Tim Eriksen

I have the 1996, 2000 and 2002-03 editions. I worked for Walker's Manual in 2004 and 2005. A few years prior Harry Eisenberg had sold it to Andrew Berger, who is based in New Jersey. What I was told is Harry Eisenberg had a staff of six people doing research and the sales could not support it so he sold. Last I heard he still lived in the Bay Area. Andrew occasionally hired people on a contract basis to help on the book and projects. I helped input and edit the September 2004 edition which came out in paperback in mid to late 2005. He told me at the time that it was being sent to people who had pre-ordered and I assume pre-paid. I have never seen the paperback for sale anywhere. I have given away my extras. I do not think the 2006 edition was ever printed. If it had, I am sure Andrew would have tried to get me to buy one. Your best shot is to contact Walker's Manual directly regarding the paperback version. They still have a web site. I would be more than happy to interact with you, or anyone else, in terms of finding out more information on any of the unlisted stocks in the book. There are some real gems.

I don't think that it is the government preventing it. The leagues don't like it. It has happened in the past. The Cleveland Indians traded from 1998-2000. The Boston Celtics LP traded from 1999 to 2003.

Does anyone know of any good sources for information on shareholder activism in Canada? To be more specific I am looking for information ranging from director nominations, proxy fights, etc. How easy is it to do versus the US?

By now I am sure all are aware that GE paid no U.S. income taxes in 2010. Per the article, they had $14 billion in profits, $5 billion of which was in the US. I am sure many of us find that troubling even though it is all legal. What most of us are probably unaware of, is how large their tax return for 2010 was. GE filed electronically. If they had done a paper filing it would have been 57,000 pages, or 19 feet tall. Who needs simplification? http://www.weeklystandard.com/blogs/ge-filed-57000-page-tax-return-paid-no-taxes-14-billion-profits_609137.html

http://www.vanityfair.com/business/features/2011/12/michael-lewis-201112 Great article by Lewis on Israeli psychologist Daniel Kahneman. The Nobel Prize winning Kahneman has a new book, Thinking, Fast and Slow, where he reveals the built-in kinks in human reasoning.

That might be true, but if you read the whole article you would see that is not the case. It argues that the increase in inequality was from 1979 to the mid 1990's, which was before the dot com bubble. I didn't link to the article in order to generate a partisan debate. The purpose was to challenge the common beliefs that many hold that may not be correct.

Good point. Could also be due to distortion from the stock market bubble caused in the 90s. Hard to say, though. Regardless, income inequality in the US has been increasing since the 80s. Don't think you can blame it on particular presidents -- that would be too cute by half. More likely, it has resulted from secular changes in the US economy combined with policies favoring the wealthy and the general trend of shifting risk from firms back onto households. While I agree it is too simplistic to blame or credit Presidents, The University of Michigan economist argues that the growth in inequality occurred between 1979 and the mid 1990's. That is interesting since the common perception is that is has occurred since that time and primarily under Bush, which according to the article is not accurate. Even your comment that inequality has been rising since the 80's could infer that it is ongoing. Yet according to the article, one could also say that inequality has not been rising since the mid 1990's which gives an entirely different understanding of the situation. You also state that inequality has resulted from secular changes in the US economy combined with policies favoring the wealthy. That seems non-specific and simplistic as well.

Surprising article based on what we currently hear in the news. http://news.investors.com/Article/590383/201111030805/Income-Inequality-Rose-Under-Clinton-Obama.htm According to the article the rich actually got poorer under Bush. "Others argue that income mobility matters more than equality. One study found that more than half of the families who started in the lowest income bracket in 1996 had moved to a higher one by 2005. At the other end of the spectrum, more than 57% of families fell out of the top 1%." Interesting stuff.

Yes that is what he said - Less Inequitable. http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2016626758_bill_gates_on_being_the_top_1.html Interesting perspective by Gates on the current state of wealth in society. He argues that the presence of the ultra-rich is not the problem, rather it is a lack of education. Education is the key to upward mobility.

The author didn't state that we need to eliminate two billion people. He said we should "return global population to its natural level of under 2 billion." That would be five billion people. What a joke.

