Jurgis

If people want to invest in a country that is run by a fascist dictator, is seriously considering annexation of big swaths of Europe and possibly nuclear war, that's their choice. Perhaps they should instead think about how to strengthen NATO and EU. Cause at some point it might be too late.

Thank you Master! /bow

In Soviet Russia oil invests in you! 8)

I may be wrong but banks are linked to the credit cycle and look cheap at market tops. Autos the same, AAPL is hugely dependend on one product, its only cheap when they can sell more iphones every year. Maybe that happens, but i am not so sure. IBM has huge problems and still trades at an FCF/EV yield of around 6.4%, thats hardly very cheap when you compare it to JNJ,GIS or MMM (~5% FCF/EV, most consumer staples are around 4% FCF/EV.) VRX is cheap when you believe in the story, but only the future will show if it was cheap in hindsight. Haha. Of course companies are cheap for a reason. If there was no reason, they would not be cheap. ;) And of course there are people like you - hey, not putting you on the spot or anything ;) - who can prove in a paragraph that they are not cheap at all. 8) (Even worse: I agree with you on couple of your arguments ;) ) So sure, you has your moneys and you takes your choices. If you think it's a bubble, that's your choice. :) Honestly, I'd be fine with 10-20% drop myself. I just don't try to predict it or call it a bubble. Have fun.

Yes, this is definitely happening. Saturday, May 16, 12:30pm. Restaurant to be decided by Wednesday. For our NH friends: the proposed locations in Woburn/Stoneham/Melrose are a tiny bit closer to you guys than Boston :) Everyone can vote your preference for the restaurant today and tomorrow.

The market is not cheap. But is it in a bubble? A bunch of people above are saying that everything is expensive. But then we have BAC/JPM/other banks trading at book value low PEs, we have (re)insurance companies trading at book value, we have IBM, AAPL trading at low valuations, we have crash in oil and commodities companies trading at book values or less if levered (of course, almost nobody here is interested, but that's irrelevant), we have large pharmas trading at "reasonable" valuations: VRX, GILD (I may disagree, but that's also irrelevant). These are huge companies in billion/multi-billion market caps. So, what bubble? IMHO, people are hugely anchoring at once-a-generation-super-cheap-prices in 2009-2011. It's quite questionable whether the current prices are high or just normal with few really-cheap opportunities.

That's not a bad system, but unlikely to happen.

OT: I never understood attraction of WSJ. Luckily I was not at the DJCO meeting when Munger asked who doesn't read WSJ. :) Maybe it's the internet time / generation, but WSJ looked half boring, half wasted space for me. :) I read Barron's and find it worth the time though I skip some parts. I'd read Economist if I had time - now I glance through it before recycling. No dailies. Considering online sites of newspapers, I probably read NYT most, some FT, some Economist. Of course WSJ is heavily paywalled as is Barron's, so it's tough to compare. I might have read WSJ more if it was not completely paywalled. ;) Anyway, perhaps I should spin this off into separate thread if there's interest. 8)

False as stated. The truth is quite a bit more nuanced: http://money.howstuffworks.com/only-53-percent-pay-income-tax.htm

To be fair, Buffett is no saint either. Sometimes pro-Buffett people are really just rationalizing his inconsistencies as "nuanced behavior".

