I mean, the appeal imo, once dividends are understood is that dividends have historically been a sign that the particular company is solid enough to “risk” a payout to its shareholders. Younger or smaller companies won’t take that risk as they’d rather just invest it. It’s generally just a sign that the company is well off up to the current point but certainly doesn’t offer or predict greater growth as opposed non paying div stocks as the market will be fully efficient in that vein.
So there’s a pretty interesting story going on regarding Alibaba Holdings (BABA), which is a super weird stock that U.S. investors can buy if they’re interested in the huge Chinese tech company. What’s odd is that the stock in no way represents ownership in the underlying company - it’s ownership in a Variable Interest Entity (VIE) that purports to have rights to Alibaba profits. Moreover, foreign ownership in the company through such VIEs is apparently illegal in China, although the prohibition is not (presently) enforced.
So the short story is that there’s an enormously profitable Chinese company, but it’s not remotely clear that U.S. investors have any ability to own it. There’s huge risk that the Chinese government could actually enforce the ban on VIEs, effectively deciding that they have no rights to any profits. On top of that, Alibaba has already experienced some light misappropriation of assets, in that the CEO just unilaterally transferred one of the company’s biggest assets (Alipay) to a different entity.
Matt Levine from Bloomberg, who a lot of people here already read, has written a lot about this.
Anyway, what makes this interesting to me is that Charlie Munger, Vice Chairman of Berkshire Hathaway, has now doubled down on his Alibaba investment via his management of Daily Journal investments. Munger has managed these investments for a long time, and (not surprisingly) has been very successful. Historically, Munger has been much more willing than Buffett to wait and wait and wait an investment opportunity to arise, and then sink a huge percentage of his portfolio in one that he thinks is attractive. (He did this with Wells Fargo during the financial crisis.)
Alibaba is growing quickly, is hugely profitable, and is down like 30% this year. When I saw the Munger news, I was tempted to play along a little bit, but I try very hard to resist that type of gambling urge. But I thought that the high risk/high potential reward might be of interest to some here. The story is good, at least.
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Glad I have all those I-Bonds
I dont see how inflation isnt higher in 2022 than in 2021 barring some sort of real economic collapse
every conference call is the same
—Passing through price increases to customers
—Trying to transport product anywhere is expensive and impossible
—Trying to find raw materials is difficult, we just pay whatever we have to and pass through to customers
—We cant find workers are our current salary levels and will be paying more to hire workers or just wont be making all the product we could otherwise make
—Energy prices already spiking and cost forecast for heating and things over the winter month is grim
—Trying to do construction projects or buy capital goods lol see you next year and we are gonna charge you an obscene amount
Will be pretty surprised if we arent more than 5.5% up year-over-year for the next several quarters
Everyone gonna be in a great mood when those student loan payments start back up!
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I don’t see inflation being much of an issue a year from now.
A lot of businesses are in short supply because they simply can’t meet demand. Folks have a lot of money right now and we are in a unprecedented level of spending and is one of the reasons why businesses aren’t finding the workers they need - they can simply afford to not go back to work right now (which is also causing higher prices)
We had a chip shortage in 1999 during the crazy buying of the time and that eventually lead to a ship glut in 2002. Maybe the pendulum swings back again like it did then. If course I could be wrong on all of this but I fervently believe we are going to snap back hard to the deflation side.
It’s pretty amazing how the media dutifully runs with literally anything right wing assholes complain about.
How much sympathy do you have for a guy who loses his entire 401k in a story that starts like this?
John says it was about a year ago that he started talking to a woman online about investments. The woman said her name was Amie, claimed to live in China, and promised she could take John’s investments to a new level.
I know people get scammed all the time, and I don’t want to be unempathetic. Obviously he thinks he had some connection with this woman, but it’s just greed overwhelming common sense.
Like in 2021 how do you not know not to send 10s of thousands of dollars to a stranger? I sort of feel bad that I don’t really feel bad for this guy.
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I was wondering how the fuck you would put your name on something like this, but at least it’s a google proof John Smith name.
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The root cause is a predatory investments industry that markets active management and individual “dabbling” in the markets as a form of productive wealth accumulation. This guy should know better, sure, but he also shouldn’t be in a system where he can be putting his 401k in speculative garbage, let alone transferring it to people he met on WhatsApp.
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Agree 100%, the story actually starts with this
“This is an app here is making some trades,” he told 3 On Your Side as John perused through his phone. “This is the gold U.S. dollar price.”
Which, although nonsensical, indicates John has been trained to think in terms of trading and speculation instead of investment. This obviously makes him a better mark!
Also unmentioned in the article is the fact that you can’t just wire money out of your 401k without paying a substantial penalty, another huge red flag.
He let them take his picture though! 
I guess props to him for going public to serve as a warning to others (assuming the whole story is legit). I think most people would take this shame to their grave.
Based on my past experiences with the media, I was expecting Mr. Smith here to have $5-10k total in his 401(k) at age 50+. Then the terrible journalist pretending like he has now lost EVERYTHING, as if there were no other possible ways he could’ve fixed this problem. Props for having a decent amount of money saved at least, albeit he seems to be behind for someone with such a prominent neck gullet.
Is that Canadian or a typo?
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Your point is moo.
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So this guy withdrew his 401k, paid the 10% penalty, and now owes tax on it too? Or I guess he could be over 59.5?
If you get an article published that you got scammed out of your 401k, I assume the IRS still wants their taxes? If not and you can somehow wriggle out then I’d wonder if this guy is actually scamming the IRS.
Don’t worry, he’s getting tax help from a cute Chinese girls that he met on WhatsApp.
People of both sexes get catfish scammed all the time. I don’t see what makes his story so special.
It’s not obvious which thread this belongs in, but this was very interesting to me:
Not the actual series (which I’ve only seen 2 episodes of), but the measurement. I’ve been fascinated for a while about how companies like Netflix determine whether an internal investment like this is worthwhile. You’ve already got people paying a monthly fee for unlimited content - how do you figure out whether it’s worthwhile to add item X to that content? And how do you evaluate whether it was worthwhile after the fact to do so?
Sure, you could look at how many people actually watched it, and trends in memberships/retention/churn around the series. You could look at whether the people who watched it were marginally more likely to renew and whether new sign-ups were watching it immediately, as well. But those all seem incredibly noisy. I’d love to sit in a room with the people who actually evaluate this with so much money on the line.
Not that this is a new problem - HBO has faced this question for decades, and even a lunch buffet faces a similar question when they decide whether to add a new dessert at the end of the line. I just think it’s super interesting, and there’s a ton of money riding on it. If an MBA student asked how I’d use data to make the decision to invest $X in a given product, I think I could bullshit a little bit about net present value and marginal cost vs. marginal revenue and opportunity costs, but I don’t actually think I’d have anything useful to say.
Spoiler alert. This is exactly how they do it.
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Great question. Since their revenue is based entirely on subscribers, I would assume that analysts (the value oriented analysts anyway) would have some method for roughly translating estimates new subscriptions and/or subscriptions retained into the value of the company/shares.