Buy Low, Sell High [duh]

From the NEW YORK TIMES
October 17, 2008
Op-Ed Contributor
Buy American. I Am.
By WARREN E. BUFFETT

THE financial world is a mess, both in the United States and abroad. Its
problems, moreover, have been leaking into the general economy, and
the leaks are now turning into a gusher. In the near term,
unemployment will rise, business activity will falter and headlines will
continue to be scary.

So ... Ive been buying American stocks. This is my personal account Im
talking about, in which I previouslyowned nothing but United States
government bonds. (This description leaves aside my Berkshire
Hathaway holdings, which are all committed to philanthropy.) If prices
keep looking attractive, my non-Berkshire net worth will soon be 100
percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and
be greedy when others are fearful. And most certainly, fear is now
widespread, gripping even seasoned investors. To be sure, investors are
right to be wary of highly leveraged entities or businesses in weak
competitive positions. But fears regarding the long-term prosperity of
the nations many sound companies make no sense. These businesses
will indeed suffer earnings hiccups, as they always have. But most major
companies will be setting new profit records 5, 10 and 20 years from
now.

Let me be clear on one point: I cant predict the short-term movements
of the stock market. I havent the faintest idea as to whether stocks will
be higher or lower a month -or a year -from now. What is likely,
however, is that the market will move higher, perhaps substantially so,
well before either sentiment or the economy turns up. So if you wait for
the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on
July 8, 1932. Economic conditions, though, kept deteriorating until
Franklin D. Roosevelt took office in March 1933. By that time, the
market had already advanced 30 percent. Or think back to the early days
of World War II, when things were going badly for the United States in
Europe and the Pacific. The market hit bottom in April 1942, well before
Allied fortunes turned. Again, in the early 1980s, the time to buy stocks
was when inflation raged and the economy was in the tank. In short, bad
news is an investors best friend. It lets you buy a slice of Americas
future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th
century, the United States endured two world wars and other traumatic
and expensive military conflicts; the Depression; a dozen or so
recessions and financial panics; oil shocks; a flu epidemic; and the
resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose
money during a century marked by such an extraordinary gain. But
some investors did. The hapless ones bought stocks only when they felt
comfort in doing so and then proceeded to sell when the headlines made
them queasy.

Today people who hold cash equivalents feel comfortable. They
shouldnt. They have opted for a terrible long-term asset, one that pays
virtually nothing and is certain to depreciate in value. Indeed, the
policies that government will follow in its efforts to alleviate the current
crisis will probably prove inflationary and therefore accelerate declines
in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade,
probably by a substantial degree. Those investors who cling now to cash
are betting they can efficiently time their move away from it later. In
waiting for the comfort of good news, they are ignoring Wayne Gretzkys
advice: I skate to where the puck is going to be, not to where it has
been.

I dont like to opine on the stock market, and again I emphasize that I
have no idea what the market will do in the short term. Nevertheless, Ill
follow the lead of a restaurant that opened in an empty bankbuilding
and then advertised: Put your mouth where your money was. Today
my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a
diversified holding company.

Trick r' Treat!

Screening tonight at Screamfest: TRICK R' TREAT from director Michael Dougherty

Pure awesome:

Yes On Prop 2!

Me, Polly, the NY Times and millions of chickens want you to vote yes on prop 2!

Standing, Stretching, Turning Around

The goal of the California Prevention of Farm Animal Cruelty Act — Proposition 2 on the state's November ballot — sounds extremely modest. It would ban the confinement of animals in a way that keeps them from being able to stand, sit, lie down, turn around and extend their limbs. The fact that such fundamental decencies have to be forced upon factory farming says a lot about its horrors. We urge California voters to pass Proposition 2. We urge every state to enact similar laws.


Americans are becoming increasingly aware of how and where food is raised. With that should come real concern. The mantra of industrial farming has always been efficiency, but efficiency has come to mean a pregnant sow — millions of them — confined in a gestation crate barely 2 feet wide and only as long as she is. It means veal-calves rendered virtually immobile in crates barely large enough to contain their bodies. It means endless rows of laying hens kept in battery cages so small that the birds cannot even stretch their wings.


No philosophy can justify this kind of cruelty, not even the philosophy of cheapness. Proposition 2 will not just improve the square footage available to these suffering animals. Reducing the concentration of animals will also help reduce the water and air pollution created by factory farms. It will also begin to redress the imbalance between small farmers and the huge corporations that have acquired vertical, and fundamentally anti-competitive, control over the meat industry.


To a California voter still undecided on Proposition 2, we say simply, imagine being confined in the voting booth
for life. Would you vote for the right to be able to sit down and turn around and raise your arms?

[NY TIMES]

David Foster Wallace

When writer David Foster Wallace took his own life on September 12th this year, I knew that I wanted to make some sort of comment on the passing of this literary genius -- this thinker who concocted tales and penned essays most writers wouldn't even think to dream of -- but somehow I couldn't find the words to relay the sort of impact I believe he had on those who read his work or heard him speak...I also read about 15 obits that said it way better than I ever could...but in the course of reading all these obits I came upon an unpublished speech Foster made to the class of 2005 at Kenyon College and I found it to be a brilliant piece of wisdom to bestow on...well, anyone really.

Twenty years after my own graduation, I have come gradually to understand that the liberal arts cliché about teaching you how to think is actually shorthand for a much deeper, more serious idea: learning how to think really means learning how to exercise some control over how and what you think. It means being conscious and aware enough to choose what you pay attention to and to choose how you construct meaning from experience. Because if you cannot exercise this kind of choice in adult life, you will be totally hosed. Think of the old cliché about quote the mind being an excellent servant but a terrible master.

