Liberty

Worth reading.

Buffett on the debt and deficit and gold in the latest letter:

I think PATK and BYD.UN are probably two.

https://news.bloomberglaw.com/class-action/visa-mastercard-settlement-up-to-6-24b-gets-prelim-court-nod

Ok, this is getting deep into facepalm territory. Now I remember our past conversations.. it had been long enough that I had forgotten how you were. TTYL

BTW, selling assets isn't what I was suggesting, but others have. I was just saying that mentioning one number alone without the other doesn't provide enough context to know much. ie. Mr Henry has 2.5 million dollars of debt. Is he in trouble? ¯\_(ツ)_/¯ Depends if he's a founder-CEO with $125m in t-bills and an annual income of $10m or if he's a Vancouver janitor. I get it. Wasn't picking on you specifically, just saying even considering the "assets" is pointless if you can't/won't sell them to service the debt. Current/future income is what should be considered for debt service at the national level and nothing else IMO. Fair. btw, I meant the more general term "assets" to mean everything opposed to liabilities (the income streams too), not just inert hard assets. I think interest rates should also be taken into account. Not the same to borrow a trillion at 6% than at 2%, especially if GDP growth is ˜3%.

Attacking me rather than the arguments. Nice. I'm not the one claiming he's a great investor! How am I attacking you? Have you never heard of the availability bias? The drunk under the streetlight is a classic example, and in no way an attack: http://www.rightattitudes.com/2016/02/26/drunkard-search-streetlight-effect/ http://discovermagazine.com/2010/jul-aug/29-why-scientific-studies-often-wrong-streetlight-effect https://www.bounteous.com/insights/2013/03/04/compensating-streetlight-effect-observational-bias-google-analytics/ http://www.rightattitudes.com/blogincludes/images/Streetlight_Effect_or_Drunkard's_Search.jpg

Thanks for implicitely conceding that you have no answer to my points. You're still trying to conflate his net worth (which you're guessing at for that arbitrary period -- what if you started 10 years earlier?) with investment performance. That's not a good way to do things, it doesn't make sense. You're like the drunk who's looking for his car keys under the streetlight. Why are you looking there, did you lose your keys there? No, it's because that's where the light it... You don't have enough data, so rather than admit that you don't know, you're making stuff up with the little data you have even if it's not enough to get the info you want.

What we know is he's a self-made billionaire, that his business never got that big (unlike most other self-made billionaires), that he owns hundreds of millions, if not billions, in common stock, some positions having gone up hundred-folds, at least one being worth 800m. This suggests great investing performance, though we can't know for sure. The only thing that goes against this is you picking an arbitrary starting point, guessing at a number based on a loss, and then equating net worth during that period to stock investing performance when there clearly can be a huge chasm between those; I'm saying that's not a good analysis if you want to know if he's a good investor. Being skeptical is fine. But it has to be based on reasonable doubt. You haven't addressed most of my criticism of your methodology, you just keep repeating the same things, so I'll draw my conclusions that you don't have anything to say about those.

Polishing your clubs for a few months is still better than being tied to this crap company.

If you'll just be repeating what you've already said, you can go re-read what I've already said. You still don't know how much he allocated to equities, how much he took out, when, etc. It's very possible for someone to be an amazing stockpicker beating the market every year with their stock picks, and yet have a net worth that doesn't beat the market for a period (and what you've selected is only a period) because you have a conservative posture and keep your exposure limited (taking money out of equities, putting it into safe things, or into things that aren't investments). That's partly why Buffett is so rich, he stayed all-in for his whole life and almost didn't spend or give anything. Not many people do that (most don't want to or need to, it's just not their game). Also, your starting point for net worth is arbitrary. If you start a little earlier in his life, you'll get much higher CAGRs for his whole net worth (unless you're saying that going from zero to 2.3bn isn't better than the SP500 would've done), because what you're doing is comparing net worth to SP500, rather than equities to equities. If you want to know how good an investor he is, you'd have to know the IRR on his investments. Pretty unfair to say he's potentially mediocre for other factors totally unrelated to investing. ie. Would you say that Buffett's record should be cut by a lot if he had given a billion to charity in his 60s and today was worth tens of billions less? Or would you still need to look at his portfolio and the CAGR there would be the same regardless or the money he took out? You can't equate net worth to investing performance 1:1, which is why I'm still saying we don't know about that part, but what we do know is very impressive.

BTW, selling assets isn't what I was suggesting, but others have. I was just saying that mentioning one number alone without the other doesn't provide enough context to know much. ie. Mr Henry has 2.5 million dollars of debt. Is he in trouble? ¯\_(ツ)_/¯ Depends if he's a founder-CEO with $125m in t-bills and an annual income of $10m or if he's a Vancouver janitor.

Did Bloomberg retract their uncorroborated piece yet?

I'm saying, again, that you don't have enough info here to know. You have to fill in too many points and this makes any conclusion you draw very tenuous, the probability distribution is so wide as to be useless. You don't know how much he had, how much was in equities, how much was withdrawn, when, how allocation fluctuated over time (could be big swings that affect things a lot). You don't know the 50 million drop was out of how much, how long it lasted, etc. A single variable can make a gigantic difference to the performance of the stocks (ie. if you withdraw a big chunk 30 years ago as opposed to recently). I understand wanting to zoom in on the stockpicking and make a judgement call there. But I don't think we have enough to know how good a stock picker he is, except for the fact that he held a 160-bagger to today, and has help some other hundred baggers at least partly to today, which in itself is very impressive to me, showing long-term thinking and conviction in very very very large positions. Personally, even without knowing his CAGR for stocks, I'm still impressed by the facts that we do know: He started with nothing and ended up with around 2.3 billion, with most of that in common stocks. That's enough to impress me, even if there's a lot I don't know. I also find interesting the concept I saw elsewhere in this thread of "he was bailed out by these 3 good investments" or whatever. It's like dumping on a guy who found Berkshire early because he didn't find a dozen more like that. All you need is one plus the ability to hold it all the way up, and he clearly did with Heico. If Heico is almost half his net worth right now, I kind of doubt that he was some closet indexer back in the day and didn't make concentrated bets, but who knows?

