benchmark

How? I looked at put options, the lowest is 842.5 strike for march 17.

I like it a lot, especially the first part of the book.

I had the same issue -- took a big loss on Jan 16, but held on to Jan 17. Fortunately, it worked out, but it was very stressful

Are you still short US markets? I reopened about half of them after the bulk of the rally following November's election. Still waiting on clarity for lasting corporate tax reform or for markets to begin to tank to get confident enough to go back to where it was at. Ultimately, the healthier the U.S. economy is, the higher interest rates go, the higher the dollar goes, and the higher wages will go. These will all act counter-cyclically to continue their contribution to negative earnings growth and I don't believe that there will be an incrementally large pick-up in U.S. consumer spending anytime soon to offset it given that we're hitting years where boomer retirements will be offsetting new job entrants (typically, spending drops in retirement and new workers won't be making enough to offset it). TL;DR - I'm expecting corporate profits to continue to fall in 2017. Was clearly wrong about 7 or so quarters of profit contractions being the end of the bull market, but I have a harder time believing markets will be ok with 11-12 straight quarters of corporate profit contraction without an eventual correction. How did you short it?

We only have Vanguard index funds in 401k, so growing at 10% is almost impossible :(

It is confusing -- the IRS says that you can contribute max of $18000 for Roth 401k -- if that's after tax, then you are contributing $26000 before tax money assuming 30% tax rate.

I have an option to do either 401k or Roth 401k or both. I'm curious if anyone has gone through the analysis on the tipping point (income/tax-rate)?

Is there a link or book that I can read up on this? thanks.

Their IV is somewhere between $70 -- $80, so right now it's cheap, but not very cheap. Hence, I'm not sure about holding period, because if it reaches closer to $70+ quickly, then one should sell and move on, as insurance is a boring business and AIG hasn't shown consistency in underwriting profitability.

I had this debate with my friend. Let's say that you bought 200 share of AIG at $50 1 year ago, and then bough another 200 at $60 3 weeks ago. Then to maximize your return, you sold 2 Nov 27 $63 calls. Now you share will be called away. Do you do FIFO which implies that you'll pay longer gain tax, or do you do LIFO which you'll pay short term gain. I argued for LIFO, because you end up paying less tax in dollar amount; He said FIFO is better because you pay less tax in terms of percentage. I argued that unless one is to keep the $60 buy for another year, one should do LIFO. FIFO: (63-50) * 200 = $2600 gain at 30%, which is $780 tax bill LIFO: (63-60) * 200 = $600 gain at 50%, which is $300 tax bill. WDYT?

I'm actually wondering if it's possible to start a fund and being the only investor (yourself)? You can get the benefit of being taxed at 20% for all your income and potentially write off expenses as business expense..

Why selling the leaps now? BAC will likely go up more in the next few month -- of course, the time value will decay as well

That's why that Moynihan is not the right guy for the job. Buffett will always praise BAC and Moynihan, because he got a steal.

Interesting that he sold all BRKB (which Munger specifically said that he instructed his heirs never do) and BAC (which Bruce B still holds a large position) -- different perspective from different value investors :)

I'd love some names of those companies :)

And then, here is Buffett on the future of BRK: The bad news is that Berkshire’s long-term gains – measured by percentages, not by dollars – cannot be dramatic and will not come close to those achieved in the past 50 years. The numbers have become too big. I think Berkshire will outperform the average American company, but our advantage, if any, won’t be great. Eventually – probably between ten and twenty years from now – Berkshire’s earnings and capital resources will reach a level that will not allow management to intelligently reinvest all of the company’s earnings. At that time our directors will need to determine whether the best method to distribute the excess earnings is through dividends, share repurchases or both. If Berkshire shares are selling below intrinsic business value, massive repurchases will almost certainly be the best choice. You can be comfortable that your directors will make the right decision. .. by percentages, not by dollars....??? Buffet has been saying that for years, and I think it is true. Even though it might still be better than most companies, but for us small investors, it might be better to invest your money elsewhere. One thing that I thought for a minutes back in 2009 was to sell BRK and buy others, but didn't pull the trigger ... I wanted to sleep easy :(

Buffet's record is declining, though still better than most, which bring the question that when he leaves, will the return be even worse that it is now? http://www.nytimes.com/2015/03/08/your-money/warren-buffetts-awesome-feat-at-berkshire-hathaway-revisited.html?action=click&contentCollection=DealBook&region=Footer&module=MoreInSection&pgtype=article

" For software, as a big example, amortization charges are very real expenses. The concept of making charges against other intangibles, such as the amortization of customer relationships, however, arises through purchase-accounting rules and clearly does not reflect reality." What does "amortization of customer relationship" means? Are these just the good will that's on the books?

Yes, I was so moved by that interview, he is a hero.

This is excellent. Chou mentioned that q-ratio was the best indicator of a stock market bubble, it's near all time hight atm....

Hy, I had the exact same thoughts -- waiting for it be long-term in Feb/15, but now i'm sitting on a loss...

For example, BAC is at $15.30 but Jan 16 15 option is trading around $1.80, so time value is $1.5 -- how do you estimate this to know if it's reasonable or not?

Schwab, which market will drop by 40%? Housing, energy stocks, tsx? Housing prices have to correct by 40% over time in real terms. If there's a 10% drop over 5 years with 4% growth then we are 30% of the way there. Just about every metric for Canada points to housing being 100% overpriced and the average of the metrics implies 40% drop is necessary. Unless money leaves these housing prices can persist but lending is dropping for a reason (which makes the problem worse faster). EDIT: To go with this, the US housing market is still overvalued because numerous interferences stopped the market from dropping. We will likely see flat housing prices with fast GDP growth to finish the correction while Canada may not have the luxury of positive GDP to save them. Also, the point of maximum pessimism is not even close for the Canadian housing market. If anything, this is maximum exuberance. Yeah no kidding, don't know what this other guy is talking about with his maximum pessimism. Everybody's still leveraging themselves up the ass for crappy homes at 10x their salary, and singing about it. Back on topic, I picked up a few more shares of KRN Karnalyte. Keeping it a small position, but pretty excited about the prospects of a company trading at 55% net cash, with a catalyst in early stages of ignition. It's like a net-net on steroids... BAC Jan17 leaps

Thanks Picasso, this is great info, and that's what I was afraid of. In general, how does one approach land investment? or is it just a too hard pile (i.e., not in my circle of competence)?

I think this would depend on the price, and whether the current quoted price/sq.ft correctly prices that parcel in that particular market. The LLC prospectus might have some DCF projections upon which the $2.50/sq.ft is based, so you might want to take their base rate but double (or even triple) the time horizon (figure 20-30 years instead of 10), weigh the relative likelihoods of the longer time horizons, and whether you could accept these lower adjusted returns. That's my 1-cents worth of speculative advice. P.S. Being an LLC, there's also the illiquidity to consider, plus on-going expenses allocated to the investors. And you might get one of those dreaded K-1 tax forms every year to file with your 1040. P.P.S The broker or representative who pitched you this LLC might have access to the limited market of 7 to 10-year old RE LLCs or non-traded public REITS whose charter investors have since taken a bath to the tune of 50% or more off the NAV. Ask if one of these are available. There are a couple of things that gives me pause: a) If the price appreciation only happens after 30 years, then the return isn't that great; plus if this is such a great deal, why isn't the seller leverage up and get it? b) LLC structure isn't well defined, and I don't like uncertainty.