being skill is more solid. He doesn't explain his reasoning in the CNBC snippet however so there is no way to understand what he means. My impression is that he comes from a trading background, especially trading options, so I'm not sure that sort of background can tell you anything about whether somebody is a good "business" picker as opposed to a good "trader". After all Soros was more a trader, even a macro-one, than a business investor.

One thing to note: The higher Berkshire's stock price remains after this split, the cheaper our aquisition of Burlington becomes. I think Berkshire stock is about 15% higher than it was before the split and when the acquisition was announced.

I think SSF's, unlike options, are a commitment to buy the stock at a future date. While it is true that one might be able to close a position, the liquidity might be an issue. Therefore, one would still have to make full payment at delivery. In this sense, SSF's would make great sense as a cash-flow management tool, when you expect certain cash-flows into your investment account at some future date within the next year but want to lock in today's price.

I was going to trade them but then I realized the kind of stock I own is an S&P 500 stock with a 30% margin requirement. The margin requirement of 20% is only 10% lower - and there is no way I was going to get close to either limit anyway. I wasn't too sure what other advantage, other than the leverage/initial deposit, there would be.

This all seems part of a logical progression over many years 1. Create the B shares. 2. Split the B shares. 3. Buy back shares and/or pay a dividend.

". It will also let the "little guy" buy a 100 share lot because the stock is now "cheap". " If the little guy could buy 100 shares after the split he could buy 2 shares before it. It must be for those who can't even buy 100 shares post-split.

"where they can no longer borrow and dare not inflate" The history subsequent to WWII suggests the American people will take a tax increase via inflation than a more disastrous depression, basically, they will go for the higher tax option but only if it is spread out relatively mildly over many years. Whether it will be different this time remains to be seen.

Of course the retail investor can get paid for securities lending. Have you seen IB's new feature allowing this?

"When oil was at $150 last year, they were losing money because they still had to pay their rent. When oil was at $40 early this year, it was a huge cash cow..." They didn't make any money when oil was $150 or when it was at $40, they went from a loss due to high prices to a loss due to the recession. Hopefully steady oil prices and coming out of a recession will help.

well you buy at 1/10th book and sell at 1/5 of book and you've doubled your money. That's pretty much what happened in TA from about 2 1/2 to 5+, now back down to about 4.

Whoever is offering a fixed rate loan at 2.5% for 9 years is probably the loser here. Anybody taking the loan is the winner. I wouldn't buy FFH (assume the loan is not attached to this security only) but other investments, certainly.

"That doesn't give me faith in LUK. " He's been (net) selling for about 20 years now...His faith in Leucadia died almost from the beginning.