I don't think I have much additional to say on AWH or insurance. I sold my GLRE position and might sell TPRE, since I think they are not very good on the (re)insurance side and I am not sure they can outperform with their float cost + hedgie fees. I still hold a lot of FFH, BRK, MKL. I really liked RE in the past and might still like it, but I don't hold it. I have not looked at AWH lately. I'll see if I have time to look at it and get back. Regarding 15% hurdle: this is a buy hurdle, it is not a hold hurdle. I'm not sure if I have posted this on CoBF, but I believe in rather large hold range where stocks are not buys, but not sells either. That's possibly expected-15% to expected-10% range - which is quite large actually. I think most of my portfolio (>90% of stock positions) are at least in the hold range, i.e. will return at least 10% annually, but hopefully 15%. I believe that FFH and BRK at current prices have a chance to return 15% without multiple expansion, but not easily. MKL - possibly not. I won't fight over these opinions - they are rather soft. :) I just looked through my portfolio and I believe about 6% of it can conservatively be called overvalued (i.e. with significant chance not to return 10% annually). Most of these are stocks that I can't value precisely like FRMO, LBRDA, DISH. From the same review, about 26% of my portfolio likely is in "buy" range, i.e. expected to return 15%+. Edit: this portfolio includes about 28% of cash+fixed income securities. Perhaps I should have posted percentages after subtracting these... Hope this helps. :)

It's an interesting tangent: in some areas we as civilization have become so risk averse that it's a miracle we progress at all. How many people died during the voyages of exploration in the past. Now we want to protect at 99.9% even people who volunteer for risky missions... Anyway, I understand that the "value" of human life has increased a lot since the past. So we can't really go back. But it's still possibly slowing down progress. (On the third hand, space exploration might not be necessary for progress...). I wonder if we have to wait until consciousness uploads and copying is commonplace to get back into risky possibly-no-return exploratory missions. Anyway, possibly OT.

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/tpre-third-point-reinsurance/130/

I believe that you are overestimating humans and underestimating the technology. So we disagree. We will see pretty soon though.

Yes, I believe we are heading into a jobless future long term (20+ years or so). How this will be handled is currently unclear. I have some thoughts, but I'd rather not OT too much here. ;)

This is a common argument and I believe people keep repeating it without really thinking about it. Perhaps you should ask yourself what happened when GM had faulty ignition switches and work from there.

Thanks for your analysis and 10K. It's interesting to see what a basket case BRK was when Buffett took over. No wonder some of his partners did not buy into BRK. I like to look back and wonder if I could have bought or held BRK through all its travails. It seems easy with 20/20 vision of the past. But boy it would have been difficult to hold at certain points in company's history...

Dan "Don't look at my underperformance! Buffett is a closet hedgie!" Loeb. 8)

Both of these arguments are flawed. Like I answered in another thread, automation is not a smooth process. Think about self driving cars. There is no way to get rid of the human drivers with 50%-self-driving car. But once you have 100%-self-driving car, boom, all humans are gone. This is extreme example, but somewhat true in other places. Edit: I guess I forgot to address your second argument. Actually this one is even more stepwise: automation is more expensive than cheap labor because it costs a lot to make robots. But if you automate making robots to make robots, the price of automation may plunge. Whether this will happen soon is unclear though.

No. Self driving cars will eliminate a huge number of human employees from tons of industries in one swoop. Automatization and robotization of other professions is ongoing. It's not a smooth process, but rather a stepwise process: you can't replace humans with machines until you suddenly can. "Big data" is a lot of hype. There's probably over 50% places where it won't matter at all. But in some other places it will matter a lot. Once again, probably not in a smooth way, but rather stepwise. If you talk about productivity in USA, it's likely the productivity increases from IT have moderated because most of USA jobs are in the categories where productivity won't increase much without a radical shift.

I believe you misread what I wrote. I don't use 4% discount rate.

There might be. However, I doubt that many of my positions won't drop in a downdraft. My dry powder for a downdraft is cash and positive non-investment cash flow(s). Unexpected inheritance at market bottom is the key. ;)

OT? None of my stock positions are held because the rates are at 2% and therefore I discount at 4% or something. I have zero stock positions that are cheap just relative to rates. All my stock positions are there because they are cheap(ish) absolutely period. Of course, the above limits stock selection hugely right now: there are only few areas that are still cheap(ish). And even the stocks that are still cheap(ish) are not as cheap as they were in 2009, 2010, 2011, 2012. E.g. FRFHF or BRK.

Whoa, tell us how you really feel. 8) I, for one, welcome our new Fed overlords. :D

Agreed.