buffet is an old man, what happens to brk price when he kicks?
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buffet is an old man, what happens to brk price when he kicks?
I think there's going to be a correction and then it will recover. I forget who he tapped to take over, but I'm sure they'll follow in his footsteps in terms of sober investingQuote:
Originally Posted by m2711c
True. And even though it would hurt me I'd love to see him take the blame for it.Quote:
Originally Posted by Bunion 2020
Yep. But he will never accept responsibility for anything perceived as negative.
BTW, did you get a BS pass this season?
Too much teflon. The economy and market could tumble 18 months after he takes office and despite having both the House and Senate, no one except for those who didn't vote for him (and perhaps a few million vacillators who voted for him) would blame him.Quote:
Originally Posted by yeahman
lol, is this inflation adjusted?
Attachment 505485
Rebalanced today - back to 70% stocks/30% bonds, I'll miss some gains, but wanted to steer clear of the correction as soon as the inevitable dysfunction begins to effect peoples psychology.
I've been slowly selling APPL, the only asset in my YOLO account and replacing it with a broad US stock index fund.
Anyone have experience with a "cash balance plan"? Wife's company is giving her option to join. I'm not a fan of this part:
"Because the Cash Balance Plan is a defined benefit plan, you will not be able to direct
the investment of your Account. The Cash Balance Plan’s assets will be invested as
permitted and determined by the Trustees or an independent investment manager
selected by the Trustees for the Plan."
Can't find any info on fees.
Also tend to think we are covered for 60+ with our 401k's and should put additional savings into stuff we can access penalty free prior to 60, despite paying income tax now.
That sounds like it’s operating like a pension fund? That’s how teacher, firefighters, etc. retirement plans work.Quote:
Originally Posted by 406
Whether it’s worth it would depend on what kind of guaranteed payout you’d be getting (and how risk averse you are). Individuals can get the same guaranteed payouts by buying annuities, but my understanding is there’s usually a big financial hit with those.
Kind of, but all contributions are from her pay, as far as I can tell no employer matching like a 401k. But what i read online "Cash balance plans do not allow employee deferrals". I'm not seeing any info about guaranteed payout, but there is something about it doesn't go negative.
She got me the investment mix:
Attachment 506535
I'm not impressed.
I know nothing about this plan or its name, but "defined benefit" means you don't worry about fees or where to direct the money, because it doesn't matter, your benefit is defined in the plan documents. As in, a pension.Quote:
Originally Posted by 406
Guaranteed ‘not to go negative’ is definitely not what I think of when I hear defined benefit plan. Defined benefit is typically ‘we’ll pay x% of you salary until you die, and have some adjustment for inflation’.Quote:
Originally Posted by 406
If it’s not that kind of defined benefit then I’d be pretty wary about it.
Not an expert, but seeing only 12% in US stocks seems quite bad to me
yeah, something seems weird.Quote:
Originally Posted by J. Barron DeJong
What is the benefit? That should be spelled out pretty clearly in a defined benefit plan.
My old company had a defined benefit pension (phased out) and then a cash balance plan. I don't remember contributing anything to it. Upon retirement, I cash the remainder of both and rolled them into a Traditional IRA to avoid the immediate penalty and tax hit (i think that was the reason). They were conservatively invested by the company. I'm 60/40 in Bonds/Large Cap and have now gained 20% in approx 3yrs.
From what I understand, it seems odd for her to have to contribute. Do they also have a Traditional 401k to offer? Is this in lieu of that?
yeah, I'm confused. In addition to 401k. "If you are looking for additional retirement plan deferral capabilities greater than your 401(k) savings you may want to consider the new Cash Balance Plan implemented by XXX"
"The minimum contribution amount is $20K annually and is a commitment until December 31, 2026. Maximum contributions allowed are based on age and listed in the table in the attached FAQ document." And looks like she can not change contribution amount for 3 years.
"What is my Plan benefit?
Your benefit under the Plan will be the value of your account at the time of distribution,
which is designed to be equal to your contributions plus actual investment earnings,
subject to a cumulative minimum floor return of 0% (as discussed below)."
Maybe if she worked full time(double income) and we didn't have three kids (deductions) I could see the advantage of getting into a lower tax bracket...but I'm not seeing saving a little on taxes being worth locking in at most 5% return for the next 20 years.
Quote:
Originally Posted by 406
https://www.journalofaccountancy.com...sion-plan.html
Thanks, that is a good article. Seems her plan only guarantees rate of return will not go below 0%, if it was higher might be worth doing or if we wanted to reduce income tax.
No, it’s only the leech class. Boomers and legacy asset holders, that have created nothing the last [emoji[emoji6[emoji640][emoji638]][emoji639][emoji[emoji6[emoji640][emoji638]][emoji640][emoji639]]][emoji[emoji6[emoji640][emoji638]][emoji[emoji6[emoji640][emoji638]][emoji640][emoji[emoji6[emoji640][emoji638]][emoji640][emoji6[emoji640][emoji638]]]][emoji[emoji6[emoji640][emoji638]][emoji639][emoji[emoji6[emoji640][emoji638]][emoji640][emoji639]]]] years, that get hurt by higher for longer rates. Inflation helps asset holders. Deflation helps the working class.
That said, Powell will cave eventually. He’s an asset pumper just like the last [emoji640][emoji[emoji6[emoji640][emoji638]][emoji640][emoji6[emoji640][emoji638]]] years of Fed chairs.
