Buffett Buffet

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Re: Buffett Buffet

Post by FinEcon » 19 May 2014 23:36

Parvus, that's one of the best posts on taxes I have read in a very long time. FWIW, I'm in the play by the rulebook whilst considering the likelihood of future changes (ie how obvious something too good will end such as the trust fiasco a few years back)
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact

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Re: Buffett Buffet

Post by Flaccidsteele » 20 May 2014 02:50

parvus wrote:It wasn't a joke.
I apologize. I wasn't very clear. I don't know if it was a joke or not (I do not know the individual personally nor have I spoken with him), I took his comment as a joke. Only speaking for myself (and maybe some of the audience members who laughed). And I found it funny. Nothing more. Nothing less. You might know him better. But I definitely can't say if it was/wasn't a joke from the speaker's perspective.
parvus wrote:So what is Cooperman's problem? That Warren Buffett buys and holds and thus escapes annual taxation on imputed capital gains where he does not because he's a frenetic trader? And perhaps ought to pay more since he's trading on the income account? Does he believe that taxation regimes that encourage long-term capital investment are wrong? Does he believe in daily mark-to-market, with a Tobin tax to ensure no evasion.
What is his 'problem'? I don't know. Perhaps one of those. Perhaps Burbank likes to poke fun at individuals who iron their underwear in the morning. Maybe something else.

Maybe Burbank just believes that his quote is funny. And the audience members who laughed confirmed that for him. Maybe he likes riling up individuals who take things literally. I don't know.
parvus wrote:With apologies if this comes across as rude.
No apology necessary. I don't take these things personally.

I found the quote funny. All that dry stuff about tax evasion/planning/avoidance notwithstanding.

PS: The individual who made the comment is actually John Burbank of Passport Capital. And the article states that "John Burbank of Passport Capital joked..." That's where I got the idea that it was a 'joke'. So, since you don't think it's a joke, I guess you know Mr. Burbank a bit better than I do. I can't say. I'm just taking the writer's (Julia La Roche) written word at face value.

Leon Cooperman of Omega Advisors was the interviewer and his comments betrayed him as a Buffett supporter. Just an FYI. So to your question, "So what is Cooperman's problem?" Well, I don't know.

Although I appreciate your lengthy commentary, I'm sure we all strive to avoid letting our passion for tax evasion/planning/avoidance and/or Buffett biases cloud the details too much :wink:

Maybe a joke is just a joke. And maybe some people find some types of jokes funny.
Retired @ 40 after reading Munger/Buffett. I avoided a fragile retirement by avoiding conventional volatility management (diversification, re-balancing and asset-allocation). "Put 90% in a very low-cost S&P 500 index fund...the long-term results will be superior" - Warren Buffett

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Re: Buffett Buffet

Post by parvus » 20 May 2014 23:05

Sorry, Flaccidsteele, I should have referenced Burbank, as well as Cooperman. They both face the same issues, as wealth managers.
"I think he's not going to do it though. I think he's basically a tax evader," Burbank said as audience members laughed and clapped.

"I think there's nobody more sophisticated in the tax code if that's what your saying," Cooperman responded.

"I just hate when he tells you to pay taxes," Burbank added to more cheers and laughs from the crowd.

"That's a different concept. If you're asking me if he's become somewhat hypocritical. I don't want to go there. What I'm saying is his returns after tax are phenomenal. And nobody talks about the fact that he's tax efficient. Political views, etc. I don't want to go there," Cooperman said.
Most people don't understand tax efficiency. Nor the tax code. So it's not just Burbank being disingenuous. It's also Cooperman. Because the U.S. tax code allows you to remain an American company while redomiciling yourself, say, in Britain or Bermuda, for tax purposes. It allows you to buy companies for their tax losses, not necessarily their ongoing businesses. It allows you to transfer profits from the most-taxed to the least-taxed subsidiary. These are not tax evasion, but tax planning, which might later be deemed tax avoidance, or worse, evasion.

You would think that two asset managers would actually understand tax instead of tossing out bon mots. But perhaps it's not in their best interest to disclose the profitability of tax arbitrage?

It certainly wasn't for Nobellist and hedge fund advisor Myron Scholes. He wrote the standard textbook on taxation and business strategy. The textbook he wrote a judge used to find his firm guilty of tax evasion -- thanks to his own cupidity.

