alwaysinvert

It was top-down managing when it was cut to 15% in the first place. Did you say at that time "This kind of top-down managing is not something I believe in or have seen any evidence of working very well historically". No, I regard the status quo as 0%. Taxing is top-managing, cutting taxes is changing management from the top to the bottom. Regarding tax-cutting as subsidizing seems to me a very odd outlook on government's role in the economy. But this is another issue. It would be a net of 0% -- just putting back what was already there originally. Your handle is "always invert". I'm merely inverting it. It's a top-down management in one direction but not the other according to you -- yet it nets out to 0%. That becomes a logical imbalance actually. Inverting is not the same as calling things something they aren't. Cutting taxes is not central planning, it is diverting power to the citizenry at the expense of top-down management. The net result of cutting taxes is less power in the hands of government, no matter what the motives behind the cut is. If that is a good thing or not is another story and up for debate. If you are going to play the game of it being "a net of 0%" I can just point to the 19th century or whenever there was no capital gains tax in the US. Productive discussion, eh? So if I point out that the tax was cut less than 10 years ago to 15%, then you'll go back to the 19th century? No, this is not productive. The tax cut even had a sunset provision. It has been temporarily extended. Yes, by all means keep arguing that this is as good as going back to the 19th century. I'm nearly 40 years old. 10 years no longer seems like much. Maybe you are only 20 and 10 years is 1/2 of your life? If not, what's with the 19th century argument? ... Yes, the reductio ad absurdum is clearly working to show how silly your argument was. My job is done.

It was top-down managing when it was cut to 15% in the first place. Did you say at that time "This kind of top-down managing is not something I believe in or have seen any evidence of working very well historically". No, I regard the status quo as 0%. Taxing is top-managing, cutting taxes is changing management from the top to the bottom. Regarding tax-cutting as subsidizing seems to me a very odd outlook on government's role in the economy. But this is another issue. It would be a net of 0% -- just putting back what was already there originally. Your handle is "always invert". I'm merely inverting it. It's a top-down management in one direction but not the other according to you -- yet it nets out to 0%. That becomes a logical imbalance actually. Inverting is not the same as calling things something they aren't. Cutting taxes is not central planning, it is diverting power to the citizenry at the expense of top-down management. The net result of cutting taxes is less power in the hands of government, no matter what the motives behind the cut is. If that is a good thing or not is another story and up for debate. If you are going to play the game of it being "a net of 0%" I can just point to the 19th century or whenever there was no capital gains tax in the US. Productive discussion, eh?

It was top-down managing when it was cut to 15% in the first place. Did you say at that time "This kind of top-down managing is not something I believe in or have seen any evidence of working very well historically". No, I regard the status quo as 0%. Taxing is top-managing, cutting taxes is changing management from the top to the bottom. Regarding tax-cutting as subsidizing seems to me a very odd outlook on government's role in the economy. But this is another issue.

I don't think looking at this specific point in time is very instructive. That kind of top-down managing is not something I believe in or have seen any evidence of working very well historically. No one knows when things are going to turn and suddenly there are loads of capital being used highly suboptimally via government. There is no human being that has the kind of foresight to prevent that.

We're pretty much in agreement. I was only talking about capital gains tax and shaking my head at the assertion it would lead to less investment in operating companies. Now, maybe somebody is trading financial assets within the operating companies. That very well may be so, however it doesn't create jobs and isn't innovative. A higher capital gains tax might get them to slow down their trading, but probably won't get them to fire the employees on the operating side of the business. Still not the effect I'm talking about. If capital is taxed away at a higher rates that is obviously a hinderance to capital going into start-ups and capital injections into existing companies. It also affects the relative pricing of entrepeneuring: if stocks and bonds are higher priced due to more available capital, then entrepeneurship gets more attractive in relative risk-reward.

The no Ipads argument is stupid, but to say that the capital gains tax (as well as income tax, consumption tax or whichever tax that has a regressive component to it if not tweaked percentage-wise) has no effect on the marginal money is displaying a profound misunderstanding of how an economy works. That's like saying that inflation has no effect on the willingness to consume vs investing. Now I could have misunderstood you and that might not be the case you are trying to make. If that is the case I am sorry. Granted, obviously the capital gains tax does not have the same detrimental effect as increased costs of hiring or higher corporate tax.

Small businesses... how do the capital gains taxes impact them??? I thought if you owned a small business you largely pay corporate taxes and payroll taxes. Maybe you pay taxes on your dividends. But capital gains taxes??? The small companies are owned, run and started by people who, lo and behold, sometimes pay capital gains. Also, calm down.

Of course it's on the margin that igher/lower tax rates have an effect. The most brilliant people will find their way as long as society does not go DDR. But it's not the Steve Jobses that create the most job opportunities, contrary to intuition. Look at number of employees in small businesses. That it where the marginal money is. You are beating up strawmen. There is no inherent contradiction in having excess capital and still having severely underutilized areas of the economy. A guess would be that removing minimum wage laws would be miles better than fiddling with the capital gains tax, though. Of course that's never ever going to happen but anyway.

That's de Gaulle for you.