I think we grew just fine with high capital gains rates. http://www.ctj.org/pdf/regcg.pdf But the two decades where the rates were the highest were the 30's and the 70's. That is not exactly a ringing endorsement for higher rates. We should also remember that the late 40's and 50's are not a normal environment. You had pent up demand from during WWII and much of the world's industry was destroyed except for the US. I am not arguing that 15% is punitive. Or that 20% would be horrible for the economy. I would say that 30% plus is not wise based on history. We can't say based on history what the impact of a zero rate would do. In theory what are capital gains anyway - the current capture (when there is a sale) of the change in NPV of future cash flows (as compared to when the security was purchased). Those future cash flows, in theory, are going to be taxed under corporate taxes. Capital gains is therefore a second tax on the same earnings just like dividend taxes are. It is not necessarily unfair if those rates are lower than normal income rates due to that fact. Once again we should look at the whole picture of taxation. In reality, a strong case can be made that dividends and capital gains are taxed at a higher effective rate than normal income under current law.

The article starts : "On October 31, the world’s seven billionth inhabitant will be born. This should be a matter for deep mourning. Not only does inexorably increasing population pollute the planet, and lessen the likelihood that the majority rather than a minority of the world’s inhabitants can achieve a Western living standard, it also hugely raises the probability of a crisis in which billions are killed." I wholeheartedly disagree with the article. There is absolutely no need to mourn the addition of another human being. That is a disgusting thought in the first place. More people does not inexorably mean increased pollution or a decreased standard of living. In the US, our air and water are cleaner than they were 100 years ago. We are more prosperous than previous generations. This is true of most every major nation on earth. The writer argues that we should reduce population to below 2 billion. How does he want to reduce/eliminate 70% of the people? Who is going to prevented from having children? The only value of the article is to remind us that there are still people who hold to a belief that is discredited. Like taxes, it is another area where Buffett is way off as well.

I don't have any opinion about 90% or even 60% tax rate for rich guys. Only thing bugs me that why should we have a system where a rich guy pays less than an average Joe. I don't think taxing them at the level of average Joe should have any objection. I have not heard any good arguement so far. While I agree that few guys like Buffet will use the money efficiently to make a difference but that's not true for everyone. Lots of people might be good at accumulating money by using unfair tax system to their advantage but they might not use it for benefit of mankind. I don't hold any opinion about optimal tax rate or any fix number but I feel strongly about average Joe paying higher tax rate than some one who makes millions each year. If unchecked it is going to create terrible situation of civil unrest in long term. I don't have any problem if everyone is paying only 10% or 0% but current system seems unfair to me. rranjan We don't actually have a system where the rich guy pays less than the average Joe. Buffett has to use poor logic and ignore the whole picture in order to come to that conclusion. If you look at effective income tax rates it is progressive in the US. While there are exceptions, the rich pay a higher percentage than the poor or middle class person. That is a fact. Buffett has to include payroll taxes and ignore corporate taxes on his non-dividend paying stock ownership, dividend paying stocks, and any capital gains in order to get the numbers to match his conclusion. (Note I am not saying he is doing it on purpose because I do not know.) If payroll taxes are a tax, which is how Buffett looks at them, then social security and medicare benefits have to be what? A government handout/benefit. It cannot be the return of money you paid or else he should eliminate it in the calculation. Remember he also attributes not just the employee paid portion but the employer paid portion to the secretary. When Buffett's secretary retires, he/she will receive $25 to 30,000 in annual Social Security income plus likely significant Medicare benefits. If it was a tax when paid, then it is a handout or benefit when received. Does he point out that after age 67 his secretary will be largely untaxed and in fact a net recipient of what will likely be hundreds of thousands of dollars, if not a million dollars? No he does not. So he is using a snapshot to arrive at his conclusions when he should look at a lifetime. Buffett's argument is weak, misleading, and flat out wrong.

To stay on topic. I think it is a great idea and have been wondering why Congress wasn't pursuing it.

