ERICOPOLY

I agree with you there. I would exempt groceries for example, but not restaurant meals. I would exempt (a certain reasonable dollar amount of) every car purchased. etc... etc... My concern is not whether billionaires are paying the same tax rate as mere millionaires, but rather my concern is that we don't raise the cost of living for the people who can barely get by. At a certain subsistence level, there should be nothing taxed at all. Anywhere I say "should", it can be reasonable to assume I really mean "I believe but everyone has their own opinion". It's just lazy style, not meant to be pushy. Cash that is locked up in a vehicle like Berkshire is not available for consumption It's available, he just needs to hit the "distribute" button. I'm not the first one to notice this distinction: http://en.wikipedia.org/wiki/Holding_company Berkshire however is not classified as a "personal holding company". I really think though the distinction with what he's got going for himself via Berkshire isn't all that different in spirit.

The key word is "taxable" income. Why doesn't he have more? Well, it doesn't make sense to pay a dividend and use the proceeds to buy KO in his personal account. After all, that would raise his TAXABLE income. Much better to retain the earnings and buy KO within berkshire, where his tax rate is far lower than even the 15% rate that he claims to be too low. But yes, we both agree that something here is disingenuous. He speaks of coddling the rich, but he didn't become a billionaire from his taxable income. So addressing taxable income is laughable -- it's the untaxable income that's made him a billionaire. Does he even have a billion in his personal account? No. Would he still be a billionaire if Berkshire paid a fair amount of tax on it's inter-company dividends? Yes, he would still be a billionaire, just not a coddled one. Anyhow, I suppose I'm advocating a corporate income tax on INTER-company dividends, and leaving the INTRA-company dividends alone.

A consumption tax would most elegantly address that, not an income tax. I don't see the connection between income taxes and consumption. Especially when the conversation turns towards coddling the billionaires, who are the least likely to consume their entire income. One could justify a lower tax rate for them on these grounds.

Not the way I would structure it. I'd give an exemption based on ownership. In the case of BAC, they own 0% so I'd tax all dividends as normal corporate income. Berkshire does not own BAC, so it's not double-taxation. They are separate companies. However, if Berkshire held a 10% stake in the common, then I'd exempt 10% of the dividend from taxation. And if they owned 100% (takeover), then the dividends could be enjoyed without any taxation.

+1 I have yet to see him advocate a tax that would materially impact him.

Yes it sounds like nonsense. Who pays him? I ask this because he says things so absolutely bizarre that I question where his motivations come from here?

Why not sell all of CCB? It's non-core after all.

They have been tracking for non-GAAP earnings in excess of $5 in FY11. And management continues to claim $7 in 2014. Will they make deals that will jeopardize the EPS targets they are promising? In the end, they will be graded on only one thing.

Before I heard the term "value investing" I heard the term "buy low and sell high". They are actually the same, of course. Buy low and sell high relative to what value? The idea of an embedded value is implicit.

I found the 2008/2009 crash to be scary, but not the crash of the past few weeks. People are afraid to touch something like WFC at 6x earnings? What the hell is wrong with these people!

That company is a value destroying sink hole IMO. They manage however to externalize the costs.

Yikes, 25g of fructose/day is too much for the liver to handle. That's hardly anything. "about the amount contained in one 12-ounce soft drink" No Coke for you!

I don't know how this will all end up, but I suspect KO will go through a low P/E phase somewhere down the line: http://arkansasmedicalnews.com/avoidance-of-fructose-could-do-double-duty-preventing-type-2-diabetes-and-alzheimer-s-cms-913

Screwed by Yeung Hung Ho. (I just can't resist. apologies).

He needs to go on Poppy Harlow's show.

Probably bad news for state and muni debt of US border states that rely in part on collection of sales tax. Yes, when i heard that I was wondering with whom the benefit lay but then i realized perhaps it is the fact that less than $1000 duty wasnt easily enforced and time consuming from a benefits std pt. May have to do with border resources allocation - streamline the coming from Canadas pay more attention to the Mexican border? Thats my guess. We have been visiting Canada every winter for a week in Sun Peaks near Kamloops. It is a ski resort. They are hurting very much from the dollar exchange rates. The US ski tourists now consider it not worth the drive -- it was once a significant cost savings, but now it's on par with the big US resorts. Might as well save the driving they figure. But we like it because the slopes are empty, rentals are easy to find, and the place is very beautiful. Plus it's packed with cute Aussie girls, even if I'm not officially allowed to look. Suspect it has something to do with that -- soften the blow for US tourists visiting Canada.