Now that's the real joke -- hoisted by his own petard. :rofl:
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Re: Buffett Buffet

Post by JaydoubleU » 10 Jun 2014 21:07

Even Buffet sees the opportunity in "climate change investing"

http://blogs.marketwatch.com/energy-tic ... atest_news

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Re: Buffett Buffet

Post by kcowan » 11 Jun 2014 13:57

This is a piece on how to avoid the adverse effects of inflation:
Porter Stansberry of the Daily Wealth Newsletter wrote:The greatest investor of the last inflationary cycle – Warren Buffett – has never bought a gold stock.

Instead, he has focused on an entirely different group of stocks...

Buffett figured out, long before anyone else I can name, that the best way to profit from inflation wasn't by buying hard assets or the companies that produce them... Instead, you should buy companies that don't require any additional capital at all (or require very little).

Buffett figured out that companies that don't require much in ongoing capital investments can simply raise their prices to combat inflation. Then, they can pay out the excess returns to shareholders. The result? Higher dividends every year. Buffett says these companies have "economic goodwill." I call them "capital efficient.” But it's the same idea.
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Re: Buffett Buffet

Post by George$ » 11 Jun 2014 14:32

kcowan wrote:This is a piece on how to avoid the adverse effects of inflation:
...

Thanks. Enjoyed it - and it made me find the source reference ... A Much Better Inflation Hedge Than Gold Stocks
By Porter Stansberry -- Wednesday, March 27, 2013
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Re: Buffett Buffet

Post by George$ » 11 Jun 2014 15:47

Another article by Porter Stansberry - on Buffett (thanks to kcowan - :wink: )
Porter Stansberry: I've uncovered a shocking secret about Warren Buffett -- From Porter Stansberry in The S&A Digest:
and a bit
One last secret. Bloomberg recently broke the story that Buffett now holds less than 20% of Berkshire’s portfolio in bonds. The allocation had fallen to around 15% by the end of last year. Since 2009 (when I began warning about “The End of America” scenario of soaring inflation and the collapse of the U.S. dollar as the world’s reserve currency), Buffett has always been stridently warning about an imminent collapse in bonds
- any wisdom out there? :shock:

Added later - CAUTION - from - Wikipedia -
Frank Porter Stansberry is an American financial publisher and author. Stansberry founded Stansberry & Associates Investment Research, a private publishing company based in Baltimore, Maryland, in 1999.[1] Porter is the author of the monthly newsletter, Stansberry's Investment Advisory, which covers investments and investment theory in commodities, real estate, and the stock market. Stansberry is also the creator of the 2011 online video and infomercial titled "End of America" (77 min).[2][3] In 2002, the SEC brought a case for securities fraud and a federal judge fined him $1.5 million in 2007.[4]
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Re: Buffett Buffet

Post by Flaccidsteele » 12 Jun 2014 01:32

Buffett has long been bearish on bonds. I would go as far to say that I don't recall reading about when he's been bullish on them?
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Re: Buffett Buffet

Post by FinEcon » 12 Jun 2014 15:27

Flaccidsteele wrote:Buffett has long been bearish on bonds. I would go as far to say that I don't recall reading about when he's been bullish on them?
Many, many occasions. Amazon post dot com crash. Harley Davidson post credit crisis. It's about value, the form of security is less relevant.
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Re: Buffett Buffet

Post by Peculiar_Investor » 13 Nov 2014 08:10

This one could almost be posted to Shopping Bargains because after a quick review of the deal, it sure seems like a bargain for Buffett for Berkshire Hathaway to Acquire the Duracell Battery Business from Procter & Gamble | Business Wire.
press release wrote:Pursuant to the agreement, in exchange for a recapitalized Duracell Company, which will include approximately $1.7 billion in cash at closing, P&G will receive shares of P&G’s common stock currently held by Berkshire Hathaway having a current value of approximately $4.7 billion.
Typical Buffett style deal, convincing P&G to put $1.7B in cash into Duracell and then paying for the company by returning some of his existing PG shares rather than sending them cash. Nice deal for Buffett :lol:
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Re: Buffett Buffet

Post by Taggart » 13 Nov 2014 13:18

Buffett didn't get much of a deal through pushing his shopping cart down the aisles of Tesco.

At least my investments in Empire and Metro from a few years ago haven't required write-offs.......so far.

