Bob Rodriguez 25 years experiment on Concentration

[Packer16]

The problem is that the even focused portfolios are diversified.  The only true focus fund out there is Fairholme.  Buffett typically has 50 to 60% of his portfolio in his top 5 positions.  The idea is to choose to focus the value investors best ideas (similar to Rodriguez' experience is the exception or the rule). 

 

Packer 

[no_free_lunch]

I have been a bit busy but I had a quick look at this. 

 

The problem with just pulling the top 5 from a diversified portfolio is they aren't necessarily the 5 stocks that the manager has the most confidence in.  Some portfolios they just represent stocks that have run-up and that haven't been trimmed.  In other cases they are also only marginally higher than say the next 5, so the top position is 6% of AUM, the 6th is maybe 4.5%, the 10th is 4%.  It gets pretty noisy.

 

I don't think there is a definitive answer on this.  Certainly you can get higher returns with a concentrated portfolio.  Whether you can do so without risking a blow-up is open to debate.

[no_free_lunch]

From January 2006 through its final report in November 2011, Gabelli & Company, Inc. published the Focus FiveTM on a quarterly basis to highlight the most compelling investment ideas covered by our institutional research team. The 5 companies were selected based on valuation and the potential for a near-term catalyst. For the six years the report was published, the Focus Five delivered a compounded return of +224.6% vs. a decline of 0.1% for the S&P 500.

 

Their focused picks beat out any of their traditional portfolios.

 

http://www.gabelli.com/research/focus-five.html

[no_free_lunch]

We examine the performance of stocks that represent managers' "Best Ideas." We find that the stock that active managers display the most conviction towards ex-ante, outperforms the market, as well as the other stocks in those managers' portfolios, by approximately 1.6 to 2.1 percent per quarter depending on the benchmark employed. The results for managers' other high-conviction investments (e.g. top five stocks) are also strong. The other stocks managers hold do not exhibit significant outperformance. This leads us to two conclusions. First, the U.S. stock market does not appear to be efficiently priced by our risk models, since even the typical active mutual fund manager is able to identify stocks that outperform by economically and statistically large amounts. Second, consistent with the view of Berk and Green (2004), the organization of the money management industry appears to make it optimal for managers to introduce stocks into their portfolio that are not outperformers. We argue that investors would benefit if managers held more concentrated portfolios.

 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1364827

[twacowfca]

What you could do is for example get the quarterly reports for FPA Capital and buy the top 5 holdings after the report are released (45 days after the Q) then replace any of the top 5 with the new top 5 every Q.  You can also do this any other good value manager (like Buffett, Fairholme, Longleaf, etc.).  It would be interesting to see in FPA's case how much slippage there would be due to the delayed timing and how much value add would occur with other value funds.

 

Packer

 

That's in effect what I used to do with Buffett.  I would ignore his adding to his old stalwarts and zero in on his new positions, especially when he was still active in buying a variety of differently sized companies, including mid caps.  Warren typically bought after a big dip in a stock's price, and I was usually able to purchase the stock at a price that was lower than his average cost. :)

[twacowfca]

In March '09 putting 1/3 of my portfolio each into WFC and AXP at ~$10 each.

 

 

What made you choose those 2 rather than some of the other beaten down stocks around that time?

 

These were the two I felt I knew the best.

 

There's a story, of course.....and it's etched in our family lore.

 

Sunday March 8(?), 2009, the wife and I are at a car wash and I say, "look, I won't do this if you say no,

but Wells Fargo and AXP are down to $10 and they are worth probably 3X that amount. The market  thinks they are going under. I don't. I want to put 1/3 into each."

 

She shocked me with an immediate "yes."

 

So I was prepared to make the trade Monday morning....I didn't sleep well, and woke up at 3 AM. Absent-mindedly I turned on CNBC, and bam, there was Buffett. And he basically endorsed them both, you know, the way he tells you without actually saying 'buy the stock.' One thing he noted was their $40BB pre tax pre-provision income and how the company was selling for like 3 X that.

 

Every once in a while we go back to that car wash and reminisce  ;D

 

P.S. Some one rudely pointed out later that if you just bought an index of small-cap stocks at that same time, you would have made even more.

 

 

 

What would have happened, however if the  market had really tanked in 09 and 10 as it did in the extension of the 1929 crash?  I think it's very likely that the high quality stocks you bought would have been among the survivors, but many of the small caps, especially those with significant debt, would not.

