A couple of years ago, a stock whose business consisted of owning short term treasuries (silly but somewhat relavent) would have been priced at a 37% discount to their asset's market value at a 50 P/E. I think you'd agree that buying a treasury for 63 cents on the dollar represents a pretty good investment. Also, cyclical companies can see earnings swings of 300-400% from year to year, which can lead to cheap stocks with trailing P/E's that range all the way to infinity (no earnings last year--substantial earnings this year). While your rule is a pretty good one, there can be exceptions. It's generally unwise for value investors to follow any hard and fast multiple rules (aside from buy at a large discount to intrinsic value).
MSFT and INTC are both in the Dow Jones Industrial Average even though they are not listed on the NYSE. The Dow isn't exactly your folks' Dow anymore. Ironically, they are both getting closer to being the dogs of the Dow, anyone want to give odds on when that happens?
They did. It was mostly to help fund testing into aluminum body design. Was popularly known as an engineer's Ferarri. Rumors are that the next version will be a 400hp hybrid.
From the reviews it lacks a certain amount of soul, but is by far the most practical exotic ever built. It could be a daily driver.
When you do your own taxes for a partnership or foreign investment, I'll be impressed. The tax prep software give you nice easy to fill out forms that feed into the final stuff but you are basically on your own as to how to fill them out. Until one owns a business I'd agree at that point you are likely enough to miss out on a decent portion of tax planning (ie if you structured a transaction this way rather than that way you would save on taxes). Those change frequently enough that unless you are paying high dollar (more than say H&R Block) for tax advice you probably won't be getting it in the service rendered.
I was very careful not to specify a profit margin. Those were all based on how much the amount of credit card balances outstanding. If your bank account was a company it would have 100% profit margins, are you greedy for not letting the bank use your money for free?
The rates are high because you can just not pay and there really isn't much they can do about it. Using Capital One as an example (in 2003 when they were about only a credit card company), they charged an average of about 13% on their credit card portfolio (a portion of the balances generates no interest income). Fraud losses were about 0.1%. Non-payments were 4.6%. It cost them 4.8% to borrow the money they loaned out. This left 3.8% (before taxes as the return on their portfolio to the greedy owners.
Before you cry them a river, fees and other income generally offset employee costs and contributed another effective 2%, but the taxman wanted about that much. I don't see how a net of 4% return on the portfolio is greedy, if they were that greedy they should move into another line of business. Running a credit card company is hard work, those margins are excellent because Capital one does a much better job than other card companies of screening potential credit losses (not fraud non-payments).
I know my RSS from my CSS but every morning (that the delivery guy shows up) you'll find me with my copy of the Journal riding the subway to work. I much prefer the paper copy to the online copy for one thing I can stand and read it much easier than on a Laptop. Also it is much harder to scan an entire page worth of articles online.
I've always found it more than a little ironic that the vehicles for which hes companies are best known in the US are Fox News, The Simpsons, and Married with Children (perhaps I'm a little behind the times--while I know StarWars and Myspace are more popular than some of my list, most people wouldn't associate them with NewsCorp or FOX). I think he's really hoping that the TimeWarners and Viacoms of the world bid up other web properties so he doesn't look like a lone idiot for paying so much for myspace.
The only programs that might appeal to you more than others would be the highly quantitative/statistical programs (UC/MIT are the best known), although you will be with very similar people. Most of the value of a top teir MBA is in recruiting so if you are just doing it for yourself, pick a good regional program but you might want to inquire about their entreprenurial professors/classes.
Most of the educational value of an MBA will depend on what your professors' experience is you should be able to find their bios somewhere, look for profs who did something remotely similar to the size of business that you plan to start (rather than ones whose real world experience was at GE/PG a big consultant or similar. Those are great management training companies, but the experiences might not translate as well to your needs.
I concur, although the problem with that strategy is that it only works once, and the side effects generally are worse than the disease. Essentially no one will loan you any money again for a very long time. Especially if the world's reserve currency is the one that did the devaluation. Are you thinking farmland?
All fiat currencies (essentially all global currencies) are based on debt (or credit). Shoot that's printed on the bills for goodness sakes.
