ERICOPOLY

Costco both delivered and installed our exercise bike and elliptical machine. Ordered online. We had a problem with the elliptical machine going "clunk, clunk, clunk" after a while -- so Costco arranged to have a person come to our house to repair it. Didn't cost us a penny.

Everyone thinks their family is more dis-functional than others, but what can you make of this data? You've got a couple of years of recession in 2002 and 2003, then a mega recession in 2009. I mean, those three years combined don't even measure up to 2011 which is a year in which many people feel like we're still in a depression! Are we in a normal dataset or is there something a little messed up here? Oh, and our dollar depreciated like crazy during this time frame thereby boosting the earnings of our huge exporting multinationals. Our financial sector is also still taking crazy losses that are suppressing their earnings. The data: 2011-09 86.73 2011-01 80.82 2010-01 56.68 2009-01 13.08 2008-01 68.86 2007-01 91.71 2006-01 80.82 2005-01 70.16 2004-01 60.87 2003-01 35.48 2002-01 31.54 source: http://www.multpl.com/s-p-500-earnings/table

So just don't own that speculative stock Berkshire Hathaway and you'll be fine: (h) in the case of shares, their nature - normally speculative in nature or of a non-dividend type.

I think it will happen again (market at 5x P/E). However because I don't know when it will happen I therefore can't make any use of my forecast. I also think that I'm going to die. But that doesn't help me either because I don't know when. So I can't even get dressed in the morning because I think maybe today is the day that I get killed by a drunk driver.

This is an outstanding paper: http://www.prosper.org.au/wp-content/uploads/2011/07/PhilipSoosBubblingOver1.pdf Myth, What (if anything) do you make of the 7% vacancy rate in Melbourne? See page 21. Nice quote on page 24: The question remains - if there is a housing shortage, why are rents not increasing? There can be two possibilities: either the rental market is fundamentally broken and there is no link between demand, supply and price, or there really isn‟t a housing shortage.

True but in the next two years the recession earnings numbers from 2002 and 2003 expire.

An apartment unit has the same number of appliances as a single family home. 1 dishwasher 1 oven/range 1 refrigerator 1 washer/dryer etc.. etc... Some people have been negatively commenting on how the recent increase in construction has been skewed towards multifamily housing, however there must be some businesses (appliances for example) that will see the same recovery in unit demand as they would from a single family home sale. Perhaps the Sears appliance business.

While the Forbes article may have been excessive, it certainly rhymes with my own experience (and plenty of people I know). You bring up GM there--the funny thing is that GM no longer produces crap, but people still believe it does. It may take the average consumer a long time to learn something, but once learned, it becomes very difficult to break out...and this cuts both positively and negatively. We bought a 2008 GM Suburban. The interior and ride is far more comfortable than that of my wife's BMW. It's a fantastic car.

You stopped short of calling them glass lookers. Maybe they have a stone in a hat that they peer into?

Gotta love forbes... :) This explains very succinctly the difference that makes SHLD different from early years BRK. One guy redeployed the cash from a textile mill in order to buy valuable streams of income, and the other guy just returns the cash to shareholders. The two strategies are very different. Berkshire practically never returns cash, just uses it to diversify the river of profits that's grown to be an Amazon. Eddie always returns the cash.

"We have interviewed the MBIA people up the kazoo and I am convinced they are utterly responsible, diligent underwriters, and the probabilities are they've done a terrific job," Whitman said. http://www.reuters.com/article/2008/03/04/sppage012-n03399090-oisbn-idUSN0339909020080304 Whitman got the monolines completely wrong as exemplified by the ACA Holdings investment. Keep in mind that, unlike Berkowitz, Whitman's thesis actually relied upon Brown and Dunton being strong financial underwriters. Whitman's responses to Ackman never strayed from ad hominem, and he seemed to treat the idea of ratings downgrades as "poor form". I don't remember him speaking up when Brown tried to keep the proceeds of a 2008 equity raise at the holding company, an action that caused the hapless Eric Dinallo to complain, "I thought that we had an understanding." A lot of big ego talking here too: "The analysts -- Ackman and all the others -- have no background in distressed securities," Whitman said. http://www.reuters.com/article/2008/03/04/sppage012-n03399090-oisbn-idUSN0339909020080304

"We have interviewed the MBIA people up the kazoo and I am convinced they are utterly responsible, diligent underwriters, and the probabilities are they've done a terrific job," Whitman said. http://www.reuters.com/article/2008/03/04/sppage012-n03399090-oisbn-idUSN0339909020080304

There's nothing quite like recovering lost ground and feeling like it's a gain.

I was up 8% in the first week of 2011, but I ended up having a terrible year. This year I'm also up 8% again. Hopefully it's not a repeat.