Probably bad news for state and muni debt of US border states that rely in part on collection of sales tax.

Isn't it 10 years these days? (My memory is hazy.) I believe I had the 5 stuck in my head because that is what I remember as being applicable to me, only I said the wrong thing. I need to first pay resident taxes there for at least 5 years out of the prior 15, then revoke my US citizenship. That's the way I avoid the expatriation tax. From IRS i8854.pdf: Certain dual-citizens. You may qualify for the exception described above if you meet the following requirements. • You became at birth a U.S. citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country. • You were a resident of the United States for not more than 10 years during the 15-tax-year period ending with the tax year during which the expatriation occurred. For the purpose of determining U.S. residency, use the substantial presence test described in chapter 1 of Pub. 519.

They also take a cut of your unrealized gains when you renounce your citizenship. Unless, like me, you are a dual citizen since birth and are leaving for your other country of citizenship. I think I read that even after renouncing citizenship they will tax any of your gifts for the next five years. So to avoid US estate tax, I will need to renounce my U S citizenship, then reside in Australia for five years, and then give the gifts to my children. Australia has no gift tax.

What's going on with the weather this year? I feel like we haven't even had 5 days yet this entire year over 80 degrees, yet the rest of the country has been dealing with extreme heat, tornadoes, earthquake, and now this! My lawn is still green yet we haven't even watered it once!

I think the stock will be at least as high as $17 by expiration of those 2013 calls. Nearly 7x returns. I didn't go "all in" on the calls, if it blow up 100% I've only destroyed 5% of my fingers -- which I would expect to recover from the warrants. I have the same number of warrants in AIG as I do in BAC. I hope AIG gets their $10b back! That gain in book value alone would repay me for the cost of my BAC warrants. Congrats Eric for the perfect pitch, your calls might lead to an early retirement. But i would rather set up a personal hedge fund.... if I would be you. ;D I don't know much though regarding real fundamental analysis. I just (think I) know who does, and then piggyback on them when I firmly grasp the gist of it. It would be sort of fraudulent in a way to invest the money of others given my technique. I can always spend my time learning though -- perhaps a formal course of study like a CFA type thing. The risk though is then I'd start making huge mistakes believing that being "certified" has made me smart enough to make my own decisions.

MBIA, Sanjeev, MBIA. I hope so. It's 30% of my money now (averaged down to cost of $8.60).

I just think that if we keep getting "once in a generation" opportunities every three years, then Berkshire is not going to be held down by the law of large numbers for quite a while yet.

I also feel good on the putback front because I have a lot of MBI. Should BAC owe them nothing, MBI gets killed and BAC soars. Should BAC owe them 100%, MBI soars and BAC staggers. Should BAC wind up paying MBI a fair amount, they both do well.

Here is the deal regarding my thinking. You can own BAC or a risk free alternative. No recession, BAC is probably a triple in 3 years. Mild recession, maybe they struggle to meet the new stricter capital rules and have to raise some equity. Very severe recession, worst case is 100% loss. So, in the benign scenario and no recession... if one stays with cash and stocks head higher from here, then one may stay with cash all throughout that period sticking to one's guns. Kept your dollar, but lost $2 relative to the alternative outcome of getting $3 from owning BAC. Given that I believe severe outcome is unlikely, I'm happier risking the $1 to get the $4 (I figure if it triples the warrants will be at least 4x current levels). Maybe the warrants would be 5x. I don't know. I'm saying that the price of preserving $1 in the "unlikely" scenario of BAC going to zero... is that one is paying a more likely opportunity cost of $2 - $4. I guess it depends on what you see as more likely. The last time home construction fell off a cliff, we had huge layoffs. But after firing the office secretary and never bringing her back, she won't be fired again. Whatever the next recession, it won't be quite as bad for the banks all other things being equal simply due to the fact that a lot of the easy fat has been trimmed, and the loan book is healthier given the quality of loans beginning in 2009. Plus loan loss reserves are at much higher levels today than before 2008. On top of that you have lower mortgage exposure. The remaining pre-2009 loans are seasoned by a rough recession. Probably missing many other things but there is no need to list everything. We all know their loan book is far healthier today. So anyways, I don't want to lose $3 or $4 bucks in the likely scenario. Depends on what you think is likely I guess. I think it's too risky to stay in cash, others disagree. I could lose money on this, but it's money I only have in the first place due to similar opportunity cost focused choices in the past. Now, if I thought the odds of success were different it would change things. But I'm not going to say pass up an 80% chance of tripling my money simply because there's a 20% chance of losing 50%.