Mephistopheles

I thought that the U.S. VP had one job. To be there in case the President kicks the bucket. To have a ticket with a 70 year old candidate and a 74 year old vp seems a little non sensical. no? Because the 74 year old may be your only real chance to get elected.

I bet Clinton chooses Sanders as VP. She's got no choice. If she chooses someone establishment, a portion of his supporters will go to Trump. Trump is smart enough to know this and has already started to appeal to Sanders people by attacking the flawed superdelegate system.

Maybe the pro bono team can chime in. I suspect that a significant factor is the incentives of the Govt lawyers. It is in their best interest to drag this out, regardless of how much sense it makes to do so. And it's the taxpayer who is footing their bill, so there isn't a sense of waste FHFA or DoJ, so they continue to do what the lawyers recommend.

No idea where you're assuming Buffett ever said anything about raising payroll taxes. What matters (and what Buffett focuses on) is the percentage of total taxes paid by an individual relative to total income (why the secretary example makes sense: total taxes/total income). Emphasis added to WB's words: No, I said that he includes payroll taxes along with income/capital gains taxes when he goes out and says his secretary pays more. That's why she has like a 33% effective rate. I'm saying that's bs to include it in the calculation. Edit: here's the link There is also the double taxation issue with dividends and cap gains. Another reason why the numbers are dishonest. Editx2: Re raising income/cap gains above $1 million/$10 million, I wonder what he thinks the cap gains rate should be? Since he doesn't mind the double taxation and all. Should it be taxed as ordinary income? Eliminate long term capital gains? I remember on CNBC a few years ago they asked him about the double taxation. This was in 2012 when there was talk about Romney's 14% effective rate and Buffett's 17%. He dodged the question saying there is no double taxation for him when he invested in Korean securities, or when Romney invested in bankrupt companies that paid no taxes. I think he's wise enough to know this is the exception and not the rule.

Touche. But I stand by my main point about the whole payroll tax argument being nonsense.

I would be surprised if Buffett didn't cut a deal with the IRS at some point in his life. He's been in business over 60 years and we all know he is desperate to avoid taxation, did he not try to write off his bicycle as a business expense when he submitted his first tax return!? I would be shock it at some point in his career he didn't cross the line at some point. To cross swords with the IRS doesn't make him a crook, however at the same time you can't help but think his attitude to taxation is more of a "do as I say" rather than a "do as I do". This so called Buffett hypocrisy on taxes is laughable. Fact is that he made his early fortune when tax rates were much higher than now--he actually had a tougher playing field. But that's not a question of playing field. His tax hypocrisy (at least in my opinion) has to do with his stance on income tax when he says his secretary pays a higher rate then him if you include payroll tax. He's done a great job at fooling America with this idiotic argument. His secretary even made it to Obama's State of the Union Address! This argument is intellectually dishonest because a) he isn't compensating for the benefits after retirement and b) he includes the employer's portion of the tax under in his secretary's tax burden. Meanwhile he makes 99.9% of his personal income through capital gains and dividends. So even if they were to raise payroll taxes to an infinite income ceiling, or even if they were to raise the income tax rates on high incomes to compensate, it would make no difference to his tax liability! Funny how he rarely talks about raising the dividend, capital gain, or corporate tax. I wonder why that could be ...

Keep dreaming. My guess is most of that is under lock and seal. Rumors were swirling that Buffett suddenly became a champion of higher taxes because he cut a deal with the Treasury to grandfather early partners in. There are allegations of dodgy partnership situations where if a dividend were paid or if the person died there could be serious tax (if not legal) consequences. And that Buffett "solved" this problem by cutting a deal. My prediction is everyone will be shocked at what comes out once Buffett dies. I'm suspicious when the only person talking about how great someone is is themselves or their groupies. My guess (educated and somewhat informed) is there are quite a few skeletons in his closet. Of course this board will say I'm wrong, he's a saint and disregard all of this. But maybe in 3/5/10 years when he passes we can revisit my predictions. Grandfather early partners in for what? Are you referring to estate taxes?

100% Berkshire

If Donald Trump wins, or has even a shot at winning, I feel they will recap and release. I can't imagine Mel Watt and Obama handing over the keys to the nation's housing market to Trump...

