Technology advances generally seem to be placing the railroads ahead of the trucks at this point. In addition, increased fuel efficiency based on fuel sources, while positive, gets negated by the decrease in miles per gallon which would be seen with the decreased navigability of the roads.
For your first paragraph LT, that might be so eventually. I think current calls that they are on the fiscal brink are seriously overblown though. However, this wasn't a long-term oriented piece.
For the second paragraph, it has been a real high interest rate(relative to its peers) country. Even if Japan's real 5 year rate was hovering around .5, .7 or so, the U.S. in comparison has actually been negative. It becomes a magnet for risk-averse people.
What makes me think the spotlight won't swing due east any moment is that many Euro countries are significantly worse off, and the bond market is very clear in telling us it isn't worried about Japan, or sees trouble in its immediate future. During the last few years Japan has had the lowest interest rate being paid by any advanced economy.
If people thought there was an imminent collapse in the yen, deflationary expectations would not exist.
"Safe" shouldn't imply "risk-free". There is no such thing as a risk-free investment. Unlike Greek bondholders where there was so much in the news about taking a 50-70% haircut recently, a place like Japan is in an unrivaled position when it comes to paying off its debt.
The one caveat, like I said, is serious inflation when taken to the extreme, which in essence would be a de facto way to default on obligations. But Japan has been gyrating into deflation for numerous years now, and at the present moment the market is not anticipating anywhere near substantial inflation for their future.
Especially short-term, with people parking their money their in times of increased global turmoil, it is a safe-haven, relative to the conditions around it.
Gold And The Companies That Mine It [View article]
Productivity ≠ how much the market value of something goes up in the context he is speaking of, obviously.
The price of it going up for 10 years gives it no more merit than it did tech stocks going up or real estate going up. When he states that "The rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As "bandwagon" investors join any party, they create their own truth-for a while." .........."but look at how much the price has gone up" is not a refutation.
Gold And The Companies That Mine It [View article]
No, the last ten years is the last ten years. That isn't cherry picked data, like 2001 to 2011...which of course eliminates the 30% drop it has had ytd for 2012...that's kind of important to note, isn't it?
As it is, i think you're confused, we're actually in late June, so ten years goes back to June of 2002...not May. That 15% drop in the ensuing month made what I put an even more advantageous number for KGC in the last ten years. It wasn't the high of the year, by far.If I was out simply to come up with the worst portrayal of its stock return that I could, I could have mentioned how from its highs in Feb of 1996, KGC is down over 70%. Not too good for over 15 years.
GG, btw is up 276%, and NEM is up 68% over the last ten years, not what you wrote. Gold is up over 500%, which was my point. It hasn't translated into the same success for the mining companies.
Gold And The Companies That Mine It [View article]
The inflation levels trended down from their highs, but it was still 2 decades of inflation which ate into people's returns and gold utterly failed to protect against it. Interestingly, what was most worried about during the heights of the crisis(and why Soros bought gold) was deflation, not inflation. And which you can see from the chart you just posted we had a minor bit of. Last decade was well below the historical rate of inflation for the last 100 years or so, and gold skyrocketed.
Gold And The Companies That Mine It [View article]
It is interesting to note that Buffett did enter the silver market earlier last decade and the late 90's for a brief period of speculation. Certainly does seem in contrast to his stated views on precious metals, although silver has more industrial use than gold, and that is what he based his thesis on.
He has been speaking negatively about precious metals since long before its recent rise though. "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."-that is from the 90's.
He also talks about gold's inadequacies as far back that I've read as his 1977 shareholder letter. His mentor Graham was also not a big fan, and neither is Munger. "Civilized people don't buy gold" is something he is quoted as saying about it.
Gold And The Companies That Mine It [View article]
Gold's attraction as a holding isn't correlated to its usefulness with its utility. It has some limited industrial use, by far most of it is simply used for jewelry and to hold as an investment.
Gold And The Companies That Mine It [View article]
160 billion dollars. It is what is the annual production of gold commands...or what it would at the prices which existed during Buffett's discussion.
I'm not one who puts weight behind a correlation between gold prices and inflation. Like I mentioned in the article, there was plenty of inflation from 1980 to 2001 and gold lost an enormous 4/5ths of its value. Over the very long run it does have a positive real return, barely...which is including its exponential growth over the last decade.
Some of the stances on why it could go higher still are pretty logical viewpoints, and people whose investing prowess I have a lot of respect for, like Einhorn, have some fairly big exposure to gold and/or gold mining companies at this point, but it appears far too speculative to me. If that 3,000 number pans out, that is a pretty dire looking future also.
The Use and Misuse Of Share Buybacks [View article]
I don't think you understand what a "moving average period" is. It covers from 1940 until 2011...all the years. Having a problem with 1940 and saying "try 1953" doesn't make sense.
Billionaire Jim Simon's Top 5 Picks Paying Dividends [View article]
If they engage in automated high frequency algorithmic trading...which looks for price changes to make predictions, their holdings would be constantly changing by the second, probably with little regard for dividends or fundamentals.
Warren Buffett's Continued Ownership Of Washington Post Is Puzzling [View article]
Well the market isn't considering it so based on their current valuation of WPO as a whole, but it is an argument where the sum of the parts is greater than the stock as a whole. There has been some discussion about it, and as a stand alone Bloomberg put it at 2 billion late last year, for example. http://bloom.bg/LNCTPO
Here is a Barron's article, a bit older from 2010, but they also put that division at 2 billion in the case of it being a stand alone company. http://on.barrons.com/...
