ERICOPOLY

Regarding the homicides of the police officers and young black men (mentioned in that link you posted)... Probably what's driving that is the legal code that we have, more than the guns. The legal code says that you can bring a contract dispute to a courtroom if the underlying activity is legal. So in other words, if you are a black market businessman the courts will not help you resolve a contract dispute. So you rely on enforcing the contract yourself. The problem is that we have a huge underground economy -- therefore, a lot of "do it yourself" contract enforcement. Legalizing the underground activity would probably resolve the violence -- the businessmen could instead properly bring their disputes into a court of law.

West Virginia Custody Battle An old mountaineer and his young ex-wife were fighting over custody of their children. The mother protested that since she brought her kids into this world, she should retain custody of them. The judge asked the old mountaineer for his side of the story. After a long moment of silence, the mountaineer rose from his chair and asked, "Judge, when I put a quarter in a candy machine and a candy bar comes out, does it belong to me or the machine?"

A string walks into a bar with a few friends and orders a beer. The bartender says, "I'm sorry, but we don't serve strings here." The string goes back to his table. He ties himself in a loop and messes up the top of his hair. He walks back up to the bar and orders a beer. The bartender squints at him and says, "Hey, aren't you a string?" The string says, "Nope, I'm a frayed knot."

It's kind of like a form of financing -- like an installment plan of sorts. Pay less money upfront and get less functionality. After a few more paychecks you fork over more money and get the full version. That's actually better. I wish I could buy a house that way. Imagine buying a 4 bedroom house for something like a 25% price discount, with bedrooms #3 and #4 locked off by the builder. You can't get the keys to unlock those rooms until you pay the final 1/4 of the house price. That would work great because initially you buy the house before you have kids, but you don't have to buy the 3rd and 4th bedrooms until you actually want them. But they are there the whole time -- you just can't use them. I wish the world worked like that!

The Microsoft Windows CDs always had the full set of windows files on them. The difference was in the Product Key -- it told setup which version to install. So you pay for "Home Edition" and that's all you get installed -- even though the "Professional" version is also sitting on that disk. History shows that Microsoft made a lot of money doing this. Didn't Bausch & Lomb once get caught into a scandal because they were selling 90 days contact lenses that were identical to the 30 days ones? It seems that in people's mind there is a distinction between software and physical goods... it seems acceptable for software but not so much for hardware. I would put a car in the later case... BeerBaron Making things worse for the customers would be worse for Tesla too. Tesla is doing what is best for the customer. You guys are essentially proposing that the "less power" battery actually has fewer cells in it for the same $$$ spent by the customer. Okay, let's say you win and they go ahead and actually ship the inferior battery that they are paying for. Then when it's time to upgrade, it's not just a product key flip -- they've got to physically change the battery pack!!! That will cost the customer more money. They'd have to buy the bigger battery and find somebody to purchase the old one. I'm pretty sure that the upgrade scenario would be worse for the customer who changes his mind. Tesla is doing him a favor here by making the upgrade convenient/cheap.

The Microsoft Windows CDs always had the full set of windows files on them. The difference was in the Product Key -- it told setup which version to install. So you pay for "Home Edition" and that's all you get installed -- even though the "Professional" version is also sitting on that disk. History shows that Microsoft made a lot of money doing this.

BNSF was investing in infrastructure to prevent collisions like these in other areas, they just hadn't yet done so in the area of the collision. However it is on their "to do" list per regulations: http://abcnews.go.com/US/wireStory/texas-train-collision-triggers-fireball-word-injuries-40187697 BNSF has pledged to meet a 2018 federal deadline to adopt technology, called positive train control or PTC, that relies on GPS, wireless radio and computers to monitor train positions and automatically slow or stop trains that are in danger of colliding, derailing due to excessive speed or about to enter track where crews are working or that is otherwise off limits. At least three freight railroads have said they'll need an extension to 2020. Faust said in a statement later Tuesday that the West Texas collision is the type of accident PTC can prevent and that BNSF is "aggressively" pursuing it "across our network." "While sections of the track operated by the eastbound train involved in this accident have PTC installed and are being tested, the section of track where the incident occurred will be installed later this year," he said in the statement.

Housing has a much bigger impact in the CPI index than just the rent itself. Go to any region with sky-high housing and everything else is very expensive too. Rents and paychecks feed off of each other. A pool service guy who comes once a week is $75/month in the Sacramento region, but $160/month in Santa Barbara. The pool guy needs somewhere to live, and he has to pay the high rents. So he demands more pay too.

