Jump to content

Mephistopheles

Member
  • Posts

    2,270
  • Joined

  • Last visited

Everything posted by Mephistopheles

  1. Thanks for your continued brilliant analysis, merkhet.
  2. Great to see you sharing your sincere thoughts. Enjoyed reading it. +1
  3. Completely agree regarding taxes. And then on the other side of the equation, he equates payroll tax to income tax, which makes his secretary's "tax rate" double his. He should also be subtracting her Social Security and Medicare benefits. What's really hypocritical here is that he includes the employer's portion of the payroll tax as a tax for the employee. Which is so incredibly dishonest, especially given that he makes no mention of the double taxation of dividends. It's true that we have budget deficits, and it's true that we must increase taxes and cut spending to compensate for them. But I would expect someone of his stature and integrity to not dive into the mud by using misleading tactics like D.C. politicians to try to bring awareness to the issue. It would be greatly beneficial if he used his business/economic acumen to propose a detailed taxation/spending policy instead of only ever saying "increase capital gains and dividend taxes on the ultra rich". We all know that even if that were to happen, it would only be a drop in the bucket. But sadly he offers no other advice, and on top of that he manipulates the numbers to help his argument. Regarding the criticism of private equity/activism: while 3G is definitely longer termed than most, they are still "active" in the sense that they go in and implement massive layoffs and shut down factories. I have no problem with that, but Loeb is correct to point out that Buffett does tend to criticize this sort of approach often - with the way he says that activists should leave management alone to run their business. Well, 3G is not exactly a passive shareholder either. Of course, private equity and activists are competitors to Berkshire's model of holding businesses permanently and not interfering with management. This is just a marketing maneuver to attract business. I don't think there's anything immoral or unethical about what he does; he's just an extremely competitive businessman, and I admire that. I have a theory, that all of this he says and does in the public eye, whether it be his tax argument, or slamming private equity/activism, his constant praising by name of many business leaders and politicians, or even his lighthearted, self deprecating humor - it helps create this warm grandfatherly image of himself while doing wonders for his reputation, and he knows it too, and takes advantage of it. This helps him get away with steals such as the BAC deal, for instance. Just all speculation, I could be completely wrong here. I should also say that I don't agree with Loeb for the hedge fund fee, and investing in financial services companies matters. Loeb himself is manipulating what Warren says to advance his argument. Why can't people just be honest and straightforward? I guess that doesn't win headlines, votes, or applause!
  4. Two houses for sale - the one you are talking about is really playing it up in the marketing - http://www.livenexttowarrenbuffet.com/ (not super classy..) Wow that is incredibly tacky. At least be discreet and ask for a high cash price instead of A shares, and make just one mention of Buffett instead of dedicating half the site to it!
  5. I saw somewhere that there is a house across the street where the owner is asking for 10 A shares, so now I'm confused. Was that a parody/joke? Or are there two houses for sale there?
  6. It took me 6 weeks to get mine, and when it did I found my cover to be pretty messed up. I was hoping for mint condition. :( Also, they specify in the visitor's guide that we can't pick them up at the annual meeting. But of course, a book commemorating 50th anniversary will be available for $20. ::)
  7. Check out the "Events and Meetings" section of the forum, there are a couple threads about this.
  8. Just curious, how do you know Mohnish, or what's your relationship with him? :)
  9. They could have preserved availability by enacting the PIK, which was to be used for precisely situations in which they can't afford to pay the dividend. The dividends accumulate, and you pay them off as they make money. Effectively, the sweep does exactly that: you don't pay when you don't have the money, and when you do have money, you pay it off. Except even when you pay it off, you continue paying with everything you earn. So if granting relief was the goal, a 2% penalty with the PIK is much more relieving than an infinite penalty. I'm not sure what you mean here? They wouldn't pay the dividend regardless if there aren't any profits, sweep or no sweep. Only way to pay dividends without making money is by continuing with the draws - which doesn't make any sense either. The only people for whom this is a sign of weakness are for those below the senior preferred. Well, turns out the sweep makes it far weaker for us. And the real sign of weakness for parties other than equity holders is depriving the companies of capital, which wouldn't be the case if there wasn't a sweep.
  10. Lol, yeah I try very hard to avoid commitment bias. But this main argument of theirs makes no sense at all! The sweep is useless without profits, and with profits the PSPA suffices!
