The wealth-building thread

[JeffS7444]

Paywalled NYT article "Why American Businesses Aren't Raring To Get Back Into Russia". But the summary is: Whole lotta challenges, and there simply might not be a lot of opportunities there. Energy? Prices are already lower than USA energy companies would like. And even before the war, Russian exports to the USA were minuscule. Trader Joe's used to source their pine nuts from Russia, but the last time I checked, they had switched to Kazakhstan.

 

[levimax]

I'm not one who hangs on every word about Buffet. So I may have had the numbers wrong. I thought the $290 billion were in companies not under his control with about $300+ billion in companies they own 80% or more of. Which would still make him about 65% equities and 35% cash. But my numbers are vague recollections. If his controlled unreported equities aren't up around that number of $320 billion then his statement in the letter that they are primarily still in equities would not be true. Another source recently said the cash vs total assets was 29% so obviously my idea of 80/20 was off. It does fit with his idea about stock market value to GDP as you show, but even that isn't really different than the idea he thinks things are over-valued and is waiting for a correction or for some opportunities that fit his idea of good value.

I came across an interesting theory about why Buffet is raising so much cash.... he wants to buy Boeing. Who knows if it is true but it is an interesting theory and on some level makes a lot of sense.

 

[Blumlein 88]

I came across an interesting theory about why Buffet is raising so much cash.... he wants to buy Boeing. Who knows if it is true but it is an interesting theory and on some level makes a lot of sense.

Other conjecture is he plans on stepping out of his roll and turning it over to others. So he is leaving them with cash to do things as they want somewhat differently than him.

I doubt he wants to buy Boeing. He is big on a good management team and Boeing is the antithesis of that. If it were incredibly cheap, and he bought a controlling interest he would replace those people. But he also says if you don't understand something don't buy it. I doubt if he is comfortable with picking management for an aerospace defense contractor. He did do the deal with GE that time. It was not a well managed company, but it was a deal too good to pass up. He made his bundle in a few years and got out without trying to fix the company.

 

[JeffS7444]

Any rally in TSLA could be meet with sellers. The 45% drop in sales demand in Europe is just the tip of the iceberg. Once you destroy demand it's hard to grow no matter what your capacity or technology offers. I expect other electric vehicle designs and hybrids will benefit.

Probably anticipates making up the shortfall in gov't contracts.

 

[JeffS7444]

That sounds like a bad bet. The new administration is currently looking at ways to remove rules that cause the US government to take action to lessen the impact of Climate Change. This will led to cancellation of tax credits for energy efficiency, electric cars, solar panels, heat pumps, heat pump water heaters and so on. It's like they have blinders on. They won't be buying Tesla vehicles or paying them to setup charging stations. There is nothing Tesla has that the new administration wants.

Everything's possible for the right price! Perhaps in Musk's mind, TSLA is old news, and SpaceX is the real prize. But he may need to share prize money with Blue Origin, now that Amazon has agreed to produce a biopic about the First Lady, on very favorable terms to her. But TSLA or a few tens of $M for an Amazon biopic of the First Lady is nothing compared to the potential for long-term contracts to establish a Mars colony.

 

[levimax]

Everything's possible for the right price! Perhaps in Musk's mind, TSLA is old news, and SpaceX is the real prize. But he may need to share prize money with Blue Origin, now that Amazon has agreed to produce a biopic about the First Lady, on very favorable terms to her.

Or maybe he is giving back to the country that gave him the opportunity to become the richest person in the world. No one can see inside another person's heart but not all motivations are evil or self serving.

 

[JeffS7444]

At the moment, TSLA market capitalization is about 1.06T USD, while Musk's own estimate of the cost of establishing a Mars colony is 1000T:
https://www.indiatoday.in/science/s...-to-25-billion-2617332-2024-10-15?form=MG0AV3
Even if he were able to reduce the cost as he suggests, ongoing support contracts could extend for generations.

 

[bachatero]

Is Thursday a good day for a FLASH CRASH?

Not quite a flash crash but a flash dip, still a great trading opportunity (up 7% today thanks to MNQ)

 

[levimax]

Lots of hand wringing considering we made an all time high this month and are only 3 % lower. The market has been in a 5% range for over 4 months now. There is an old adage "don't short a dull market". Unfortuneately predicting the future is and always has been a fools errand.