 

Your choice presented what Taleb calls convexity of outcomes, relatively good results under many prospective futures and resistance to failure in the worst circumstances.  Congratulations on a fine risk adjusted decision that wasn't all that risky in even worse outcomes than what occurred.  :)

 

 

[giofranchi]

Your choice presented what Taleb calls convexity of outcomes, relatively good results under many prospective futures and resistance to failure in the worst circumstances.  Congratulations on a fine risk adjusted decision that wasn't all that risky in even worse outcomes than what occurred.  :)

 

I agree. Yet, to this “convexity of outcomes” I would still prefer a “great conviction in a business”. To have great conviction in a business doesn’t mean you know everything about it. I don’t know everything about FFH, nor about LRE. Exactly as I don’t know everything about WFC, nor about AXP. Yet, I have great conviction about FFH and LRE, while I don’t share the same feeling about WFC and AXP. To have great conviction in a business, you don’t have to know everything about that business. Instead, I think you should study what works in business and what doesn’t. And just stick with those businesses that show to possess all the favorable elements.

Once again:

Investing is the most intelligent, when it is the most businesslike.

 

giofranchi

 

[Kraven]

In March '09 putting 1/3 of my portfolio each into WFC and AXP at ~$10 each.

 

 

What made you choose those 2 rather than some of the other beaten down stocks around that time?

 

These were the two I felt I knew the best.

 

There's a story, of course.....and it's etched in our family lore.

 

Sunday March 8(?), 2009, the wife and I are at a car wash and I say, "look, I won't do this if you say no,

but Wells Fargo and AXP are down to $10 and they are worth probably 3X that amount. The market  thinks they are going under. I don't. I want to put 1/3 into each."

 

She shocked me with an immediate "yes."

 

So I was prepared to make the trade Monday morning....I didn't sleep well, and woke up at 3 AM. Absent-mindedly I turned on CNBC, and bam, there was Buffett. And he basically endorsed them both, you know, the way he tells you without actually saying 'buy the stock.' One thing he noted was their $40BB pre tax pre-provision income and how the company was selling for like 3 X that.

 

Every once in a while we go back to that car wash and reminisce  ;D

 

P.S. Some one rudely pointed out later that if you just bought an index of small-cap stocks at that same time, you would have made even more.

 

 

 

What would have happened, however if the  market had really tanked in 09 and 10 as it did in the extension of the 1929 crash?  I think it's very likely that the high quality stocks you bought would have been among the survivors, but many of the small caps, especially those with significant debt, would not.

 

Your choice presented what Taleb calls convexity of outcomes, relatively good results under many prospective futures and resistance to failure in the worst circumstances.  Congratulations on a fine risk adjusted decision that wasn't all that risky in even worse outcomes than what occurred.  :)

 

In my opinion there is a lot of hindsight bias involved in looking back at investments made in the post Lehman bankruptcy through March 2009 time period.  At this point, almost 5 years later, it seems "obvious" that everything would be just fine.  I like the reference to the convexity of outcomes.  I think there was certainly a possibility that things didn't turn out ok and that everyone jumping into AXP, WFC, BAC, and many other financials and non-financials would have been burned.  People forget that there was very real talk of nationalizing some of the banks.  Would AXP and WFC just skated away if C and BAC, for example, were somehow nationalized?  I don't know. 

 

It was a very scary time.  The only thing that kept me sane about it was that while I didn't know what would happen or if it would all work out ok, I knew that the alternative was probably a change in life as we knew it.  Maybe not guns, ammo and canned goods, but perhaps something closer to that.  So either things got better or they didn't and if they didn't I wasn't sure that it would matter what your stock portfolio did.

[twacowfca]

In March '09 putting 1/3 of my portfolio each into WFC and AXP at ~$10 each.

 

 

What made you choose those 2 rather than some of the other beaten down stocks around that time?

 

These were the two I felt I knew the best.

 

There's a story, of course.....and it's etched in our family lore.

 

Sunday March 8(?), 2009, the wife and I are at a car wash and I say, "look, I won't do this if you say no,

but Wells Fargo and AXP are down to $10 and they are worth probably 3X that amount. The market  thinks they are going under. I don't. I want to put 1/3 into each."

 

She shocked me with an immediate "yes."

 

So I was prepared to make the trade Monday morning....I didn't sleep well, and woke up at 3 AM. Absent-mindedly I turned on CNBC, and bam, there was Buffett. And he basically endorsed them both, you know, the way he tells you without actually saying 'buy the stock.' One thing he noted was their $40BB pre tax pre-provision income and how the company was selling for like 3 X that.