  11. I was excited to see Judge Wheeler's remarks. Let's see what happens. On a separate issue, I like to read John Carney's posts on Twitter just to provide myself with a Devil's advocate. One thing he keeps saying is that the 12% PIK was not a viable option, because it doesn't provide a cash dividend. I really don't understand this argument, so maybe someone can enlighten me. Basically he's saying that the sweep was necessary, because it doesn't make sense to continuously borrow from Treasury to have to pay dividends to Treasury. Nor does it make sense to create an IOU in the form of payment in kind. Therefore, the best option is to take all the money that pours in. My question to this is, weren't the Senior preferred dividends cumulative? So if the companies can't afford to pay, they would still accrue, right? And if the companies ever do return to profitability, the Senior preferred be first in line to receive all missing payments anyway. Furthermore, it's not like the sweep would help if the companies don't return to profitability, at which point it would be no different than an IOU. And if the companies do earn money, well then cumulative dividends get paid and no need to worry about it being non-cash. Tough to follow Carney's or the government's logic here. Edit: FWIW, Judge Wheeler and Judge Sweeney were both appointed on the same day by George W. Bush. Hopefully that's not all they have in common. :)
  12. Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper. Whether it's worth paying 1.4X is something people have to decide for themselves. :) I think he means the share repurchase program, but that is at 1.2x BVPS, not 1.3. So the hard floor, if it exists, would be 1.2.
  13. Here's a copy of the actual letter: http://online.wsj.com/public/resources/documents/GrassleyResponse04212015.pdf
  14. The only one thus far with ENFP, fwiw.
  15. Don't forget his explicit bias towards hiring a woman over a man with equal credentials.
  16. I have a question about RE investing but didn't want to start another thread. With leverage, like 20% down, it's possible to get a great return. But you have to pay off more and more of the loan every year, so your return on equity declines over time. Is it possible to reconcile that somehow? I know they used to have interest only loans pre-crisis, but I doubt it's possible to get those nowadays. A friend and I have looked at properties and which would produce great leveraged returns but on an unlevered basis it's not worth it.
  17. This blog is too flashy, as opposed to Berkshire's website which is bland. Therefore, Bruce doesn't count as a value investor anymore.
  18. Does Kraft own Cadbury? Or is that under Mondelez? This is ironic given that Buffett criticized the Cadbury acquisition and the simultaneous sale of the pizza business, a few years ago, and ended up selling his shares. Now he will own probably a 50% stake lol.
  19. Given how Buffett sold out his XOM stake, I don't think I would be the only one chastising him for the purchase... On second thought, you're right on this one. How the hell Buffett goes around claiming to be a value investor after daring to invest in a horrendous business such as XOM, I don't know. That Buffett is the greatest value investor of all time is the greatest misconception of modern times. The man is an outright scam. Disclosure: Short XOM and BRK.A
  20. Pretty sure that was a joke about Buffett reading his analysis. I don't get how he's a clown for wondering why Buffett doesn't own MCD. So basically you chastise Buffett for investing in XOM as well, with the line "how can he call himself a value investor"? +1 Plus, XOM is down about 5% (when you account for dividends) since bmichaud made his comment while oil prices have dropped about 55%. Such a terrible pick!!! lol It's so ridiculous to see a guy with 23 posts come on here and start throwing insults to long standing members. Not to mention the criticism isn't even deserved in this case.
  21. Pretty sure that was a joke about Buffett reading his analysis. I don't get how he's a clown for wondering why Buffett doesn't own MCD. So basically you chastise Buffett for investing in XOM as well, with the line "how can he call himself a value investor"?
  22. http://www.wsj.com/articles/would-be-financial-whiz-is-charged-with-stealing-from-investors-1426554634 Investors who asked for their money back from Mr. Malik were rebuffed with email replies that ranged from affectionate (“you know that I love you”), indignant (“stop your nonsense”) and angry (“go f— yourself”), to bizarre (“I am going Deer hunting”). “I AM CRYING, I AM A HUMAN BEING…NOT A MONEY MAKING MACHINE, I HAVE FEELINGS AND DREAMS” he emailed one investor at 10:45 p.m. in February 2014. “YEAH PUT ME IN JAIL GOOD JOB!” Mr. Malik spent the money on a “lavish lifestyle,” including $30,116 on vacation travel and $36,124 for restaurant dining and liquor, the SEC said. The purchases allegedly funded by investors include $25.53 in the Statue of Liberty gift shop and a $49.99 subscription to a Muslim dating site, court filings show. Mr. Malik tried to fake his own death, the SEC said, sending an email to one investor from a nonexistent employee named Courtney that read: “Mr. Malik has been passed away with the heart attack after accident. We will dissolve the fund shortly.”
  23. And even that falls short by 100 hours by some standards
×
×
  • Create New...