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Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

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Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#191

Post by akvadrako »

caminante wrote: post #173
whitepoplar wrote: post #136

Earlier quoted context omitted.

RenTec doesn't make money off "buy and hold." They're a quant firm that profits from small inefficiencies in the market, trading that with leverage. Their really good secret is that they have superior data sources, and superior modeling (lowering their risk to almost nothing).

Their secret sauce is less subtle. They harvest tax loopholes [0]. [0] http://www.zerohedge.com/news/2014-07-21/how-rentec-made-mor...

Although the tax loopholes could increase their income by about 15%, it doesn't explain all of it. Being able to increase their leverage from 1:2 to 1:20 could account for it, but it would require covering loses.

If that's really all they did, it's basically a Ponzi scheme, because they would sometimes lose money.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#192

Post by dforrestwilson »

mythrwy wrote: post #174
lostlogin wrote: post #166

Earlier quoted context omitted.

I don't think you could cause more division than the current administration has.

That's your opinion but mine is that division requires minimum two parts.

The politically motivated down-votes here make me sad..

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#193

Post by caminante »

tptacek wrote: post #187
caminante wrote: post #178

Earlier quoted context omitted.

> That might be true, but you'd make your argument more credible if you cited Bloomberg (or anyone else, but BB is who ZeroHedge cites)... Your statement's not "credible." ZH didn't just cite Bloomberg. The ZH post also includes excerpts from the 93 page report (not included in the Bloomberg article) released by the US senate subcommittee, which was highly relevant. Is anything in the ZH post false? Please add it to…

Pointing out that a source isn't credible isn't an ad hominem attack --- or, in my case, even an attack at all. I'm broadly sold on the idea that Renaissance profits largely through tax loopholes.

Respectfully, for the link, you're attacking ZH and not the substance of ZH's positions.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#194

Post by lordnacho »

CPLX wrote: post #146
lordnacho wrote: post #130

Earlier quoted context omitted.

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…

I've got a degree in economics as well. There are a few more big ones, including the advent of the joint stock company (or more generally, the ability to effectively pool capital) and the common law, specifically the ability to enforce business contracts. Those two are fundamental.

This is a good point, under the rubric "institutions girdling trust".

Quite relevant as a set of innovations in the time when people started having to do business with strangers, particularly ones with different ecological positions. You can imagine having lived in agricultural societies there would be a big question of how exactly you're going to have a business relationship with say a factory owner or delivery company.

JSC, exchanges, (perhaps central banking as well) and various encounters with credit issues worked out a certain way in the UK, and innovations were copied across many other societies.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#195

Post by tptacek »

caminante wrote: post #193
tptacek wrote: post #187

Earlier quoted context omitted.

Pointing out that a source isn't credible isn't an ad hominem attack --- or, in my case, even an attack at all. I'm broadly sold on the idea that Renaissance profits largely through tax loopholes.

Respectfully, for the link, you're attacking ZH and not the substance of ZH's positions.

ZH isn't the argument. The argument is "does Renaissance succeed principally though tax manipulation".

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#196

Post by caminante »

akvadrako wrote: post #191
caminante wrote: post #173

Earlier quoted context omitted.

Their secret sauce is less subtle. They harvest tax loopholes [0]. [0] http://www.zerohedge.com/news/2014-07-21/how-rentec-made-mor...

Although the tax loopholes could increase their income by about 15%, it doesn't explain all of it. Being able to increase their leverage from 1:2 to 1:20 could account for it, but it would require covering loses. If that's really all they did, it's basically a Ponzi scheme, because they would sometimes lose money.

Don't forget that 15% getting re-invested.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#197

Post by tptacek »

gizmo wrote: post #185
tptacek wrote: post #169

Earlier quoted context omitted.

If you re-read the letter, you'll see it ran through the entire crash, and hasn't ended yet.

I said 2/20 fees aren't the norm anymore. You quoted from the letter. I provided a source that shows hedge fund fees are going down and remarked that the Buffett bet started before the 2008 crash when fees were higher then they are now. Because it was a boom period and because index funds that push down management fees have only recently become popular.

It seems to be that either Buffett must be mistaken or you are, right? His claim is that the funds involved in the bet are 2/20 funds, and while the bet started in 2008, it is still running today.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#198

Post by TheSpiceIsLife »

arjie wrote: post #79
pg314 wrote: post #46

Earlier quoted context omitted.

> if a hedge fund is actually worth investing in (and there are quite a few) Apparently it is hard to come up with a collection of 5 of them that would beat the S&P 500 over 10 years. At least Buffett had a hard time finding counterparties for a bet.

Renaissance Technologies claims 71% annualised from 1994 to 2014.

Now name four more

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#199

Post by vkreso »

dsacco wrote: post #17

There'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…

I must say that I also feel proud and I'm not even American!

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#200

Post by ajmurmann »

mythrwy wrote: post #174
lostlogin wrote: post #166

Earlier quoted context omitted.

I don't think you could cause more division than the current administration has.

That's your opinion but mine is that division requires minimum two parts.

In this situation you are probably right. However, it's very problematic as a general statement. There are too many atrocities committed by violent majorities against powerless minorities that come to mind. This blanket statement gets into victim shaming really quick.
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