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment. For what it's worth, I avoid both. No, but the "harms" are higher for tobacco. One can be enjoyed in moderation, the other can't. There are plenty of people who smoke casually. The risk of addiction and the damage caused by even moderate amounts of smoking are much more severe than are for Coca-Cola. Are you saying the two are equivalent?

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment. For what it's worth, I avoid both. No, but the "harms" are higher for tobacco. One can be enjoyed in moderation, the other can't.

I know quite a few people haven't been satisfied with the quality of the questions. I'm thinking, Buffett should ask an all star group of investors to be seated in the analyst panel instead of equity research folks. Imagine a panel of Gabelli, Ackman, and Pabrai or something like that? They are regulars at the meeting and I'm sure would have no problem doing so. Would be a win win for everyone.

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed. Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates. Personally my moral values are different. I wouldn't mind owning shares of a tobacco company because I have a higher threshold for what I think personal responsibility should be. But let's say heroin and crack were legal, then I wouldn't invest in them. Does that make me a hypocrite? No, it's just that's where I draw the line. Often times victims of drug addiction grow up in such environments and the odds are stacked against them in terms of risks of addiction. Not to mention such drugs also ruin your life in almost every other way aside from the direct health effects. As an aside: I also have my own set of morals. I'm vegetarian and refuse to invest in companies that directly deal with animal cruelty. But I recognize this is impossible to completely avoid. For example, Berkshire owns all sorts of companies that I wouldn't touch if they were standalone. It's not their core business so I make an exception.

So here's the thing, it's not just me who thinks people en masse aren't capable of making the best choices for themselves, it's Warren and Charlie who say that. And then, they own and sell a product designed to take further advantage of that. But then they say it's up to the individual, and don't mention that they are kind of enabling the behavior? It seems hypocritical to me. Frankly I have no problem with them owning KO or the company selling the product. I would have no problems if they owned Altria either. Just save the holier-than-thou act while doing so. Also, you can very well label KO as worse than most others. There is no taste memory of Coke, as designed. Most foods are self-limiting. Your stomach gets full. You get sick of the taste. With Coke I can drink and drink and drink it all day and not get physically sick of it. I see. So my understanding is that you are referring to the human biases that Buffett&Munger always talk about such as lack of self control, and that owning KO makes this hypocritical? If I am misinterpreting your point let me know, but I believe this is what you are saying. Funny thing is that I also have a problem with Buffett acting holier than thou - but that's with his tax policy, and how incredibly misleading what he says is about his secretary paying a higher rate than him and grouping payroll and income taxes together, so by all means I'm not saying the man is holy. Imo with the KO issue though, I haven't heard them ever particularly talk about people's lack of control with food and beverages. I've only seen them talk about human flaws in general, which can be applicable to everything from eating to gambling to investing or fraud. So I don't necessarily think it's hypocritical in this case. In fact I think their understanding of human flaws has made them superior investors all around, not just with Coca Cola. It would be one thing if Buffett chose to deal with obesity or healthcare as a central philanthropic/political issue, but it's not.

But then don't most companies market most products in ways to trick you into spending more or consuming more than you would otherwise? That's the goal of every company. Personal responsibility should be exercised here. You shouldn't blame anyone but yourself for not eating right. Yes but most CPG products haven't caused the health problems coca cola has. Nobody is developing diabetes from buying $8 razor blades from gillette or $4 on crest or colgate toothpaste. Personal responsibility only goes so far. At what point is the seller partly responsible as well? Crackheads should exercise personal responsibility too, no problem legalizing crack I presume? New parents and homebuyers should have independently tested lumber liquidator flooring for formaldehyde levels. Let em sell that stuff, screw the kids crawling around on it, their parents should have exercised personal responsibility. To clarify, I have no issue with selling this stuff. My issue is the hypocritical moral high ground you can pretend to have while doing so. Just come out and say, "We're selling this stuff to all of the human race, many of whom lack self control and will most likely develop health problems over time, which society will bear. In the meantime we're going to make a lot of money for our shareholders. And we're OK with that." Well again I don't think it's possible to enjoy crack in moderation without getting addicted or it completely taking over your life. The health problems are occuring in those who a) overconsume and b) shouldn't be consuming at all. It's not Coke's fault if someone decides to drink 6 cans a day. The difference between crack and coke is that you can have a coke every now and then and be fine. Yes it can be addicting but I don't see the vast majority of people hooked on the product. And then those who weigh 300 lbs or have Type 2 Diabetes shouldn't be consuming at all, but again, it's not Coke's fault if they do. Regarding personal responsibility; most Americans are overweight, and this is caused by so much more than Coca Cola. So if you think KO is immoral on the level of Tobacco, then you should equate all fat food and sugary drink companies to the same level. If you think people aren't capable of having the personal responsibility to avoid excess consumption these products, then I can see why you think Buffett is a hypocrite, but note that this precedent should then apply far more broadly than KO - to everything from sugary drink beverage makers, to fast foods, to packaged foods, to restaurants, grocery stores, etc. For me the distinction between coke vs. crack/tobacco is: can the average person enjoy moderate consumption without causing harm or forming an addiction? And my guess is yes.