Not as savvy as me, that's pretty funny Al. I may evolve to a 2 trick pony once BAC recovers. Retirement gets a lot easier if you have enough where you're only living on 4-5% even when your portfolio is down by 50%. Buffett can most easily ride out volatility because he'd need to be down 99.99+% before he had to worry about the things the rest of us worry about. Stated differently, you become a better tempered investor as you get richer because the losses are less significant (it's non-essential money that you lose to volatility). Living in Australia will make my life easier because the US markets will be closed when I wake up in the morning, and won't open until after I go to sleep.

Hah! I'm just waiting for some poster who shall remain unnamed to jump all over you for that one!

That was the basis for this article from August where it was said that BofA may face an additional $9b in claims. http://www.bloomberg.com/news/2011-08-18/bofa-mortgage-risk-may-rise-9-billion-if-new-york-judge-sides-with-mbia.html?cmpid=yhoo

That's a sample size of 1, so yes proof is very awkward because you haven't demonstrated whether the failure is caused by the gas canister or the design of the gizmo itself that is faulty. Instead, let's say that your company built 100,000 of these gizmos on a factory line and sold them to customers. About 5% of them exploded. Later, it is determined that gas canisters (from a specific production run) from one of your part suppliers were faulty in such a way that can trigger explosions. You kept good enough records to determine that 90% of the exploded gizmos contained faulty serial number gas canisters from that very same production run. Is that not proof enough? It basically becomes an argument of statistics.

Actually, in Canada we can use the capital losses against past years capital gains at the same rate of taxation. I don't know if that is the same in the US for individuals. We can't, unfortunately. You can make a big fortune one year, pay a lot of tax, lose it the next and you are left with nothing -> the government keeps your tax even though you have no gain. You can carry the tax loss forward to future years but you may never use it up if you've lost a fortune and are broke. -25%.

It is sort of fun to go back and read some of CW's comments from October 2010. He say it's not just BAC, but "all lenders" that are in a crisis. Then he says the largest US banks are insolvent!: Mounting cash flow stress on all lenders is reaching crisis levels. Non-payment by borrowers and mounting foreclosure backlogs are creating the conditions for the collapse of some of the largest U.S. banks in 2011. The largest US banks remain insolvent and must continue to shrink. Failure by the Obama Administration to restructure the largest banks during the 2007-2009 period only means that this process is going to occur over next three to five years -- whether we like it or not. http://www.businessinsider.com/chris-whalens-foreclosure-crisis-2010-10#subprime-losses-have-been-hidden-by-bad-accounting-1

no. CW is basically still upset that usa did not nationalize the banking system back in 2008. Whalen writes that the US economy would improve if BAC were to be restructured: Economists from Irving Fisher to Henry Kaufman have noted that without credit expansion, the US economy cannot grow. In fact, credit is contracting with public confidence in America’s banks. The solution to the financial crisis affecting BAC and the US economic malaise are the same, namely an orderly, immediate public process of restructuring for the top banks and housing agencies. http://blogs.reuters.com/christopher-whalen/2011/08/09/uncertainty-and-indecision-threaten-bank-america-and-global-markets/ The trouble I see with his thinking is that we already have well capitalized banks with untapped excess lending capacity. So what will adding more untapped capacity solve? Nothing.

Which country of the three has the lowest minimum wage? A) United States B) Canada C) Australia Now, using your theories above, tell me which of the three has the most unemployment? Now predict what would happen if we merely raised it to meet the levels seen in Canada. Here they are: http://en.wikipedia.org/wiki/List_of_minimum_wages_in_Canada

Robert Shiller has commented that tax and spend would be his choice of policy to get GDP growth. He doesn't like borrow and spend. Investors only invest when final demand is there. Cutting taxes for capital gains, for example, won't boost investment if there is no increased final demand to invest in. Raising minimum wage increases final demand because if you are on minimum wage you spend it all. This encourages investment (to meet that higher final demand). When state workers wages are raised you can't make an argument that their wage will leave them unemployed (as is made in the case of minimum wage).

Dick Bove has made a lot of meaningless analysis, like when he says that the banks are trading for less than the cash on their balance sheets. And if you go back over his prior comments, he was saying Citigroup would be at $200 (split adjusted) a share by the end of 2011 or 2012. http://wallstnation.com/bove-citi-1122009 What did Dick do in his career that made people listen to him? He seems to not be a very good bank analyst at all.

I was reading that one of the main political contenders hopes to drop the overseas profits repatriation tax to just 5%. I think doing so will only make overseas operations even more enticing and profitable -- it's just obvious to me. So much for the middle class.