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America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

nytimes.com

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Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#291

Post by jononor »

roenxi wrote: post #233
zentiggr wrote: post #191

Earlier quoted context omitted.

And there is the failure of so much modern thinking, laid out in black and white: your financial picture is your measure of success. God I hate greed and the profit motive more than anything else in this whole wacky place. I would love to die in average suburban comfort if it meant the billions I'd made had all gone to deserving causes and not to any flagrant lifestyle of my own.

Greed and the profit motive are proxies for resources not being infinite and so we have to make hard choices about who gets what. What doesn't get managed (observe->think->act if needed) gets squandered; and if we squander resources at the societal level that would just be stupid. We don't have the abundance of the modern era because luck is on our side, we have it because our management practices have grown unbeliev…

You forgot how we (as a society) have been consuming fossil fuel resources (in particular) way above a sustainable rate. Millions of years of accumulated resources gone in tens of years. Possibly 'efficient' in the short term, but most likely problematic in the longer term - even without accounting for climate change.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#292

Post by sokoloff »

dingaling wrote: post #284
sokoloff wrote: post #216

Earlier quoted context omitted.

> the 401k...is also a full time job that the 401k "owner" doesn't need on top of their existing job that pays into the 401k in the first place Really? I can't imagine how to spend 20 hours per year on 401(k) related topics, let alone 40 hours per week on it. If you're under 40, buy a broad-based stock fund and forget about it. (Probably true if you're under 50.) Use the 40K hours you save by not having this extra "f…

> buy a broad-based stock fund and forget about it The stock fund is a product designed by a third-party to make money for them, which was the poster's point about you not being in control of your pension in that case.

In my 401K, I have access to FXAIX (broad-based, S&P 500 fund), for which I pay 1.5 bpp of fees (0.00015 of AUM). If I had a million dollars in my 401(k)'s FXAIX (I don't of course), that would come to $150 in fund fees annually.

If I wanted exposure to a broader index of mid-cap stocks, I have FSMAX (Fidelity Extended Market Index), at 4.5bpp (0.00045 of AUM). $1MM in that fund would cost me $450 annually.

As I get closer to retirement, Vanguard's Total Bond Market (VBTLX) is available at 5bpp (0.0005 or $500/year for the notional 401K millionaire).

It's true that mutual funds pay the managers of those funds, but you don't have to pick the 50 or 100 bpp funds. On average, it's unlikely that population of 401K investors will outperform the population of professional money managers before fees. Not that many people have a 7 figure 401K account. Not all 401Ks allow individual share investments.

There's a pretty limited upside to spending even 100 additional hours on 401K investing in an attempt to beat the pros out of their $150-500 in fees.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#293

Post by ksherlock »

sn0n wrote: post #98

I especially liked this bit "The pension fund for the Boston-area public water utility invests in Cerberus. The California State Teachers’ Retirement System, CalSTRS, is a Cerberus client, as is a pension fund for the Presbyterian Church as well as many university endowments, sovereign wealth funds and philanthropic foundations." Made me chuckle a bit inside, as I know a couple people who are less on the side of guns…

If you're opposed to guns, isn't this a good thing? You make money and destroy 18 gun companies in the process.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#294

Post by dfrage »

ksherlock wrote: post #293
sn0n wrote: post #98

I especially liked this bit "The pension fund for the Boston-area public water utility invests in Cerberus. The California State Teachers’ Retirement System, CalSTRS, is a Cerberus client, as is a pension fund for the Presbyterian Church as well as many university endowments, sovereign wealth funds and philanthropic foundations." Made me chuckle a bit inside, as I know a couple people who are less on the side of guns…

If you're opposed to guns, isn't this a good thing? You make money and destroy 18 gun companies in the process.

Bankruptcy comes in different flavors, and rather than a Chapter 7 liquidation, it's a "pre-packaged" Chapter 11 reorganization, according to Wikipedia's introduction "Remington exited bankruptcy in May 2018, less than two months after filing for protection under Ch. 11 laws. Remington's quick exit from bankruptcy was due to a pre-approved restructuring plan that was supported by 97% of its creditors."

All part of the game that got them into this mess in the first place.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#296

Post by amanaplanacanal »

chipotle_coyote wrote: post #227
mwfunk wrote: post #203

Earlier quoted context omitted.

They’re both screwed. I’d rather have crippling debt than children dying from malnutrition, but obviously both Marc and John are completely screwed in different ways. They’re both losers in this scenario, there are no winners.