The problem won't be not buying expensive crap, it will be paying off the leveraged bet on expensive asset prices, if they were to decline. Not buying the expensive crap will sort of come naturally.
The shares would have declined in value far more than the puts increased. Most likely they were trying to capture a differential that had opened between the price of the options and the price of the stock, that is a reasonably decent sized business and helps to create efficient markets for those who want to transfer risk.
Well, there are lots of ways to interpret the 10th ammendment, as well as the entire constitution. Neither is right or wrong, per se. To give you an idea of this there isn't an explicit right to privacy nor is there a granting of powers for the federal government to regulate the legality of abortion provided in the constitution. If one relies only on the 10th amendment, this would be totally regulated by the states. It can be interpreted from the 1st, 4th, 5th, 9th, and 14th amendments that the Federal government can regulate the states' behavior to protect an implicit right to privacy granted. In a similar vein the very existance of both FEMA and the Army Corps of Engineers (who maintain the levvys) suggest that the federal government was undertaking some of the responsibility for New Orleans in a disaster.
The Federal Government is not exactly operating in the same manner as it was originally laid out. Between then and now there was a war over states rights that the states lost and expansion of the federal government accellerated dramatically in the 1930s. The original constitution was designed to be quite vague to allow the government room to adjust to change.
From a very distant perspective, there were a large number of people living in New Orleans who had relied on various levels of government to meet the majority of their needs. It failed to meet their needs in Sept of 2005. I hope that there will always be room for debate about whether there should be anyone who relies on the government to meet their needs to that level.
If Saudi Arabia really is running out of oil (regardless, it remains my contention that the current administration belives Matt Simmons), $1-2 trillion for control of another perhaps 200 billion barrels would be a pretty good investment.
You have to understand a company in Google's position in the market at that time. They were exceedingly expensive (to the point that the company had effectivly no chance of earning enough to justify their price). So the price was basically a popularity contest one which depends on a constant stream of good news and no bad news. The first bad thing that happens and the stock price will reverse. Why do they do this?
The stock market becomes a great way to shift compensation onto others. Here's how it works. A high (preferably ascending stock price) allows option grants to provide a substantial portion of earnings. Say you had an good employee who was making $150,000, to steal him perhaps you would have to pay him $200,000. So our example firm offers him $100,000 and 1000 options on Google stock at $200. Each $100 that the share price increases earns our employee $100,000 and he can see the value in that so he leaves. As long as the stock price moves up his compensation increases and we have a very happy employee.
Then after the stock price has fallen (and hopefully our employee cashed out before it got to the bottom). The company purchases the 1000 compensation shares for $50 which only requires $50,000 (the real value of which might only be $30-40k at that point). The extra earnings came from investors who paid higher prices (and sold at the lower price). Pretty sweet deal, and now you have an idea of why companies have taken on two roles (first operations and second selling the value of their stock as an investment). Even if they don't buy it back in the case of a company like Google, the nominal amount of new shares would not impact the control that the founders would have on the overall company. The downturn actually started when someone pointed out that their profit growth was partially the result of interest on the proceeds of their secondary offering.
Why is this? Anything unique (or not unique) about Christianity that causes this? How has modern western Christianity diverged? I think it's more that it weeds out the fair weather Christians. The devout arguement is that it builds faith (a heavily persecuted ie if found would be jailed or killed Christian would need to live almost totally on faith.
The love of money is like bad law, it's used to justify all sorts of things that are mostly the opinion of the quoter. As best I can interpret this should be no more inflammitory than it's converse, I find contentment in all things. A Christian is called to be modest, humble, and content in all circumstances (that does not give an excuse for not working to improve which is better covered by other passages). It is difficult for anyone who has ammassed power on Earth to remain focused on the Heavenly kingdom (because their power on earth requires an expenditure of effort on maintenance). A love of money could be compared to focusing too heavily on building Earthly power to the detriment of a Christian walk.
As a practical matter look at all the things that people will do to have a little more than their neighbor. The trick to being a wealthy Christian seems to be remaining humble, and realizing that ultimatly God provided the resources to you as a steward, and the responsiblity of managing those resources is a tremendous one. If one manages their life according to that, they probably would never come close to stumbling over those passages.
