MVP444300

I normally use a discount number that is several basis points above the long-term US Govt bonds. Recently I've been using 8 or 9, sometimes even higher depending on how risky I think the company is as an investment. What discount rate do board members normally use?

Elon is a very smart and innovative businessman willing to take calculated risk with his own money. You gotta admire that. He talked about putting all of his $180 million he received from the post Paypal sell to Ebay into Spacex, Tesla, and Solar City. In the video he mentioned he had to borrow money from friends to make rent after investing everything he had in those companies. Wow! Starting these companies will end up either being a brilliant decision or very bad investment. I definitely wouldn't bet against him especially since Space X and Solar City are already profitable according to him. Are there any other guys out there like him to keep an eye on for possible investments?

http://online.wsj.com/article/SB10001424052702303624004577338070658967732.html?mod=WSJ_hp_LEFTTopStories Hmmm, I wonder if Mr. Buffett had anymore trades he bought from Goldman?

Just a word of warning: owning rental property is not a passive investment like stocks or bonds where you can put money in, leave it in a brokerage account for few months or years and just monitor the company by reading 10K/10Qs as they come out, and cashing dividend checks quarterly. Its A LOT OF WORK and a HUGE HEADACHE!!!!! Personally I prefer real estate rehabs, but that is another discussion entirely and is not what is being discussed in this thread. Whenever you buy a house, trailer, or apartment. Make sure you do your homework before cutting a check. By homework, I mean, figuring out what the average rent will be for the type of renters you want for the property in question and what the going rate is for comps to your property whether you will rent it as is or fix it up to get more rent out of it; make sure you hire a reputable closing attorney before closing on the property (yes I've had issues with crocked closing attorney); make sure that you have looked at the plat and know the dimensions of the property (yes I've had issue with property boundary). As with stocks or bonds, know what your risk and minimize them as much as possible before you make your purchase. Financially speaking, before I buy a property it has to meet certain guidelines that I have before I'll even considering buying it. 1. The rental unit has to make money the first year. 2. I want a minimum return on capital of 40 to 50% per year; by that I mean, my net profit from the rental income will have to yield that much return versus what I'm willing to pay for the property before I'm willing to take the risk in buying it. Trust me, you'll need those returns to make it worth doing lol Word of warning: I've seen some people who try to enter the business thinking they can rent a property at $400 or $500 per month and be able to keep all or even half of that revenue. That isn't happening period! You need to very carefully figure out what your property taxes will be (excluding homestead exception), insurance expense, maintenance cost, clean up cost, administrative fee, factor in a vacancy period/renters cheating you out of rent, and so forth to get your net profit margin and then use your net profit from what you've estimated to figure out what type of return you get. 3. Have a very large margin of safety, at least 50%, in the purchase price from what you figure out is the intrinsic value of the property. The more disrepair or age of the property the more margin of safety I want when buying. There will mostly likely be unpleasant surprises you'll find after your purchase. 4. Regardless of how much you love the property, be able to walk away from any negotiations if the purchase price doesn't meet your financial guidelines that you set forth before doing it. Don't be afraid to low ball an offer under your estimated intrinsic value, you'll be surprised how many offers you get accepted especially if you can pay cash for a deal. Below are some of the unpleasant things I've experienced over the years when dealing with renters. --A $35,000 and $44,000 bill on two houses after the tenants left. They knocked holes in the wall, destroyed the lawn by spinning tires, ruined the floor by turning on the water/leaving it on, knocking out all the windows, and other bad things. Note Insurance doesn't cover damage done by the tenants. --A woman burning herself alive in the trailer by smoking with oxygen tanks and the property being destroyed. --Having air conditioning/heating units stolen. $5,000.00 out the window each time that occurred. --Property being left with roaches all over the place. --Being sued for someone falling down the steps- A 300 pound woman should not be walking on high heels down steps. I hope that I scared you enough. lol

http://money.cnn.com/2010/09/14/technology/cisco_dividend/index.htm Cisco is declaring a dividend for the first time in its history. Frankly, I think they need to return most of that $40 billion in cash to shareholders they are earning less than 2% on.

Only one I could find. http://online.wsj.com/article/SB10001424052748704540904575451910642552160.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Thanks for the lead on offshore drillers. Doing a quick screen search of the industry it appears this sector is cheap following the Gulf oil spill. Particularly some names already mentioned in the above post (ESV, DO, NE). The stock screener does show one really cheap company Sea Hawk. Market Value: $122 million Cash: $73 m T current Assets: $139 m T Current liab: $103 m Working capital: $36 m No long term BV: $434 M Inc loss $-22 m Sea Hawk looks relatively cheap on the balance sheet side from my really quick glance. I’ll definitely have to do more homework on the stocks listed above.

