I cheated, though
. The whole story is that they also trade BRKB shares and those have been splitting. And if someone owns BRKA, they can convert it to BRKB without a tax consequence.
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. The whole story is that they also trade BRKB shares and those have been splitting. And if someone owns BRKA, they can convert it to BRKB without a tax consequence.I’m not trolling, I’m genuinely curious: how is this any different from how the Fed used QE and other strategies to get out of the Great Recession of the early 2000s? That seemed to end just fine (and not in hyper inflation like so many predicted)... Are they doing something different this time around?
All of those 30x-40x growth companies have a lot of work to do. Otherwise you’re just buying a 5-6% nominal expected return.
There is no alternative (TINA), as they say. Where else are you going to put your money?
I'm no financial expert by any means, but I do find this stuff interesting and try to follow it.
My opinion is that the Fed's QE and other strategies to get us out of the last recession were kind of a "roll of the dice". They took a chance on it because they really didn't know what else to do. In recent history, the Fed's traditional tools to control the economy (such as raising and lowering the Prime interest rate) have become ineffective. They've had to keep the rates extremely low after taking them down near 0% initially didn't really do more for them than help the poor economy "tread water". And every time they try to bump them back up again, they cause another economic stumble/falter -- which is keeping them from moving it more than very incrementally. Ultimately, the Fed got a lucky roll with those efforts and we recovered. But I'm not sure they can keep pulling us back from the brink, as we see this roller coaster of economic prosperity/recession happening again and again?
I think as our national debt keeps increasing, we're weakening the actual buying power of a dollar more and more. A number of factors have helped mask or mitigate that, such as most people keeping a good standard of living thanks to big decreases in the cost of technology. (Cheap labor from 3rd. world countries helped even "poor" people in America own big screen televisions and capable smartphones, for example.) But you can really see the weakness of the dollar in other areas, like what an education costs today, or what healthcare costs.
I think another "buffer" that helps hide the immediate problem is the fact that wealth in America tends to get handed down from one generation to the next. The current generation of people who are getting old and dying were probably the last really prosperous ones. (By and large, they got to experience the "American dream" of owning a house that was paid off in full, a car or two in the garage, a family they raised successfully, and sufficient retirement money from pension plans and other investments.) That means their kids are inheriting those homes, vehicles, and left-over wealth - so that helps smooth other the financial struggles we're in today. But I'm not seeing the working or middle class people in their 30's - 50's positioned nearly as well for their old age. What will THEY have to pass on to their kids?
That's the longer-term, bigger picture problem I see America facing. The Fed has had to resort to more and more extreme tactics (like government buying up private debts) to keep things going -- and there's going to be a reckoning for all of that.
Non us stocks and non growth stocks have higher expected return. But I agree that it’s not irrational to buy growth stocks too.
Carefull! You’re using real numbers and financial logic...sure you’re on the right site???
Actually, the ‘we’re going Japanese (economy) thing has been preached for almost the last 30 years....and always been wrong for many, many reasons.
Agree with a lot of what you say except for the ‘education/health care’ part. Those two are probably the most rigged segments of our economy bar none.
Adam Smith would scream ‘murder’ were he alive to access how they have been solely ‘for profit’ structured with no real concern for their apt places in a functioning society. I mention A.Smith because of his ’profession’.....which was NOT as an economist or banker etc.
From what little I have read, the danger of "devaluing" the dollar isn't as big for the US (and a few other countries) as it is for most since the debt is denominated in US currency. This means that the debt is devalued in parallel with the currency.
The part I don't understand about this argument, though, is that the cost of imports would necessarily go up as the currency is devalued. On the other hand, I suppose that the ability to export would go up as things would be cheaper for other countries, perhaps increasing the number of jobs and allowing higher wages (in theory, anyhow - I would suspect that it would only mean higher incomes for the already-overpaid C-level executives and upper management.).
I think the bigger problem is the tax situation. The average tax burden for high-income earners in the 1950s was about 5-6% higher than it is now, yet the economic and industrial growth during that period was immense. Some of that was undoubtedly driven by post-war gains and the Cold War. Nonetheless, (and I say this as someone who may be negatively impacted by my proposed changes) there is an argument to be made for higher marginal tax rates at the upper end, and fewer deductions that seem to be targeting only the wealthy. Ideally, we could find a balance where there is a greater incentive to reinvest money in a company and employees rather than just dropping it in the owner/CEO's pocket. I have a hard time understanding how a company like McDonald's can justify a CEO earning over 3000 times that of the median worker. The current average in the US is well over 200, whereas it was only 20 in the 1950s, and was barely over 100 as recently as 20 years ago.