On 2008-06-24 09:15:48 -0700, "Default User" <defaultuserbr[at]yahoo.com> said:

- quote -

I know; he definitely is not "old time rich." What I was trying to say
is that those old time rich folks and any of that ilk who are still
around today would disapprove of Buffett's methods of managing wealth.

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On Jun 23, 8:06*pm, Don <dwz...[at]telus.net> wrote:
- quote -


Unusual maybe, but definitely not strange.

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Don wrote:

- quote -

But Buffet isn't "old time rich". He's from what sounds like
upper-middle-class background.





Brian

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On 2008-06-23 19:47:34 -0700, PeterL <po.ning[at]gmail.com> said:

- quote -

Giving his money to a foundation set up by someone else, passing on a
relatively small part of his wealth to heirs, supporting Democrats in
national elections, living in a rather modest dwelling in Omaha,
advocating redistribution of wealth. ( I thought these ideas to be
"strange" only from the point of view of what I called "old time rich
folks." Nowadays they are becoming less and less strange.)

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On Jun 23, 3:42*pm, Don <dwz...[at]telus.net> wrote:
- quote -


what are his "strange" ideas?

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On 2008-06-23 13:50:24 -0700, PeterL <po.ning[at]gmail.com> said:

- quote -

Anyone who speculates that one stock will do better than another over
any time frame in a sense is predicting the future. The real question
is: What accounts for Buffett's spectacular results when other equally
talented and hard-working investors had good, but not spectacular
results? My suspicion is that chance played a large role. In the
uncertainties of financial markets the player who comes in first does
not always have any special ability not possessed by the runners-up.

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On 2008-06-23 13:36:35 -0700, Douglas Johnson <post[at]classtech.com> said:

- quote -

Strike Carnegie from my list. I forgot about all those great libraries
he created. Come to think of it, all those people, or most of them,
made extensive charitable contributions.

Somehow, I still believe they would look askance at Buffett and his
strange ideas.

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On Jun 23, 2:11*am, "Gil Faver" <rowdy'sb...[at]xxyz.com> wrote:
- quote -


Wow, that's what I would call a very loose connection.

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On Jun 21, 3:43*pm, Don <dwz...[at]telus.net> wrote:
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Buffett's, and other successful investors, do not rely on "special
ability to make accurate prediction about the future" for their
success. Other than a reliance on the long term benefits of publicly
traded equities, there is no need to predict the future. In fact, it
is not possible to predict the short term direction of the market with
any rate of success. The long term growth of the market is known to
everyone for a long time so there is no need to make any predictions.

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Don <dwzimm[at]telus.net> wrote:

- quote -

Again, too broad a brush. From the Wikipedia article on Andrew Carnegie:

"By the time he died, Carnegie had given away $350,695,653 (approximately $4.3
billion, adjusted to 2005 figures). At his death, his last $30,000,000 was
likewise given away to foundations, charities, and to pensioners."

-- Doug

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On 2008-06-23 10:44:51 -0700, "Elle" <honda.lioness[at]spamnocox.net> said:

- quote -

I'll bet the old time rich folks like the Rockefellers, the
Vanderbilts, the Carnegies, the Hunts, and any others that may still be
around, hate Buffett with a passion (along with the internet, USNET
newsgroups, U-tube, Myspace, and all the other places where voices of
criticism arise nowadays and cannot be silenced). Buffett actually put
some of his own money into the Bill and Melinda Gates foundation,
instead of starting a new foundation in his own name! That would be
like the Vanderbilts turning money over to a Rockefeller foundation.
What is the world coming to? And, just think of it, giving the bulk to
charity instead of heirs. Buffett money surely should go to Buffett
kids, or else someone might get the idea Rockefeller money should not
go to Rockefeller kids! And I'll bet the Titans of finance are fed up
with financial planning newsgroups on the internet that actually advise
working-class commoners how to invest responsibly and avoid ripoffs and
make profits for themselves.

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On Buffett's support of the estate tax and claims it is
self-interest: Sure, maybe... uh... come on... hogwash. In
his testimony to the Senate, he said the estate tax revenues
need to go back to the poor, and he elaborated on exactly
how. Media reports say he has been a long time proponent of
wealth re-distribution. He's been a supporter of both
Senators Obama and Clinton (and no GOPers). He's known as
the biggest Democrat in the country. The clincher: He's
leaving the bulk of his fortune to charity, and very little
to his kids. Self-interest, hooey, unless the guy wants to
be remembered for getting money for himself so he can give
it away to others.

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"W. Wells" <otf70[at]nc.rr.com> wrote
- quote -

I see media reports from early 2007 noting the lack of
transparency in banks reporting exposure to subprime
mortgages. No one (except maybe insiders of each bank) could
say which bank had the most exposure. Choosing banks in
which to invest then becomes capricious. Buffett IIRC spoke
about the real estate bubble and tranching mortgages, that
these were insanity. Is the current pricing of BAC based
merely in hysteria? Or is it based in little factoids like
it has had huge writedowns and has a dividend payout ratio
that shot up to over 100% recently? I do not think so. It is
hard for me to believe that Buffett would not proceed with
more caution when purchasing banks last summer, unless he
made a mistake. I would have thought someone like him would
hope for a dive in the BAC price rather than buying near a
high in a precarious time for mortgages and housing and so
banks.

Still, for the long term, we laypeople might extrapolate
what happened c. 1991 and the following five years. Many
banks recovered and restored their dividends.