Thanks for the reply and advice everyone. I am in the process of switching to Schwab, I hated to do it because he has been dealing with me and my family for years. However, I think the price is too high for the service he has been providing. I have never asked my broker to print out any of the forms that I requested in my OP before so that was my first time doing so as I'm ggoing out of town for a week and wanted the information to read; I normally request the information from the companies be sent by snail mail but I didn't think they would get to me before I left. I like the paper personally, I have a hard time reading 10K off my computer with my eyes. I don't know how some of you can do that. lol

On Friday, I called my broker (full service) to ask that they print off the 10K of the last 5 years and most recent 10Q for three companies I'm looking at making purcheses in. The assistant relayed the message to my broker who called me back/left a message basically saying that they will not be complying with my request and that I should call these respective companies requesting for information. He is willing however to provide me printed research information of what their research department says about the companies--which I don't think is worth the paper its printed on. It almost sounded to me like he was telling me that my request was not an acceptable and that I should not be wasting their time. His statement royally pissed me off to the point where I'm moving my money to a discount brokerage firm this coming week. On my last two trades alone he charged me $700 and $821 to make puchase transcations. Full service brokerages are full service until you actually request something from them that doesn't require they get paid. What is your opinion of this? Am I asking for too much from my broker and what do you think is acceptable for me to ask from them?

Prospectus: http://www.sec.gov/Archives/edgar/data/5272/000095012308005621/y57656b2e424b2.htm SECURITY DESCRIPTION: American Intl Group Inc., Equity Units, stated amount $75 per unit, initially consisting of Corporate Units which include a stock purchase contract and initially, a 1/40, or 2.5%, undivided beneficial ownership interest in (i) the Series B-1 Junior Subordinated Debentures initially due February 15, 2041, (ii) the Series B-2 Junior Subordinated Debentures initially due May 1, 2041 and (iii) the Series B-3 Junior Subordinated Debentures initially due August 1, 2041, each with a principal amount of $1,000. The stock purchase contract requires the holder to purchase for $25 a variable number of shares of American Intl Group Inc. (NYSE: AIG) common stock on each of the three stock purchase dates of February 15, 2011, May 1, 2011 and August 1, 2011 and pays a contract adjustment rates of 2.7067% per $75 equity unit per annum through 2/15/2011, of 2.6450% per $50 equity unit per annum through 5/1/2011, and of 2.6100% per $25 equity unit per annum through 8/1/2011. The stock purchase settlement rate at each of the three stock purchase dates will be 0.54823 shares per unit if the then current market price is equal to or greater than $45.60 and 0.6579 shares per unit if the market price is equal to or less than $38.00. For market prices between those values the settlement rate will be $25 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 5/12/2008 was $38.37 per share. The debentures are subject to reset and remarketing as specified in the prospectus. The Corporate Units pay quarterly distributions of 8.50% per annum on 2/1, 5/1, 8/1 & 11/1 to holders of record on the record date which is the 15th day of the month prior to the payment date while the securities remain in book-entry form (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these securities are derived from interest paid on the underlying debt securities and therefore are NOT eligible for the 15% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. The debentures are pledged as collateral to secure the holder's obligations under the stock purchase contract. The holder has the right at any time to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury securities for the debentures and to later recreate Corporate Units. The debentures are unsecured, subordinated debt securities and rank junior to the company's unsecured senior indebtedness. Now someone with a brain please translate this into English. lol I'm having a hard time understanding it at 2:30 am

Instead of the users paying, why not let the purchasers of the securities pay? Better yet, why not get rid of the credit agencies entirely so that individual investor's come to their on conclusion?

I was hoping it would fall below $20 again. ;D How much cash do you think is excess for the company? MSFT is reporting about $40 billion in cash during the most recent quarter. My estimate is it only needs about $10 billion, the other $30 billion in excess.

Where do you find the price quotation for these warrants? I can't find it on Google or Yahoo Finance under those ticker symbols.

Hi Shalab, here is what I could find, look at the bottom of each article to more easily click on the next comment from Buffett and Munger. Buffet on Newspaper industry: http://blogs.wsj.com/marketbeat/2010/05/01/buffett-mind-blowing-how-fast-newspapers-losing-ground/ Buffet Video Highlights: http://blogs.wsj.com/marketbeat/2010/05/01/buffett-video-highlights-talking-potholes-hank-paulson-and-a-rod/ Bearrish on Curiencies: http://blogs.wsj.com/marketbeat/2010/05/01/oracle-of-omaha-more-bearish-on-currencies/ Natural Disasters: http://blogs.wsj.com/marketbeat/2010/05/01/buffett-berkshire-has-some-exposure-to-large-natural-disasters/ Buffet on Ajit Jain: http://blogs.wsj.com/marketbeat/2010/05/01/berkshire-insurance-whiz-jain-cannot-be-replaced/ Succession: http://blogs.wsj.com/marketbeat/2010/05/01/buffett-dodges-succession-question-again/ Minute by Minute account of meeting: http://blogs.wsj.com/marketbeat/2010/05/01/live-blog-of-berkshire-hathaway-shareholders-meeting/ I certainly hope there are more questions than these which seem to be the mundane ones that are asked every year. Enjoy!