But then don't most companies market most products in ways to trick you into spending more or consuming more than you would otherwise? That's the goal of every company. Personal responsibility should be exercised here. You shouldn't blame anyone but yourself for not eating right.

Yea, 5 cokes a day is pretty bad, but that's the extreme. 5 cigs is probably on the lower end of consumption among smokers. On the other hand, 1 coke a day or every few days with an otherwise balanced diet, imo the pleasure outweighs the damage. Again I'm not saying that I'm personally against investing in big tobacco but in terms of the pleasure derived being not worth it, I can see why they've avoided it while embracing KO, See's Candies, Heinz-Kraft, Burger King, McDonald's, etc.

I made it clear I didn't like Buffett's answer, and I've pointed his hypocritical views on this forum in the past - so no hero worship here. The difference between cigarettes and soda is that it's nearly impossible to enjoy smoking in moderation without getting addicted. Also, even moderate consumption of tobacco is bad for you whereas the same isn't necessarily true of coke. Note that I have nothing against investing in tobacco but just saying the risk:benefit ratio is different and this is why Buffett may be against it. Almost ANY food and drink is bad for you in excess, including fruits and vegetables. Some more so than others and some should be consumed more moderately than others. If you think it's wrong to invest in "pleasure" than why stop with KO? To continue with the air travel argument - you say business and efficiency benefits. Ok, but not all forms of air travel are for business or productivity. How about flying for pleasure (vacation)? Nearly all food investments should be off the radar for Berkshire if you want to apply his tobacco logic to everything. And why stop there? How about the bottlers, shippers, and aluminum producers who all facilitate in consumption? All soda consumption cannot be painted with the same brush. A healthy athlete having a can every now and then is different than a 250 lb. obese man with type 2 diabetes having 3 cans a day. Or to use the airline example - someone with a history of deep vein thrombosis should be more careful flying than the average person.

I'm trying to watch some parts I missed. But it won't let you fast forward or rewind?? Useless

I think Charlie's was a great answer, perfectly summarizing why they're okay with KO. Everything in life has a trade off and it really is about risks vs benefit, in this case that benefit being the pleasure derived. Why is the air travel comparison stupid? Nothing wrong in indulging. The problems (obesity, diabetes, CV disease) are largely related to overindulging. I agree that Warren's gave a bad answer.

The mos is that there are multiple judges and multiple aspects of the law that are being challenged. i.e. we can lose the APA and fiduciary duty claims but can still win on the Fifth Amendment Takings claim, or on the Delaware corporate law claim, etc.

Are you drunk on a Thursday night?

Might be time for them to settle before this really gets out of hand before elections. It's surprising that Matt Taibi is on our side. I would have expected him to chastise the hedge funds trying to "profit off the taxpayers"

Delaware law is more established than Virginia law re various corporate rights. Assessing that is just a function of knowing general corporate law. I don't really know how to get more granular than that. It's not like I did a review of hundreds of years of case law in both states or anything. Although, my guess is that it'd be easier to do that for VA law because the VA case law is likely pretty light. That's true that DE is more established but I was just concerned about a (very unlikely) scenario in which a judge in Virginia rules in favor of us and one in Delaware for the govt. Like if we get a Lamberth type character in DE and Gingsburg/Brown type in VA.

I have no allocation to common. 100% of my allocation is in the Fannie Mae preferreds. You said this is because Delaware law is more established as opposed to Virginia law right? Is it also because McFarland was Fannie CFO not Freddie? I know DE and VA law is different but how do you assess one is more favorable than the other ? Wouldn't it be safer to do 50/50 in each?