wobatus

2009 Depression Will Be Nothing Like 1929

The internet and instant communication? We're just guilding the lily-they had the telegraph and the phone back then, ya know.

Top 5 Quotes from Berkshire's Annual Meeting

Hey, it's fun with cherry picking dates time.

Let's try January 1980. Berkshire is up from 300s to 93,000 even after a big dip, up about 290x. Does that beat inflation?

Gold has gone from $850 at its all-time high back then, to, hey, $904. Does that beat inflation?

So, if you had invested $85,000 in gold back in 1980, you'd have $90,400 today (forgive my math skills). You'd have been better off in treasuries (not that I'd be buying treasuries these days per se-well, maybe for a brief pull back in the stock market return of some fear trade). If you had invested $85,000 in berkshire back then you'd have $24,722,515.00. Give or take.

Past isn't necessarily prologue, do your own dd, future results may vary, this is not an offer to sell, nor a solicitaion of an offer to buy, the offer is only made by prospectus...

Love the avatar by the way. So does Joe Kernen.

And best of luck, ole yeller horde.


On May 03 08:29 PM yellowhoard wrote:

> Buffet, like most people his age, don't want to admit that they prospered
> from this massive ponzi scheme that is collapsing around us.
>
> Sure, buy and hold works great when money is cheap and credit is
> expanding. But, had you bought one share of Berkshire ten years ago
> you would be about even today. That is only because the dollar has
> fallen so much that inflation has "kept you even".
>
> Had you invested the same $90,000 in 1999 in gold, today you would
> have over $300,000.
>

High-Yield Canadian Royalty Trusts vs. Dividend Growth Stocks

Bruno T., chill, he just says don't put all of your eggs in that basket. I have some ERF and have taken a hell of a beating, but i also own mcd, mmm, pg, pfe (which unfortunately cut), hnz, bmy, dvy, wmt, intc, msft, gs, gfig, nm, plus some other income producing sources, mtp, hio, ncz, avk, bny...along with some non-dividend stocks.

Balance. i don't plan on selling my erf, and may add some other canadian trusts, although i'd like to see what the new corporate forms will be, how the law plays out, etc.

You may a good buy of pwe at a trough. Good for you. I think the author is talking more about someone looking for retirment income long term.

Jeff Immelt Buys 50,000 GE Shares: Whoop-Dee-Doo

Oh stfu. YOU go spend 1/8th of your pre-tax salary on a stock to which you are already massively exposed.

Time to Bury the Rotting Carcasses of Dead U.S. Banks

news.morningstar.com/a...

Look at the graph on page 2, housing starts compared to expectations. We've had a bigger housing start bubble before. Notice how long it lasts and what eventually happens. Housing starts will pick up starting in late 2009 or 2010, and that'll play out into the rest of the economy.

How About Adjustable Principal Mortgages Instead?

dave and reveigel, actually, as proposed it would not be more risky. So long as the initial underwriting standard is prudent (more so than it was) and the banks could hedge and charge a rate premium, it is a viable product. At least this guy is thinking outside the box.

Charlie Gasparino: Another Crash 'Has to Happen Again'

Unless you toe the line in Seeking Alpha comments you get a lot of negative recs, even if you point out the obvious. To wit, the whole "government should not be involved/government was too involved" want-to-have-it-both-ways commentary you get from "experts". Government sucks, banks are greedy, let them fail, no I agree we need bailouts, they shouldn't have repealed Glass-Steagall, they should stay out of markets, they shouldn't have raised the leverage limits, there should be no government oversight, the banker's are greedy, but they would have been fine if government didn't let them act all greedy....

This is the level of discourse we get. If moral hazard alone allowed this to happen, that would seem odd, since no one had any way of knowing who would get saved and who wouldn't, as witness what actually happened. Did Citi shareholders really think of themseleves as "bailed out" with shares worth $4 that were worth $50? How does Dick Fuld feel about his shareholding in LEH? How do some LEH bondholder's feel?

My point here is not to feel sorry for them. Merely to point out that there were some misunderstanding of risk here that could not have been from moral hazard, but from simple misapprehension of the risk. nd that, awful as the government's role has been, it is being chastised often by the same people for intervening too much on one hand and too little on the other. or for allegedly making bankers some how greedier than they might already be. Let's face some facts: compensation practices were completely askew. yes some folks knew the risks. Others evidently did not (ratings agencies didn't get it or willfully ignored the risk, and so did huge shareholders and many executives). And the fact you could reap wild benefits in good times and even if you made nothing in bad times no one made you give it back. That is what fed the risk mostly.

And whose fault is that? Corporate governance. Shareholders not having enough say, not understanding, but mostly simply not caring. The vast majority of shareholding is done by institutions who don't rock the boat. They invest other people's money. They vote with their feet (i.e., hold or sell shares), not by proxy. They let this happen on their watch, cozy board's, no management oversight and no reigning in of the compensation practices. And then you get the WSJ et al come in and pooh pooh the admittedly awful spectacle of government pay dictation, when they trumpet the "free" market that let this happen, were huge drum-bangers to end Glass-Steagall, to let leverage go where it might in the free market, even knowing of the distorting effects of moral hazard, Fannie and Freddie, CRA, etc.