Would you have preferred Bernanke, Paulson and Geithner just minded their own business and let BAC, JPM, GS, GE, eventually WFC, BRK and most other leveraged financial institutions fail in 2008? Government can work, as long as they don't cater to special interests and actually have the country's best interest at heart. Cheers! The problems are income inequality and declining morality of the elites. The former seems to cause the latter. Think of the robber baron age around 1910. It brought out the worst problems: income tax, the federal reserve, two world wars, the change of the US from a republic to an empire, and the great depression. The elites are using the threat of the collapse of the financial system to impose heavy debts on taxpayers, the taxpayers' children and the taxpayers' grandchildren. This is massive theft. Stupid policies favouring the elites are everywhere you look. Governments don't work well when dramatic income inequality allows the few to game the system. Income inequality is so severe that the only way to fix it and to reduce the debts is to let those who lent imprudently to go bankrupt. Corporate wealth is so concentrated that the collapse of any one of the few will cause them all to collapse because of derivatives. If the financial system collapses it will win freedom for our children and grandchildren. The collapse is the only way to eliminate the debt from the system and rid us of the quadrillions of derivatives which reward the immoral. The middle class and the poor can easily protect themselves by being prudent. Pay off debt and buy assets which will retain their value when the debt leverage is gone. I prefer a society where the prudent are rewarded and the parasites lose their position and power. Only the prudent will well survive the financial collapse and the collapse will teach morality. The generation that arose from the great depression was the "hero generation". They became moral people who left us a better world than they started with. With immoral people in charge the collapse is going to happen anyways. All we can control is the severity of the collapse. The severity is controlled primarily by starting the bankruptcy process sooner before more massive debts are incurred and by expanding the bankruptcy system so that the work is completed more quickly. No one will voluntarily roll over the huge debts so the next step is to make the loans involuntary. Napoleon's efforts to fund his war machine is a good example of what we can expect. Maybe that is why the Dutch and the Germans refuse to agree with the bailouts proposed by the elites. They remember when they were at the wrong end of the bayonets and they were forced to loan all their wealth to Napoleon's war machine. Or possibly you are way off base. You really think declining morality is caused by income inequality? Are you positing that the rich got richer and eventually that led them to a loss of morality? Or are you seeing the elites as a third group whose morality declines when the rich get richer and the masses don't? Really. Either way, that is sad. You seem to have absolutely no understanding of human nature. Thus all your conclusions are incorrect. You attribute immorality to some but not all, and interestingly not the masses. Why is that? Were just lenders greedy and not borrowers????

Your understanding of how the capitalists look at the situation is incorrect. Those who disagree with Buffett are not looking for a free handout. They have a different belief in what is fair and reasonable. They also realize Buffett is making an inaccurate comparison in order to arrive at a conclusion he thinks is right. To compare just payroll and income taxes at one point in time is not looking at the whole picture. He ignores corporate taxes that companies (and shareholders indirectly) have already paid. He attributes both halves of payroll tax to the individual (when the corporation (i.e. shareholders) actually paid half) which makes it look worse for the middle class person right now but ignores that the same person will collect Social Security for many years in the future. If it is a tax now then it is a handout (opposite of a tax) when collected (and results in a hugely negative tax rate for most middle class Americans). To argue that capitalists are looking for a free handout is absurd. Buffett is not different from them in thinking everyone should pay their fair share. Capitalists in general believe that as well. They obviously have a different belief in what is fair. To posit that the free handout is provided by the government is also misleading. It is provided by taxes which largely come from the capitalists you say are wanting a free handout. You are giving Buffett too much credit and the capitalists too little.

Obama has proposed an increase in rates for the wealthy. The Senate Democrats have proposed a surtax. If the problem is that some rich do not pay a high enough percentage, why is no one proposing an AMT (Alternative Minimum Tax) option that says at the end of the day you must pay a minimum of X% of your taxable income? Wouldn't that be simplest and most logical?

It depends on your style and what kind of companies you are interested in. Someone like Buffett will hold KO at full value, or even above, because to him the margin of safety comes from the moat and the future growth, and because if he sold he might not find a better business to invest in. So what you said definitely applies to cigar butts, but not necessarily to good businesses. IMHO. I don't understand how you can describe something as at full value, or even above, yet still having a margin of safety. We must have a different understanding of what margin of safety is. Many value investors think (and thought at the time) that Buffett should have sold KO more than a decade ago when it was obviously above full value. There were plenty of things better, and there was no logical justification to hold it.