 

[JeffS7444]

Possible altruistic goals: Cut costs, eliminate distractions, colonize other worlds:
https://www.space.com/space-explora...on-as-possible-elon-musk-says-lets-go-to-mars

 

[bachatero]

Lots of hand wringing considering we made an all time high this month and are only 3 % lower. The market has been in a 5% range for over 4 months now. There is an old adage "don't short a dull market". Unfortuneately predicting the future is and always has been a fools errand.

I like to think there's two solutions to this problem:

1. We can't predict what the market's going to do over the short term, so you might as well day trade using predictable intraday patterns.

2. For 125 years now the market has always gone up. So, just keep pumping your money into index funds and you can't lose over the timespan of decades.

 

[Timcognito]

Don't understand the IRS firing when the US is $trillions in dept. If there is more than stated a commitment to Defense, SS and Medicare the only answer is Revenue. This will only weaken the dollar that will stimulate inflation, and slow the economy. Seems that the master plan is going to hurt investments not help. But maybe some can explain to me how this to me, as like others I'm here to understand wealth building. If fraud and abuse is goal why not build a bigger IRS, one of the few revenue generating departments?

 

[Timcognito]

I appreciate the answers but don't understand how it helps the economy. Revenue and efficiency can go hand and hand to growing the economy and reducing debt and debt service. Why not redirect IRS resources to compliance, fraud and abuse. Inability to recon with the growing debt problem by both party's hurts our economy. Some leverage is good especially with a strong dollar. Not seeing how the market grows when underpinnings are capriciously eroded; revenue, debt, employment, living wages, education and health. I think I'm happy getting 4-5% in the fixed income markets as these policies are going to lead to high unemployment and poor earnings reports. Trying not to be Chicken Little among a lot of Pollyanna's but the plan is unclear about issues that are being attended to and government spending does not even come close solving fundamental mechanisms of commerce and economic well being.

 

[Blumlein 88]

I appreciate the answers but don't understand how it helps the economy. Revenue and efficiency can go hand and hand to growing the economy and reducing debt and debt service. Why not redirect IRS resources to compliance, fraud and abuse. Inability to recon with the growing debt problem by both party's hurts our economy. Some leverage is good especially with a strong dollar. Not seeing how the market grows when underpinnings are capriciously eroded; revenue, debt, employment, living wages, education and health. I think I'm happy getting 4-5% in the fixed income markets as these policies are going to lead to high unemployment and poor earnings reports. Trying not to be Chicken Little among a lot of Pollyanna's but the plan is unclear about issues that are being attended to and government spending does not even come close solving fundamental mechanisms of commerce and economic well being.

The thinking I've heard by some (not saying I believe this mind you) is that money sent to the government is used in the least efficient way possible. So by the IRS collecting less, that leaves dollars to be used more efficiently and effectively in the economy. Making for more economic growth from less taxes. How does that square with the effects of growing the Federal deficit higher? Don't know, but that is why you need DOGE to make it look like your cutting. I believe they are possibly cutting spending, but not that it is enough, and possibly not in ways that down the road will make things better. The whole thing is so complex however I wouldn't claim to know what the heck will really happen. It would seem more rational to me, to do the cutting of spending first, and promise to reduce taxing when you can later. Of course such long term thinking doesn't really work in politics so maybe that isn't a practical option.

 

[JeffS7444]

Tariffs hit home today, as Mouser Electronics is now adding a 10% surcharge to PRC-made items.

 

[Blumlein 88]

NOAA has 12,000 employees. So this reduction would be too small to say the agency is being gutted. Whether the reduction is well considered is probably the more important question.

 

[Mikig]

I could teach you about “how not to make money”!!
Nothing, it’s stronger than me, I’m not capable of building wealth, maybe because I’m not in love with money? I’ve never understood, but I can be sure of one fact: I’ve never considered my priorities as primary in my life…
so, if you want I’ll tell you what I do, and you do the opposite!!

 

[Timcognito]

The thinking I've heard by some (not saying I believe this mind you) is that money sent to the government is used in the least efficient way possible.

