Burton A. Johnson

How Goldman Sachs Games the System

Maybe you should solicit a statement from Hillary Clinton, the Queen of Front Running.

Do you remember how she ran $1,000 into $100,00 in one year trading commodity futures when she was a young, struggling lawyer and her husband was governor? GS only made 97%.

Burton A. Johnson
valueinvesting.com

Blacklist Grows for Troubled Banks

Why should the FDIC not reveal the banks on the "Black List?"

Burton A. Johnson, MD,JD
bajvalueinvesting.com

Reviewing the FDIC's Role in This Crisis

A brilliant analysis by Edward Harrison!

The FDIC is essentially an illusion.
Our problems go back to the Depression when the FDIC was conceived by Marriner Eccles.

For once, John Kenneth Galbraith got it right when he described the Federal Reserve under Mr. Eccles -- and by extension the other agencies established by FDR uncle Eccles tutelage, as "the center of Keynesian evangelism in Washington."

Nothing has changed in the intervening 70 years.
The Keynesian True Believers are still in charge and must maintain their hegemony by frantically hanging more mirrors and adding more fuel to the smoke machine while passing the bill to the people who are actually productive.

Burton A. Johnson, MD.JD
bajvalue investing.com

Shrinking Banks

Could the elephant in the parlor be the near-confiscatory tax rates imposed by First World Nations? In the U.S., about the only break left for the high income earner is the deduction for a homestead mortgage?

Could another elephant in the parlor be the FDIC, another one of FDR's ideas that has turned into a racket, that essentially guarantees every crooked and/or stupid banker a blank check on the U.S. Treasury?

Could the third and fourth elephants be Fannie and Freddie, that, pressured by the likes of Barney Frank and Sen. Dodd, to buy up the those toxic mortgages, equitize them, and sell them off to gullible bankers around the world?

The parlor needs to be emptied and aired out. Don't count on it happening.

Burton A. Johnson, MD, JD
bajvalueinvesting.com

Warren Buffett and Brett Favre's Big Mistake

Where's Mr. Rein's evidence that WB is losing it?

Burton A. Johnson, MD,JD
bajvalueinvesting.com

The Tyranny of the CPM

Very, very interesting.

The question arises, if I diminish the number of my clicks, will my IQ and income rise correspondingly?

Burton A. Johnson
BAJvalueinvesting.com

Real Estate Has Hit Bottom? Not Even Close

I can understand why you've come to question the integrity of CNBC commentators.
I can't undertand why you ever respected them.

Burton A. Johnson, MD, JD
BAJvalueinvesting.com

Warren Buffett's Stock Portfolio: Part I

Congratulations to Jae Jun for his his evaluation approach that is comprhensive but remarkably simple to understand.
The BDX Spider Graph, which is new to me, is a wonderful tool.
I hope Mr. Jun has a book or at least many more articles in mind.

Burton A. Johnson, MD, JD
BAJvalueinvesting.com

Justice Watch Lawsuit Raises Serious Questions on TARP Decisions

So, if you are a banker in Massachusetts and want to write some subprime mortgages, sell them off to Fannie or Freddie, and have the US Treasury pick up any losses along the way, call Barney. Don't forget to put something in the pot, boy.

Obamacare, anyone?

Burton A. Johnson, MD, JD
Burton A. Johnson Portfolio Management, Inc.

Justice Watch Lawsuit Raises Serious Questions on TARP Decisions

So, if you are a banker in Massachusetts and want to write some subprime mortgages, sell them off to Fannie or Freddie, and have the US Treasury pick up any losses along the way, call Barney. Don't forget to put something in the pot, boy.

Obamacare, anyone?

Burton A. Johnson, MD, JD
Burton A. Johnson Portfolio Management, Inc.

What If: The New New York Times

Does this mean that, henceforth, I must keep my hand over my ideological wallet whilst reading AOL news as I have for decades with the NYT?
Which news items will they supress, which will they spin beyond recognition, which "news" will they simply make up to fit their ideological agenda? How many more puff pieces on Teddy Kennedy, Bill Clinton, and Alger Hiss will we be asked to believe?

Burton Johnson, MD,JD
BAJvalueinvesting.com

How Debt Repudiation Presents Systemic Risk

Ask any GM bondholder about "Ruthless Defaulters".

Portfolio Diversification and Risk: The Basics of Beta

"Wide diversification is only required when investors do not understand what they are doing."

The above was true the first time Warren Buffet said it, and it still is.

He has also defined risk as the possiblity of total loss of capital in an investment. That's also a simple truth.

I think virtually all investors trying to limit risk by diversification and the use of various derivatives, hedging techniques, and esoteric formulae are basically attempting to modify the effect of short-term, random changes in the market prices of their investments.

Furthermore, I think that extensive diversification actually increases the risk of loss by dissemination and diffusion of it among multiple holdings that must be monitored. The excessive turnover imposed by widespread diversivication and hedging also imposes a significant increase in brokerage costs.

Random means something that occurs in no definate pattern and is thereby unpredictable, so all the energy put into such investing is useless in the pursuit of protecting capital and obtaining superior long-term compounding of it. Louis Bachlier got it right over 100 years ago. It helps to go back and review his work from time-to-time.

Market prices flucuate, and flucuate widely and randomly. Investors can't do anything about that but to accept it while investing for the long term.

I'm convinced the best way to control risk, i.e., the possibility of permanent loss of capital, in an investment is to buy only businesses that have a superior, sustainable, long-term economic advantage, low debt, and outstanding management, and to never pay too much for them, based on business criteria. That doesn't require a PhD in math or a Nobel Prize in economics.

Burton A. Johnson, MD, JD
Burton A. Johnson Portfolio Management, Inc.

Reviewing Munger's The Psychology of Human Misjudgment - Part II

"Other people's triumphs and excellences belong to them.
Likewise, your possesions may have excellence, but
you yourself don't derive excellence from them."

Epictetus

Epictetus, as usual, got it right. He was a slave-turned-philosopher and tutor to the upper classes - Marcus Auralius was one of his star pupils. Epictetus limited himself to the pursuit of reality. He left probability and possibility in the lap of the gods, where they belong.
Mr. Munger and his pal WB have been in the reality business for decades.

Burton A. Johnson, M.D., J.D.

ADRs in the OTC Market with Dividend Yields Greater than 5%

Everybody likes good companies that pay high dividends.
What about the 20% withholding on those dividends by the host government, especially on tax-qualified accounts?

Burton A. Johnson, M.D., J.D.