Warren Buffett’s Annual Shareholder Letter

Posted on by

Is now online – pdf.

Charlie and I are extraordinarily lucky. We were born in America; had terrific parents who saw that we got good educations; have enjoyed wonderful families and great health; and came equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to other people who contribute as much or more to our society’s well-being. Moreover, we have long had jobs that we love, in which we are helped every day in countless ways by talented and cheerful associates. No wonder we tap dance to work. But nothing is more fun for us than getting together with our shareholder-partners at Berkshire’s annual meeting. So join us on May 6th at the Qwest for our annual Woodstock for Capitalists. We’ll see you there.

A Pleasant Saturday Morning at Tyrol Basin

Posted on by

I’ve been avoiding trips to local ski areas from many years. The AA tag on my ski bag tells the story. The last time the bag was used was a flight from Albuquerque to Dallas – our last pre-children ski trip. The ski bag, along with my boot bag made the journey from Dallas to Madison in 1993.

Living in a four season climate, my recreation thoughts have generally drifted toward warm weather vacations. However, and perhaps giving in to the inevitable, I put my fun but evidently outmoded skis (purchased at Denver’s Gart Brothers during my days there) in the car and made the short drive to Tyrol Basin early Saturday morning.

A glorious, sunny day, there were perhaps 15 cars in the lot as we walked toward the ticket office. The temperature and conditions were quite good, with only a bit of ice detected here and there.

Moments later, standing on top of the basin, I enjoyed the view and thought that it was quite pleasant to be within an hour’s drive of this place.

While checking out the basin’s runs – all except the moguls, my thoughts turned to:

  • Training:
    I saw two (surprising) examples of skiers evidently losing control and requiring ski patrol assistance. Years ago, when I learned to ski in a more serious way (via a Swiss instructor at Loveland), he advised that I take a lesson at the beginning of each ski season. I think this is correct – and I spent a bit of time on Tyrol’s bunny hill last weekend, regaining my alpine perspective.
  • The Road Not Taken:
    Like Frost, I prefer the less travelled and popular routes. Tyrol makes it easy to turn right off the main lift and ski down toward another lift, where very few people where skiing (moguls – not for me, but the black and blue runs were enjoyable). I chose this route quite a few times and very much enjoyed the views, serenity and a rather quiet late morning outing.
  • Safety:
    There’s quite a bit more safety enhancements than I recall. A large, orange plastic fence now greets the skier as she turns off the triple chair. An out of control skier will be caught in this, rather than careening down the hill.
  • The rise of snowboarding:
    Just starting to take off when I last skied, snowboarding is big time, today. I can see the friction between traditional alpine downhillers and snowboarders.
  • Variety:
    Snowboarders, downhillers and telemark skiers mingled reasonably well at Tyrol. It’s great to see a few telemark folks sliding downhill.

Finally, my eldest added these notes:

You are weird skiing is odd and my lower back is sore!!!!! Overall it was a fun experience, and I would love to go more often next year!!! Thank you Nora for teaching me!!

Pricing Politicians

Posted on by

Alex Tabarrok:

Prosecutors call it a corruption case with no parallel in the long history of the U.S. Congress. And it keeps getting worse. Convicted Rep. Randall “Duke” Cunningham actually priced the illegal services he provided.

Prices came in the form of a “bribe menu” that detailed how much it would cost contractors to essentially order multimillion-dollar government contracts…the California Republican’s “bribery menu”… shows an escalating scale for bribes, starting at $140,000 and a luxury yacht for a $16 million Defense Department contract. Each additional $1 million in contract value required a $50,000 bribe.

The rate dropped to $25,000 per additional million once the contract went above $20 million.

Bad News: AT&T / BellSouth Proposed Merger

Posted on by

Via Dave Farber:

It will be interesting to see what happens when the FCC begins reviewing thereported and alleged merger of the AT&T/BellSouth deal. As it may be a much different Commission body with the hopes of Robert McDowell’s confirmation by the Senate.

Mr. McDowell is a telecom lawyer who currently serves as
assistant general counsel at Comptel and opponent of the AT&T and Verizon
mergers last year. Mr. McDowell is scheduled to appear before a Senate
committee on Thursday for his confirmation and is likely to be asked about
the merger.

I can’t imagine this will be, in any way positive for our lagging broadband services. Read “We thought you said spend the $200 billion on dark fiber” for more on this mess.

Gladwell: Lazy Centers

Posted on by

Malcolm Gladwell:

David Sally, a behavioral economist at Dartmouth, responds to the discussion I had with Bill Simmons yesterday on the tendency of NBA players to so dramatically over-perform in the last year of their contract:

With regard to the contract year phenomenon, we can go a little further–we can predict that the likelihood of the post-contract dip is positively correlated with the height of the player. Why is that? Again, the answer lies in the environment-individual link. The seven foot guy has heard that he should be a basketball player since he was eight years old or even younger. He’s been pushed his whole career onto the grade school team, onto the varsity, into Division I, and then the NBA draft. He is much less likely than the six foot guy to ever have made a committed choice. He may never had to exert anything approaching his maximum effort level until his contract year. As a result, he has either no idea how to persevere or no intrinsic motivation. So, Simmons’ rule is actually too blunt: it seems he should be able to draft contract-signing point guards and two guards for his fantasy team, but never centers or fours. Small forwards–we’d have to do the empirical study.

A Magic Way to Make Billions

Posted on by

Donald Barlett and James B. Steele:

The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.

With Washington reeling from the Abramoff lobbying scandal and Republicans and Democrats alike pledging to crack down on influence peddling, with one lawmaker already gone from Capitol Hill because he traded favors for cash, you’re probably guessing this isn’t the best time for members of Congress to dispense a fortune in favors to their friends.

Guess again.

Apathy, The Downside of Everything

Posted on by

Ed Wallace:

No, instead I’m concerned about our country’s lack of vision for the future and the can-do attitude that we seem somehow to have lost — at least, it’s missing from most discussions on issues facing us today. In a nutshell, I’m lamenting the apparent mortal illness of optimism and ingenuity — the kind of spirit and drive that ignores all the negative issues in the news, the naysayers and the partisans and simply presses forward, driving toward solutions that benefit all of society.

I know we had that once, because the car industry as we know it today was not the invention of large and well-funded corporations. It was created and delivered by men who, though they often worked against the most incredible odds, never lost sight of their dreams and visions. With that focus — which often earned them scorn and insults — they changed the world for the better in a way that centuries of innovation hadn’t. And they did it in mere decades.