beerbaron

I think David Winter uses 3 different discount rates. Off the top of my head I think it's about: 8% for stable companies with a dominant market position. 10% for smaller companies with less dominant positions. 12% for bets that are speculative in nature. BeerBaron

The market values the insurance business on their UW and investments at par. I think the market has it roughly right. FFH should be great at UW and great at investing. ..the later coming as a bonus. BeerBaron

I have a friend that got an american card by using a PO box in the US. Maybe you could use the same strategy. BeerBaron

Retirement planning is quite straightforward in an excel spreadsheet, I don't know why people rely on web sites/financial formulas. To reflect what Eric has said, it's very likely that you will die with 2-3M$ if you were conservative in your assumptions. Better to die with a few dollars then to starve at age 70. It must be really bad to retire with no money... all the time in the world and no means to enjoy it. BeerBaron

I also only get cashback cards. Thanks for pointing out the Amazon one. The canadian version has 2% cashback, not 3%, but I buy enough books and other stuff there that it's probably worth getting over time. There's also a 25$ gift certificate when you sign up. Chase Visa Amazon Card has 0% currency transaction fee in addition to some cash back. What you pay is the market spot price. Great for vacations! BeerBaron

Another strategy I have explored would be to make a corporate entity in say, the Bahamas. For as long as I don't liquidate my shares of the corporate entity I should not have to pay taxes on it. anybody has input on this? I find the derivative strategy proposed in the white paper to be painfull. It's like getting kicked in the knee instead of in the junk... painfull. Furthermore, selling s&P derivatives to offset your holding is a very dirty hedge. I have always found that buying puts on an index if like trying to time the market. Selecting a single security that will outperform the general market, I can probably achieve. Finding the proper moment to time the S&P is just dumb. BeerBaron BeerBaron

An this is the story why I have a shitload of cash doing nothing in my margin account and none in my tax free accounts. Adding a criteria that the stock has to be a super long term holding greatly diminishes the available companies available. Catalyst almost become your enemy. I don't understand why the article says even a index fund has taxes tough. If I hold an ETF for 20 years, I ouly have to pay taxes at the end of the term. Regardless of the actual constituents of the ETF. Does the ETF get taxes on it's turnover? BeerBaron

I would add high operating leverage (software business, money management, etc...) BeerBaron

Thank, quite comprehensive. BeerBaron

Sometimes we see comments like the yield of Italy is 2.6% and Germany's is 1% implying that Italy would default on it's debt every X years. What's the formula to get the implies default rate? Thanks BeerBaron

IBM has made Watson and data analysis as one of their 3 pillars for future growth. They are probably the only company in the world to put that much effort and resources. BeerBaron

I would argue that i was who i am before i knew what value investing was. I just recently realized that most pleasures from buying stuff do not offset the displeasure of spending hard earned money. It is a virtue and a curse because you can never enjoy life at its full potential. To conclude, value investing gave me the theory of buying cheap asset. Which is only an extension of not spending money, hence who i am Beerbaron

I'm in Canada, so my brokers are not available to you. Just shop around, I'm sure there is one that fits your needs. BeerBaron

I think with a 1000$ you should aim to have one or two positions so that frictions costs are tolerable. I would suggest 50% index fund (S&P 500) and another stock. Aim to keep the S&P500 long term (10Y) and the stock medium term (3-5Y). The good news is that a 1000$ any major mistakes will be offset by your new savings. As your nest egg gets bigger you increase the amount of positions to your desired level (10 maybe?). As for the broker choice, take a broker that does not charge monthly fees. With that amount the fees would eat into your savings quite fast. One thing that is important is to no be trigger happy, friction fees will be running in the 1-2% for each transaction which will kill any outperformance. Forget dividends, and focus on capital appreciation, do you really care about those 30$ in dividends? It's not like you need it to live on right. Ah yes, don't forget that your risk tolerance is whatever does not make you lose sleep at night! BeerBaron

I wonder what they have in mind? Investing in pot cafes down south? How candid is the CEO, could it simply be that the company is tight on cash, they want to expand but will need to open corporate stores to test the concepts? BeerBaron

If I remember properly the cpi derivatives are based on a set level. So even if there would be 0% the derivatives would slowly decay. Obviously the guy at the other side of the deal would be nervous for a few years...

I find it incredible that in 2014 there is no central bond exchange and that we still have to go trough trade desks. Trillions of dollars trade on the bond market and yet it's not accessible to the retail investor. BeerBaron

Happy birthday. I wish you another 100 so that you can compound money until you can buy Berkshire. BeerBaron

I would not do that. If by some means she has less money in 5 years than now she will be very mad at you. 4% is an ok hurdle but not low enough to invest in 5Y treasuries... which would make it a riskless arbitrage. I find that helping people make money without managing yourself is a negative risk return. If you are right you get very little benefit and if you are wrong you could ruin the relationship. BeerBaron

How is that even possible? Depositors would flee the banks and store their money anywhere else... Can someone explain how this would work? BeerBaron

So how can the ECB enforce negative interest rates without a bank run by depositors? BeerBaron

What you described in your examples was an incompetent engineer. I've seen many incompetent engineers in NA too, they just did not climb the ladder that much. In China relationships can bring you pretty high in the corporate world, especially if you have a tight ass. However, I would not be ready to challenge North-America's top 1000 engineers against China's top 1000 engineers. Technically our ass would get kicked, they have studied harder, longer and better than us. They would work harder and longer thant us as well. Overall, I hugely respect China's engineers but we have to understand that the spectrum of technical qualifications is much wider than in North-America. An undergraduate from Shangai's university is probably much more qualified than one from Ningbo's university. BeerBaron

The US post 1929 had very strong deflation pressures. BeerBaron

Too bad no questions were asked about their latest investment in Greece. BeerBaron

I heard he was giving out a stack of 500 pages plus a quiz about the material. If you answered the quiz right and gave it back to him by the end of the day he'd give you a secret stock tip. Word going around Omaha is "c c b d a a d..." I thought it was up up down down left right left right b a select start? CONTRA!