 

Every once in a while we go back to that car wash and reminisce  ;D

 

P.S. Some one rudely pointed out later that if you just bought an index of small-cap stocks at that same time, you would have made even more.

 

 

 

What would have happened, however if the  market had really tanked in 09 and 10 as it did in the extension of the 1929 crash?  I think it's very likely that the high quality stocks you bought would have been among the survivors, but many of the small caps, especially those with significant debt, would not.

 

Your choice presented what Taleb calls convexity of outcomes, relatively good results under many prospective futures and resistance to failure in the worst circumstances.  Congratulations on a fine risk adjusted decision that wasn't all that risky in even worse outcomes than what occurred.  :)

 

In my opinion there is a lot of hindsight bias involved in looking back at investments made in the post Lehman bankruptcy through March 2009 time period.  At this point, almost 5 years later, it seems "obvious" that everything would be just fine.  I like the reference to the convexity of outcomes.  I think there was certainly a possibility that things didn't turn out ok and that everyone jumping into AXP, WFC, BAC, and many other financials and non-financials would have been burned.  People forget that there was very real talk of nationalizing some of the banks.  Would AXP and WFC just skated away if C and BAC, for example, were somehow nationalized?  I don't know. 

 

It was a very scary time.  The only thing that kept me sane about it was that while I didn't know what would happen or if it would all work out ok, I knew that the alternative was probably a change in life as we knew it.  Maybe not guns, ammo and canned goods, but perhaps something closer to that.  So either things got better or they didn't and if they didn't I wasn't sure that it would matter what your stock portfolio did.

 

Good points.  However, "if you don't know jewelry, know your jeweler" is apropos here.  Everything Warren has bought repeatedly till it becomes a major position has that quality of convexity, although sometimes an entire industry like print media can be superseded by something new.  With WFC, they would have been the last domino standing among the big banks, a likely survivor in anything other than a nationalization of the industry.  AXP had relatively minor exposure to risky assets. 

 

The Taleb insight is key.  We may not know as much about one of his holdings as Warren does or be able to predict the future, but knowing where convexity lies  or betting on the jockey who rides the all weather horse when the course is a mud field is crucial.

[Uccmal]

Very accurate assessment Kraven.

 

It was a very scary time.  And it happened twice - Oct/Nov. 2008 and March 2009.  I was fully invested gong into round 2, and subsequently took the elevator down.  And then I took the ride back up with a better portfolio. 

 

Giofrqnchi, you are overly optimistic in your assessment.  FFh was down $100 going into March 2009.

 

They had fully cashed in the CDS, their own stock portfolios had been destroyed.  If the government had mismanaged the situation by tightening rather than loosening Ffh would have been wiped out along with virtually every other financial.  The survivors would have been few.  I bought Leaps in AXP, GE, Sbux, HD, at the time.  I even bought some FFh.  At that point though it was a pure gamble that governments would do the right thing, and the markets had over reacted.

 

Interestingly, my tax free accounts (RRSPs) were only down slightly relative to the markets at the time - no leverage.

[Kraven]

In March '09 putting 1/3 of my portfolio each into WFC and AXP at ~$10 each.

 

 

What made you choose those 2 rather than some of the other beaten down stocks around that time?

 

These were the two I felt I knew the best.

 

There's a story, of course.....and it's etched in our family lore.

 

Sunday March 8(?), 2009, the wife and I are at a car wash and I say, "look, I won't do this if you say no,

but Wells Fargo and AXP are down to $10 and they are worth probably 3X that amount. The market  thinks they are going under. I don't. I want to put 1/3 into each."

 

She shocked me with an immediate "yes."

 

So I was prepared to make the trade Monday morning....I didn't sleep well, and woke up at 3 AM. Absent-mindedly I turned on CNBC, and bam, there was Buffett. And he basically endorsed them both, you know, the way he tells you without actually saying 'buy the stock.' One thing he noted was their $40BB pre tax pre-provision income and how the company was selling for like 3 X that.

 

Every once in a while we go back to that car wash and reminisce  ;D

 

P.S. Some one rudely pointed out later that if you just bought an index of small-cap stocks at that same time, you would have made even more.

 

 

 

What would have happened, however if the  market had really tanked in 09 and 10 as it did in the extension of the 1929 crash?  I think it's very likely that the high quality stocks you bought would have been among the survivors, but many of the small caps, especially those with significant debt, would not.