Yes it may be inefficient but what is the incentive for cancer research or any cure, when a product treats symptoms for a lifetime will make more money. There are so many corollaries to this. The government has the size, resources and serves so many functions that the private sector has neither the resources, ROI and few incentives to accomplish, including being a watch dog over corruption and exploitation. The US ranks low, in education, health, poverty, transportation, energy distribution, productivity, than quite a few of our European counterparts. The fox is in hen house and our economy will suffer. Get ready for higher prices and a recession. Saying the the government the source of all evil in a democratic society is frivolity and something more sinister is going on now. I'm bearish as there is no plan for a better economy by reversing congress' programs, not focusing on efficiency by analyzing what is good and what is bad or the debt issue. The voters have been duped. Use your 401k as backstop in case of downturn, IMO.

 

[Blumlein 88]

Managing gov't is different. I worked in a local govt. It was headed for bankruptcy. For years some of us tried to trim the work force and reallocate it. Not replacing retirees or replacing them with people doing a different job. Nope, just wasn't possible. A federal court put someone else in charge of operations for a time. They cut the workforce 40% in one month. Ridiculous, services suffered, necessary items were being left undone. Over two years the workforce ended up about 20% smaller and stayed there. Services if anything improved.

When you cut too much it makes it very clear what are real needs. Also which positions simply made no difference when they were gone. Takes no genius to put it back together with what is really needed. It is messy, ugly, not entirely rational and ruins some people's lives. However, it is a quick effective way to prune the ever growing tree of govt. Since gov't isn't managed without the interference of politics that is sometimes how it gets done. It need never come to that except well it does.

Something sure needs to stop the $36 trillion debt from growing. A rational way would be to trim programs until it begins to go down. Leave taxes alone even though we all hate them. Once things are headed in the right direction then later you might get a tax cut. Politics being politics that isn't how it will happen. Looks like they'll attempt to trim down gov't and taxes. Probably going to end up with a smaller gov't and the debt where it is. As a book I read about various civilizations put it once, "bad gov't is the price of gov't". It usually is a price well worth paying vs alternatives.

None of the administrations in my lifetime have been perfect or even exceptional in my opinion. Good and bad points to all. I don't think this is some doomsday scenario as it is. Regardless of what anyone is doing equities seems awfully highly valued at the moment. Something was bound to kick off a correction I think. Capitalism is a story of booms and busts.

 

[Timcognito]

Managing gov't is different. I worked in a local govt. It was headed for bankruptcy. For years some of us tried to trim the work force and reallocate it. Not replacing retirees or replacing them with people doing a different job. Nope, just wasn't possible. A federal court put someone else in charge of operations for a time. They cut the workforce 40% in one month. Ridiculous, services suffered, necessary items were being left undone. Over two years the workforce ended up about 20% smaller and stayed there. Services if anything improved.

When you cut too much it makes it very clear what are real needs. Also which positions simply made no difference when they were gone. Takes no genius to put it back together with what is really needed. It is messy, ugly, not entirely rational and ruins some people's lives. However, it is a quick effective way to prune the ever growing tree of govt. Since gov't isn't managed without the interference of politics that is sometimes how it gets done. It need never come to that except well it does.

Something sure needs to stop the $36 trillion debt from growing. A rational way would be to trim programs until it begins to go down. Leave taxes alone even though we all hate them. Once things are headed in the right direction then later you might get a tax cut. Politics being politics that isn't how it will happen. Looks like they'll attempt to trim down gov't and taxes. Probably going to end up with a smaller gov't and the debt where it is. As a book I read about various civilizations put it once, "bad gov't is the price of gov't". It usually is a price well worth paying vs alternatives.

None of the administrations in my lifetime have been perfect or even exceptional in my opinion. Good and bad points to all. I don't think this is some doomsday scenario as it is. Regardless of what anyone is doing equities seems awfully highly valued at the moment. Something was bound to kick off a correction I think. Capitalism is a story of booms and busts.

Overall good with this, but we are pruning good fruit producing branches like the IRS. Also, to keep things functioning, there is expertise, international good will and coordination, good faith agreements and jobs that fuel commerce and taxes. Relieving the the heads of agencies to bring in fresh blood and new direction is a long followed and tested way organizations reorganize. What about NASA or farm subsidies? Cuts in education just hurt the poor and disadvantaged. Dumping tens of thousands into unemployment could have same effect as the pandemic did when that last happened. It seems unorganized and punitive. There is talk in California about holding back federal tax contributions to shore up lost federal programs which now have to be managed by the state. We give far more than we receive.