Liberty

That's like saying that if the casino hadn't been rigged people wouldn't have been harmed. Yes, it's a tautology, but it doesn't matter. What we're discussing is the impact of a rigged casino. That's not what I read. Multiple people, including you, seem to say "where's the harm? people would have done the trade anyways?", and I'm saying that there's harm, and I explained why.

IIRC, it was a Bear Stern position that JPM supposedly inherited. Not sure how to verify its existence, though..

I found this while looking for the letter that Buffett wrote: http://online.wsj.com/article/SB120371859381786725.html About the filmmaker and how the film had an impact on his social circle..

Thanks for posting. That's something that I probably haven't written about enough in the FTP thread; increasing food prices should be good for DP prices because food crops (including those fed to animals, since little cattle now grazes as nature intended) compete for arable land with cotton. So not only are billions of people now able to afford a few more clothes, but they're also eating more and higher on the food chain (ie. it takes many pounds of grain to produce one pound of meat), which should also be good for dissolving pulp.

One thing that Berkowitz mentions that I find very important is concentration in your best ideas. "Why buy your 10th best idea when you can add to your best one?"

:o Edit: usually when people say things like this it's not even worth responding, but for the record: I never commented on sentencing, merely on your assertion that it was some harmless crime that didn't matter (like a rigged casino, right?). And btw, if it had been public knowledge that Buffett was about to invest, the other side of the trade almost certainly wouldn't have made the trade anyways, or at least not at that price. So even that argument doesn't make sense.

The question is 'who was he advocating that to'? Warren Buffett, or the average investor? Buffett also advocates index funds to the average investor. I guess we here are all hoping we're not average :)

Are you serious? You really don't see what's wrong with going to the casino and it being rigged or not against you even if you don't know and would have played there anyway?

I don't understand... You don't know who is on the other side of the transaction... People who sell to Raj are going to sell regardless of who is on the other side of the trade. But both sides are supposed to have access to the same public information. In this case, they didn't. One side got screwed because they played by the rules. This is like buying a house from someone who had a chance to fully inspect it, but you can't, and you think they couldn't either.

You sound a bit defensive here, especially not having seen the film. Out of curiosity, are you a "kid of the super rich"? I'd be curious to see what you think after seeing the documentary. I agree that there's no one-size-fits all and we should be careful about judging individuals based on stereotypes, but at the same time, as a group on average, if your family is worth hundreds of millions of inherited wealth, you probably live in a bubble of exclusive privates schools, exclusive stores and clubs and exclusive resorts for the wealthy, always hanging around with other super-wealthy people.. This isn't like the kid of a doctor or lawyer (upper middle class), this is more likely a completely different world, as the film shows. Not for 100% of them, of course, but nothing is true for 100% of any socio-economic class. The most telling part of the film is where they show how they all know each other and most haven't even considered dating outside of that pool of people, and how most haven't even realized that it's not normal to have servants and many houses and horse carriages and to fly fish with an helicopter in the mountains of Chile and such until they are pretty old.. This isn't upper-middle-class at all, unless you define it in a different way than most people.

Just finished watching it. I liked it. I read a few books about the very rich, but the video interviews and the insider perspective added something. Nothing mind blowing, but if you are interested by that world, it's pretty good.

Thanks, seems promising!

Well, when you make rules that everybody's supposed to play by and someone doesn't, it harms all the others who were supposed to be playing the game with the same information as everybody else but actually weren't. So everybody who could have benefited from knowing that Buffett was about to invest but didn't was harmed (most directly those on the other side of the trades, but also everybody else who with that information would have traded differently). That's a lot of people. But that's just the first degree; once you have enough of that stuff, it erodes confidence in the whole game and makes the whole system stop working, so that's a lot more damage, even if more indirect and diffuse.

Be careful about the 'halo effect' equivalent for short-selling. Looking at successful shorts and then saying "they were so smart, look what they did"... I'm sure many other shorts lost their shirts and now people are saying they were stupid, but if their bets had worked out they would be saying how clever they were. I would agree that in general shorts are probably more sophisticated than longs in the same way that option traders are more sophisticated than mutual fund holders, but in the end what matters is how correct their facts and analyses are. Sophisticated or not they are humans too, so they suffer from all the cognitive biases and erroneous beliefs that afflict the rest of market participants. Lots of very sophisticated people do very stupid things every day in the market...

It all makes sense when you realize that politicians will say what they think will get them elected, not what they actually want to do once in power (if they even know -- many seem to want power for its own sake).

Thanks for posting. Gotta love the 'swimming with the sharks' intro animation :)

Except in practice, both parties end up making decisions that lead to very similar outcomes (ie. despite the rhetoric, republicans bloat up government size - and thus money printing - via f.ex. wars, and limit individual liberties via things like the patriot act and war on drugs). So I agree with you; both are atrocious.

I'm near Ottawa on Quebec's side.

I don't have much expertise on this question, but so far I'd lean toward a case-by-case evaluation of each company to try to determine which structure would be better. The idealized scenarios that I'm thinking of when I think of this problem are: 1) A fundamentally good business that could be run by a ham sandwich. What you are investing in here is the business itself, and you just want management to not do anything too stupid. Diluting their power a bit might help. 2) An owner-manager that makes what might otherwise be an ordinary business extraordinary because of their integrity/skills. Here you are investing first in the management, and second in the business. In this case I think it can make sense to make decisions as easy as possible for that individual(s) because that should increase value creation. But reality is always messier than that, small investors rarely have much to say about this, and I'm not even sure if that's the best way of looking at it. It's just what I think right now, but I'm open to change my mind if I hear convincing arguments.

Anyone knows where they got their money? Was it BRK stock their father gave them, or some other source?

Heh. I always forget when I suggest these things that 90% of the people will be close to Montréal, so of course that's where the meeting would be, and I don't feel like driving 2h and dealing with MTL traffic... :P But this year I will make a big effort and try to go to the Fairfax annual meeting...

Thanks! If someone can remember to post a link to the interview here once it's online, that'd be great. Otherwise I have a feeling I might forget...

I'm in Quebec too. Seems like there are many of us on this board...Maybe if we have critical mass we can have a meetup to cry in our beers or something. My first language is French, but I still find the political and economic situation in Quebec pretty depressing (not that the language that you were randomly born into should be used to define anyone, but I just want to point out that it's not only Anglos who are frustrated by how things are here)...

Definitely. We're not measuring the right things right now, and sadly they're hard things to measure. Our obsession with 'easy' numbers like GDP leads to all kinds of perverse incentives and badly optimized systems (ie. paying people to dig a hole and then fill it back up increases GDP, but it doesn't actually create any value).

But the bottom line is quality of life for each person. If you have lower GDP growth, and lower population growth, but people live better and have more goods and services available to them in a more robust/resilient/sustainable civilization, that's a total win in my book. We must be careful not to measure the wrong things and optimize for them rather than for what really matters.