Warren Buffett's Continued Ownership Of Washington Post Is Puzzling [View article]
Valued comparatively towards companies like Comcast, one can see it at over 2 billion dollars(whereas the market cap of WPO is now below 3 billion) but Graham has been asked about possibly breaking up the divisions and is not for it at all at this point.
Just like all other countries which retain their own currency, Japan is viewed as a safe haven, despite the very high levels of debt. Having the deeply embedded deflation that it does, and which is expected for years, will push down interest rates. While nominally very low, real interest rates in the United States and other countries are a lot lower than in Japan, making Japan an attractive place for capital. It will push up the value of the Yen.
Japanese authorities have been and will be looking to prevent further appreciation of the Yen, but with their deflation deeply embedded in future expectations, and attracting the capital that it does, it will be an uphill battle. They don't want to see it to appreciate must pass 80, but to have it fall all the way back to 350/dollar, where it was back in the 1960's, seems highly unlikely in this environment.
He's usually right, but there are cases where he has been wrong, and he is honest in admitting them. A recent example was his 2 billion dollar investment with Energy Future Holdings. The guy is a legendary investor, but I often wondered "why the heck does he still own WPO?" He even mentioned maybe half a dozen years ago that he saw nothing but trouble for it in the years ahead, and it dropped over 60% since then. Now with these new investments in newspapers, I still don't see the rationale behind it. I think it was a mistake.
Union Pacific's Inherent Defenses [View article]
The Outlook For The Yen [View article]
For the second paragraph, it has been a real high interest rate(relative to its peers) country. Even if Japan's real 5 year rate was hovering around .5, .7 or so, the U.S. in comparison has actually been negative. It becomes a magnet for risk-averse people.
What makes me think the spotlight won't swing due east any moment is that many Euro countries are significantly worse off, and the bond market is very clear in telling us it isn't worried about Japan, or sees trouble in its immediate future. During the last few years Japan has had the lowest interest rate being paid by any advanced economy.
If people thought there was an imminent collapse in the yen, deflationary expectations would not exist.
The Outlook For The Yen [View article]
The one caveat, like I said, is serious inflation when taken to the extreme, which in essence would be a de facto way to default on obligations. But Japan has been gyrating into deflation for numerous years now, and at the present moment the market is not anticipating anywhere near substantial inflation for their future.
Especially short-term, with people parking their money their in times of increased global turmoil, it is a safe-haven, relative to the conditions around it.
Gold And The Companies That Mine It [View article]
The price of it going up for 10 years gives it no more merit than it did tech stocks going up or real estate going up. When he states that "The rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As "bandwagon" investors join any party, they create their own truth-for a while." .........."but look at how much the price has gone up" is not a refutation.
Gold And The Companies That Mine It [View article]
As it is, i think you're confused, we're actually in late June, so ten years goes back to June of 2002...not May. That 15% drop in the ensuing month made what I put an even more advantageous number for KGC in the last ten years. It wasn't the high of the year, by far.If I was out simply to come up with the worst portrayal of its stock return that I could, I could have mentioned how from its highs in Feb of 1996, KGC is down over 70%. Not too good for over 15 years.
GG, btw is up 276%, and NEM is up 68% over the last ten years, not what you wrote. Gold is up over 500%, which was my point. It hasn't translated into the same success for the mining companies.
Gold And The Companies That Mine It [View article]
Gold And The Companies That Mine It [View article]
He has been speaking negatively about precious metals since long before its recent rise though. "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."-that is from the 90's.
He also talks about gold's inadequacies as far back that I've read as his 1977 shareholder letter. His mentor Graham was also not a big fan, and neither is Munger. "Civilized people don't buy gold" is something he is quoted as saying about it.
Gold And The Companies That Mine It [View article]
Gold And The Companies That Mine It [View article]
I'm not one who puts weight behind a correlation between gold prices and inflation. Like I mentioned in the article, there was plenty of inflation from 1980 to 2001 and gold lost an enormous 4/5ths of its value. Over the very long run it does have a positive real return, barely...which is including its exponential growth over the last decade.
Some of the stances on why it could go higher still are pretty logical viewpoints, and people whose investing prowess I have a lot of respect for, like Einhorn, have some fairly big exposure to gold and/or gold mining companies at this point, but it appears far too speculative to me. If that 3,000 number pans out, that is a pretty dire looking future also.
Thanks for the book recommendation.
The Use and Misuse Of Share Buybacks [View article]
It covers from 1940 until 2011...all the years. Having a problem with 1940 and saying "try 1953" doesn't make sense.
Billionaire Jim Simon's Top 5 Picks Paying Dividends [View article]
Warren Buffett's Continued Ownership Of Washington Post Is Puzzling [View article]
Here is a Barron's article, a bit older from 2010, but they also put that division at 2 billion in the case of it being a stand alone company. http://on.barrons.com/...
Warren Buffett's Continued Ownership Of Washington Post Is Puzzling [View article]
Aflac Is At A Compelling Valuation [View article]
Japanese authorities have been and will be looking to prevent further appreciation of the Yen, but with their deflation deeply embedded in future expectations, and attracting the capital that it does, it will be an uphill battle. They don't want to see it to appreciate must pass 80, but to have it fall all the way back to 350/dollar, where it was back in the 1960's, seems highly unlikely in this environment.
Buffett Is Wrong About Free News [View article]