ERICOPOLY

I think so too. It's hiding too much in the open for this to take long.

I don't like the BAC warrants that much either. We've got 7 more years to expiry. Break even point is $16.78. The $12 strike 2014 calls are 78 cents (break even at $12.78). They keep your foot in the door while deploying only 20% of the money. In 2014 you'll have a much better idea of how things are tracking vs today. So the break even point is fully $4 less and you are at that point only left with 5 years of remaining life on the warrants. There won't be significant dividends paid over the next two years. So you'll start 2014 $4 ahead (on a break even basis). At that time you can probably buy 2016 $12 strike calls or $15 strike calls or whatever. You'll have your foot in the door. Meanwhile you've got far less cash deployed. Things go very wrong over the first two years and you lose 1/5 as much. Things go as I expect with 99% of my heart and most likely you wind up with a spike to $20 in the first 3-4 years and you've got a lower cost basis as you roll your options.

Yacktman appears to have the right idea in terms of buying high quality businesses at fair to good prices that will give you a decent risk-adjusted return over time. And I'm not just talking about him because he "made money" last year. Yacktman's portfolio is the type of portfolio that someone who is really rich would want to have to first preserve -- and second grow -- one's wealth without too much stress. And guess what Yacktman bought in Q4? BAC.

They sold FAIRX and bought BAC after Bruce explained to his fundholders how much BAC would look like WFC in early 1990s, but the fund is only allowed to buy 5%. Okay, that's probably a small minority of his shareholders but that's what I would have done.

The article doesn't clearly explain why lawmakers would resist such a ban. ;D The political intelligence industry comprises hundreds of lobbyists, former congressional aides and others who scour Washington for market-moving tips about pending government activities that could affect stock prices. These political intelligence purveyors are paid by hedge funds and other Wall Street firms to gather information about pending changes in public policy the investors can use to make trades. A study by the nonpartisan Integrity Research Associates said the global market for policy research and political intelligence services is about $400 million a year and growing.

$19.86 -- April 15, 2010. What a crazy stock market.

Only another 92% gain to go from here to get back to the 52 week high.

Banning Congress from trading on insider information. Passed the Senate 96-3. Now it needs to pass the House. Found this quote funny: The focus of one of the Journal stories, Rep. Spencer Bachus (R., Ala.), became an unlikely champion. He helped revive the bill with a high-profile hearing in the House Financial Services Committee, which he chairs, and used the opportunity to press more senior Republican leaders for a vote on the House floor. Republican leaders initially balked, scolding Mr. Bachus in an angry meeting in December. http://online.wsj.com/article/SB10001424052970203711104577199113513037068.html?mod=WSJ_article_LatestHeadlines

Zuckerberg can become a trillionaire by age 65 if he grows his estimated $28.4b stake by 10% per annum

I wonder though if you were to open a spa in New York or Los Angeles, how much would customers pay to bathe in a bathtub full of cash?

Well, it was roughly mid-February last year when Berkshire released their Dec 31st holdings. I really think he topped up to a 15% (including warrants) BAC ownership. Every now and then I need to make a prediction.

One thing I have learned: If a stock goes from $14 down to $5, and then back up to $7, it is "overbought". Then someone who rhymes with "ass" shorts it. We'll see how he does.

I take it this real estate has a low cost basis on BofA's balance sheet. By selling it, they can monetize the DTA to build capital ratio for Basel III.

Question: What's a fair approximation of price per square foot. Their total real estate holdings are worth $12.5 billion at $100 per square foot. BofA’s 2010 annual report says the bank owned or leased 118.7 million square feet domestically and 6.9 million square feet in foreign countries. http://www.bizjournals.com/charlotte/blog/bank_notes/2012/02/bank-of-america-to-sell-hearst-tower.html?ana=yfcpc&page=2

In my own words I feel like corporations should pay for their external costs. It's wrong to tax the dividends twice. This is why I support the idea of bringing a dividend franking system to the US. The current tax system encourages the corporation to make uneconomic (on the whole) yet tax-efficient decisions so as to meet the criteria for various corporate tax breaks. The dividend franking system would discourage some of this as it only pushes up the personal income tax to be paid on the dividend. They could instead make the best (most economic) decision at the corporate level (thus paying more corporate tax in doing so) and get granted the franking credits when paid out in a dividend (thus a low personal tax rate if any tax due at all). I'm also an advocate on not taxing nominal capital gains, but rather only taxing "real" capital gains. Well, I feel that payroll taxes are part of their external costs. Part of the external costs of being a corporate citizen in a civil society.

