Kraven

Good post. Those were good years. In many ways it was the same at some level in most businesses then. There was a very real sense of "the sky is the limit" on things. Everyone was going to change the world and make beaucoup bucks (as a friend of mine used to say).

I'd be interested in reading this book too. Any update on whether it will be more widely available?

I agree. Very sad. As much as I can't stand CNBC, I feel in many ways that Mark Haines has been in some (very) small way a part of my life for a long time. Many years ago before CNBC was the CNBC we know and love today, Mark Haines was great. Agreed as well on his broadcast on 9/11. Sad.

While I agree that there are some reckless people who will never heed warnings, there are also those who do change their behaviour when made to understand the risks. Consider smoking - wouldn't you agree that less people smoke now because they are more aware of the risks? Some segment of the population will benefit from credit warnings imo. In fact, we should make mutual fund companies and financial advisers give warnings to the effect that studies show that most active managers underperform their benchmarks and that unless they (the mutual fund companies, etc) can provide proof of long term outperformance, clients should assume that they too, will underperform. I am in agreement. As I mentioned before, I hope that more and better disclosure is done and that it causes people to live within their means. I agree with a prior comment as well that when people default it isn't just their problem, that it puts costs on all of us. But my original comment is that it doesn't make the credit card company a loan shark just because we all share in the pain. I understand that point has been modified. What can you say? Americans at least love to spend. After all that's how we are getting ourselves out of the financial crisis, by spending more. It's a fantastic idea to fix a debt crisis by adding on more debt. Other countries should enact their austerity plans, but so long as Americans can buy another IPad, stream movies on Netflix any time they want, buy crap on Amazon and have a single cup of Green Mountain coffee, all is good.

"Would you be opposed to credit card companies being forced to show (prominently) the amount of interest that a customer would pay if he just made minimum payments? This way, no one can accuse the banks of being evil." I think it would be great for them to do that. Believe me, I am all in favor of more and better disclosure. That's what I did in a past life. My honest opinion though is that in this kind of case it doesn't matter. I want to go back to an earlier point I made. At 10,000 feet it doesn't matter whether the person is paying 10% or 30% interest. Don't get me wrong. I KNOW it matters. My point is that for the average joe to read that their big dinner out will cost them not the $200 they spent but $500 or $1000 down the line, what does it matter? Will it stop them from spending? Everything is down the road. Smoke now and in 50 years you may die of lung cancer. Actually, no, not 50 years, but 45.9 years. Does the person say, damn, 50 years was ok, but I'm not cool with 45.9 years. Same here. I hope more and better disclosure does cause people to live within their means. I fear it won't happen though.

If you believe that they take advantage of people who don't have knowledge or skills, and the implication is that they do this on purpose, then there isn't a lot to discuss. At the end of the day we are all responsible for the choices we make. I completely agree that things shouldn't be hidden and more disclosure is absolutely the right thing to do. But let's be real, more disclosure won't matter a bit in many cases. Should McDonald's not sell fast food? Should cars be "fixed" to only drive the maximum speed limit? Should bubble gum be sold since it can rot your teeth? Look at all the people that smoke. There are warnings up the wazoo and people still decide to kill themselves. People are going to do what they are going to do. Doesn't mean that they are being taken advantage of.

Alexbaylee, you bring up an interesting point. No offense, but why are the credit card companies loan shark companies? I mean, no one forced anyone to charge things. While the credit card companies could be clearer about their rates and so forth, at the very least everyone knows that when they charge something there will be interest that needs to be paid on that. At a macro level, whether it's 10%, 15% or 20%, it's a lot of money. So when the piper calls, why is the credit card company the bad guy?

Add in the Linked In IPO and it is just like it was 13 years ago! Those were crazy times. Everyone was so earnest in their desire to change the world, one parking ticket.com at a time.

Opihiman2, it's been a long time since I've thought about these issues in any detail. The answer to whether more needs to be done when one corporation buys another is it depends. If one or both of the companies is subject to regulatory oversight, then that is going to be part of the process. But in and of itself, that does not determine ownership. It just may mean that the "transfer" won't be allowed to occur. So the "ownership" aspect doesn't come into play. In terms of a majority shareholder, there are legal restrictions on what they can and can't do in terms of screwing minority holders. Just to cut to the chase, my honest opinion is don't spend too much time on this subject unless it's something you are really interested in as an intellectual exercise. If you are looking into this because you are going to be buying or selling a company, you are wasting your time. Just my 2 cents. You'd be better off worrying about the end of days tomorrow.

