ERICOPOLY

I found it interesting to see that the financial sector in the S&P500 is less heavily shorted than the average for the index across all sectors. Does this suggest that the market agrees with you? Presumably they'd be heavily shorted if the sentiment was that financial sector is shaky.

Well, I've been fully invested. Missed this opportunity.

As Paul Tudor Jones once said, "The obvious trade is obviously wrong." I must be the only guy on this thread to make any money so far on MSFT ;D It could always go the other way, we'll see what happens. This seems like it might turn into one of those divergent problems in which the structure of the problem itself almost guarantees that most people will not be able to solve it correctly. As a friend of mine once pointed out, that's why certain problems, such as education, are very hard for democracies to solve, they are divergent problems by their very nature. Are you now the only one on the thread to be losing in MSFT? Just kidding.

In four trading days it has gone from 80 cents to 1.96 and back down to low of 1.03 today.

I'll give it a few days to adjust the price post settlement, then sell what I've recently added. Not sure about the rest of it.

Hopefully soon. Would like to make the big gain and then buy other cheap things with the proceeds. It's getting to the point where I look for news every day. This week's news makes it look like the ice is thawing.

That 6 years of overhang again assumes they all go back to apartments. As jobs come back (if they do), some of these people won't need to be in foreclosure in the first place or will be able to rent an SFH again. Family with two income earners can't afford the payments today with one laid off, but when he gets his job back in construction related industry they can once again suddenly afford it. Somebody has to build those 6 million apartments (and all the rest of the jobs that construction drags along with it). I don't see why again a person losing a house with a $2,500 monthly mortgage is assumed to not be able to rent it from the next owner for $1,250. You are tossing all of these people into the apartment pile. They have children, they have furniture, they believe they need more space and quite likely can afford more space if monthly payments cut in half.

I think this is where you come to the different conclusion from myself and Buffett. I don't see a reason why a strategic defaulter is going to want to move in with Mom/Dad, or go to an apartment. This is merely somebody who bought too high and doesn't want to pay off the mortgage. They haven't said "I hate all this space, I want to put all of my furniture filling this huge house into a cramped apartment". You're putting those words in their mouths and I can't see why. They can just rent a SFR and they achieve their goal of strategic defaulting. Same goes for people who bought at the top and cannot afford the mortgage -- rents on SFRs instead of their mortgage payments will likely cut their monthly cash outlay in half, so why this belief that they would prefer the cramped space of an apartment all of a sudden? Lastly, there aren't 8 or 9 million vacant apartments. This is an affordability issue in addition to a preference issue. The preference is for the larger space... if they can still afford it. These are people who once made the leap from an apartment to an SFR... presumably because of the benefits relative to an apartment. Why do you have the assumption in place that most of these 8 million can't even afford rent on an SFR? Do you have data on that? I think we can safely assume that SFR rents are significantly cheaper than their troubled mortgages from a current cash flow perspective... to argue that it won't provide enough relief we need data showing that.

Also... Every now and then an old house is torn down for various reasons. Perhaps the house was tiny and outdated and the buyer bought it for the large lot in a good location. Or a developer bought it for redevelopment.

1) They all still need a housing unit to live in. It sort of doesn't matter whether or not they are the owner. It's still a household. 2) Housing overhang figure is being magnified by the jobs environment. You are not making allowance for any jobs recovery. So I think you're just counting the wrong thing. Instead, I believe it just makes more sense to look at the housing formation growth of the last 10 years versus the amount of housing units built (less those destroyed). That's the only true overhang. This other stuff is noisy distortion coming from jobs picture and people who cannot afford their payments (but they can afford to rent, so they will still occupy a unit of housing stock). The pipeline of people who either are forced to sell or simply wish to default strategically -- this may push housing prices down, but that's completely irrelevant when it comes to how many households were formed in the past 10 years versus how many net housing units were built. A person who wishes to strategically default isn't planning on living in a tent.

300,000 homes destroyed per year in addition to 1.2m average new household creation (1.2m is what I read somewhere). So that would be 1.5m home demand versus just 300,000 currently being built per year. 1.2m per year deficit takes only 7 years to blow through "8 or 9 million home overhang", less that 1/2 of the estimated 16 to 18 years. Where did the number "8 or 9 million" come from? During the housing bubble there were never that many homes built in excess of demand. Is this based on a forecast that jobs never come back and/or get worse?

