Jim Chanos Is Wrong: There Is No China Bubble [View article]
Remember that the US real estate bubble occurred mainly in only 4 places: Florida, Vegas, Arizona, and California ... and it brought the entire world to its knees.
This said, the most important factor is the lack of leverage in the system. If prices fall substantially, it will harm the Chinese consumer, but the banking system will survive largely unscathed.
Also, its important to remember that asset prices will increase substantially in an inflationary environment prompted by Chinese monetary and fiscal stimulus. A doubling of asset prices is much more reasonable in an economy with 8% inflation than one with 2% inflation ... and does not necessitate a decline in prices to establish the proper market equilibrium.
How Investment Banking Is Like a Video Game [View article]
I think those men have been pretty well punished, Dick Fuld especially. Imagine the money he lost in his Lehman holdings, imagine the difficulty he'll have ever finding a job of similar prestige. That man's life is flucked. Of course, he did make away with millions in cash that his former shareholders can never claw back.
Paul, there is no way to regulate this through government. The best way to regulate risk-taking is to not invest in companies that take excessive risk (like those leveraged 30to1) or cloud their earnings. They are actually not hard to spot.
I say the people that invested in Lehman or LTCM are just as cullpable. Investors making outsized profits turn a blind eye to the way in which those profits are made and then cry foul when it turns out those profits were illusory. Bullshit, they are just as responsible. Their goals were just as narrow (big profits) and they ignored the risks in exactly the same way.
"healthcare is not a 'normal' good that responds to price signals"
WRONG
Healthcare is a normal good in that the supply of that good is rationed based on the price people are willing to pay for it. When you control the price, you lower supply and increase demand. You know the bread lines they had in Russian? Well imagine one of those at the emergency room.
It's funny how people idealize the public system. I am Canadian. Yes, we spend less on healthcare, though we are still top 5 in the world in $$/GDP. But you have to wait 3 years for a hip replacement. Canadians go into the US all the time to skip the lines and get more timely care. How about a recent event in Calgary, Alberta where a pregnant woman in labor was airlifted, AIRLIFTED to Montana to have her baby because there were no beds available in Calgary.
Yes, Americans pay more. What you you receive in return is more timely care and, I think, overall that improves the productivity of the economy.
On Dec 01 05:28 PM Pat C wrote:
> Excellent article, your comment that: "healthcare is not a 'normal' > good that responds to price signals, and cannot be treated as such > in a purely free-market model of supply" - is a reality that both > political parties just don't seem to "get". A purely market based > approach will never be the answer. Lets face it, we will never allow > our children or aged to go without health care and I know of noone > is going to go to the emergency room and seek out the optimum price > and service. On the other hand, centralized public monopolies will > never rein in the costs either. The answer is somewhere in the middle > and until we force out BOTH national political parties we are going > to get nothing but gridlock and more lobbying. We must vote out all > incumbents to get it back under control. Now is the time - we just > have to understand that we do indeed have the power.
12% dividend on a your convertible preferred is hardly early. In fact, it protects you from the risk of being to early!
On Nov 23 10:22 PM Grouper wrote:
> At first, I thought the deal didn't make sense, but then I decided > I like it. Here is why: > 1. Absolutely no way to re-create the right of way system, today > or ever, at the price he just paid for the operating company. > 2. Our friends in Washington are going to tax the heck out of fuel, > increasing rails freight advantage, but more importantly, finally > creating demand for passenger rail (which will of course be funded > by our tax dollars). > 3. What will be the logical place to put passenger rail? Sure, in > existing freight ROW, which, of course, we tax payers will buy or > lease from BNI. > 4. Where will we logically develop higher density urban villages? > In and around existing ROW. > 5. Obama has big bucks flopping around for "High Speed Rail". What > are the odds some of that money ends up buying or leasing BNI ROW? > In case you haven't noticed, WB is a big BO supporter - why not, > BO bailed him out of the too early investment in GE and GS (both > of whom benefitted from the AIG bailout, TARP, TALF, or whatever). > > 6. High Speed rail requires local commitment to regional systems...... > > 7. All of the above will be funded by fuel taxes....
alot of you are missing the point. Buffet's timeline is 100 years because he is going to be DEAD SOON.
This investment is meant to sustain BRK well past his death, likely in the form of a charitable organization. Buffett believes the railroads will be around until the end of time, which they may very well be.
You've missed the point completely with the Japan vs. US comparison.
Population Growth is the key. Japan's population has been stagnant since their economic collapse. Pop growth rate is 0.2% now. Very difficult to have economic growth without population growth.
Japan's fertility rate is in the 1.2 children/women range, well below the 2.1 required for population growth. And their immigration is miniscule compared to other developed nations.
The US is actually one of few developed nations whose birth rate is high enough to maintain population growth on its own. Plus they have strong immigration. This will be the foundation on which future economic growth is built in the US.
Great piece. very tough to find thoughtful and poignant analysis of health care from an objective investing perspective ... and not the political fecal matter that gets tossed around like zoo monkeys. lol
Winston, I came across your name on a review for the book Health Care Investing on Amazon and I liked it. I was wondering if you had any recommendations for other books I could read about a similar theme ... health care from an investing perspective, since you felt that one was lacking.
Is Research in Motion Becoming a Dinosaur of Smartphone Industry? [View article]
Is Research in Motion Becoming a Dinosaur of Smartphone Industry? [View article]
Jim Chanos Is Wrong: There Is No China Bubble [View article]
This said, the most important factor is the lack of leverage in the system. If prices fall substantially, it will harm the Chinese consumer, but the banking system will survive largely unscathed.
Also, its important to remember that asset prices will increase substantially in an inflationary environment prompted by Chinese monetary and fiscal stimulus. A doubling of asset prices is much more reasonable in an economy with 8% inflation than one with 2% inflation ... and does not necessitate a decline in prices to establish the proper market equilibrium.