Oh lord. Legal reviews are the worst. Law professors have way too much time on their hands and many of them have such wacky ideas it would be amusing if it wasn't what they were teaching their students. Most (not all) law professors are law firm refugees who couldn't wait to get out of practice and into the protective cover of academia. There are DIFFERENT types of ownership. The article you attached makes that clear, but doesn't then doesn't take that further and analyze the point it's trying to make. Rather, they focus on the 9 incidents of ownership that is taught in 1st year law school property to determine that shareholders do not actually own the company. No one is saying that shareholders have all 9 of those incidents of ownership. But ownership takes different forms. Would you disagree that if you own all the shares of McDonalds you own the corporation? Who else other than you would get the rights to the cash flow, the properties, etc. (ignoring any contractual obligations)? And if you did own it, why different if 100 people own shares or a million or 10 million? Do you own your home (assuming you do)? If so, how come you can't do whatever you want with it? Because there are limitations on ownership, both by contract and by law.

This kind of paper and theory is right up there with the it's illegal for the government to collect income taxes crowd.

After spending about 2 seconds looking at this paper, it seems to me to be crazy talk. Using basic 1st year property law 9 incidents of ownership to determine that shareholders are not the owners of a corporation strikes me as law professors with way too much time on their hands. Have they forgotten that property rights can be dictated by law and by contract? Sure, if you are a shareholder of McDonald's it does not mean you can walk into one of the restaurants and start kicking over tables and chairs because they're "yours". It is obviously a different kind of ownership. Property law and contract alter ownership terms all the time. The fact that there are limitations does not change ownership. If you own your home, it does not mean you can have 150 tenants living it along with 50 cats and dogs. If you own a condo, you may be restricted on who you can sell to or rent to.

That has to be one of the worst pieces of "journalism" I have ever read. Ridiculous.

Check out the investing for income page on Seeking Alpha. There are some dividend zealots there. There is a loyal flock of dividend followers to the various authors there.

Would love to go to a lunch like that. As a fellow Graham nut, would love to hear more than the same story of how they met I've read numerous times.

"by the way, have you guys read his book at all? any good?" I read it. It's ok. Exactly what you would expect. Here is what value investing is, why it works, etc. Very basic. Nothing you haven't seen a million times before. There is a section or 2 on foreign investing which is more than most include, but I wouldn't run out to get the book because of it. I was hoping for something more out of the book. Even if the "something more" was just more about his interactions with Graham, but there was very little about that. Just a basic summary of how he met Graham and that was it. Just as an aside, I've always found it interesting how Brandes and others like Donald Smith have been able to parlay the 2 seconds they knew Graham into long and lucrative careers. Don't get me wrong. Not to take anything away from these guys as they've done fantastic. But Brandes was the broker on duty in La Jolla and met Graham one day when he walked into the office. I believe they got together a few times. Smith was a research assistant on a project while at UCLA. Just goes to show that a little luck in life never hurt anyone. Of course, you could say that luck favors the prepared too.

SD - they are all bespoke agreements in something like this. Cost is an issue, but you may be overestimating how much. At the end of the day, it would depend on who one is who wants to make this trade. If you're a big boy, then you can probably get this done relatively cheaply. If you're Joe Blow, then if you can get it done, then will be pricey. All would depend on what it is you're looking to synthetically short. I don't see how you can "bet" on a HF itself. What is it you would be shorting? They need to have some kind of obligation to reference. If it's a private obligation then that's going to be more expensive likely and create informational issues. There will also be legal issues in terms of disclosure, confidentiality, etc. Other issues: while you could maybe get someone to take the other side on this trade on a one off or virtually one off basis, there will never be an industry in it so long as the current environment stands. By that I mean the hedgies pony up too much cash for the banks. Presumably you want your counterparty to be someone who will likely be there tomorrow. Forgetting Lehman and Bear for a minute, that leaves the investment banks and the larger banks who play in this area (BofA, Citi, etc.) They make too much money though to risk the chance that they are known as the guys that make a market in shorting the industry. I don't see it happening. None of the banks would risk pissing those guys off.

You can certainly do so synthetically. That's what I was attempting to refer to in my first post in this thread. You wouldn't even need to create it synthetically and then short it. You could simply create the synthetic short if someone would take the other side. Very nice reference to secret shorts by AIG. I laughed at that. I do chuckle though at the reference to Cayman Islands subsidiaries. These are all shell entities (generally) housed in one of about 3 buildings with the same set of officers and directors. They are subsidiaries in name only.

