Liberty

The Fed chief is nominated by the sitting president - in this case, Bernanke's term ends in Jan 2014. He was actually initially nominated by GW Bush, and Obama re-nominated him. Alan Greenspan actually served for 18 years prior to Bernanke, but the punditry speculates that Bernanke would be replaced with a R/R administration. That's true. I guess I was thinking more about addressing entitlements and dealing with the budget/taxes/etc...

That would make sense. Here in Canada we don't have that long-term/short-term capital gain stuff, so it's not something that comes to mind easily, even though I knew it applied in the US. Thanks for reminding me of it Sullivcd.

Maybe I'm just dense - sorry for asking you to explain stuff twice in a row - but what do you mean here "I've been selling it out as my positions turn long. Next long lots are November and December."?

Isn't the whole debate on "what woud obama/romney do?" a bit off, though, since the president has only limited powers when it comes to that stuff and congress has more impact in that area?

http://www.anandtech.com/show/6292/iphone-5-a6-not-a15-custom-core

Gotcha. Out of curiosity, selling because it worked, or because it didn't?

+2

I'm not sure I understand what you mean here. "Big sell"?

100% equities That's it :D I always wish I kept more cash, but I run a very concentrated portfolio, and when one of the few businesses I like enough to buy gets really cheap, I can't resist piling on. Guess we all have our weaknesses...

I've read it. It is certainly interesting to extrapolate out non-intuitive exponential curves for technological progress, though I'm not quite sure that all of Kurzweil's predictions will take place in that timeframe since many depend on software/math breakthroughs and not just size-of-components and power-of-computation advances. But certainly thought-provoking stuff worth reading, and even if a small fraction of what he predicts happens anytime soon, the world will be very different.

Yeah, I don't think the "bet it all" should be taken literally - and I kinda doubt that even Rothstein did that - but it goes back to Munger/Buffett and how, when you are sure enough something is a really great opportunity and you've really done your homework, don't put 5% on it... Great opportunities don't come by everyday, so get the most of them. At some point I think Buffett had 75% in GEICO...

http://arstechnica.com/information-technology/2012/09/intel-researchers-put-wifi-inside-the-processor-that-is/

:) Mostly, I completely endorse the process. However, Roshtein died young most probably killed for debts after a cold gambling streak. Also, he will be forever associated with the Black Sox scandal. You have to know when to retire. But Eric's last comment is not a comment from a compulsive gambler. http://en.wikipedia.org/wiki/Arnold_Rothstein I took it to be a compliment based on that scene you linked to rather than to the whole life of Rothstein; I like how he talks about waiting for the right moment, and when the odds are heavily in your favor, to bet big, and when there's 'no play', to just work on improving your skills, marshall your resources, makes plans, etc.. Very Munger and Buffett-esque, in a way (except in gambling rather than in investing).

You take it back? I thought it was a compliment. Guess I misunderstood you :)

That's kind of my position too. If they can do it, great for them, but I'll believe it when I see it. Microsoft has been trying to do search in one form or another for as long as Google (since 1998, MSN search, and then all the rebranded successors) and what they've got for their trouble is billions in losses. It's kind of like saying that Facebook can just make a smartphone and compete with Apple. Well, if they can, great for them, but I'll believe it when I see it because it's not quite that easy...

I haven't followed FFH's numbers closely for a while, but I think that you have to look at all those versus the equity number. If you have around 8B of equity for 24B of total assets, this means that a relatively small shock to the total assets could wipe out a large fraction of the equity, and they need to maintain a certain equity ratio for their insurance obligations. Someone else please correct me if I'm wrong.

Thanks for posting it.

Thanks. I'm just trying to apply Buffett's look-through earnings concept to other things (something that others here are also doing -- nothing original about my way of doing things). For example, I look at the leverage (or lack thereof) of the businesses in my portfolio as if it was my own. About FFH, I think Parsad has written very insightful things about their position. I tend to agree with him that their hedged position isn't exactly an 'offensive' position ("we know everything's going to hell and we're going to profit from it like we did in the GFC!") but rather a 'defensive' shift to neutral because of their capital needs as a levered insurance company. They just can't afford big shocks, so I think they're just waiting for either the storm to hit so they can deploy capital at cheaper valuations, or for the clouds to pass so they can go back to doing the kind of investing they've always done without quite as much macro incertitude. I think it's very very smart for them to do, though there are also other ways to be defensive in this environment.

I've been considering buying a few shares of SpaceX when it IPOs just for the principle, not so much as an investment :D I think Tesla has a good chance of succeeding over the long term, but they don't fit my investment criteria on many levels. I'd rather buy one of their cars someday than buy shares 8)

I thought it was mildly-interesting. Not really my style, I guess.. He seems more into short-term macro trading, at least from that interview. I was not familiar with him. But thanks for posting, always good to hear different points of view and approaches.

Not quite, though. There's no such thing as a free lunch. People are still paying for the expensive phones, they're just amortized over a 2-year contract or whatever instead of being paid all upfront. It's a cosmetic difference that, sadly, seems to fool most people into buying stuff they can't afford (same when people fixate on the monthly cost of buying a car or a house rather than the total cost). I know you know this, I just felt like venting a bit about the general state of financial illiteracy in the world :)

Which is why I won't even look at the miners. That business is too hard. I prefer either service companies that sell picks & shovels to miners (I'd rather be the guy selling shovels than the guy buying them, so to speak), or royalty/streaming companies that are basically merchant banks with options on the upside if things go better than planned and downside protection if things go south (they are not responsible for any capex after initial investment).

Eric, sorry if you've addressed this elsewhere, but I'm curious to know what is your view on how all this QE stuff will impact financial institutions (like BAC) that own lots of financial assets denominated in dollars. I have a few guesses, but I'd love your insights.. f.ex. 1) It's bad for BAC because it makes all their fixed rate assets worth less, but the margin of safety in the price is so big that it doesn't matter too much, and if this jolt helps revive animal spirits in the economy, it might be good for BAC on balance. 2) Maybe it's good for BAC in a direct manner. Can they unload some crap from their balance sheet to the federal reserve? 3) ???

They're already doing some very solid hardware encryption: http://support.apple.com/kb/HT4175

I think it makes sense for them. Once they know there's something computationally expensive they want to do a lot of, building specialized hardware to do it will make it much faster and significantly more energy-efficient than a software-only solution, which over a few such tasks can add up to an advantage over the competition. The question is: Can they find enough such tasks that deserve their own piece of silicon to add up to a big enough difference compared to a more vanilla chip? And will the competition start to customize their chips more too? Guess we'll have to wait and see.