beerbaron

I don't understand why people say there will be QE3. QE2 aimed at lowering long term bonds rate so that lending would expand, it did not do any of the desired effect as it basically raised long term bonds as people were expecting more coming inflation from QE2. I'm sure Bernanke came to the conclusion that the long term bonds are better off being left alone. QE is not a fiscal stimulus. BeerBaron

The applification of hardware is possible under one condition: -There is enough computing power to emulate the real device I don't see how Cisco's higher end routers could be emulated. ASICS are 100 times more energy and speed efficient then processor based applications. Energy is an important factor when it come to routers. Processor speed acceleration has been slowing down since the beginning of the century. Complex QAM needed in routers cannot be emulated since it's pure analog signal that need to be controlled by less then 1 cycle. For lower end router, I agree the applification is possible. Then again, CSCO is capable of the same... isn't it already doing so with their linksys brands which are basically computers? It's probably doing more or less the same with their other lines. Regards BeerBaron

Anybody has an exhaustive list of preferred trust. I guess some of those must have gone down quite a bit with the volatility. I'm interested by Trust Preferred because they won't count as Tier 1 capital pretty soon. So even if you are buying 30Y preferred you might get the principal back much sooner. BeerBaron

It's days like this that revive my love for investing. I barely red an annual report since january but now I can't seem to find companies that interest me :) BeerBaron

I love how accurate those "estimates" are... anybody estimating M$ to the single digit is either an IRS agent or a complete idiot. BeerBaron

Am I reading this thing wrong or the chart point that when PE are increasing the 20 year return increases? It seems counter-intuitive to me... BeerBaron

I think it's pretty much break even. It cost FFH 936M$ but they had Equity Gains of close to the same amount. True up to a month ago hedges cost them a lot a profit... not the same ballpark today. BeerBaron

With all the noise around I decided to make a simple logical exercise. What is the certain real effect of a treasury downgrade on the future profits of America's corporation: On Banks -If Treasuries are not AAA anymore then their Tier 1 capital decreases. Increases their financial leverage and risks associated with them. Some people would think that this would dampen the recovery by reducing lending but it is not it. Banks have all been increasing their capital, because they just can't find anybody to lend to. -If Treasuries are not AAA anymore yields will go down and interest rates up. Impacting spreads. People are not stupid, they know the USA can print their own money. How could you fear default in that situation? Yields should be relatively unaffected by the downgrade. On Insurers -Insurers would likely have to increase their statuatory capital. Reducing the quantity of business they can do. True, but their is an oversupply of capital right now in the insurance industry. It can only help to reduce the supply in the mean term. On Businesses -If yields do not change, there is very little impact. True On USA foreign lenders -China will stop lending to the USA China has been buying treasuries for their own interest. They do not intend to make any profit on those treasuries, they are just aiming at moving the manufacturing industry and fuel their growth by keeping their currency low. They know they will get 10 cents on their initial investment in 30 years. But who cares, they will have grew 13 times their GDP by then.

Buffett explained something pretty similar in it's 1999 speech in Sun Valley. Risk free rate is the law of gravity in finance. Stock are just perpetual bonds with variable coupons and principal. The question tough is what to do... if you have bonds then the same effect applies as to stock. Variable rates preferred... maybe. 6.4% is not all that bad if you compare with 30Y treasuries. BeerBaron

I'm glad to have about 15% in BRK, the old guy does a better job at making me rich then I could myself. BeerBaron

Amen, how high you jump without considering gravity is kinda irrelevant! I'm sure Buffett is starting to feel like an undersexed guy in the Playboy mansion :) BeerBaron

This was indeed a great day. You know you are a Value Investor when your portfolio goes down 4% and you get all excited to buy cheaper then before. Question : Will FFH hedges support the stock for long... or soon some people will start selling their wins (FFH) to buy cheap stuff? 5% Cash now, but will get a nice 30% cash influx within the next 2 weeks we will see where we are when I get there. BeerBaron

Yeah I'm from Longueuil. Glad to know some people in Quebec think about money ;) BeerBaron

Liberty are you from Montreal? BeerBaron

Did any of those filings ever sticked? From my experience, courts are very carefull to start putting their nose into business administrations. BeerBaron

How come the WSBase still climbs without QE2... BeerBaron

I've been trying to import SEC 13F statements into Excel. Anybody tried it, so far Excel won't recognize the data as a table... BeerBaron

Used car shopping is lots of fun for a value investor. The market is pretty inneficcient (altough the internet brings it closer to efficient), the perceptions on cars is as bad as novice investors. And, nobody seems to do any cash flow projections when buying cars. For example, over here in Montreal you can buy a 125k km Intrepid for 1500$, fully equipped. Compared with a 5000$ Civic with about the same life expectancy. People will tell you, it's a lot cheaper to buy the Civic because it's so cheap on gaz totally ignoring that 3500$ difference. They will also tell you, Civic break a lot less. Totally ignoring that breaks, suspension etc is normal maintenance and would have to be replaced as often. In the last 5 years I think my cost of ownership for cars has been below 100$ per months excluding gaz. That is value in my book! BeerBaron

Insurance is a tricky beast you sell a product before knowing what the price is...so companies with good combined ratio that suddenly drops because of an accident year were probably selling their product too cheap. As simple as that. BeerBaron

It's probably the conversion of bonds to equity in the bankruptcy. BeerBaron

Lol If you call the tail of a dog a leg. How many legs does a dog have? BeerBaron

Not nearly as good as a month ago. Lots of volatility in my portfolio for such a mix of quality businesses. Value and size seems to get a hit these days. RIM did not help too. BeerBaron

My preferred accomplishment from Schiller was it's studies on the price of a stock VS all it's future discounted dividends. He basically explained that the market overshoot by a wide margin by discounting all the discounted future dividends of the SP500 and adding the SP500 chart on the same chart. You guys might want to watch it's course on Columbia University. Pretty interesting. BeerBaron

Whatever the number of jobs, I would put the odds of a temporary tax levy pretty high. Obama does not have a lot of cards to play, if he could get the jobs and the shareholders happy at no direct cost why would he not... That is why I won Cisco, it's a nice speculation imbedded in a nice investment. BeerBaron

Actually a 3 leg stool is technically better then a 4 leg more. A 3 leg stool will never wobble.. ;) Beerbaron