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Re: Buffett Buffet

Post by Peculiar_Investor » 13 Nov 2014 15:34

The Duracell deal has a big tax angle too, Buffett Set to Save More Than $1 Billion on Taxes in Swap - Bloomberg
Since Buffett’s cost basis on the shares was about $336 million, and corporate capital gains are typically taxed at 35 percent, structuring the deal in this way could save Berkshire more than $1 billion. P&G also stands to reduce its tax liability on the sale.
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Re: Buffett Buffet

Post by Flaccidsteele » 14 Nov 2014 00:42

That's awesome. :thumbsup:
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Re: Buffett Buffet

Post by Flaccidsteele » 05 Feb 2015 00:36

Buffett says that the absolute "last asset" he would want to buy is a long-term government bond.
Retired @ 40 after reading Munger/Buffett. I avoided a fragile retirement by avoiding conventional volatility management (diversification, re-balancing and asset-allocation). "Put 90% in a very low-cost S&P 500 index fund...the long-term results will be superior" - Warren Buffett

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Re: Buffett Buffet

Post by AltaRed » 05 Feb 2015 01:15

Probably correct in the current environment, but like most profound statements he makes, they are mostly meaningless to the average Joe. OTOH, they would have been perfect bought back in 1980 or so.
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Re: Buffett Buffet

Post by scomac » 05 Feb 2015 09:50

I enjoy listening to or watching Warren Buffett interviews. He is the most entertaining man in America when it comes to discussing almost any issue. There's just something endearing about his jovial, folksy and self-effacing style of communicating. But, you have to know how to read what he says. Almost any interview can be distilled down to two or three bullet points and I find they're obvious to spot. His tone changes, he turns away from the camera towards the interviewer and very earnestly makes his point. Then, instantly, he resumes his role of the carnival barker.

The degree of earnestness to joviality is a direct reflection of the times we are in. I recall clearly an interview with Charlie Rose back in the fall of 2008 when humour was almost entirely absent from Warren's responses discussing the then unfolding credit crisis. I knew instantly just how serious the situation was by his tone. It was almost as if Warren was making an appeal to everyday Americas outlining the absolute necessity that their representatives pass the various bailout packages then before congress as we were on the brink!
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Re: Buffett Buffet

Post by Flaccidsteele » 05 Feb 2015 09:58

AltaRed wrote:Probably correct in the current environment, but like most profound statements he makes, they are mostly meaningless to the average Joe. OTOH, they would have been perfect bought back in 1980 or so.
I agree.

Which is one reason the average Joe's financial situation is what it is.

Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable. After all, he's been babbling about financial matters for over 4 decades now.

If Buffett had his own show, the ratings would be dismal. Bloomberg, CNBC, BNN, et al. know how to attract more viewers.
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Re: Buffett Buffet

Post by brucecohen » 05 Feb 2015 13:05

Flaccidsteele wrote:
AltaRed wrote:Probably correct in the current environment, but like most profound statements he makes, they are mostly meaningless to the average Joe. OTOH, they would have been perfect bought back in 1980 or so.
I agree.

Which is one reason the average Joe's financial situation is what it is.

Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable. After all, he's been babbling about financial matters for over 4 decades now.

If Buffett had his own show, the ratings would be dismal. Bloomberg, CNBC, BNN, et al. know how to attract more viewers.
A Warren Buffett investing TV show would have trouble filling its airtime since he has repeatedly advised retail investors to simply buy broad-based index funds. From AP via CNBC:
The stock market index fund Warren Buffett picked in a bet continues to outpace a collection of hedge funds seven years into the 10-year wager.

The latest standings in Buffett's bet with the money managers who own Protege Partners were reported Tuesday by Fortune magazine. Buffett made the bet in 2008 to demonstrate how hefty fees can hurt investment returns.

The Vanguard S&P 500 Admiral index fund Buffett chose is up 63.5 percent since the bet began.

The five funds of hedge funds Protege picked were up roughly 19.6 percent.

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Re: Buffett Buffet

Post by AltaRed » 05 Feb 2015 13:18

Flaccidsteele wrote:Which is one reason the average Joe's financial situation is what it is.

Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable. After all, he's been babbling about financial matters for over 4 decades now.
The average Joe will never have the capacity nor the opportunity nor the luck Warren had in his early years. It is irresponsible to pronounce otherwise. The average Joe cannot go to the universities Warren did, cannot engage nor cross paths with the exceptional people Warren did, nor likely have the luck Warren did. It is unwarranted to unduly criticize the average Joe for his situation and to suggest Joe can replicate that succes by trying to emulate Warren literally.

If so, one should commit their entire investment plan to Berkshire Hathaway shares.

