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Monthly Archives: October 2013

I’m currently reading The Essays of Warren Buffett: Lessons for Corporate America, Third Edition and while I’m tempted to repeat every little tidbit of wisdom on this blog I’ve thus far been successful at not completely plagiarizing the author’s work.  Below is a fantastic little excerpt on Gold.

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $ 1,750 per ounce— gold’s price as I write this— its value would be $ 9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $ 200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $ 40 billion annually). After these purchases, we would have about $ 1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $ 9.6 trillion selecting pile A over pile B?

— Cunningham, Lawrence A.; Buffett, Warren E. (2013-03-01). The Essays of Warren Buffett: Lessons for Corporate America, Third Edition (Kindle Locations 2516-2522). Carolina Academic Press. Kindle Edition.

As a side note I’ve whole heartedly adopted the Kindle app as my e-reader of choice (I have an iPad & a MacBook Air).  While I like iBooks I find the books on Amazon to be generally cheaper than iTunes and there are more ways to access your books (Kindle app for ipad, the internet, and a Kindle app for OSX).  Although I’ve heard that Mavericks will have an iBook app when it is released later this year so stay tuned.

 

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That number is shocking to me.  I for one think high frequency trading is a perversion of our capital markets.  People will argue that it provides liquidity but at what cost?  Read the full article over at Quartz.

“Although the SEC isn’t saying as much, experts think it’s a sign that high-frequency trading are flooding the market with orders, overwhelming the average retail or institutional investor.”

“High frequency trading firms have been known to flood the market with orders, trying to determine the price institutional or retail investors are offering, then cancel 90% of them a split-second later. This can artificially alter the price of a security, netting high-frequency traders profits at the expense of their counterparties. True, those profits are small—often just pennies. But over time, these firms make millions of dollars.”

I like Charle Schwab’s and Walt Bettinger’s solution:

“A penalty on excessive cancellations, rigorous enforcement of rules regarding information access, and a top-to-bottom study of the NYSE’s 40-year-old Market Data System would be good places to start,”

An interesting idea of heaven from an interesting man – this is Hemingway’s letter to F. Scott Fitzgerald.  People just don’t write letters / correspond like they used to!

***

Burguete, Navera.
July 1 [1925] –

Dear Scott –

We are going in to Pamplona tomorrow. Been trout fishing here. How are you? And how is Zelda?

I am feeling better than I’ve ever felt — haven’t drunk any thing but wine since I left Paris. God it has been wonderful country. But you hate country. All right omit description of country. I wonder what your idea of heaven would be — A beautiful vacuum filled with wealthy monogamists. All powerful and members of the best families all drinking themselves to death. And hell would probably an ugly vacuum full of poor polygamists unable to obtain booze or with chronic stomach disorders that they called secret sorrows.

To me a heaven would be a big bull ring with me holding two barrera seats and a trout stream outside that no one else was allowed to fish in and two lovely houses in the town; one where I would have my wife and children and be monogamous and love them truly and well and the other where I would have my nine beautiful mistresses on 9 different floors and one house would be fitted up with special copies of the Dial printed on soft tissue and kept in the toilets on every floor and in the other house we would use the American Mercury and the New Republic. Then there would be a fine church like in Pamplona where I could go and be confessed on the way from one house to the other and I would get on my horse and ride out with my son to my bull ranch named Hacienda Hadley and toss coins to all my illegitimate children that lined the road. I would write out at the Hacienda and send my son in to lock the chastity belts onto my mistresses because someone had just galloped up with the news that a notorious monogamist named Fitzgerald had been seen riding toward the town at the head of a company of strolling drinkers.

Well anyway were going into town tomorrow early in the morning. Write me at the / Hotel Quintana
Pamplona
Spain

Or don’t you like to write letters. I do because it’s such a swell way to keep from working and yet feel you’ve done something.

So long and love to Zelda from us both –

Yours,
Ernest

***

Source: Brainpickings

Found via Jack Dorsey