In the vast scheme of things, plenty of blame to go around: wall street, government, rating agencies, mortage brokers, certain borrowers, and yup, the institutional shareholders and managements they empower that let this happen as thieves of OPM.


On Nov 05 04:33 PM wobatus wrote:

> Not to absolve government, but these dopes would have immolated even
> without the incentives. Moral hazard is such an over-played card.
> Did all the shareholders and bond-holders of LEH really expect to
> get bailed? Well that was wrong, wasn't it? Same with ma and pa Citi
> shareholder. And then we get half-wit tinpot commentary from financial
> illiterates.

Charlie Gasparino: Another Crash 'Has to Happen Again'

Not to absolve government, but these dopes would have immolated even without the incentives. Moral hazard is such an over-played card. Did all the shareholders and bond-holders of LEH really expect to get bailed? Well that was wrong, wasn't it? Same with ma and pa Citi shareholder. And then we get half-wit tinpot commentary from financial illiterates.

Goldman Sachs: No Global Financial Espionage Story Here

Kid, I have taken shots at ZeroHedge and its monomaniacal conspiracy theories and logrolling with other conspiracy theorists myself. Good work on your part. And ZH/TD have much to offer, if it wasn't all bathed in snark and bs. Of course, in the era of i-bank as evil giant squid, this sells, so I can understand why Taibbi et al spew the crap, which unfortunately just obfuscates valid points. Somehow, they make Blankfein et al sympathetic. The ultimate irony.

Why Is Congress Reinstating the Uptick Rule?

I like how I get negative 1 for pointing out that the uptick rule was investigated during a period of market calm. It is axiomatic that volatility was low for years leading up to the peak. We went over a year with no 2% moves either direction. Look it up. Uptick rule isn't my bugaboo anyway. naked shorting is. But a study during such a placid market period won't add much info either way.

Flash Trading: Goldman Sachs Front Running Everyone Else

I could care less that short term traders rip each other off as I am extremely uninterested in the current price of my holdings. I only care about price if i am buying or selling. If I don't like the price I don't buy or sell. But a fascinating look at the process, TD.

In full disclosure: Long GS at $92. I guess I could rail at the folks shorting it down to the $40s after I bought (and i thought I was buying the dip) but I knew the nature of the beast, gritted my teeth and held through it. And I suppose I wouldn't like it to be profiting by illegal behavior, but what the hell. I own MCD and MO too and I suppose I profit from the sclerotic arteries and constricted lungs of obese smokers too.

Not to be too cynical about it.

All the best. Happy investing, or, if you are a trader, gooooood luck.

Apple Overvalued? Here's What Else You Can Get for the Price

The only above post that makes a cogent point is the one about cash flow. I bought some Apple at around $7 or so in 1999 or so. It was trading near cash levels.

I don't know that it is an awful investment here. It is a great company. The author doesn't gainsay that. I think it could double in 3-5 years or so, maybe, if it continues this growth rate somewhat and premium valuation, or the standard 8-9 years for a solid equity. It will eventually run into a wall, law of large numbers, and a lot of its success has to do with a hip cachet that is hard to maintain. When everyone has an iphone, how hip can it be?

Flash Trading: Goldman Sachs Front Running Everyone Else

I knew I'd get negative recs for that. These blogs tend to have fairly uniform comment sections. It is incredibly easy to get positive recommendations if you want them A fairly rote bashing of various evil-doers suffices.

Take care. Drive safely.


On Jul 22 10:00 AM wobatus wrote:

> I could care less that short term traders rip each other off as I
> am extremely uninterested in the current price of my holdings. I
> only care about price if i am buying or selling. If I don't like
> the price I don't buy or sell. But a fascinating look at the process,
> TD.
>
> In full disclosure: Long GS at $92. I guess I could rail at the folks
> shorting it down to the $40s after I bought (and i thought I was
> buying the dip) but I knew the nature of the beast, gritted my teeth
> and held through it. And I suppose I wouldn't like it to be profiting
> by illegal behavior, but what the hell. I own MCD and MO too and
> I suppose I profit from the sclerotic arteries and constricted lungs
> of obese smokers too.
>
> Not to be too cynical about it.
>
> All the best. Happy investing, or, if you are a trader, gooooood
> luck.

Open Letter to SEC: Wall Street's REIT Bait-and-Switch

I gotta say, having been a critic: nice work Tyler and Zero hedge. Thanks.

IF (big if) the credit markets thaw, I like KIM. Despite the debt, on and off balance sheet. GGP, for example, had decent cash flow. It just couldn't roll. KIM is raising equity and raised unsecured. Obviously, the banks are pulling in their horns. And it is risky. But no pain no gain.

Did you see Milken's paean to capital structure adjustments in yesterday's WSJ?

But in any event, if one is going to roll the dice, good to know what is going on. So kudos, Messrsr. Fight Club Pseudonym and ZH. File this under you can lead a horse to water but can't make him drink.

Goldman Releases Earnings Early; Has World Gone Crazy?

VaR=Value at Risk.

Ask "Tyler" if there are any positive takeaways.