Deflation helps the working class?Quote:
Originally Posted by 4matic
Like during the Great Depression, or are we picturing some fantasy version of deflation that doesn’t come along with mass unemployment?
Depression created the middle class of the fifties and sixties. Stay at home mom’s. Single income could afford house and car.Quote:
Originally Posted by J. Barron DeJong;[emoji[emoji[emoji6[emoji640
I don’t know what all this emoji stuff is but sorry.
Hard to parse that with the emojis, but I’m pretty sure that economic history is wrong, though I’d like to read an argument that says the Depression itself was what created the middle class.Quote:
Originally Posted by 4matic
Who were these stay at home Mom’s who could suddenly afford a car in an economy where a quarter of workers were unemployed?
Just like when Volker forced the worst recession since the Great Depression he set up decades of prosperity only to be ruined by asset pumping monetarists: Reagan, Greenspan, Bernanke, Yellen, and Powell. Every one of them a loose money asset pumper. Throw tax cuts on top and the future was stolen from future generations.
Fifties and sixties. Post war post depression.Quote:
Originally Posted by J. Barron DeJong;[emoji[emoji6[emoji640
“From 1929 to 1932, sales of new automobiles fell by 75 percent—and automobile companies had a combined loss of $191 million in 1932 ($2.9 billion in today’s money), or 25 percent of industry sales. This compared with profits of $413 million in 1929, or 14 percent of industry sales. The highly profitable luxury end of the market virtually disappeared. The lower-priced segment grew from 40 percent of sales in 1929 to 80 percent of sales in 1933 and remained at 60 percent through the upturn and beyond. As a result, half the automakers closed down.”
https://www.bcg.com/publications/201...eat-depression
As I redacted, the Great Depression created the environment for a sustained low inflation long period of prosperity of the Subsequent three decades. Just like the period after Volker.
The boomers squandered it with greed and selfishness.
Boomers think they’re fat because they bought a house for a dozen bananas and now it’s worth millions. Nothing created.
Wut?Quote:
Originally Posted by 4matic
Seems like inflation fluctuated quite a bit immediately post war. It wasn’t ever low and stable until post Volker.
Attachment 508061
Post war inflation is common. Like the seventies post Vietnam
But the only period with deflation is in 49/50 where prices dropped a modest 4%. What’s the evidence that that period of deflation specifically was good for the working class? That was your initial statement.Quote:
Originally Posted by 4matic
And there was no postwar depression, there were some recessions where unemployment peaked at ~8%.
So I’m still not convinced that a depression is someway beneficial for the the working class, or that it’s what led to the middle class.
But if someone has written a detailed argument for that, I’d read it.
A 30% decline in asset prices (stocks and housing) and a few years of PCE deflation would hurt who and help who? A 50% decline in stock prices would only take us back 4 years. Case Shiller is up 50% in the same period.
Consider that the average age of first time home buyer is up 13 years in the same period and the average age of a second time home buyer is 61 y/o! Who is going to buy all these houses at inflated prices?
First time home buyer as % of all sales is at an all time low and dropping. There is zero labor force growth and it will be negative if immigration gets whacked. We are at a similar stage as Japan in the early nineties. Japan has had thirty years of deflationary trend.
Japan has started allowing working age immigration
In 2018, Japan passed legislation to bring 345,000 foreign workers to the country over five years. In 2019, the government established the “specified skilled worker” program, which allows non-Japanese with limited skills to secure work visas.
Policy shift
In August 2023, the number of foreign nationals in Japan rose 11% from 2022. This is due to a number of factors, including:
A plummeting birthrate
A super aging society
A need for at least 7 million foreign workers by 2040
How are you getting that kind of price asset depreciation without a recession?Quote:
Originally Posted by 4matic
Who gets hurt the most in a recession? The unemployed.
Who’s most likely to become unemployed in a recession? The lower classes.
Native born working age Americans are currently employed at near all-time highs.Quote:
Originally Posted by 4matic
Low-income workers came out the best from the recent bout of inflation, whereas they were the hardest hit during the Great Recession.
Home affordability is at an all time low.Quote:
Originally Posted by J. Barron DeJong
Deflation aside, a serious recession is not likely for quite a while since 80% of all jobs are service.
Where I think deflation will reside. Housing and energy. Specifically oil.
17% of new car buyers agreed to a payment over $1000 a month and negative equity in car loans is now at an all time high.
High paying jobs are where layoffs are happening. Also consider if the federal government does start cutting significant work force. Those are high paying jobs in today’s economy and 20% of all job gains the last few years were government.
All due respect, but you've been predicting the dramatic decline of oil for a number of years now and it hasn't happened. Meanwhile the world's appetite for energy and fossil fuels just continues to increase. With AI it's only going to get worse. No energy technology that can logically replace fossil fuels is even in the pipeline (sorry green energy fans). I don't see oil rising much above $70 a barrel but I can't see how it's going to fall much below that either.Quote:
Originally Posted by 4matic
Three years ago the price of WTI was $100 a barrel. $70 now. Gasoline is down more, about 35%. I maintain my $50 price target for WTI.
A little over four years ago the price of WTI was less than zero. If dollar strength continues oil, priced in dollars, will be actively liquidated to get more dollars.
If and when Putins head is on a stick the price of oil will crash, at least short term. Syria used to produce 380k barrels a day. It’s 20k thousand now and they aren’t part of OPEC. Argentina could also ramp production in their new regime.
OECD predicts that the Americas demand for oil will fall.
With regards to AI data centers. Where does oil fit in that picture?