The 1 in 4 statistic is widely quoted but never substantiated. It implies every night when it likely refers to at one time during the year. It also implies malnourishment/starvation which is not a problem in our society. Obviously no one wants a child to be starving. If a child goes to bed hungry in this country (meaning they did not get any dinner) it is due to the failure of their guardians. There are significant resources (food stamps, school lunch programs, etc.) set up in order to make sure the poor are fed. For example in my city (rural) a family of four with an income of $41,000 or less qualifies for free school breakfast and lunch. Larger families qualify even more easily. A family of 6 with an income below $55,000 qualifies. Are there no work houses.... Tim do you know how much of the philosophy of Scrooge you are espousing. Who cares WHY the kids are going hungry you feed them first and then work on finding long term solutions. Paul Ryan thinks that Tiny Tims demise is just one of the unfortunate causalties of the noble crusade he is leading. I am espousing none of the philosophy of Scrooge. As I said we have numerous government (federal, state and local) plus non-profit programs in place to prevent starvation/malnourishment. When was the last time you heard on the news that a child in America starved to death or nearly starved to death (excluding some nut job that locked up their child in some closet or basement)? Please read Kiltacular's post. If it were to happen it would not be due to lack of concern or programs. Someone would have to purposefully do it. We (as a society) do feed the children of the poor. We offer free education for the child. We provide health care for the child. We subsidize housing for the child's family. We subsidize college for the child. We reduce the tax burden for the parent(s). etc. What do you want a check a for whatever they make below $50,000? Our society has problems, but our treatment of the poor is not at the top of the list.

In your examples you wrote that you would sell a January 2014 put. I think you mean sell a call.

Tim Erikson You do not "know" what you think you know. For substantiation, read "The Prize of Civilization" by economist Jeffrey Sachs. I don't have the time or inclination to read Sachs' book. I did read Paul Ryan's review of the book from the WSJ http://online.wsj.com/article/SB10001424053111903703604576589090204327736.html Philosophically I would disagree with most of Sachs assessment and proposals as presented by Ryan. Sachs' philosophy is not the one this country was founded on and not one I prefer. That is not to say that some tax increases are not warranted to help balance the budget, but I don't think most Americans want what Sachs' is proposing. If Sachs actually said "Yes, the federal government is incompetent and corrupt—but we need more, not less, of it," it tells most of what I need to know about him and his book.

The 1 in 4 statistic is widely quoted but never substantiated. It implies every night when it likely refers to at one time during the year. It also implies malnourishment/starvation which is not a problem in our society. Obviously no one wants a child to be starving. If a child goes to bed hungry in this country (meaning they did not get any dinner) it is due to the failure of their guardians. There are significant resources (food stamps, school lunch programs, etc.) set up in order to make sure the poor are fed. For example in my city (rural) a family of four with an income of $41,000 or less qualifies for free school breakfast and lunch. Larger families qualify even more easily. A family of 6 with an income below $55,000 qualifies.

And for statements like these "instead of hating the rich , the poor and middle class should be thankful for them" I just don't understand them. Data clearly shows that over the last few decades the American pie has grown and the rich have taken home a bigger slice year after year and the middle is now shrinking and joining the bottom which is taking home a smaller slice. So what do they have to be thankful for? The fact that the rich pay more in income taxes hence the poor get food stamps and medicaid and what not? At the end of the day if one group is taking home more of the pie every year that group is winning the race, however way you want to look at it; the problem is that it eventually leads to social unrest when that group represents 1-5% and 95% is losing. Once again the comment did not refer to the economic pie, it referred to taxation and benefits thus the data on income does not relate. In terms of taxation and benefits the poor and middle class are not being abused. They are net beneficiaries. Maybe it comes down to how we view fairness and justice. Is fairness and justice about opportunity or outcome? To me it is about opportunity with one proviso. If the outcome of some is horrible then we have a responsibility to make sure they have their basic needs met until they can do it themselves.

Actually "wealth without work" is already taxed more than income from work. If Buffett were proposing eliminating the corporate tax and having all profits pass through as income, or having the corporate tax rate equal the highest personal marginal income tax rate and eliminating capital gains and taxes on dividends, then you would be correct. Buffett is doing neither one. I am not sure you really want to bring Christian theology into this. Since you did, I will respond. The historical Judeo-Christian belief (and what the Bible teaches) is that God gave Moses the law - in which God instructed them to set up a taxation system. It wasn't progressive. It was a flat rate applied to all. Two annual tithes and a tithe every three years resulting in a effective rate of 23%.

Maybe I am wrong, but I disagree. I've specific proposals for example from Ryan and Coburn to cut spending. I've heard of general proposals by moderates of both parties (leaving the specifics of what is to be cut to be determined later). Maybe I've missed it, but I have not seen any specifics on spending cuts by Democrats. If everyone was really focused primarily on the spending side the Tea Party (which I am not a part of) would not be getting bashed and seen as extremists.