He makes the point that everyone has to break free from the innate notion that they are the center of the universe, or in other words, you must truly be able to see the world through a more objective lens and focus less on the "you." He makes an example of how its easy to sit in traffic and think that the asshole in the huge SVU in front of you is an unthinking, environmental-scourge who is just in your way as you are trying to get home, but from another angle...

...It's not impossible that some of these people in SUV's have been in horrible auto accidents in the past, and now find driving so terrifying that their therapist has all but ordered them to get a huge, heavy SUV so they can feel safe enough to drive. Or that the Hummer that just cut me off is maybe being driven by a father whose little child is hurt or sick in the seat next to him, and he's trying to get this kid to the hospital, and he's in a bigger, more legitimate hurry than I am: it is actually I who am in HIS way.


He calls this sort of thinking your "default setting" and explains that you have to struggle to break free from it, continuing...

And the so-called real world will not discourage you from operating on your default settings, because the so-called real world of men and money and power hums merrily along in a pool of fear and anger and frustration and craving and worship of self. Our own present culture has harnessed these forces in ways that have yielded extraordinary wealth and comfort and personal freedom. The freedom all to be lords of our tiny skull-sized kingdoms, alone at the center of all creation. This kind of freedom has much to recommend it. But of course there are all different kinds of freedom, and the kind that is most precious you will not hear much talk about much in the great outside world of wanting and achieving and [unintelligible -- sounds like "displayal"]. The really important kind of freedom involves attention and awareness and discipline, and being able truly to care about other people and to sacrifice for them over and over in myriad petty, unsexy ways every day.

That is real freedom. That is being educated, and understanding how to think. The alternative is unconsciousness, the default setting, the rat race, the constant gnawing sense of having had, and lost, some infinite thing.

To sum up....

...It is about the real value of a real education, which has almost nothing to do with knowledge, and everything to do with simple awareness; awareness of what is so real and essential, so hidden in plain sight all around us, all the time, that we have to keep reminding ourselves over and over:

"This is water."

"This is water."

It is unimaginably hard to do this, to stay conscious and alive in the adult world day in and day out. Which means yet another grand cliché turns out to be true: your education really IS the job of a lifetime. And it commences: now.

I wish you way more than luck.

The speech itself -- and I wish I could find audio -- is tremendously insightful and inspiring and, as much as I hate to chop it up and present it in soundbytes, I know the best way to get people to go see a movie is with a trailer, so consider that your teaser -- the full transcript is here.

If you want to check out his novels, Infinite Jest is daunting (I have yet to tackle it), but is touted as a penultimate peice of post-modern fiction. Brief Interviews With Hideous Men is a short story collection that is more easily tackled (I have it if you would like to borrow). And A Supposedly Fun Thing I'll Never Do Again is my top pick because I lean towards essays over fiction...it also has such a fantastic title.

Do yourself a favor and read ANYTHING he's written.

Remakes Are (Frequently) Horseshit

Novels are translated from one language to another. One never assumes, "Well, Dostoevsky's themes really won't play in the U.S., we should get Dean Koontz to re-write his novel for American audiences." Furthermore, I'm sure Cormac McCarthy would take it personally if a French author re-wrote The Road to make it more acceptable for a foreign language audience -- hell, the guy is still alive and his book is still new! In film, however, the respect for a piece of narrative art is minimal if existent at all.

A good foreign film is tossed to American filmmakers like a piece of raw meat heaved into a jackal cage. They tear at it madly -- unable to execute an original idea of their own, they feed off other people's art. How utterly insulting to have a film you made -- a film JUST NOW being released in the use -- being remade before it even hits theaters. "Americans won't read subtitles" is a total piece of bullshit - just look at Passion of the Christ, Pan's Labyrinth, Hero or Crouching Tiger, Hidden Dragon. At least let the original breathe on its own before snuffing it out when no one has had a chance to see it in its pure form. And don't try to mask your creative bankruptcy with some veil of "I'm exposing their ideas to a larger audience," because that's also complete hackery.

This tantrum is not for nothing, by the way...

Magnolia Pictures will be releasing Let the Right One In in LA/NY October 24th with more cities to come [Slashfilm has details] and I would urge everyone to see the original before it's remade for U.S. audiences. In short, it is an art house horror film that defies every horror film convention and fashions a perverse love story that will haunt you relentlessly. It doesn't really matter if I find the remake insulting because it's not my film to begin with, so here is what the film's Swedish director Tomas Alfredson told Moviezine:

Remakes should be made of movies that aren’t very good, that gives you the chance to fix whatever has gone wrong. I’m very proud of my movie and think it’s great, but the Americans might be of an other opinion. The saddest thing for me would be to see that beautiful story made into something mainstream.… I don’t like to whine, but of course – if you’d spent years on painting a picture, you’d hate to hear buzz about a copy even before your vernissage!

The less you know the better, but this trailer should help you decide if you want to Let The Right One In...and by "right one" I mean "original," so kudos to Magnolia for releasing it here in the U.S.

Frie-deened

Okay, so maybe I was a little harsh on Friedman before ever having read his book, but I do love this bit from his NY Times editorial today about the financial crisis:

Well, you say, “I don’t own any stocks — let those greedy monsters on Wall Street suffer.” You may not own any stocks, but your pension fund owned some Lehman Brothers commercial paper and your regional bank held subprime mortgage bonds, which is why you were able refinance your house two years ago. And your local airport was insured by A.I.G., and your local municipality sold municipal bonds on Wall Street to finance your street’s new sewer system, and your local car company depended on the credit markets to finance your auto loan — and now that the credit market has dried up, Wachovia bank went bust and your neighbor lost her secretarial job there.

What a wonderful way to summarize the idea that we are all connected and, ergo, all fucked.

[NY Times]