 

Your choice presented what Taleb calls convexity of outcomes, relatively good results under many prospective futures and resistance to failure in the worst circumstances.  Congratulations on a fine risk adjusted decision that wasn't all that risky in even worse outcomes than what occurred.  :)

 

In my opinion there is a lot of hindsight bias involved in looking back at investments made in the post Lehman bankruptcy through March 2009 time period.  At this point, almost 5 years later, it seems "obvious" that everything would be just fine.  I like the reference to the convexity of outcomes.  I think there was certainly a possibility that things didn't turn out ok and that everyone jumping into AXP, WFC, BAC, and many other financials and non-financials would have been burned.  People forget that there was very real talk of nationalizing some of the banks.  Would AXP and WFC just skated away if C and BAC, for example, were somehow nationalized?  I don't know. 

 

It was a very scary time.  The only thing that kept me sane about it was that while I didn't know what would happen or if it would all work out ok, I knew that the alternative was probably a change in life as we knew it.  Maybe not guns, ammo and canned goods, but perhaps something closer to that.  So either things got better or they didn't and if they didn't I wasn't sure that it would matter what your stock portfolio did.

 

Good points.  However, "if you don't know jewelry, know your jeweler" is apropos here.  Everything Warren has bought repeatedly till it becomes a major position has that quality of convexity, although sometimes an entire industry like print media can be superseded by something new.  With WFC, they would have been the last domino standing among the big banks, a likely survivor in anything other than a nationalization of the industry.  AXP had relatively minor exposure to risky assets. 

 

The Taleb insight is key.  We may not know as much about one of his holdings as Warren does or be able to predict the future, but knowing where convexity lies  or betting on the jockey who rides the all weather horse when the course is a mud field is crucial.

 

I can't disagree with anything you said. However, perhaps I suffer from lack of imagination, but I have a hard time seeing a world where things like BAC and C are nationalized and WFC and AXP just go on, business as usual. They might have been last man standing, but perhaps not by much. I just don't believe that BAC and C go under but people keep on taking out home loans from WFC and charging dinners at Lutece on their Amex card. But who knows, that was just my fear. I think we are all more interconnected than we believe. Look at the financial crisis. A crisis in real estate touched and has continued to touch every walk of life since.

[giofranchi]

Good points.  However, "if you don't know jewelry, know your jeweler" is apropos here.  Everything Warren has bought repeatedly till it becomes a major position has that quality of convexity, although sometimes an entire industry like print media can be superseded by something new.  With WFC, they would have been the last domino standing among the big banks, a likely survivor in anything other than a nationalization of the industry.  AXP had relatively minor exposure to risky assets. 

 

The Taleb insight is key.  We may not know as much about one of his holdings as Warren does or be able to predict the future, but knowing where convexity lies  or betting on the jockey who rides the all weather horse when the course is a mud field is crucial.

 

I can't disagree with anything you said. However, perhaps I suffer from lack of imagination, but I have a hard time seeing a world where things like BAC and C are nationalized and WFC and AXP just go on, business as usual. They might have been last man standing, but perhaps not by much. I just don't believe that BAC and C go under but people keep on taking out home loans from WFC and charging dinners at Lutece on their Amex card. But who knows, that was just my fear. I think we are all more interconnected than we believe. Look at the financial crisis. A crisis in real estate touched and has continued to touch every walk of life since.

 

Kraven,

I agree. That’s why I neither invested in BAC and C, nor in WFC and AXP. Instead, I bought those businesses in which I have “great conviction”. Under the apocalyptic scenario you painted, probably they would also have gone under… even if business is among humans ever since the Phoenicians set sails on the Mediterranean Sea… probably before! :)

But what about a much easier scenario to conceive: something like Japan during the last 20 years? A slow but steady decline in asset prices, or at least a prolonged stagnation… Europe is already well on its course to follow Japan… Why couldn’t it also happen to the US? Is it so unconceivable? I don’t know… anyway, I think the jury is still out!

In such a scenario (and probably also in the apocalyptic one) I do believe that shrewd capital allocators would still find ways to prosper…

This is what great entrepreneurs do:

They shift economic resources out of an area of lower and into an area of higher productivity and greater yield.

--Jean-Baptiste Say, around 1800

And to stick with great entrepreneurs is the policy with the greatest “convexity of outcomes” I can think of.

