wescobrk Posted November 30, 2013 Share Posted November 30, 2013 It appears at age 98 he hoarded the capital and distributed a minute percentage each year of his net worth. He was a great man but that looks odd to me. Link to comment Share on other sites More sharing options...
Guest wellmont Posted November 30, 2013 Share Posted November 30, 2013 After looking at the article again it looks l like he gave a very small percentage of net worth while alive (536k) and 187 million after he passed. He gave away less than 1 percent while alive? Ill play devil's advocate and ask the board if that was a wise thing to do? Why not give at least half in your old age to see the benefits? this one's easy. because like buffett, he's a great compounder of money. so the more money he has to compound the better off society, which will continue to have massive issues to deal with, is going to be when he's done compounding. To illustrate, what if Buffett had given away half his capital at age 45? Would society be better off? Or is it better off that he waited till he was 75? I think the answer is quite obvious. Link to comment Share on other sites More sharing options...
collegeinvestor Posted November 30, 2013 Share Posted November 30, 2013 Has anyone found out his investment strategy? His holdings? Thanks. Link to comment Share on other sites More sharing options...
Palantir Posted November 30, 2013 Share Posted November 30, 2013 How does society benefit from people who are compounding capital in secondary markets? ::) Investment is just reallocation of wealth. Link to comment Share on other sites More sharing options...
wescobrk Posted November 30, 2013 Share Posted November 30, 2013 "this one's easy. because like buffett, he's a great compounder of money. so the more money he has to compound the better off society, which will continue to have massive issues to deal with, is going to be when he's done compounding. To illustrate, what if Buffett had given away half his capital at age 45? Would society be better off? Or is it better off that he waited till he was 75? I think the answer is quite obvious." True, but Buffett announced at age 76 he started to give a material amount away each year. If you want to compare to Buffett, at age 98 to have 99 percent and distributed less than 1, even compared to Buffett, that is extreme. Link to comment Share on other sites More sharing options...
sswan11 Posted November 30, 2013 Share Posted November 30, 2013 How does society benefit from people who are compounding capital in secondary markets? ::) Investment is just reallocation of wealth? I believe the economics theory answer is that resources are allocated to more efficient users of capital (ie better businesses), thus making the economy as a whole more efficient and the economic "pie" larger. Link to comment Share on other sites More sharing options...
Palantir Posted December 1, 2013 Share Posted December 1, 2013 So tell me, I bought RHT, how did society benefit? Society benefits from capital formation in primary markets. Secondary markets only support the former! Link to comment Share on other sites More sharing options...
LC Posted December 1, 2013 Share Posted December 1, 2013 Stock price influences compensation agreements, M&A activity, etc. Lets say the world just sold every stock tomorrow. Heck, I could go around buying ownership stakes in companies and run them into the ground if I wanted. No more fertilizer, energy production, etc. Link to comment Share on other sites More sharing options...
zippy1 Posted December 1, 2013 Share Posted December 1, 2013 Stock price influences compensation agreements, M&A activity, etc. Lets say the world just sold every stock tomorrow. Heck, I could go around buying ownership stakes in companies and run them into the ground if I wanted. No more fertilizer, energy production, etc. well said! Link to comment Share on other sites More sharing options...
Palantir Posted December 1, 2013 Share Posted December 1, 2013 Stock price influences compensation agreements, M&A activity, etc. Lets say the world just sold every stock tomorrow. Heck, I could go around buying ownership stakes in companies and run them into the ground if I wanted. No more fertilizer, energy production, etc. Secondary markets support primary markets as a whole, but that doesn't mean that a great capital allocator is adding societal value! They are very different statements. Link to comment Share on other sites More sharing options...
twacowfca Posted December 1, 2013 Share Posted December 1, 2013 Stock price influences compensation agreements, M&A activity, etc. Lets say the world just sold every stock tomorrow. Heck, I could go around buying ownership stakes in companies and run them into the ground if I wanted. No more fertilizer, energy production, etc. Secondary markets support primary markets as a whole, but that doesn't mean that a great capital allocator is adding societal value! They are very different statements. Strongly disagree. Success in the secondary markets provides the true north signal for those in the primary markets to align their interests with what benefits society most. Even bubbles may play a role in jump starting the economy to focus on something that is an emense benefit to society. :) Link to comment Share on other sites More sharing options...
zippy1 Posted December 1, 2013 Share Posted December 1, 2013 Stock price influences compensation agreements, M&A activity, etc. Lets say the world just sold every stock tomorrow. Heck, I could go around buying ownership stakes in companies and run them into the ground if I wanted. No more fertilizer, energy production, etc. Secondary markets support primary markets as a whole, but that doesn't mean that a great capital allocator is adding societal value! They are very different statements. Strongly disagree. Success in the secondary markets provides the true north signal for those in the primary markets to align their interests with what benefits society most. Even bubbles may play a role in jump starting the economy to focus on something that is an emense benefit to society. :) I couldn't say it better. Link to comment Share on other sites More sharing options...