Wow that's a good idea. Good thing the framers thought of that and added an amendment to the constitution that covered these sorts of issues.
U.S. Constitution: Tenth Amendment
Tenth Amendment - Reserved Powers
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
I think it is a larger portion urban poor depend primarily on the government as their support network which has replaced the other support networks that are still common in rural areas.
It's my growing belief that Christianity requires persecution to thrive, and modern western Christianity hasn't had enough. I think that there are many Christians who are such in name only. Just as there are many Americans who take their rights for granted, there are many Christians who take their faith for granted. There are plenty of prohibitions on both borrowing and lending, but how many people have credit card debt, or make any attempt to own a home without a mortgage (even a token $20/month principal payment).
Incidentally I like two excellent money quotes, first is your checkbook is a wonderful theological document it shows were your interests really are. The second is that the bible has more verses about money management than almost any other subject (except I think prayer).
We had a discussion about God's plan and will for your life, and an interesting hypothysis was brought out, that God's will is much less about the say 50 big decisions you will make exactly right and more about the execution of those decisions day by day. I have a few quibbles about it mostly that I think God's will is more about reliance on him for bigger and smaller decisions as we face them, but that is a both very relaxing (in that should worry less about tomorrow) and very challenging (in that it includes a commission that requires a substantial amount of work).
What if he burned the house he was renting down? Or through neglignece made a field less productive (or the boat sank etc). Would that person have become a debt slave as well (I don't know and would love comments from others)? Interest is little more than the rent for the use of money for a period of time, but for some reason debt stirs far more powerful emotions than other forms of renting. I'm not trying to be argumentative, but am genuinely curious why money is special from other productive assets.
I think it relates to the principle of a laborers lack of savings and need for something immediatly redeemable for their daily needs. The wages you pay them daily would provide food and possibly shelter for the evening. I've worked on farms where the migrant workers were paid daily. Depending on your laborers' access to financial institutions, the immediate application would be the payday loan business (almost directly in conflict) and might be extended to cover paying day laborers with a check rather than something that could be spent directly. It is surprisingly expensive and difficult to cash a check if one doesn't have a checking account. Perhaps your payroll processing firm would pay using stored value cards (like the Visa gift cards) or something more easily spent.
I recall a similar vs in Proverbs forbidding not paying your neighbor when you are able to, which would be difficult to reconsile with most corporate treasury operations.
Why is the interest and principle portion of a fixed annuity such a stumbling block? If you weren't making mostly interest payments in the beginning but paid of your loan in 360 months, your payment would decline substantially over the life of the loan. In all months your payment is the interest on the principle for the month+an ammount of principle such that you will pay off the loan in 360 months. If you wanted a declining payment you could set up a loan that paid interest plus a fixed amount of principle, but your interest payment would simply decline much faster.
On minimum payments, only those with a negative ammortization (option ARM) mortgage are buying a home similarly to a credit card payment. The initial credit card payments are structured not to pay the full amount of interest generated on your balance in the month so if that were all the payment you were making after your payment your balance will be larger than the prior month with no additional purchases. Very, very different than a 30 year mortgage.
Finally, a refinancible mortgage carries a highly valuable option embedded within it (a call option on the note). To make a loan a lender will either be paid with a higher interest rate or a payment that covers the premium of the option--that is why mortgage rates are higher than treasury rates, to investors both are essentially the same credit risk--the US Governement. It makes some sense that subprime notes (which are all ready written at a premium would shift the cost of the option away from the interest rate (which is a competitive). However, don't feel too bad for the poor, the last three years have seen a substantial decline in the risk premium charged to subprime mortgages (and the newfound capital access most subprime borrowers have has probably done more to inflate the housing bubble than anything else--which reinforced the lower risk premiums because even if the borrower defaulted the house had appreciated so the lender didn't lose too much).