To be revisited in five years or so. Or it would sure make
sense if Buffett bought more BAC right now, wouldn't it? If
he does not, well I think he knows he got burnt at least a
little.

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"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

I thought better of the National Review than this. It is worth reading only as
an exercise in critical thinking and reading. You can expect any article that
says "Buffett is another of those leeches. Buffett is another of those leeches."
(yes, twice) to be long on emotion and short on facts.

This article does not disappoint. It connects a few (mostly correct) facts with
a great deal of emotion and inference. Bread did a nice job of dissecting the
details.

-- Doug

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"Will Trice" <wtrice[at]notmonitored.com> wrote
Ever in search of brevity, snip
- quote -

To me the OP's article suggested that Buffett was a sage as
a stock picker. But if much of his success in this single
ten-year period was due mostly to a single, very good stock
selection, then to me, this does not define a sage. I think
Buffett is still good with his stock and non-publicly traded
company investments, as evidenced by, for one, the last ten
years per
http://www.berkshirehathaway.com/letters/2006ltr.pdf . BH
stock beat the S&P by about 6% on average per annum from
1997 to 2006. But I hesitate to infer this denotes
wizard-like stock picking, though, since the BH company does
not buy solely stocks.

On the third hand, the guy does not exactly tout himself as
a wizard. In the letter linked above, Buffett writes with
great humility about the mistake he and one of his partners
made when they bought Blue Chip Stamps decades ago. On the
fourth hand, freely describing mistakes one has made is the
sign of someone who is honest, learns from the mistakes,
etc. This might put him back in the oracle category in many
people's eyes. It improves his credibility, and so forth, to
me.

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"Gil Faver" <rowdy'sboss[at]xxyz.com> writes:
- quote -

The article basically says that Buffett's got investments
in companies which make money off of efforts to avoid/minimize
the impact of estate taxes. In particular, life insurance
companies.

Secondly, it claims that his business practices - in particular,
the acquisition of family businesses - depends partly on
families having an incentive to sell out due to estate
tax issues.

The first argument is a bit of a stretch - not a huge one,
but a bit of one. I think one would be hard pressed to
show that a big chunk of the profits in the life insurance
business comes from estate-tax-planning permanent life
policies, but rather more of those profits come from
term life policies that folks hold while they have dependents,
and which never pay out because folks let them lapse.

The second argument is absurd, though. Folks sell off
family businesses to people like Buffett not mainly
because of estate taxes but rather because of control
and management and succession issues. And to cash
out. It's hard to sell off part of a business one
owns completely. It's easy to sell the whole business
to someone like Buffett in exchange for BRK stock which
can then easily be sold off a little at a time and
which also helps get professional management in place
to keep the business running - especially important
if one doesn't have, say, kids who are likely to run
the business well.

None of this, however, ties into Buffett's interest
in buying business at substantial discounts to intrinsic
value. He's said he believes the estate tax is a good
thing and while I generally disagree (it seems to make
more work for accountants and lawyers than it raises
useful tax revenues), but I am willing to take Buffett
at his word regarding this.

Norquist's attempt to paint Buffett's support for
Estate taxes as part of Buffett's self-interest-driven
investment planning is, at best, just political posturing.

Norquist can make better arguments against the Estate
tax without taking these potshots at Buffett. And Buffett's
investment strategies work just fine whether that tax
is in place or not.

There is one interesting piece which ties into all of
this which has not been mentioned, though - a stock
which simply accumulates capital value and pays no
dividends - under current Estate tax structures an
heir who inherits that stock gets a "stepped up basis"
on the value of the stock. Under the provisions of
the Estate tax repeal in 2010, while the estate pays
no tax on the inheritence, the heirs will ultimately
pay, instead, much larger cap-gains, since they will
inherit the lower cost basis of the original purchaser.

Under existing rules, the Estate tax exemption allows
some cap-gains to never be taxed (ie. any estate which
falls below the exemption, heirs get stepped up basis,
but no taxes are paid on the estate). Under Repeal,
much smaller estates may be hit when heirs sell
appreciated properties (though there is a provision
for executors to allowate "increased basis" of $1.3
million to assets in the estate and up to $3million
to assets transferred to surviving spouses) - those
provisions may not be as generous in many instances
as existing step-up basis provisions.

As far as these basis issues affecting Buffett, well,
the truth is that it'll only substantially affect
the very wealthy heirs of folks who bought BRK a
long time ago. But, again, that's not very specific
to Buffett or his stock-picking and investment strategies.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

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As far as Buffett investing in BAC, I think that he has found that it is a
strong bank that will probably keep paying its dividend and he had a lot of
cash to park that would get better return than cd's etc.

- quote -

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"PeterL" <po.ning[at]gmail.com> wrote in message
news:e544ba93-0588-471b-b54e-c1b7b5c30276[at]p39g2000prm.googlegroups.com...
- quote -


http://article.nationalreview.com/?q...TQxMzNlOWQ3MzQ

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On Jun 22, 9:20*pm, Will Trice <wtr...[at]notmonitored.com> wrote:
- quote -

I definitely agree, nice piece of research Elle did there.

Not his foul, IMO, but a foul for the people who tab the stats for
BRKSY. Not to disparage Buffett, but the public noise over the fund's
performance - *without explaining AXP and private company
contributions* - may have discouraged many would-be individual
investors. I can't be the only one who has felt downright stupid, can
I:?

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"PeterL" <po.ning[at]gmail.com> wrote in message
- quote -

Or wealthy.

Elizabeth Richardson

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