I found it here: https://news.ycombinator.com/item?id=19216219

Given that Liberty's signature contains a link to The importance of saying 'oops' I'm sure he'll come round. That's totally not something that is happening in this topic. :P What's my error, except maybe engaging with posters here longer than I should've? btw, that first part that you bold in the Yudkowsky quote doesn't mean what you seem to be implying it means. Will you admit that error?

Oh please. I shared an article, I wasn't defending a thesis for a PhD. I didn't dismiss, I pointed out what I saw as critical flaws in those arguments. You're making this up because the facts aren't in the story. You don't know if he bought in lump sums or over time. And just because it says that he likes to hold things for the long term and not sell doesn't mean that he didn't sell from those positions (and we don't know when or how much). For all we know he put 10% in each and pared them down over time, maybe to give to charity or fund other businesses or buy a wine collection. We don't know. You don't even know if the estimate of his portfolio in the early 80s is correct, and how much of that portfolio was equities and how much was municipal bonds or whatever. As I said, we can't know what his returns are because we don't know how much of his net worth was allocated to equities, how much was cash, real estate, reinvested in his businesses, how much was taken out when (taking out some millions in the early years makes a huge difference to where the net worth ends up decades later, and since you guys calculate the CAGR based on the net worth and not the (unknown) equity portion, we can't judge what his performance as a stockpicker was compared to an index. I'm sitting here saying I don't know, while you guys are saying "it's probably this" but you're basing your math on unrealistic assumptions. It feels more honest to me to say "I don't know"... My point in posting the article was sharing a story that I found interesting. A man starting from nothing with many disadvantages in life became a multi-billionaire, in large part thanks to his ingeniosity and long-term oriented public market investing. Guess that's really controversial.

I agree that it's very hard to overperform, and that a lot of people who pretend to try are actually just gathering AUM and getting rich off fees rather than alpha. But in this case, based on what we know, I don't think it's likely he underperformed on his equity allocation, but we don't know. It's possible he underpferformed on his whole net worth, though, but that's not a fair comparison, as few people have 100% of it invested in equities, don't take anything out (and anything taken out early will have oversized impact on final CAGR because of the nature of compounding growth), don't have cash, real-estate, business reinvestments, art collections, etc.

Tesla vs Jaguar I-Pace and Audi E-Tron efficiency and range test: https://electrek.co/2019/02/21/tesla-efficiency-range-test-audi-e-tron-jaguar-i-pace/ At 120 KPH on the autobahn.

I'm sorry you saw it like that. I know people don't like to be disagreed with, so they usually read those responses in a much worse tone than was intended, but my reply to you was truly just to point out that when I mentioned the assets, I didn't mean selling them off (as you mentioned), but rather that as the debt was growing, the value of the assets (fixed and cashflowing) was growing also.

You were implying that me saying I didn't have enough specific interest in the topic to provide what the other poster demanded was akin to not caring about environmental sustainability and giving up on the future, did you not? It didn't feel like much of a bridge to me. I'm saying that pointing out a common flaw in these debt discussions is the opposite of not caring, it's caring about having a more rational discussion about the issue, but that it also doesn't make me an expert and I won't pretend to be one. It also doesn't mean that I'm in favor of a big debt or that I like the current debt, as I keep repeating. Being against something doesn't mean you should turn a blind eye to bad arguments against it.

Mauboussin's latest paper: https://www.bluemountaincapital.com/wp-content/uploads/2019/02/Who-Is-On-the-Other-Side.pdf

Writeup: https://traviswiedower.com/2019/02/20/netflix-the-powerful-combination-of-scale-and-network-effects/

Golf season is coming, he's got better things to do with his time.

No. You missed my point, which I explicitly appended to my post. 1) Periodically saying "oh, the debt it 10 trillion" "Now it's 15 trillion" "oh, not it's 20 trillion" is lacking context and is meaningless. 2) It's a complex issue with lots of variables. Reducing it to the usual slogans isn't helping the situation, it's muddying it up with lots of noise. I'd rather people talked less about it but in a more informed manner. My trying to better frame the discussion (pointing out that if you're talking about liabilities, you should probably also look at assets) was the opposite of not caring about it, but it also doesn't mean that I'll spend my life doing macroeconomic study and debate. 3) Me saying that I don't know enough about it is just being honest. The rest who spout their strongly held opinions also probably don't know enough about it, they just don't admit it to themselves. There's is a parallel to climate change: Because people can see the weather, they think they can just intuitively understand complex climate systems without studying any of the data or understanding the best working theories and models. It's dunning-kruger. Macroeconomics is very complex and you can't think about it like you think about the finances of a convenience store. People have been predicting doom and gloom about budgets and the debt since probably 1776, and here we are, a little richer than they were. I also personally wish the debt was much lower and people were more responsible and the government wasn't such a shitshow, but that doesn't mean that I can come up with an easy model for how to understand all the ramifications and be sure about where the thresholds are for "too much". So basically, I don't know how bad things are, and the talkings heads on TV and fearmongers selling gold bullion newsletters don't either. But it happens every time I make a nuanced argument. People skim it, and go "oh, so if you're not categorically, knee-jerk against that thing, so you're for it, right?". Blue team, red team... yawn.