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A couple of years ago, a stock whose business consisted of owning short term treasuries (silly but somewhat relavent) would have been priced at a 37% discount to their asset's market value at a 50 P/E. I think you'd agree that buying a treasury for 63 cents on the dollar represents a pretty good investment. Also, cyclical companies can see earnings swings of 300-400% from year to year, which can lead to cheap stocks with trailing P/E's that range all the way to infinity (no earnings last year--substantial earnings this year). While your rule is a pretty good one, there can be exceptions. It's generally unwise for value investors to follow any hard and fast multiple rules (aside from buy at a large discount to intrinsic value).
MSFT and INTC are both in the Dow Jones Industrial Average even though they are not listed on the NYSE. The Dow isn't exactly your folks' Dow anymore. Ironically, they are both getting closer to being the dogs of the Dow, anyone want to give odds on when that happens?
They did. It was mostly to help fund testing into aluminum body design. Was popularly known as an engineer's Ferarri. Rumors are that the next version will be a 400hp hybrid. From the reviews it lacks a certain amount of soul, but is by far the most practical exotic ever built. It could be a daily driver.
Perhaps not the laptop, but the guy in front of me's screen saver in multi-variable calc was certainly distracting.
When you do your own taxes for a partnership or foreign investment, I'll be impressed. The tax prep software give you nice easy to fill out forms that feed into the final stuff but you are basically on your own as to how to fill them out. Until one owns a business I'd agree at that point you are likely enough to miss out on a decent portion of tax planning (ie if you structured a transaction this way rather than that way you would save on taxes). Those change frequently enough that unless you are paying high dollar (more than say H&R Block) for tax advice you probably won't be getting it in the service rendered.
I was very careful not to specify a profit margin. Those were all based on how much the amount of credit card balances outstanding. If your bank account was a company it would have 100% profit margins, are you greedy for not letting the bank use your money for free?
The rates are high because you can just not pay and there really isn't much they can do about it. Using Capital One as an example (in 2003 when they were about only a credit card company), they charged an average of about 13% on their credit card portfolio (a portion of the balances generates no interest income). Fraud losses were about 0.1%. Non-payments were 4.6%. It cost them 4.8% to borrow the money they loaned out. This left 3.8% (before taxes as the return on their portfolio to the greedy owners.
Before you cry them a river, fees and other income generally offset employee costs and contributed another effective 2%, but the taxman wanted about that much. I don't see how a net of 4% return on the portfolio is greedy, if they were that greedy they should move into another line of business. Running a credit card company is hard work, those margins are excellent because Capital one does a much better job than other card companies of screening potential credit losses (not fraud non-payments).
I know my RSS from my CSS but every morning (that the delivery guy shows up) you'll find me with my copy of the Journal riding the subway to work. I much prefer the paper copy to the online copy for one thing I can stand and read it much easier than on a Laptop. Also it is much harder to scan an entire page worth of articles online.
I've always found it more than a little ironic that the vehicles for which hes companies are best known in the US are Fox News, The Simpsons, and Married with Children (perhaps I'm a little behind the times--while I know StarWars and Myspace are more popular than some of my list, most people wouldn't associate them with NewsCorp or FOX). I think he's really hoping that the TimeWarners and Viacoms of the world bid up other web properties so he doesn't look like a lone idiot for paying so much for myspace.
I agree, I haven't owned a TV for 5 years, but the radio is always on providing background noise to my computer activities.
The only programs that might appeal to you more than others would be the highly quantitative/statistical programs (UC/MIT are the best known), although you will be with very similar people. Most of the value of a top teir MBA is in recruiting so if you are just doing it for yourself, pick a good regional program but you might want to inquire about their entreprenurial professors/classes.
Most of the educational value of an MBA will depend on what your professors' experience is you should be able to find their bios somewhere, look for profs who did something remotely similar to the size of business that you plan to start (rather than ones whose real world experience was at GE/PG a big consultant or similar. Those are great management training companies, but the experiences might not translate as well to your needs.
I concur, although the problem with that strategy is that it only works once, and the side effects generally are worse than the disease. Essentially no one will loan you any money again for a very long time. Especially if the world's reserve currency is the one that did the devaluation. Are you thinking farmland?