Both you and the poster you're replying to are comparing debt to savings rather than debt to income. Taking the numbers from a downstream reply, the guy with the $120K mortgage on the $150K house is ahead if he can comfortably afford the monthly payment on his mortgage with the $80K annual salary. The entire point of taking out a loan is that you don't have the assets available to outright buy the thing you're taking…

Yes, net worth and cash flow are two very importantly different things.

Negative net worth just means you can declare bankruptcy when necessary. Positive cash flow is what keeps you out. The risk is that an interruption to that cash flow can mean that you have to take the bankruptcy option.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#297

Post by ericd »

mschuster91 wrote: post #285
ericd wrote: post #268

Earlier quoted context omitted.

Insurance is a thing... you do have to build up enough savings to survive while not working, but that’s doable if you don’t blow everything on traveling and other luxuries.

I doubt this. Even as a German I regularly get healthcare gofundme's in my twitter feed. HN frontpage regularly has horror stories about billing, including "out of network" hospitals in emergencies. There is no way one can build up savings to shoulder such shit, much less are savings to be used for medical issues!

As an American currently working with healthcare data, I’m familiar with the abundant failings of the US healthcare system. But I think it’s a mistake to think that it’s completely unavoidable and take a fatalistic attitude and feel like you always have a sword hanging over your head. As far as I can tell, it’s avoidable, but you need to get decent insurance before you’re sick, and to save up money to help you ride out times when you’re not making money (as well as pay the deductible/out of pocket portion). This is definitely expensive, and if you make no money, it can be difficult (though you'd then likely qualify for Medicaid). But many Americans do make quite a lot, and spend everything they make (and more) during the good times, even if they pull in >$100k/yr. Consumerism has a much stronger hold here than it does in Europe.

EDIT: A bit more, since I didn't really address your comment about out of network charges.

In the event that you get balance billed for some surprise out of network charge despite going to an in-network facility, you likely don't have to pay it, even though they're invoicing you. Contacting your insurer about it will likely take care of it. And if it turns out that you do need to pay it, hospitals are generally willing to accept $0.10-0.20 on the dollar for self-payers who can't pay, before they send it to collections. You don't have to pay the retail price, which is totally made up and has very little relation to what they'd accept. This is largely due to their adversarial relationship with the insurance companies, which force them to accept the lesser of their retail price and their contracted rate. Think of the high prices as the starting point in their negotiations.

I fully agree that the US healthcare system is very messed up, and that what I'm saying sounds insane and unnecessary. I wish we had a single-payer system in the US (with optional private insurance on the side). Fortunately, it seems like people are getting sick of this, and we're getting closer to getting that. I just wouldn't take the attitude that the world is totally fucked, so you should live for today.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#298

Post by dredmorbius »

UweSchmidt wrote: post #140
ahupp wrote: post #118

Earlier quoted context omitted.

Both of these things can be true: that the top 1% own a large fraction of wealth, and that an even larger fraction is owned by the pensions and retirement plans of the non-wealthy. Wealth comparisons are tricky, e.g they'll show that Americans are some of the poorest people in the world because there's a large fraction with debt (e.g homes, credit cards, student loans). While technically true, that doesn't really mat…

Well then our intuition is wrong. If your finances throughout your life are not in order, if you have high debt, regardless if it's because of medical bills, student loans or too big a car and house, you are in a weak position. What good does a nice car do if you worry about bills and if you try to avoid to look at the balance in your banking app? You don't always know how rich some folks are, but for the most part i…

Yonatan Zunger's notion of "financial shock wealth" is the most novel and satisfying framing of this question I've seen in years.

...If $5,000 is something you could afford, ask yourself the same question again with $100,000 (fire burn down your house?), with $250,000 (cancer treatment and your health insurance kicked you off?). For everyone, there’s some number which is the largest size of a financial shock they could weather.

This number is probably the truest measure of a person’s real wealth: What is the largest unexpected financial shock you could sustain without the cost of that to you suddenly becoming ten times the original cost or more? That number isn’t something easy to calculate; it depends on whether you have a family that can help you out, on your income, on whether that shock involves losing your job (and thus your health insurance, if you live in the US), on whether you have access to any other sources of security (including public assistance)....

https://shift.newco.co/2017/12/04/your-financial-shock-wealt...

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#299

Post by perseusmandate »

kpennell wrote: post #153
kevin_b_er wrote: post #16

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

That's how Mitt Romney got rich

Mitt Romney's deals at Bain Capital were overwhelmingly growth equity oriented

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#300

Post by JetSpiegel »

kpennell wrote: post #153
kevin_b_er wrote: post #16

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

That's how Mitt Romney got rich

"Corporations are people, my friend"
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