 

giofranchi

 

[Packer16]

I am sorry but I think anyone who thinks the US is going to be like Japan or the US in the 1930s is not looking closely at what is going on now or in history.  In the 1930s, you had a collapse of the financial system (banks) and in Japan you had a system where zombie firms kept capital captive in unproductive firms for years.  Even with the huge anchor in Japan GDP still increased.  Japan was hit with two situations at once - high asset prices and the world catching up to them in terms of cost competitiveness compounded by a banking system and culture which made problems worse (no way to quickly work out debts and move on and a culture that lacks minority shareholder friendliness). 

 

Will there be low price inflation (like the 1930s and Japan)? I think so but if you examine what happened in the 1930s you had huge declines in GDP in the US.  In Sweden, whose policies is similar to the US fed now had small GDP declines.  That is not happening in the US.  As to Japan happening in Europe, it will depend upon how flexible the financial system is.  If failing firms are propped up then it will have similar issues.  If they are resolved then I think it will be different.   

 

Packer

[giofranchi]

I am sorry but I think anyone who thinks the US is going to be like Japan or the US in the 1930s is not looking closely at what is going on now or in history.  In the 1930s, you had a collapse of the financial system (banks) and in Japan you had a system where zombie firms kept capital captive in unproductive firms for years.  Even with the huge anchor in Japan GDP still increased.  Japan was hit with two situations at once - high asset prices and the world catching up to them in terms of cost competitiveness compounded by a banking system and culture which made problems worse (no way to quickly work out debts and move on and a culture that lacks minority shareholder friendliness). 

 

Will there be low price inflation (like the 1930s and Japan)? I think so but if you examine what happened in the 1930s you had huge declines in GDP in the US.  In Sweden, whose policies is similar to the US fed now had small GDP declines.  That is not happening in the US.  As to Japan happening in Europe, it will depend upon how flexible the financial system is.  If failing firms are propped up then it will have similar issues.  If they are resolved then I think it will be different.   

 

Packer

 

Packer,

but the majority of your banks were failing firms! They were just rescued by taxpayers money! You kept them alive! Now free money and no marked to market accounting are helping them to post significant earnings increase… Maybe, and I really hope it is so, now they have learnt their lesson and are finally doing the right things… but, it is way too early to judge and, as I have said, the jury is still out!

Most of all, just because Sweden “got lucky” one time, doesn’t mean it matters for the whole Europe or the US… I don’t know what Sweden did exactly, or how much its private and public sectors were indebted… If you know a good book on the subject, I would gladly read it.

What I do believe is something that has nothing to do with macro. What I believe is rooted in human nature: if you have made mistakes, sooner or later you must pay for them. And, if you have let your finances get too much into debt, imo, you have made a serious mistake!

Now, people say: if you enact this policy, your are going to pay for your mistake, but, if you enact this other policy instead, you won’t. Well, that is macro (or macro tourism!).

Maybe, we will truly discover the philosopher stone, and from now on we won’t have to pay for our mistakes any more (Hey! Just keep getting into debt as much as you want! Don’t worry, we have the right policy to solve everything!). But, until there is evidence about that great event, I would proceed with caution and I would wait to declare victory!

 

giofranchi

 

[Liberty]

but the majority of your banks were failing firms! They were just rescued by taxpayers money!

 

Wasn't that more of a liquidity thing than a "failing because your assets are worthless and you have no long-term earning potential anymore" situation, though? I think the government made money on most of the bailout and got out of most things it injected capital into. That's different from nationalizing institutions that have no real profitable business and leaving the taxpayer money into them to be destroyed over time...

 

That's my understanding, anyway. Saying "they were failing" hides that fact that there are many ways to fail, some less recoverable than others (f.ex. The difference between John Malone getting a margin call because he was over-stretched - bad but if he can get through he still owns good productive assets - and someone else running a business into the ground because the fundamentals are terrible and that can't easily be fixed, so that even if you save them, it's just temporary and they'll keep destroying value).

[JEast]

giofranchi -- Tongue in cheek but I understand that Italy has been in decline for nearly 2000 years but I have a belief that Italians are doing just fine these days irrespective of what the press or macro economists are saying :)

[Packer16]

I think the banks had a liquidity issue not a solvency one, which is what happened in the 1930s and in Japan.  Even Freddie and Fannie appear to have had on a liquidity issue as they are going to pay back the gov't with interest.  In Japan, the solvency issue was dragged out over 10-years thus part of the reason for the stagnation.  I think a key in Europe is how they handle the solvency issues they have in Southern Europe (either through a devaluation via a S-Euro or restructure).  The Swedish reference is in Irving Fisher's paper written in the 1930s on Deflations.