I agree wholeheartedly with OP and am almost down to no cash. Waiting for positive signals is market timing and does not work. If you think there are cheap stocks out there but want to wait for further drops then I don't know what you are doing. If you don't think stocks are cheap until they are traded at 4 times earnings, then credit to you and have fun waiting.

For the vast majority of people taxing capital gains means taxing work twice.

Recommended reading for anyone who actually wants to understand which limitations and incentives the political process favours, instead of just throwing dirt on people with different values: http://www.foreignpolicy.com/articles/2011/09/14/a_dictators_handbook_for_the_president?page=0,0

hear hear

Don't be silly. If it was evident it wouldn't be discussed. Your personal moral axioms are not universal. For democrats many people seem remarkably ignorant of how democratic discourse and decision-making works. Repeating how evil and stupid everyone who values things differently is won't help. Insisting that an issue shouldn't even be discussed is so authoritarian it sends shivers down my spine. Ok I am guessing you are not in favor of the Buffett rule and you also take umbrage with his commentary about corrupt congressmen , what part of the debate are you adding to by calling the poster silly and democrats ignorant. Democracy and politics are just systems to get the other guy to pay for stuff and the rich have been winning this battle since the Reagan was in the White house. What sends shivers up MY spine is the where this is all heading if reasonable men and women are not listened to because I can imagine it will not be a very nice place. I don't take issue with the notion that politicians are corrupt, no. But they are more corrupted by the system of democracy, which incorporates rent-seeking, public choice problems from all different kinds of important lobby and voter groups than single-handedly by big business. By merit of numbers it's completely obvious that the middle-class is the most coddled group in a modern democracy. That's why we have loads of regulated businesses, minimum wages, protectionism etc etc. The rich comes only a good second before the distant third that is the lower classes, who always are adversely effected by government regulations (and then handed down some alms to keep the real problems of policies from the view of the middle-class). The prime example on this would be the war on drugs in most western countries. Middle-class parents want to prevent their kids from exposure to drugs, and may succeed to some extent, but that happens at the expense of millions of poor people being unnecessarily killed or jailed. But anyways, all that is beside my point. If you consider yourself a democrat (in both senses of the word) I find it ignorant to say that some issues should not be discussed. It seems like that is a controversial statement but I find it hard to see why.

Don't be silly. If it was evident it wouldn't be discussed. Your personal moral axioms are not universal. For democrats many people seem remarkably ignorant of how democratic discourse and decision-making works. Repeating how evil and stupid everyone who values things differently is won't help. Insisting that an issue shouldn't even be discussed is so authoritarian it sends shivers down my spine.

Not necessarily a value trap in the commonly understood sense of the word (if there is one) but I find it astonishingly puzzling that there are value investors who own Apple. A quick glance through their product lines and how it changes completely every 5 years should tell everyone it's very high risk. At the same multiple I'd much, much rather own Microsoft.

I don't think it's a stretch to say that Munger will quit doing BRK meetings soon.

Because it is sufficiently undervalued at 110%?

It's not that hard to get them illegally if you want too, at least for the more known titles...

People always think they are experiencing extraordinary times and the same of course translates to investors. There has not been one single point in human history when people haven't thought the situation was unique. Of course, this is true to a great extent, but I'm just not sure how that is helping anyone. What's happening in the world in terms of macro events is very important but not knowable. I prefer to act on logic, and my logic says there are cheap things out there at this very moment.

He's playing the game as the rules currently exist. Why on earth would you handicap yourself to make a point? That's like people choosing to not eat meat just because of factory farms or something like that--though in that case it might be healthier for you, it effects no change whatsoever. One person doing something voluntarily isn't going to change anything. I agree. It's obviously better if one person forces everyone else so it gets done the right way.

Actually, the ponzi scheme (or FRB scheme :P) is not news to the poker community. The fact that they didn't have the player funds separated has been out there since just after the FBI clamp down. Glad to see Ferguson and Lederer finally taking some real heat, though. I was lucky and only had scraps deposited on FTP as my main game always has been on euro sites.

I find it absolutely fascinating that Microsoft haven't put out some update for Windows 7 that makes Skype work without either shutting off the Windows firewall completely (which I do) or making exceptions (which I had to to for my parents). Surely most Skype users just have no freakin' clue what's going on when they're on a new computer and can't get Skype working? Maybe I missed something but this seems to be so very basic for MS to do when integrating Skype.

I don't remember for what investments but I have a strong memory that Buffett took out bank loans early in his career (says so somewhere in Snowball?). I guess the key is flexibility, nothing wrong with leveraging up a bit when you could buy strong cash-flow generating large caps for p/e 3-5 in 2009, for example. Most people, among them me, just aren't good enough at this to gain the conviction to lever up, though.

Shareholders by holding shares implicitly state that the shares are not overpriced. Just because management makes continous repurchases instead of highly opportunistic ones doesn't make it bad capital allocation. For shareholders it's still better than taxable dividends. I'm quite skeptic on repurchases overall, but if companies do them I rather see them do it as an alternative to dividends rather than speculations that the stock is too low. Irregular repurchasing programmes are more often badly timed then well timed, and trying to work out afterwards if they were based on good analysis is subject to considerable hindsight bias.