If You Think Healthcare Is Expensive Now, Just Wait [View article]
not to mention the effect of supply restriction on service. imagine a USSR bread line ... in an American emergency room.
How Investment Banking Is Like a Video Game [View article]
Paul, there is no way to regulate this through government. The best way to regulate risk-taking is to not invest in companies that take excessive risk (like those leveraged 30to1) or cloud their earnings. They are actually not hard to spot.
I say the people that invested in Lehman or LTCM are just as cullpable. Investors making outsized profits turn a blind eye to the way in which those profits are made and then cry foul when it turns out those profits were illusory. Bullshit, they are just as responsible. Their goals were just as narrow (big profits) and they ignored the risks in exactly the same way.
Healthcare Costs and U.S. Growth [View article]
WRONG
Healthcare is a normal good in that the supply of that good is rationed based on the price people are willing to pay for it. When you control the price, you lower supply and increase demand. You know the bread lines they had in Russian? Well imagine one of those at the emergency room.
It's funny how people idealize the public system. I am Canadian. Yes, we spend less on healthcare, though we are still top 5 in the world in $$/GDP. But you have to wait 3 years for a hip replacement. Canadians go into the US all the time to skip the lines and get more timely care. How about a recent event in Calgary, Alberta where a pregnant woman in labor was airlifted, AIRLIFTED to Montana to have her baby because there were no beds available in Calgary.
Yes, Americans pay more. What you you receive in return is more timely care and, I think, overall that improves the productivity of the economy.
On Dec 01 05:28 PM Pat C wrote:
> Excellent article, your comment that: "healthcare is not a 'normal'
> good that responds to price signals, and cannot be treated as such
> in a purely free-market model of supply" - is a reality that both
> political parties just don't seem to "get". A purely market based
> approach will never be the answer. Lets face it, we will never allow
> our children or aged to go without health care and I know of noone
> is going to go to the emergency room and seek out the optimum price
> and service. On the other hand, centralized public monopolies will
> never rein in the costs either. The answer is somewhere in the middle
> and until we force out BOTH national political parties we are going
> to get nothing but gridlock and more lobbying. We must vote out all
> incumbents to get it back under control. Now is the time - we just
> have to understand that we do indeed have the power.
Why Is Goldman Sachs Vilified While JPMorgan Is Shielded? [View article]
1) Goldman is (or was) a pure investment Bank. No retail banking, which may give JPM that commercial appeal.
2) JPM perhaps was less exposed to AIG. The govt bailout of AIG has been seen as a veiled bailout of GS. And the "veiled" part is the problem.
I had no idea GS was more jewish.
Why Is Goldman Sachs Vilified While JPMorgan Is Shielded? [View article]
1) Goldman is (or was) a pure investment Bank. No retail banking, which may give JPM that commercial appeal.
2) JPM perhaps was less exposed to AIG. The govt bailout of AIG has been seen as a veiled bailout of GS. And the "veiled" part is the problem.
I had no idea GS was more jewish.
Why Is Goldman Sachs Vilified While JPMorgan Is Shielded? [View article]
1) Goldman is (or was) a pure investment Bank. No retail banking, which may give JPM that commercial appeal.
2) JPM perhaps was less exposed to AIG. The govt bailout of AIG has been seen as a veiled bailout of GS. And the "veiled" part is the problem.
I had no idea GS was more jewish.
Has Buffett Lost His Mind? [View article]
On Nov 23 10:22 PM Grouper wrote:
> At first, I thought the deal didn't make sense, but then I decided
> I like it. Here is why:
> 1. Absolutely no way to re-create the right of way system, today
> or ever, at the price he just paid for the operating company.
> 2. Our friends in Washington are going to tax the heck out of fuel,
> increasing rails freight advantage, but more importantly, finally
> creating demand for passenger rail (which will of course be funded
> by our tax dollars).
> 3. What will be the logical place to put passenger rail? Sure, in
> existing freight ROW, which, of course, we tax payers will buy or
> lease from BNI.
> 4. Where will we logically develop higher density urban villages?
> In and around existing ROW.
> 5. Obama has big bucks flopping around for "High Speed Rail". What
> are the odds some of that money ends up buying or leasing BNI ROW?
> In case you haven't noticed, WB is a big BO supporter - why not,
> BO bailed him out of the too early investment in GE and GS (both
> of whom benefitted from the AIG bailout, TARP, TALF, or whatever).
>
> 6. High Speed rail requires local commitment to regional systems......
>
> 7. All of the above will be funded by fuel taxes....
Has Buffett Lost His Mind? [View article]
This investment is meant to sustain BRK well past his death, likely in the form of a charitable organization. Buffett believes the railroads will be around until the end of time, which they may very well be.
U.S. in Worse Shape than Japan Was [View article]
Population Growth is the key. Japan's population has been stagnant since their economic collapse. Pop growth rate is 0.2% now. Very difficult to have economic growth without population growth.
Japan's fertility rate is in the 1.2 children/women range, well below the 2.1 required for population growth. And their immigration is miniscule compared to other developed nations.
The US is actually one of few developed nations whose birth rate is high enough to maintain population growth on its own. Plus they have strong immigration. This will be the foundation on which future economic growth is built in the US.
The Reality of Healthcare Reform [View article]
Great piece. very tough to find thoughtful and poignant analysis of health care from an objective investing perspective ... and not the political fecal matter that gets tossed around like zoo monkeys. lol
Winston, I came across your name on a review for the book Health Care Investing on Amazon and I liked it. I was wondering if you had any recommendations for other books I could read about a similar theme ... health care from an investing perspective, since you felt that one was lacking.
my email is ryan_skene@hsbc.ca