It's not the principle being repaid that people get hung up on (after all, you are just returning the pre-tax money that you borrowed). Whether or not you spent the pre-tax money that you borrowed and are then repaying it with other money is just a shell game argument -- the dollars are fungible. Rather, I think it's the interest payment portion that makes them cringe. They see it as a contribution to the account using after-tax dollars. In that regard, not all loans are made equal. And the 401k loan is at a potential disadvantage here. Compare it to a margin loan, for example. The interest on a margin loan (if used to purchase investments) can be paid pre-tax using the investment income. However if you make the same investment using the proceeds from a 401k loan, you cannot deduct the interest if the plan was funded with elective deferrals (which they generally are).

It's why I think people should contribute post-tax to the 401k if available rather than post-tax to an IRA... that is, if funds are limited such that one can't contribute to both.

Me too. I always maxed out my post-tax 401k contributions. Then when I quit my job, I rolled my 401k plan into two separate accounts at the same time. The pre-tax contributions all went into a Rollover IRA. The post-tax contributions all went into a Roth IRA. Pretty cool. The post-tax 401k contributions were all allowed to go directly to a Roth IRA once I quit the job. It was not considered a "Roth conversion", and as such was not restricted by income limits. It's what some people call a "back door" Roth contribution. Are you legally able to allocate 100% of the pre-tax to the Rollover and 100% of the post-tax to the Roth? The reason I ask is because if you want to do a Roth conversion from a Traditional IRA, I'm pretty sure you can't do just the post-tax portion and ignore the rest. Meaning, you have to do it proportionally from what I know. So if only 10% of your total IRA assets are post-tax, only 10% of every conversion you do can be considered tax free. I may be wrong on this though, or the rules may be different for 401k transfers. But I know for sure this is true with state taxes in NJ; you can't just count your entire Roth conversion as the post-tax contribution amount, has to be proportional. I was a tax resident of Washington state where there is no state income tax. Here you are: https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans Distributions sent to multiple destinations at the same time are treated as a single distribution for allocating pretax and after-tax amounts (Notice 2014-54). This means you can roll over all your pretax amounts to a traditional IRA or retirement plan and all your after-tax amounts to a different destination, such as a Roth IRA.

Me too. I always maxed out my post-tax 401k contributions. Then when I quit my job, I rolled my 401k plan into two separate accounts at the same time. The pre-tax contributions all went into a Rollover IRA. The post-tax contributions all went into a Roth IRA. Pretty cool. The post-tax 401k contributions were all allowed to go directly to a Roth IRA once I quit the job. It was not considered a "Roth conversion", and as such was not restricted by income limits. It's what some people call a "back door" Roth contribution.

The profile pic with the Sinatra dude was Arnold Rothstein: https://www.google.com/#q=arnold+rothstein+biography

Remember that "Cops" episode where they sat behind the desk fielding calls where they refused to investigate? Yeah, I missed it too.

Had my wheels stolen from a car once -- same response. Police never came out to the property. Cost $2,000 to replace them -- mostly at my cost because it was a high-deductible. Encourages vigilante emotions. Gun sales probably benefit from all of this.

Keep It Simple Stupid. FFH in June 2006 was simple. They would not have lost money in 2005 (including KRW losses) were it not for runoff. You had Prem in the 2005 Annual Report in your hand, saying he expected runoff to turn the corner in 2006. You could believe him, or not. He might be off by a little on the runoff turnaround timeline, but to be off enough to sink the company he would need to be an outright liar. And the insurance business itself is pretty boring.

Ok Kenny!: It usually takes me quite a few drinks before playing that one!...but you have to sing-along, otherwise it just doesn't work. He said, "Son, I've made a life Out of readin' people's faces Knowin' what the cards were By the way they held their eyes So if you don't mind me sayin' I can see you're out of aces For a taste of your whiskey I'll give you some advice" I think you could apply that wisdom to Prem's face and Pearson's face.

Regarding FFH vs VRX comments... You've got to know when to hold them and know when to fold them. I think that wraps it up.

Somebody has succeeded in developing a miracle 5 minute turnaround time blood test for detecting malaria: http://money.cnn.com/2016/06/03/technology/malaria-blood-test-device/index.html?iid=surge-toplead-dom

How do you value something when you don't know the future price of a commodity? Take a company that sells diapers -- the price of diapers can't swing up and down really wildly. And a name branded diaper reinforces that price stability with a better profit padding. Isn't that why Buffett doesn't like commodities -- his word for it is "price takers", I think. I've always thought that you value resource related stocks on what can't happen rather than what you think should happen. If everyone is under water, only the low cost guys can survive long enough for the rest of the sector to go out of business. A certain percentage won't be running losses forever. Then you at least get the future macro/cycle optionality for free and you'll eventually reset to the cost curve. It didn't seem like that was the ZINC thesis. I just love the "swimming naked when the tide goes out" analogy. Initially I think Buffett used it with regards to margin leverage, but I think doing risky things in the resource sector applies as well. Given that resource prices can be really volatile just like stock prices. The swimming naked part was the bit about the factory not working. That was risky to take on in a resource stock where the commodity price swings wildly like a tide. In other words, the risks of swimming naked at the lake (no tide) are different risks compared to swimming naked at the ocean's shore (tide). So if you have a stock that's discounted because they can't get their factory up and running, it would be less risky if their other profitable business is selling name branded diapers (you're swimming at the lake, not the ocean). So, perhaps the resource sector is well and truly exciting enough without adding in broken-factory related drama.