I, too, have heard and read about everything there is to read from and about Warren and have high regard for what he says but his words need to be interpreted for one's own situation and not taken literally.
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Re: Buffett Buffet

Post by kcowan » 05 Feb 2015 16:02

AltaRed wrote:I, too, have heard and read about everything there is to read from and about Warren and have high regard for what he says but his words need to be interpreted for one's own situation and not taken literally.
:thumbsup:

Context is everything!
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Re: Buffett Buffet

Post by Bylo Selhi » 05 Feb 2015 16:13

AltaRed wrote:Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable.
And even then Jack Bogle doesn't like the odds of their successfully emulating Buffett ;)
The average Joe...

...first has to win Buffett's Ovarian Lottery. The odds of doing that aren't very good either.



If you're impatient you can skip ahead to about the 3 minute mark.
I, too, have heard and read about everything there is to read from and about Warren and have high regard for what he says but his words need to be interpreted for one's own situation and not taken literally.
:thumbsup:
Sedulously eschew obfuscatory hyperverbosity and prolixity.

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Re: Buffett Buffet

Post by Flaccidsteele » 05 Feb 2015 23:01

brucecohen wrote:A Warren Buffett investing TV show would have trouble filling its airtime since he has repeatedly advised retail investors to simply buy broad-based index funds.
Completely agree. Nobody would watch this.
Bylo Selhi wrote:And even then Jack Bogle doesn't like the odds of their successfully emulating Buffett ;)
The average Joe...

...first has to win Buffett's Ovarian Lottery. The odds of doing that aren't very good either.
Also completely agree.
AltaRed wrote:The average Joe will never have the capacity nor the opportunity nor the luck Warren had in his early years. It is irresponsible to pronounce otherwise. The average Joe cannot go to the universities Warren did, cannot engage nor cross paths with the exceptional people Warren did, nor likely have the luck Warren did. It is unwarranted to unduly criticize the average Joe for his situation and to suggest Joe can replicate that succes by trying to emulate Warren literally.

If so, one should commit their entire investment plan to Berkshire Hathaway shares.
I have to admit that it's difficult for me to imagine that average Joe is doing better than Berkshire Hathaway shares.

Going forward I will have to decide whether to place my child's entire inheritance (outside of our real estate holdings) entirely into Berkshire Hathaway stock or a low-fee U.S. index. It's a tough choice.
AltaRed wrote:I, too, have heard and read about everything there is to read from and about Warren and have high regard for what he says but his words need to be interpreted for one's own situation and not taken literally.
Again I agree.

As I said, Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable.

Buffett's words definitely need to be interpreted for one's own situation. Everybody's personality and situation is different.

I was extremely blessed to have had the appropriate personality (clean slate indoctrination), situation (no money/very young), and result.
Retired @ 40 after reading Munger/Buffett. I avoided a fragile retirement by avoiding conventional volatility management (diversification, re-balancing and asset-allocation). "Put 90% in a very low-cost S&P 500 index fund...the long-term results will be superior" - Warren Buffett

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Re: Buffett Buffet

Post by scomac » 06 Feb 2015 08:18

Flaccidsteele wrote: As I said, Buffett's words are only going to appeal to a tiny demographic and an even smaller number of individuals would find the lessons actionable.
Maybe that's the problem. Maybe that what's wrong with the world. I'm not necessarily talking about investing here, but some of the things that Warren has talked about over the years. Let's call them life lessons which inevitably get repeated from time-to-time during investing topics.
For example; the sage advice that it takes a lifetime to build a reputation, but only an instant to destroy it.

These are not unique pieces of information. One could say it's common sense perhaps, but I know that these sorts of things were once widely held and followed principals. But, perhaps that is something that has passed on along with the Greatest Generation and their forebarers. Chalk it up to unbridled capitalism perhaps?
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Re: Buffett Buffet

Post by kcowan » 06 Feb 2015 14:23

I think even my peers are looking for the silver bullet. That is the downside to any piece of advice. It is the context that makes the difference. Without that, any piece of advice is dangerous.

I could say I invest like Buffett except that I don't hold Coke or Berkshire or railways! What!
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Re: Buffett Buffet

Post by DenisD » 17 Feb 2015 23:47

Buffett Ends $3.7 Billion Exxon Investment Amid Global Oil Rout
Buffett also eliminated a smaller holding in ConocoPhillips while adding to a bet on Canadian synthetic crude oil producer Suncor Energy Inc. and oil refiner Phillips 66, according to the filing, which detailed the U.S. stock portfolio at Buffett’s company as of Dec. 31.

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