Packer16 Posted December 1, 2013 Share Posted December 1, 2013 Secondarily great capital allocators and value investors have a tendency to live below their means and want their children to live modestly also. This leads to excess capital which can be provided to benevolent purposes. This is a more direct influence of secondary market capital allocation on the world. Packer Link to comment Share on other sites More sharing options...
Uccmal Posted December 1, 2013 Share Posted December 1, 2013 I am going to give away all my money to create foundations for neutron bomb development, and biological weapons enhancement..... yaa, just kidding. Lets rephrase the question. How many of those who have commented on this thread given away 1% of their wealth this year? I know I haven't. Please dont answer that question. It is just food for thought. How about 10% of your time to some cause that doesn't pay you anything? I have likely done better in this department. At what personal dollar value do you think you can start giving away 1% per year. 1 million = 10000 10 million = 100000 etc. We all know how compounding works. The last 10 or 15 years the sheer dollar value of his wealth probably compounded faster than he could conceive, especially in his 80s and beyond. Link to comment Share on other sites More sharing options...
racemize Posted December 1, 2013 Share Posted December 1, 2013 Lets rephrase the question. How many of those who have commented on this thread given away 1% of their wealth this year? I know I haven't. Please dont answer that question. It is just food for thought. How about 10% of your time to some cause that doesn't pay you anything? I have likely done better in this department. Maybe I'm not understanding, but if you are going to give away 100% anyway, does it matter if you compounded it all and then gave it away or gave away your whole life? Aren't we just choosing who benefits--people now or people later? Is there a big difference between now-people and later-people? I'm not sure I particularly care which time period of people I'm helping, but perhaps there is some reason for preference for now-people. I guess you could argue affecting people now is better since they can influence more people, but isn't that similar to the lost-compounding of money that you have given away? (In other words, does the helping of people now help more over the long term than waiting and giving more away? That seems very hard to answer, and would dramatically depend on what you were giving to.) Link to comment Share on other sites More sharing options...
Packer16 Posted December 1, 2013 Share Posted December 1, 2013 The way I look at is to give away 10% of the increase in net worth plus salary per year to charitable causes. I have been blessed with these gains (which to some extent are provided by events beyond my control) at minimum I can provide 10% to others. Depending upon your salary you can give more or less. You can start with a small amount. The one thing I have noticed is I like to give to causes that help folks today and provide a hand-up like scholarships for kids that go to my kids school and relief work. Packer Link to comment Share on other sites More sharing options...
rkbabang Posted December 1, 2013 Share Posted December 1, 2013 Lets rephrase the question. How many of those who have commented on this thread given away 1% of their wealth this year? I know I haven't. Please dont answer that question. It is just food for thought. How about 10% of your time to some cause that doesn't pay you anything? I have likely done better in this department. Maybe I'm not understanding, but if you are going to give away 100% anyway, does it matter if you compounded it all and then gave it away or gave away your whole life? Aren't we just choosing who benefits--people now or people later? Is there a big difference between now-people and later-people? I'm not sure I particularly care which time period of people I'm helping, but perhaps there is some reason for preference for now-people. I guess you could argue affecting people now is better since they can influence more people, but isn't that similar to the lost-compounding of money that you have given away? (In other words, does the helping of people now help more over the long term than waiting and giving more away? That seems very hard to answer, and would dramatically depend on what you were giving to.) I think it is much better to give $190M away when you are 98 than it is to give $50M away when you are 75. Link to comment Share on other sites More sharing options...
wachtwoord Posted December 1, 2013 Share Posted December 1, 2013 Lets rephrase the question. How many of those who have commented on this thread given away 1% of their wealth this year? I know I haven't. Please dont answer that question. It is just food for thought. How about 10% of your time to some cause that doesn't pay you anything? I have likely done better in this department. Maybe I'm not understanding, but if you are going to give away 100% anyway, does it matter if you compounded it all and then gave it away or gave away your whole life? Aren't we just choosing who benefits--people now or people later? Is there a big difference between now-people and later-people? I'm not sure I particularly care which time period of people I'm helping, but perhaps there is some reason for preference for now-people. I guess you could argue affecting people now is better since they can influence more people, but isn't that similar to the lost-compounding of money that you have given away? (In other words, does the helping of people now help more over the long term than waiting and giving more away? That seems very hard to answer, and would dramatically depend on what you were giving to.) I think it is much better to give $190M away when you are 98 than it is to give $50M away when you are 75. That's only 6% annually. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted December 2, 2013 Share Posted December 2, 2013 You can also enjoy your money in another way while helping others. You can employ a housekeeper, a person to rub your wife's feet, a cook and wranglers for a pack horse trip, a guide to take your family whitewater rafting, dog groomer, car detailing, private tennis lessons, private surf lessons, fully crewed charter vacation, commission an artist to sketch your children, five star dining... etc... etc... Even if you "waste" your money in such a manner, you are doing good. People take home a paycheck. You are redistributing your wealth to working people. Link to comment Share on other sites More sharing options...