All fiat currencies (essentially all global currencies) are based on debt (or credit). Shoot that's printed on the bills for goodness sakes.
The problem won't be not buying expensive crap, it will be paying off the leveraged bet on expensive asset prices, if they were to decline. Not buying the expensive crap will sort of come naturally.
Wow, am I out of touch, I thought everyone meant the Xanadu.
The shares would have declined in value far more than the puts increased. Most likely they were trying to capture a differential that had opened between the price of the options and the price of the stock, that is a reasonably decent sized business and helps to create efficient markets for those who want to transfer risk.
Well, there are lots of ways to interpret the 10th ammendment, as well as the entire constitution. Neither is right or wrong, per se. To give you an idea of this there isn't an explicit right to privacy nor is there a granting of powers for the federal government to regulate the legality of abortion provided in the constitution. If one relies only on the 10th amendment, this would be totally regulated by the states. It can be interpreted from the 1st, 4th, 5th, 9th, and 14th amendments that the Federal government can regulate the states' behavior to protect an implicit right to privacy granted. In a similar vein the very existance of both FEMA and the Army Corps of Engineers (who maintain the levvys) suggest that the federal government was undertaking some of the responsibility for New Orleans in a disaster.
The Federal Government is not exactly operating in the same manner as it was originally laid out. Between then and now there was a war over states rights that the states lost and expansion of the federal government accellerated dramatically in the 1930s. The original constitution was designed to be quite vague to allow the government room to adjust to change.
From a very distant perspective, there were a large number of people living in New Orleans who had relied on various levels of government to meet the majority of their needs. It failed to meet their needs in Sept of 2005. I hope that there will always be room for debate about whether there should be anyone who relies on the government to meet their needs to that level.
If Saudi Arabia really is running out of oil (regardless, it remains my contention that the current administration belives Matt Simmons), $1-2 trillion for control of another perhaps 200 billion barrels would be a pretty good investment.
You have to understand a company in Google's position in the market at that time. They were exceedingly expensive (to the point that the company had effectivly no chance of earning enough to justify their price). So the price was basically a popularity contest one which depends on a constant stream of good news and no bad news. The first bad thing that happens and the stock price will reverse. Why do they do this?
The stock market becomes a great way to shift compensation onto others. Here's how it works. A high (preferably ascending stock price) allows option grants to provide a substantial portion of earnings. Say you had an good employee who was making $150,000, to steal him perhaps you would have to pay him $200,000. So our example firm offers him $100,000 and 1000 options on Google stock at $200. Each $100 that the share price increases earns our employee $100,000 and he can see the value in that so he leaves. As long as the stock price moves up his compensation increases and we have a very happy employee.
Then after the stock price has fallen (and hopefully our employee cashed out before it got to the bottom). The company purchases the 1000 compensation shares for $50 which only requires $50,000 (the real value of which might only be $30-40k at that point). The extra earnings came from investors who paid higher prices (and sold at the lower price). Pretty sweet deal, and now you have an idea of why companies have taken on two roles (first operations and second selling the value of their stock as an investment).
Even if they don't buy it back in the case of a company like Google, the nominal amount of new shares would not impact the control that the founders would have on the overall company. The downturn actually started when someone pointed out that their profit growth was partially the result of interest on the proceeds of their secondary offering.
Why is this? Anything unique (or not unique) about Christianity that causes this? How has modern western Christianity diverged?
I think it's more that it weeds out the fair weather Christians. The devout arguement is that it builds faith (a heavily persecuted ie if found would be jailed or killed Christian would need to live almost totally on faith.
The love of money is like bad law, it's used to justify all sorts of things that are mostly the opinion of the quoter. As best I can interpret this should be no more inflammitory than it's converse, I find contentment in all things. A Christian is called to be modest, humble, and content in all circumstances (that does not give an excuse for not working to improve which is better covered by other passages). It is difficult for anyone who has ammassed power on Earth to remain focused on the Heavenly kingdom (because their power on earth requires an expenditure of effort on maintenance). A love of money could be compared to focusing too heavily on building Earthly power to the detriment of a Christian walk.