FERGUSON: Well, certainly Japan is a terrible warning to the United States, that you can get into an awful equilibrium of very, very low growth and an inexorably growing debt mountain. And that is not where the U.S. wants to go. There are various forces in [the United States'] favor. It's socially not Japan. It's demographically not Japan. And I sense also that the Fed is very determined not to be the Bank of Japan. Ben Bernanke's most recent comments and actions tell you that they are going to do whatever they can to avoid the deflation or zero inflation story. The U.K. is actually ahead here. If the game is to quietly give bondholders negative returns without awakening public fears of inflation, the U.K. is doing pretty well. We clearly are more likely in the U.S. to go down the U.K. route than the Japan route.

Another thing to consider, for what it's worth, is that in the event of an emergency, my understanding is that 911 cannot tell where you are from a mobile phone or computer based phone. With a landline, on the other hand, in the event of an emergency all you would need to do is call 911 and let the phone drop (if you couldn't speak for example). They are supposed to immediately dispatch help even if no one is on the other end. I've had Vonage VOIP for a few years now -- it's registered to my address so in a 911 situation our address is identified. That's not a concern for us. The concern we have is that when our cable internet service is down we can't call to complain. We live near some hills on an island just across the water from near Seattle -- our cell phones only work at our house when our internet is working (we have one of those internet based AT&T cell phone repeaters). We are otherwise out of cell phone range (although sometimes it works from the corner of the property). So our cell phones are also of no use to us when the internet goes down. We can send up smoke signals though.

Then it still benefits the corporation. Society as a whole is a human resources mine from the corporation's perspective. A mine operator bears the cost of extracting the valuable nuggets all the same as the cost of extracting the worthless rock. You can't pay only for the costs of extracting the nuggets. I disagree with your analogy. I think it misrepresents the corporations view and neglects the employee's view. Employment is where one entity (a company) agrees to pay another entity (the employee) for services rendered. They agree on a price for those services. Either is open to ending the deal based on the agreement. I also think your analogy (logic) is dangerous in that it opens the door to the corporation being liable to the employee for an indefinite amount of time. That may not have been your intent but that is how some would interpret the analogy. The point is that Microsoft hires the people who have graduated with an education. These are the gold nuggets. There is an expensive system in place the bubbles this gold up to the surface where Microsoft can just bend over and pick it up. I view the corporation as bearing responsibility for funding the expensive system. Do you not? Don't want to shock you but corporations are not responsible for funding education in practice. Education is largely local/state funded via property, sales and personal/business income taxes. Thus if the costs of education are your rationale for the existence of federal corporate taxes it fails logically. I appreciate the need to feed you little tidbits that you can win. It's the entire system cost that matters. There's a whole support network that the federal government pays for. Transportation, defense, entitlements... etc... you can't take them all out and still have a functioning human resources mine. You can't just keep the lights turned on in the mine -- you need to keep the support beams maintained otherwise the mine will collapse. Of course, when the corporation only pays for the nuggets they can always just find their gold in a different mine. So prevention of collapse is not really the responsibility of the corporation. Thus, the development centers in India, China, etc... This happens to some degree regardless, but some of this isn't just a shift to lower cost labor pools -- some of it is rather that they can't find enough of the skilled talent here! Missing for example is the people from the ghetto who have the talent but will not make it through the system. Bernanke is trying to boost consumption, but we don't have a consumption problem. We just don't produce many of the goods that we consume. Bringing income and payroll taxes off of the individual and onto the corporation makes the domestic labor more cost competitive (more domestic production of the goods that we consume).