How do you value something when you don't know the future price of a commodity? Take a company that sells diapers -- the price of diapers can't swing up and down really wildly. And a name branded diaper reinforces that price stability with a better profit padding. Isn't that why Buffett doesn't like commodities -- his word for it is "price takers", I think.

I wonder when the feature creep will occur... it won't be long before the debate rages on whether cars will be required to brake in school zones, to brake for red lights... to brake for the speed limit! At least on highways where pedestrians aren't an issue, do speed limits even make sense for autonomous vehicles? Reaction times for the autonomous driving systems are much quicker than for human beings. Under the banner of energy conservation they make sense. And noise reduction for the communities alongside the roadway -- tire noise. Energy conservation is a personal choice. Energy costs money, you choose how much of it you wish to buy. You should be able to set your vehicle to stay in the right lane and go slow if you wish to save energy or go faster if you wish to save time. And noise, if you buy a home near a highway you know what you are buying. Again money solves the problem. If you wish to live in a quieter neighborhood then it will cost a little more to buy a home. Or neighbors could get together and have sound barriers installed to help shield their neighborhood from the noise. The 55 MPH speed limit is not personal choice, and it was created to save energy.

huh???? The purpose of leverage is to increase your balance sheet so you can make more income. But borrowing from your 401k is moving it from one place in your balance sheet to another? And of course there is the double taxation issue. The only advantage to borrowing from 401k is to invest in things you cannot invest in your 401k. But there is just such a high cost. This is not accurate. When you borrow from a 401k, you are not withdrawing money from your account. The 401k plan is issuing you a loan and in-effect, your 401k holdings are the collateral. Also of note, some plans do not allow for loans. It's up to the business owner when they establish the plan. I need to make a correction here. After reading more on this topic, a 401k loan does not provide financial leverage as I previously implied. Randomep was correct in that it is in fact moving assets from one spot on the balance sheet to another. However, a loan from a 401k plan does allow you tax free access to up to $50k of your 401k account balance. The "interest" you pay on the loan is paid back to your own account. Some have noted that you're repaying your loan with after-tax dollars. This is true, but the loan is received free of taxes to begin with so its a wash. The "interest" you pay yourself would be paid back with after-tax dollars however. My apologies for the mistatement. A 401k loan can be a cheap way to get cash, but it does not provide financial leverage as such. Although I did not do this (wish I had), when your 401K is weighed down to mediocrity by the investment choices therein, taking out 50K and immediately investing outside would've worked out great. I know this is hindsight but how I know this would've been the case is that much of my net worth gains have come from rolling over my 401k's into IRA's, for me 401k and mediocrity go together. I have rolled over about 5 times in the past 15 years. Keep joking with my wife to quit or take a break from her job (get rehired back, they'd do so in heartbeat) so her 401K could have wings attached to it. Too bad the bastids cap off loans at 50K and make you pay it back in 60 months. It's a 2 month payback requirement if you lose your job. It's only 60 months if you remain employed. They will kick you when you are down if they have a legal right to do so.

It seems relatively likely that the two manufacturing executives were forced out. After the Model S, there were problems with suppliers. They were given a second chance. Then with the Model X, there are problems again with the suppliers and those problems are holding up Model X production right now. So the executives are shown the door and new public expectations are being set (500,000 in 2018) so it's well understood to the replacements what will be expected of them.

Good point. Even Fairfax with their outstanding investment track record, only added 1.38% by my calculations over the entire period from 1986 to 2014, excluding the CDS gains. Their portfolio as a whole (stock, bonds, cash) grew at 6.12% compared to 4.74% if invested in an appropriate index. Vinod 6.12% is 29% higher than 4.74%. It's not 100% higher, but 29% is not meaningless. It may be that they can't repeat it going forward, or perhaps they will do worse than markets going forward, but so far it appears to have been worth it. It is unclear going forward that their underwriting would improve if their float were invested in index funds. Fire HWIC and the underwriting gets way better as a result? I thought the people involved in underwriting were different from the HWIC people, so how does that work?