Tuesday, September 25, 2012
Recently released 13F filings for Berkshire Hathaway show Warren Buffett and his new team of successors are currently sellers of equities, including some like JNJ, PG, and KFT which you would never expect him to sell.
Ask yourself one simple question. If Warren Buffett is selling equities, why are you buying them?
BRK is adding to energy positions like PSX. This should give curious investors where his thinking lies.
Tuesday, September 18, 2012
Since writing about the Obama Administration 18 page definition of full time employment under the new ObamaCare regulations, the actual link has been deleted in a large number of articles and periodicals across the Internet. Very strange, and a bit suspicious.... But it is an election year so who knows the reason?
Here is a permanent link to the ObamaCare definition of full time employment which is one of the worst cases of regulation drafting I have ever seen. Read it to disbelieve it.
Tuesday, September 11, 2012
Try this definition I just made up.
"A full time employee is one that works for any single employer for at least forty hours per week."
Well not to the Obama Administration which has just released its EIGHTEEN PAGE definition of what is full time employment under Obamacare medical regulations.
You have to read the actual Obamacare definition of full time employment to really believe it---or not.
Most importantly, full time employment is now just 30 hours per week, surprise to many employers and workers who always thought even 32 hours was still part time. This definition, aside from bringing many new part timers into Obamacare for taxation and penalty purposes, now means the Administration can claim an increase in full time employment merely by changing the commonly accepted meaning of the term.
But the legalese and boilerplate in this definition is beyond belief. As one observer quipped, "it's scary." Whoever came up with this madness should be tarred and feathered right before being exiled from DC for life.
Read the new regulations for yourself but stop when your eyes begin to fall out of your head.
Friday, September 7, 2012
I have read and heard many tragic stories since the real estate bust of 2008 but this case from Dublin, Ireland is the worst I can imagine.
Priory Hall is a large and now abandoned apartment complex surrounded by chain link fencing. In October 2011, the local city government declared the entire building a fire hazard and ordered all 256 residents in 187 apartments to leave on just 48 hours notice. The Dublin City Council has already spent more than $2 million housing the now homeless residents and is refusing to pay any more for their upkeep.
But here is where the problems just begin.
The vacant apartments have now become overrun with squatters and vandals who are destroying the property while the legal residents are prevented from returning. Priory Hall is rotting, infested with rats, mold, and garbage.
Of course, all the residents still have to make their mortgage and tax payments on their condemned, vacant, and deteriorating units.
But here is where the story gets strange.
The developer of this mess is Tom McFeely, a former IRA hunger striker from Northern Ireland (please do not confuse the two Irelands!) He went from urban terrorist who spent 53 days without food in 1980 to support the IRA to real estate developer and a $12 million home in Dublin. Now his home is gone (foreclosure), he has been sentenced to jail for not making repairs to Priory Hall, and even forced into bankruptcy against his will.
For construction aficionados this property's building reeks of incompetence. Windows were installed backwards so every time it rained apartments flooded. Pipes burst on a routine basis filing the complex from the parking garage to the units themselves with feet of water. The building was so dangerous that the Dublin City Council moved its 26 tenants out of the building in 2009 after declaring the building a fire hazard BUT allowed those who owned their apartments to remain!
The facts of this case study are UNBELIEVABLE. I'm only scratching the surface here.
What makes this case so sad is there are more than 2,000 ghost developments across Ireland today.
What makes this case so dramatic is Ireland is the size of the state of Indiana. Very small.
Thursday, September 6, 2012
This market is overvalued using every metric. RIDICULOUSLY overvalued. Read this excellent analysis on stock market valuation metrics for guidance on the current market conditions.
jFor example, check out this analyst report on the absurd expectations on 2013 corporate profit margins.
There is a major recession coming in 2013. I'm not the only one saying this. Check out the CBO report on the projected 2013 recession. Excuse me, but where does the margin expansion come from?
If Romney wins, there will be a bull rally going even higher. My advice?
Tuesday, September 4, 2012
The FTC has won a final judgment against famous "Pennies on a Dollar" guru John Beck. I wrote about the FTC's preliminary victory in a previous post.
The case is Federal Trade Commission v John Beck Amazing Profits, LLC et al, U.S. District Court for the Central District of California, 09-cv-04719
John Beck is individually liable for $113 million. The other real estate gurus involved in this case are Jeff Paul and John Alexander.
The final judgment was issued on August 23, 2012 by U.S. District Judge Jacqueline Nguyen in Los Angeles.
Sad story. I always admired and liked John. A great writer and teacher, at least a long time ago.
Monday, September 3, 2012
I do a great deal of government bashing on this website but not all bureaucrats are fat and lazy. This analysis below from the Bureau of Labor Statistics on how inflation indexing and especially the Producer Price Index ("PPI") is designed and can be used in long-term contracts is EXCELLENT. Utterly fascinating and helpful work---and that is no joke.
Escalation Guide for Contracting Parties
|Base price = $768,450||-||-||-||-|
|Current period series values (December 2010)||110.0||190.2||259.2||-|
|Divide by the base period series values (December 2009)||107.0||189.5||205.1||-|
|Multiply by 100 to yield the converted series values||102.8||100.4||126.4||-|
|Multiply by assigned weight (Labor 40%, Materials 40%, Fuels 20%)||41.12||40.16||25.28||-|
|Add the three figures to get the current value (December 2010) for the special index||-||-||-||106.6|
|Multiply by original base price ($768,450)||-||-||-||81,916,770|
|Divide by 100 to yield the adjusted price||-||-||-||$819,168|