Stahleyp - that is a very good point. That would work by proxy. At one time, there were some companies trying to work on retail hedge fund product indices, but I think they all went bust.

Without getting into the merits of hedge fund specific types, the industry, etc., you could short in certain ways by entering into a derivative agreement (straight or by structured product) via an ISDA with one of the banks using one of the hedge fund indices as your reference obligation. Obviously not for most individual investors. I don't know of any kind of "retail" product that would allow you to do the same. This would of course be a customized investment. The only products I am aware of that used hedge fund indices (which was a number of years ago), were all long. Because of course who would want to short!

There's a group out of the DC area with the cheesy name of "The Wise Investor Group". Despite the bad name, they have had a radio show for something like 15-20 years. I think it is semi-national at this point, but I'm not sure in how many markets. For a show intended for a "mass" audience, they are pretty good value guys. The managing partner, Randy Beeman, just put out a book called something like Value Returns. I haven't read it as it's supposed to be pretty basic, but I think people who need an introduction generally like it. On their show they generally go over investments they are looking at and for a radio show give some pretty good detail. They generally stick with large cap value names, none of which are going to be a surprise for the people on this board. They like things like INTC, ADP, MSFT, BBY, etc. Once in a while they will mention "edgier" type stuff like SVU, DF, etc. Sometimes they do some financial planning type discussions, but mostly keep to the investments. They do a weekly Sunday show and a mid week podcast which are all on ITunes. It's enjoyable enough if you are killing some time and better than most of the crap you hear on the radio.

I don't know what happens in this case. But note that being a non-profit has nothing to do with ownership per se. It's a tax distinction. The tax code may have certain requirements on who may own a non-profit, I don't know about that. But it doesn't change the ownership of the entity. The owners are whoever they are. If it's a hospital it could be the city, county, etc. I wouldn't think it would be a profit maximizing entity unless this was part of a charitable program they have. I'm just making this up, but it wouldn't surprise me if one of the big hospital operators had a couple small non-profits somewhere along the way as part of their charitable giving program. I doubt it, but could happen I guess.

Definitely some gems from time to time. I guess the point I was trying to make was similar to one I heard Greenblatt make about the magic formula. He was essentially saying you just need to follow it since if you look at the individual names you will never invest. Even when I've looked at individual names on a Piotroski screen from a fundamental standpoint they didn't seem so great either. Not even talking about there being hair, etc which of course I would expect. They just didn't seem that great. Obviously as a whole it works out though.

Packer, I am a member and have noticed the same thing. One thing that I have always found interesting is that Piostroski screen typically kills the others. I haven't looked in a while so don't know if that is still the case. Whenever though I've looked at the individual names in that screen, they don't seem so wonderful. If I was ever going to follow a mechanical investing approach blindly though, Piotroski screens always seem to do well.

I wanted to reply to a few of the comments about Graham. Graham DID state in 1976 or so (right before his death) that a formula was the way to go. There is a big difference between Graham in the early and middle part of his career and then at the end of his life. He did move away from individual stock picking to more formulaic approaches. Graham was a multi-faceted individual. Certainly he appreciated money and all the things it could do for him, but making gobs of money was not his primary objective (after of course a certain level of comfort). It was the intellectual exercise that appealed to him. He was involved in other disciplines as well. Keep in mind that Graham lived a long and full life. He didn't start really pushing the formulaic approaches (to the detriment of other approaches) until he near 80 and the end of his life. I have always taken this as the product of an old and tired man who had seen others take a bit of his limelight away and had become a bit curmudgeonly. Unless you're Irving Kahn or Walter Schloss, how many guys want to be fighting in the trenches when they're 80? So he wanted to stay in the game, but didn't feel like doing the nitty gritty work. So he looks for some short cuts. Nothing wrong with that in the least. At that time people were starting to use some rudimentary computers and such as well. Perhaps he felt like time had passed him by a bit. But what I always fine amusing is when guys like Jason Zweig and John Bogle use these types of statements as support for why Graham would be in favor of index funds. I don't believe that is the case. In my view, it's all part of his multi-faceted intelligence. He mastered individual stock picking and wanted to master formulaic investing as well. Obviously he had done formulaic investing earlier with net nets, etc, but this was different. However, it doesn't mean his earlier statements and writings become irrelevant.