stahleyp Posted December 2, 2013 Share Posted December 2, 2013 You can also enjoy your money in another way while helping others. You can employ a housekeeper, a person to rub your wife's feet, a cook and wranglers for a pack horse trip, a guide to take your family whitewater rafting, dog groomer, car detailing, private tennis lessons, private surf lessons, fully crewed charter vacation, commission an artist to sketch your children, five star dining... etc... etc... Even if you "waste" your money in such a manner, you are doing good. People take home a paycheck. You are redistributing your wealth to working people. Just a taste of the life if you're Eric. ;) Link to comment Share on other sites More sharing options...
Crip1 Posted December 2, 2013 Share Posted December 2, 2013 This has been interesting to read, thanks to all who have commented to date. The story itself, of an individual who seemingly lived a VERY modest lifestyle when compared to his substantial net worth, is intriguing to say the least. In a capitalist society, it is much more normal to spend accumulated wealth on material things (homes, cars, clothes, travel, etc.) than to live a more “simple” life. The abnormality of this gentleman’s existence is what gets everyone going as human-kind does show interest to abnormalities (Think PT Barnum’s Freak Shows). It would be interesting to be able to ask him why he did this as opposed to speculation but, speculation is all we have left. While the story itself is interesting, something else is equally interesting to me. Here is a guy who gave, by any measurement, a boat-load of money to charity…and several board members choose to question his actions. Perhaps he should have been donating monies throughout his life? Perhaps he should have “enjoyed” his money more? After reading the messages to date I can conclude one thing. Specifically…he may have kept his fortune a secret in order to avoid receipt of unsolicited advice from others who were NOT as successful in capital allocation or who were less inclined to donate monies to charity. Lived 98 years, was thoroughly successful (at least financially) and seemingly happy with his more modest existence (as, if he was not, he could certainly have lived a far less modest existence) and left a substantial legacy for the fruits of his labors to do well after he leaves this earth. Maybe he did have it all figured out. -Crip Link to comment Share on other sites More sharing options...
shalab Posted December 2, 2013 Share Posted December 2, 2013 Ericopoly said: Even if you "waste" your money in such a manner, you are doing good. People take home a paycheck. You are redistributing your wealth to working people. This is absolutely right - buying of goods and services in the economy causes money to circulate creating jobs and more spending... Link to comment Share on other sites More sharing options...
LC Posted December 2, 2013 Share Posted December 2, 2013 You can also enjoy your money in another way while helping others. You can employ a housekeeper, a person to rub your wife's feet, a cook and wranglers for a pack horse trip, a guide to take your family whitewater rafting, dog groomer, car detailing, private tennis lessons, private surf lessons, fully crewed charter vacation, commission an artist to sketch your children, five star dining... etc... etc... Even if you "waste" your money in such a manner, you are doing good. People take home a paycheck. You are redistributing your wealth to working people. True, but as with everything I think there's a line. Buffett said something to the effect of how he could pay thousands of people to sit and paint portraits of him all day for years on end, but it would take away from productive uses in society: those people could be researching diseases, etc. and so he's not going to do that. Now, do I think a portrait for your family is somehow a bad thing? Of course not, I'm just saying that this type of consumption for consumption's sake type of economic activity goes very quickly from being useful to being harmful to society at large. Link to comment Share on other sites More sharing options...
JBird Posted December 2, 2013 Share Posted December 2, 2013 How does society benefit from people who are compounding capital in secondary markets? ::) Investment is just reallocation of wealth. One of the great benefits for society comes when a donation is made to further a cause that benefits society-- one that's not already being sufficiently funded. For example, Polio vaccination. Before you wail about which causes are beneficial to society, let's be clear-- that is a hugely gray area. And it's not the point. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted December 2, 2013 Share Posted December 2, 2013 True, but as with everything I think there's a line. Buffett said something to the effect of how he could pay thousands of people to sit and paint portraits of him all day for years on end, but it would take away from productive uses in society: those people could be researching diseases, etc. and so he's not going to do that. Now if he said that, I think it's a silly comment. He knows that artists are artists, and scientists are scientists. Link to comment Share on other sites More sharing options...
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