What Buffet left out. The massive windfall from OPIC, a U.S. Government insurance program not audited by the GAO, in the buy of Mid American. https://www.opic.gov/sites/default/files/docs/claim_mid_amer...
Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
121–130 of 324 posts
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#122"This team efficiently deals with a multitude of SEC and other regulatory requirements, files a 30,450-page Federal income tax return" 30,450 pages holy crap
How can that be necessary? Not a rhetorical question.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#123Earlier quoted context omitted.
While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth. Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains. If you look at the history and the…
> for economic understanding it's important to note that these were not the major drivers of growth. Two hundred years of slavery was not a major driver of economic growth? Edit: Serious question, rephrased: do economic historians really not consider slavery a major driver of growth? If so, that would be highly counterintuitive. We're talking about the free labor of ~10 million people over two centuries, in an econom…
It's not that it wasn't significant at that time. It's just that in the long-term, it looks small compared to making the value of the labor of the entire population 100x more valuable.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#124>
We may in time experience a decline in float. If so, the decline will be very gradual – at the outside no more than 3% in any year. The nature of our insurance contracts is such that we can never be subject to immediate or near-term demands for sums that are of significance to our cash resources. This structure is by design and is a key component in the unequaled financial strength of our insurance companies. It will never be compromised.
Is he basically saying that the insurance business is structured in such a way to never payout catastrophic amounts? Is this a harmful thing for the insurance claimants?
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#125Earlier quoted context omitted.
While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth. Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains. If you look at the history and the…
> the big boost was started by the industrial revolution Exactly. Now, lets look at some of the causes of the first Industrial Revolution First, large tracts of lands in Britain, largely held in the commons, were stolen from the peasantry and given to private individuals and landlords, as part of the Enclosure movement. This forced the peasants to look for work in cities en masse, providing cheap labor for the capita…
> Cheap cotton […] fueled the textile industry, which was at the heart of the industrial revolution.
It's always been my understanding that _wool_ had been the early carrier of the industrial revolution? That by the time cotton entered that picture, the revolution was well underway?
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#126Earlier quoted context omitted.
What is it for 86 year old male multi-billionaires?
Probably not as much as you would think. Money can buy you access to cutting-edge medical treatment... but not safe or effective cutting-edge medical treatment. Almost all new treatments don't work or have more drawbacks than benefit, that's why it's called research - and billionaires get access to the results of the big clinical trials at about the same time as everyone else.
One possible difference is his access to tailored research and treatment.
When Finnish geneticist Leena Peltonen-Palotie was diagnosed with rare sarcoma in 2008, her colleagues started big project to save her life. Her cancer became the "worlds most studied cancer" for a short period. They sequenced her genes and used large screening robot to test tens of thousands combinations of different drugs against tissue samples taken from her.
They actually fond a cure for the sarcoma she was diagnosed with, but the cancer had already mutated into a form that did not respond to the treatment and she died two years later 2002. I believe this might have been the first ever for this kind of large scale tailored cancer research. Weirdly enough I can't find any mention of this research effort in English speaking magazines.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#127Earlier quoted context omitted.
Life expectancy of 86 year old male is 5.4 years.
What is it for 86 year old male multi-billionaires?
tl;dr: ~5.3 years.
I collected all Wikipedia articles on American billionaires who died in 2008 - 2017: http://tools.wmflabs.org/dschwenbot/intersection/index.php?l...
That got me 74 results. I wgot the articles and manually removed the women based on related Wikipedia categories (turns out https://en.wikipedia.org/wiki/Aubrey_McClendon was a man, I would have removed him just based on the name).
Then I grepped the files for '"[0-9]\{4\} births"' to get the year of birth (this string marks the corresponding category). Two men didn't have a known birthdate, so I threw out their articles, too. This left me with the years of birth for 65 American billionaires. I got their years of death analogously.
After that I calculated their ages as the difference (yes, this could be off by +-1 year, but my method is not exactly rigorous anyway). The mean of these values is ~82.6. 29 of them are >= 86. The mean of those is ~91.3, or 5.3 years past 86. Considering the huge error bars, this is well in line with the general population average.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#128There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
America is worth way more than $90 trillion. He's valuing it like a buyer :) As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn. The son of a bitch wants it at a 4.7 trailing multiple, after a relatively slow-growth year. All that praise - and then a 4.8x multiple. Now I know how he butters up his acquisition targets :) EDIT: I am getting downvoted, but I am keeping this. You guys don't realize tha…
From: https://www.federalreserve.gov/releases/z1/current/z1.pdf
"The net worth of households and nonprofits rose to $90.2 trillion during the third quarter of 2016."
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#129Earlier quoted context omitted.
While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth. Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains. If you look at the history and the…
> the big boost was started by the industrial revolution Exactly. Now, lets look at some of the causes of the first Industrial Revolution First, large tracts of lands in Britain, largely held in the commons, were stolen from the peasantry and given to private individuals and landlords, as part of the Enclosure movement. This forced the peasants to look for work in cities en masse, providing cheap labor for the capita…
> First, large tracts of lands in Britain, largely held in the commons, were stolen from the peasantry and given to private individuals and landlords, as part of the Enclosure movement. This forced the peasants to look for work in cities en masse, providing cheap labor for the capitalists.
A very interesting related book that I've read about that period and which I'd recommend to everyone generally interested in economic and social history is E. P. Thompson's "The Making of the English Working Class" (https://en.wikipedia.org/wiki/The_Making_of_the_English_Work...). I'm generally leaning on the right side of politics and economics (I'm a sympathizer of both Bentham and Benjamin Constant, who are not receiving very kind words in this book), but I found it super interesting and I find it intellectual honest to try and and understand opinions (and related facts) coming from multiple sides of the story.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#130Earlier quoted context omitted.
While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth. Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains. If you look at the history and the…
> for economic understanding it's important to note that these were not the major drivers of growth. Two hundred years of slavery was not a major driver of economic growth? Edit: Serious question, rephrased: do economic historians really not consider slavery a major driver of growth? If so, that would be highly counterintuitive. We're talking about the free labor of ~10 million people over two centuries, in an econom…
Normally the story is that you need certain institutions to make it work.
Rule of law (contracts, low official corruption), absence of arbitrary confiscation risks (ie the King is not going to suddenly come and grab your stuff), unfettered movement of goods/people/ideas. Generic ideas that allow you to compare across societies.
I actually studied economics, and the explanation of how growth arrived does not normally rely on slaves. It tends to focus more on the advent of early parliamentary government (Glorious Revolution), presence of coal in northern England, and advancement of science and technology.
There's no absolutes in economic history though, and you might well find an argument that the triangular trade aided the industrial revolution. That's more of a vignette that explains why England in particular might have prospered, rather than an explanation of how growth gets started in general.