The thing is, I believe that if the person paying the costs of the entire system (not just the gold nuggets) also has the most political influence (as the corporations do), then we are most likely to get social justice. In other words, the person footing the bill may try to get more gold nuggets wrung out of the system -- perhaps some proactive outreach programs to attract some of the capable and bright children from the ghetto that you describe. Alternatively, if we allow the corporations to only pay for the gold and not for the whole system, then we will not get such change.

My last post makes it clear that I do not miss that point.

Then it still benefits the corporation. Society as a whole is a human resources mine from the corporation's perspective. A mine operator bears the cost of extracting the valuable nuggets all the same as the cost of extracting the worthless rock. You can't pay only for the costs of extracting the nuggets. I disagree with your analogy. I think it misrepresents the corporations view and neglects the employee's view. Employment is where one entity (a company) agrees to pay another entity (the employee) for services rendered. They agree on a price for those services. Either is open to ending the deal based on the agreement. I also think your analogy (logic) is dangerous in that it opens the door to the corporation being liable to the employee for an indefinite amount of time. That may not have been your intent but that is how some would interpret the analogy. The point is that Microsoft hires the people who have graduated with an education. These are the gold nuggets. There is an expensive system in place the bubbles this gold up to the surface where Microsoft can just bend over and pick it up. I view the corporation as bearing responsibility for funding the expensive system. Do you not? I believe you could instead advocate for a Soviet style system where the future Olympians are selected at a very young age. Thus Microsoft could test the young children and individually pay for the education (and social safety net) of only those children. However, those children would then be required to work for Microsoft and have no freedom of choice over their careers. Thus our system may be expensive but it gets the gold nuggets -- and they are probably purer gold given the enormous experiences that shape them along their way (rather than just being farmed under a Soviet style Olympic system). EDIT: Ironically though, I'm probably the "communist" here :D

Then it still benefits the corporation. Society as a whole is a human resources mine from the corporation's perspective. A mine operator bears the cost of extracting the valuable nuggets all the same as the cost of extracting the worthless rock. You can't pay only for the costs of extracting the nuggets. I disagree with your analogy. I think it misrepresents the corporations view and neglects the employee's view. Employment is where one entity (a company) agrees to pay another entity (the employee) for services rendered. They agree on a price for those services. Either is open to ending the deal based on the agreement. I also think your analogy (logic) is dangerous in that it opens the door to the corporation being liable to the employee for an indefinite amount of time. That may not have been your intent but that is how some would interpret the analogy. The point is that Microsoft hires the people who have graduated with an education. These are the gold nuggets. There is an expensive system in place the bubbles this gold up to the surface where Microsoft can just bend over and pick it up. I view the corporation as bearing responsibility for funding the expensive system. Do you not?

Then it still benefits the corporation. Society as a whole is a human resources mine from the corporation's perspective. A mine operator bears the cost of extracting the valuable nuggets all the same as the cost of extracting the worthless rock. You can't pay only for the costs of extracting the nuggets.

That's what the Australians concluded after they tried it out. Then they switched to just using 50% of the income tax rate (to acknowledge that some of the gains are just inflation and not really gains). However I think in today's world of computers "web services" it's not really that difficult to administer. If you E-File you could just submit your numbers for nominal cost basis, and then the IRS's own computer could then adjust the cost basis numbers for you to their real component. You could then review the numbers and if you agree with them submit your tax return. There is no more room for cheating than there is under today's system. The CPI-U is computed every month. Your online brokerage for example could easily show you an additional column for "adjusted cost basis". The IRS server just publishes a web service -- you call the web service from your online application passing it three parameters: 1) nominal cost basis 2) date of purchase 3) date of sale The web service then returns a single result (the adjusted cost basis). Your online tax worksheet could be configured to call the web service. Really slick.

Here is the biggest one: The entitlement programs take the burden of pension costs away from the corporations. Also: Unemployment benefits relieve the corporation of the burden of employing workers while demand is slack.