Mephistopheles

Hi all, Quick question regarding this topic. Scenario: Let's say I converted $25,000 out of a $50,000 IRA to a Roth. I owe Federal taxes on the full $25,000, because it was a tax-free contribution to start with, and tax-free growth. For state taxes, I only owe money on the growth, because the contribution was taxed initially. The way to figure out amount of the conversion is the contribution, that I don't have to pay state taxes on, is figure out what % of the total account the $25,000 was. Now my question is, do I take the account value on the day of the conversion, in this case $50,000? Or do I take something like end of the year value, including the $25,000 I converted? For example, if the account at the end of the year post conversion is $40,000, then the total would be $65,000. So would it be $25k/$65k in that case, $25k/$50k? Hope I'm not confusing anyone. I tried Google but couldn't find a clear cut answer. I figure people on this board have converted many times so hoping someone knows. Thanks for reading!

I'm praying for a settlement. There is no better time for one than a market crash!

Two reasons: He isn't the sharpest knife in the drawer and has the IQ of a toaster. The comment section is worse: "thoroughly researched piece and convincing article. Just one thought. When one invests in Berkshire, one is actually investing in a portfolio and not in a stock. Is it fair to compare a portfolio return with single stock return? We all know that the portfolio returns are less volatile than a single stock returns."

Because initially the investment in Heinz was only listed for $12 billion on the balance sheet. Now that it's a publicly traded company again, the change in value will be reflected and marked as such every quarter.

Are there any prominent lawyers who believe the shareholders will lose this one? I'd like to read their stuff as a bear thesis. I used to rely on Carney's articles for it but he's been disappointing.

Knowing the variant perception is helpful but has its limitations. I like to read bear cases simply to be challenged i.e. to try and kill the idea. Sometimes though, as abovementioned, there is no concrete variant perception, or there are tons of variant perceptions. Ultimately what matters is if you think the cash excreted is greater than what you're putting up - if I can know why others think I'm wrong, that's great, I happily read their thesis. If I can't find out a reason why they think I'm wrong, or if it's something silly like the economy, China, or Greece; also great - I buy anyway. People have stupid rationale for buying and selling (including professionals). So no need to worry so much about what they're thinking, because often times, they're not.

The important thing to remember is that there need not be a ultimate final decision for there to be a payoff. There are many catalysts along the way. For example if Judge Sweeny unseals the depositions, that might be a quadruple right there. Or if the appeals court throws out Lamberth's decision. If something like this were to happen you can reevaluate the odds and reallocate to other investments if beneficial.

So now there are three major legal challenges: 5th Amendment, Conservatorship under HERA, and Corporate Law. If we win one of these and lose the other two, is that still a win? I.e. Sweep doesn't violate the Constitution but does violate Delaware corporate law. If so, let's just assume each case has a 10% chance of winning (even though it's much higher imo). That's 30% chance of an 8 bagger for some of the preferreds. I'm sure I'm oversimplifying, but the odds are looking pretty good.

Thanks Luke

Can you post the pdf here? Or we have to make a Lumin login?

If there is no chance of settlement, let's hope the judge makes the stuff public. If it's as damning as we think it is, the preferred would likely triple or quadruple. At which point I would sell much of my position to pick up some cheaper stocks due to this China induced selloff.

Crack cocaine because it sells at a discount to the pure stuff

I started in 2000-2005. Better way to ask this question imo is "at what age did you start investing?"

LOL^

So no response yet? If we don't get one is it safe to say that settlement talks are under way?

Government response due tomorrow for the motion to release discovery docs. Should be very interesting!

Just wanted to bump this. Merkhet, do you agree with this line of reasoning?

Someone should open a new front in Delaware Court just as we have in the Claims Court and District Court. Then there will be 3 separate issues challenged - 1) 5th Amendment violation by the Treasury, 2) Conservatorship/HERA violation by FHFA, 3) Corporate law violation. We just need to win 1 to win the whole thing. i.e. even if it's found that FHFA didn't violate terms of cship or Treasury didn't violate 5th amendment, there can still be a violation of corporate law. Seems like pretty good odds to me.

If it does, the answer will be "end Freddie Mac and Fannie Mae, privatize mortgage market, Obama's fault"

I'd be surprised if there wasn't some sort of pressure by the Paulson Treasury to secure the free warrants from the company. Though, I don't know what must happen to be considered coercion. In addition to a 13(3), Wheeler ruled it as an illegal exaction under the Fifth Amendment. If there was coercion, would this not be the perfect precedent?

Merkhet, if Greenberg gets damages in appeals court, does that set a precedent for FNMA/FMCC common holders to challenge the bailout? In this case the upside would be $100 assuming it's $20 today, making it 50:1 odds. Do you think this case would be at least as strong as Greenberg's, especially in light of the excessive DTA writedowns? It seems the GSEs were in better shape than AIG in 2008. I wonder if Ackman is planning on challenging the original bailout depending on what happens with Greenberg. I don't see why not to give it a shot.

I guess he was driving without a margin of safety

If they're that advanced, maybe they can travel at 95% or 99% the speed of light, at which point the time experienced for those on board would be a fraction of the 1200 years due to time dilation. We shouldn't be so quick to rule out life on planets that may be inhabitable to us. Life comes in so many different forms on Earth, who's to say it can't be vastly different on other planets, with vastly different types of needs and tolerances? Just being devil's advocate. This stuff is fascinating to talk about but I hate how it's all just speculation and nothing more.

Would you go as far to say the government's most logical choices at this point are to either (1) try again to get an extension (delay) beyond the 10th, (2) push to settle or release rather than let Sweeney decide on whether or not to unseal, (3) hope for the best with Sweeney's decision on whether or not to unseal, or (4) other? I would think #1 might not be a possibility since she has already set August 10th as the date after the government asked for August 17th. It's probably an unanswerable question, but I'd be interested in what you believe are the probabilities of 2, 3, or 4? I think you have the order of preference right, but I think assigning probabilities would be a difficult thing to do. Thanks, Merkhet. I agree that assigning probabilities is difficult. It is somewhat exciting when one ponders that outside of asking Sweeney to delay (again), the most logical course of action for the government is to seriously consider release or settlement prior to August 10th. And even if she delays, it will be another month or so max. So really, settling is the best option assuming the documents are bad enough to not show to the public. Allow the Court to possibly throw numerous former & present Obama officials under the bus vs. end the sweep and still earn a huge windfall with the warrants. What would you choose? Not holding my breath but it's certainly exciting to think about.

Not sure if this has been posted...