 

Packer

[goldfinger]

I think a key in Europe is how they handle the solvency issues they have in Southern Europe (either through a devaluation via a S-Euro or restructure).

 

If only all the problems of Europe were contained within the boundaries of the southern real!  :-[

I think Europe has much much bigger problems than that Packer.

[goldfinger]

I think a key in Europe is how they handle the solvency issues they have in Southern Europe (either through a devaluation via a S-Euro or restructure).

 

Also another thing to understand about Europe is that the union itself is not a reality in the minds of europeans at all and that their mentality about economic matters is really really far from the pragmatism displayed here in America.

[John Hjorth]

I think a key in Europe is how they handle the solvency issues they have in Southern Europe (either through a devaluation via a S-Euro or restructure).

 

If only all the problems of Europe were contained within the boundaries of the southern real!  :-[

I think Europe has much much bigger problems than that Packer.

+1 [with all respect for the quality of the posts from Packer on this board on other matters, the posts are by me much appreciated].

[Packer16]

I agree there are problems but when you compare how far Europe has come in 70 years it is incredible.  The US began as a loose confederation of states (1770 to 1780s), established a constitution with lots of states rights in 1780s.  The country really did not congeal until after the civil war on the 1860s and even then it was a weak central gov't.  So it took from the 1770s to the 1880s or about 110 years to work together as a unit with alot of people who were immigrants from other places.  So if you compare Europe to the US compare it to the US in the 1840s.  The US had disbanded its central bank and was being ripped apart with the slavery issue.  The one thing we did not learn in the early part of our history was that compromise is the key to the US success.  When compromise broke down the Civil War ensued.  At least I think Europe has learned that and that will allow them to muddle through crises without war.  I think what has driven much of the compromise here is the accomodation/compassion for others.  I am assuming it is the same in Europe and therefore think they will muddle through without blowing up.

 

Packer 

[Kiltacular]

Very accurate assessment Kraven.

 

+1

[twacowfca]

I agree there are problems but when you compare how far Europe has come in 70 years it is incredible.  The US began as a loose confederation of states (1770 to 1780s), established a constitution with lots of states rights in 1780s.  The country really did not congeal until after the civil war on the 1860s and even then it was a weak central gov't.  So it took from the 1770s to the 1880s or about 110 years to work together as a unit with alot of people who were immigrants from other places.  So if you compare Europe to the US compare it to the US in the 1840s.  The US had disbanded its central bank and was being ripped apart with the slavery issue.  The one thing we did not learn in the early part of our history was that compromise is the key to the US success.  When compromise broke down the Civil War ensued.  At least I think Europe has learned that and that will allow them to muddle through crises without war.  I think what has driven much of the compromise here is the accomodation/compassion for others.  I am assuming it is the same in Europe and therefore think they will muddle through without blowing up.

 

Packer

 

There is hindsight distortion in what led up to The US Civil War. Two years before the war started, relations between the US States were so peaceful and congenial that there were less than 2000 men under arms in part time voluntary militias in all southern US States combined.  Then, one of the anti slavery terrorists skirmishing on the western frontier with pro slavery terrorists led a small raid that captured a US arsenal in Virginia, an eastern slave state, and invited the slaves to join him in a rebellion against their masters. 

 

The horror of that act in the view of the slave states polarized opinion to such a degree that on the eve of secession of the southern states from the Union, there were almost 200,000 men under arms in the southern states.

 

Here's a question only for the European posters on this board:  Is there anything specific on the horizon in The EU that could lead to such polarization in the near future?

[goldfinger]

Here's a question only for the European posters on this board:  Is there anything specific on the horizon in The EU that could lead to such polarization in the near future?

 

There is always the possibility that some countries elect nationalistic and/or far right oriented governments. It would not surprise me at all to see France go into very severe economic stress pretty soon (it is kind of already happening) and then put the far right on top. How is Europe doing then???

[Packer16]

Haven't countries already had election with these fridge parties (Greece, etc)?  Interestingly enough I don't know how different the right from the left is in some of the countries.  Take France, Hollande won and spoke a good game but how many of his "socialist" policies has he been able to implement?  He raised taxes on the rich but he has had to deal with economic limits of the welfare states and has not talked about nationalization.  I will be concerned when I hear of nationalization.  It appears the only difference is taxes and the social issues. 

 

Packer