I have sold today at 2x cost. The only problem I had with them was the 13% interest rate the controlling family was getting on those loans. Thanks Harry!

Regarding the CDS, I presume a lot of it was underwritten before 2009, even 2008. Should they kick the can down the road another 3 years, a lot of those contracts will be expired, therefore reducing a good deal of risk to systemically important institutions (underwriters of the CDS). I can't see why facing the "inevitable" default today is more desirable than waiting a few years; with all the unknowns from the CDS why take the hit today, when in a couple more years of CDS runoff the risk should be reduced?

Rents will climb as well (taxes are ultimately passed on to renters), so it may not be as steep as that.

You'd want to put her in charge of an extremely highly leveraged fund.

DELL has $2.20 per share non-GAAP forward earnings if the latest quarterly numbers are to be maintained. That's I think where DELL is much cheaper than MSFT and CSCO. Time will tell.

Their performance vs S&P 500: 15 year +2.2% 10 year +2.25% 5 year -1.01% 3 year -2.31% 1 year -2.42%

I always thought they could have done something like just sell the rest of NB or ORH.

Way to channel your inner crotchety old man! Why settle on Pocket Computer? I think Miniature Mainframe, or Smarter Dumb Terminal, or even Super-Advanced Difference Engine would be just as accurate. Mine is a streaming media server (iPhone streaming iTunes via bluetooth to my Pioneer Elite receiver). I probably did get the "pocket computer" name from the days when we were impressed by a "pocket" calculator. Ericopoly Why stream with bluetooth? Why not get an airport express and a toslink cable? This is my area, it will sound a lot better. Heck, you can even get an apple TV, hook up HDMI or Optical and with the touch of a button stream to the pioneer without having to turn on the TV, but get the free option of using apple TVs services as well. DW Bluetooth is already there, and it sounds "good". My hearing isn't the best in the world though, and I'd have to hear it side by side with the other to see if I can really tell the difference. Perhaps I'd have to upgrade my amplifier and speakers to really know the difference. Thanks for the suggestions. Will now have to go and read about airport express and toslink.

Way to channel your inner crotchety old man! Why settle on Pocket Computer? I think Miniature Mainframe, or Smarter Dumb Terminal, or even Super-Advanced Difference Engine would be just as accurate. Mine is a streaming media server (iPhone streaming iTunes via bluetooth to my Pioneer Elite receiver). I probably did get the "pocket computer" name from the days when we were impressed by a "pocket" calculator.

They need to stop calling these things "smartphones". They're no more "phone" than "camera", or many other things. Maybe they are "smartbrowsers", or just truly "pocket computers".

Wikipedia suggests that some countries have a restriction on how much Treasury Stock can be owned by the company, as a % of total capitalization -- any idea if the US has such a restriction?: http://en.wikipedia.org/wiki/Treasury_stock#Limitations_of_treasury_stock That restriction would limit this idea of buying back shares on foreign exchange but not cancelling them.

I assumed that would be treated as a taxable repatriation. Otherwise, why aren't they all doing this? Company can then issue shares on the US exchange. Buy back on one, issue on the other. Repatriated cash. No, this must be taxable, that's too much of a scam. My guess is that they'd have to hold the shares in the subsidiary and not cancel them. My reaction, perhaps based on ignorance, is: "so what"? What extra benefit does cancellation bring? None of this stops them from issuing new shares if they simply want the cash moved to the US. The end result is that the non-company-subsidiary shareholders collectively control the company and divide the value of the company amongst themselves -- whether or not the subsidiary shares were cancelled.

I assumed that would be treated as a taxable repatriation. Otherwise, why aren't they all doing this? Company can then issue shares on the US exchange. Buy back on one, issue on the other. Repatriated cash. No, this must be taxable, that's too much of a scam.

Thanks! Care to share your views on relative merits of investing in multifamily properties vs single family? Better yields, better financing terms, tenant diversification, economies of scale in mgmt? Yes, better yields. Yes, tenant diversification. Not sure yet about financing terms. Ideally, best loan would be 0% down negative amortization, but what a pipe dream that is. FannieMae offers conforming 30 yr fixed loan if less than 4 unit property. Not sure about economies of scale in mgmt. I will be going with a property manager though.