As a practical matter look at all the things that people will do to have a little more than their neighbor. The trick to being a wealthy Christian seems to be remaining humble, and realizing that ultimatly God provided the resources to you as a steward, and the responsiblity of managing those resources is a tremendous one. If one manages their life according to that, they probably would never come close to stumbling over those passages.
Wow that's a good idea. Good thing the framers thought of that and added an amendment to the constitution that covered these sorts of issues.
U.S. Constitution: Tenth Amendment
Tenth Amendment - Reserved Powers
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
I think it is a larger portion urban poor depend primarily on the government as their support network which has replaced the other support networks that are still common in rural areas.
It's my growing belief that Christianity requires persecution to thrive, and modern western Christianity hasn't had enough. I think that there are many Christians who are such in name only. Just as there are many Americans who take their rights for granted, there are many Christians who take their faith for granted. There are plenty of prohibitions on both borrowing and lending, but how many people have credit card debt, or make any attempt to own a home without a mortgage (even a token $20/month principal payment).
Incidentally I like two excellent money quotes, first is your checkbook is a wonderful theological document it shows were your interests really are. The second is that the bible has more verses about money management than almost any other subject (except I think prayer).
We had a discussion about God's plan and will for your life, and an interesting hypothysis was brought out, that God's will is much less about the say 50 big decisions you will make exactly right and more about the execution of those decisions day by day. I have a few quibbles about it mostly that I think God's will is more about reliance on him for bigger and smaller decisions as we face them, but that is a both very relaxing (in that should worry less about tomorrow) and very challenging (in that it includes a commission that requires a substantial amount of work).
What if he burned the house he was renting down? Or through neglignece made a field less productive (or the boat sank etc). Would that person have become a debt slave as well (I don't know and would love comments from others)? Interest is little more than the rent for the use of money for a period of time, but for some reason debt stirs far more powerful emotions than other forms of renting. I'm not trying to be argumentative, but am genuinely curious why money is special from other productive assets.
I think it relates to the principle of a laborers lack of savings and need for something immediatly redeemable for their daily needs. The wages you pay them daily would provide food and possibly shelter for the evening. I've worked on farms where the migrant workers were paid daily. Depending on your laborers' access to financial institutions, the immediate application would be the payday loan business (almost directly in conflict) and might be extended to cover paying day laborers with a check rather than something that could be spent directly. It is surprisingly expensive and difficult to cash a check if one doesn't have a checking account. Perhaps your payroll processing firm would pay using stored value cards (like the Visa gift cards) or something more easily spent.
I recall a similar vs in Proverbs forbidding not paying your neighbor when you are able to, which would be difficult to reconsile with most corporate treasury operations.
Why is the interest and principle portion of a fixed annuity such a stumbling block? If you weren't making mostly interest payments in the beginning but paid of your loan in 360 months, your payment would decline substantially over the life of the loan. In all months your payment is the interest on the principle for the month+an ammount of principle such that you will pay off the loan in 360 months. If you wanted a declining payment you could set up a loan that paid interest plus a fixed amount of principle, but your interest payment would simply decline much faster.
On minimum payments, only those with a negative ammortization (option ARM) mortgage are buying a home similarly to a credit card payment. The initial credit card payments are structured not to pay the full amount of interest generated on your balance in the month so if that were all the payment you were making after your payment your balance will be larger than the prior month with no additional purchases. Very, very different than a 30 year mortgage.
Finally, a refinancible mortgage carries a highly valuable option embedded within it (a call option on the note). To make a loan a lender will either be paid with a higher interest rate or a payment that covers the premium of the option--that is why mortgage rates are higher than treasury rates, to investors both are essentially the same credit risk--the US Governement. It makes some sense that subprime notes (which are all ready written at a premium would shift the cost of the option away from the interest rate (which is a competitive). However, don't feel too bad for the poor, the last three years have seen a substantial decline in the risk premium charged to subprime mortgages (and the newfound capital access most subprime borrowers have has probably done more to inflate the housing bubble than anything else--which reinforced the lower risk premiums because even if the borrower defaulted the house had appreciated so the lender didn't lose too much).