How many dollars worth of stock does one need to own before qualifying to attend the Berkshire Hathaway Annual Shareholders Meeting?

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SO, HERE'S AN UPDATE ON THE FREE TICKETS!! (they are gone!)*

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HERE'S THE STORY:  SO, A YOUNG MAN (IN INDIA) TOLD ME THAT HIS DREAM WHAT TO ATTEND THIS MEETING WITH HIS FATHER.

AGAIN, HE IS IN INDIA!

I RECEIVED THIS VERY PHOTO FROM HIM JUST A FEW HOURS AGO.

GOD WILLING HE'S GOING TO GO WITH HIS FATHER TO SEE (AND, MAYBE MEET) MR. WARREN BUFFETT IN OMAHA.

HE THANKED ME FOR BOTH GETTING, AND SENDING, THESE TWO TICKETS TO HIM!

HE'S VERY EXCITED!

*thank you FEDEX  for getting these tickets to HG!!

(I FEEL GOOD!!)

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I (no longer) HAVE TWO FREE TICKETS* TO BERKSHIRE HATHAWAY'S 2016 ANNUAL SHAREHOLDER MEETING (I AM NOT GOING THIS YEAR!)

Warren Currier is a Most Viewed Writer in Value Investing.

Photo credit: BLOOMBERG VIA _______________________________________________________

QUESTION: "WHAT DOES WARREN BUFFETT THINK ABOUT THE SILICON VALLEY?"

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ANSWER: 

(BUFFETT) "HEY MUNGER, ANY GOOD IDEAS ON HOW WE CAN SCORE A FEW QUICK BILLIONS?"

(MUNGER) "I ALREADY TOLD YOU, WARREN! SHORT THE SILICON VALLEY"

(BUFFETT) "ARE YOU SUGGESTING WE DOUBLE-DOWN ON BYD?"

(MUNGER) "PRECISELY"

(BUFFETT) "LET'S DO IT!  WE'LL SHORT THE VALLEY WITH AN INCREASED INVESTMENT IN BYD. AND THEN WE'LL REALLY SHOW THEM WHEN WE IMPORT OUR CHEAP ELECTRIC CAR.  CHARLIE, I LOVE IT! WE'LL MAKE BILLIONS UPON BILLIONS *AND* WE WILL BE LETTING EVERYONE KNOW WHAT WE REALLY THINK OF THE SILICON VALLEY!"

*Please send me a PM with your story.  And on Friday, April 22, 2016, I'll pick one person to whom I'll send two tickets for this year’s Berkshire Hathaway shareholder meeting.

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6 things I learned at Buffett’s annual meeting

Warren Buffett, star

FORTUNE — The drumroll for Warren Buffett’s annual Berkshire Hathaway meeting in Omaha started in the airport terminal back in D.C., where a father was explaining over sandwiches with his young redheaded son the concept of share classes: “But sometimes you can buy a smaller piece for a lot less money …”

And on the plane — perhaps the only weekend of the year where Omaha-bound flights are completely full, with most passengers in suits — the chatter was all Berkshire.

On the airport shuttle to the hotel, the conversation between strangers ranged from the market (“I’m sure there will be a dip, I’m just not sure when”) to how they’d first come to own Berkshire shares (“I heard about it from my neighbor … I originally sold when it hit $2,000”) to Buffett’s succession plan (“It’s pretty much assumed that it’s going to be Ted Weschler”).

MORE: Warren Buffett, activist investor?

The meeting itself, which begins with a brief discussion of earnings results and closes with the obligatory board vote, has become a full-blown festival that takes over Omaha the first weekend in May — a bonanza of an event that Buffett dubs “Woodstock for capitalists.” Indeed, for many of the shareholders who flock to the event from all over the world — especially the early investors whose Berkshire-driven wealth is often a footnote to an otherwise modest lifestyle — the weekend is a spree during which they are encouraged to do like Buffett. That generally involves (besides disciplined investing) dining on ketchup-laden sandwiches, See’s candy, and Coca-Cola — at any and all times of day — and loading up on discounted items from Berkshire companies in the name of frugality. As Buffett’s longtime business partner Charlie Munger put it, somewhat facetiously, “The more you buy, the more you save, at these prices.”

Among the Oracle of Omaha’s responses to dozens of shareholder questions at the meeting, here are some of his key insights:

Ted and Todd are being groomed for management.

As shareholders get increasingly restless for Buffett to name a successor, speculation has focused on his two portfolio managers, Ted Weschler and Todd Combs, who have outperformed Buffett himself for the last several years, but have yet to make an appearance at the annual meeting. Buffett continued to be demure about his pick, but said Weschler and Combs, who currently manage roughly $7 billion, “will be handling more money in the future than they are now.” Buffett also noted that he has relied on the managers to help with other parts of the business, such as negotiating with companies and executing ideas Buffett doesn’t “feel like carrying out myself.” Hinting further about Combs and Weschler’s expanding role, Buffett said, “They’ll be more important factors as the years go by.”

Don’t ask Buffett for a raise.

The Oracle may be a great boss in many aspects — he doesn’t micromanage and rarely makes layoffs, for example (more on that later) — but he seems to prefer employees who accept their salaries without complaint. On several occasions during the meeting he praised managers for doing their jobs well without asking for more. “Ted and Todd have both been very helpful in doing things beyond their investment management duties — they like doing it, they want to do it, they don’t ask for extra compensation for doing it,” Buffett said. And when Buffett acquired RV company Forest River, offering its CEO a certain compensation package, “he never suggested a change,” Buffett remembered fondly. To be sure, Buffett is known to pay pretty well.

Global warming is irrelevant.

Buffett’s railroads carry coal, but he stays out of the debate over coal’s environmental impact because the trains are required by law to carry it, so he couldn’t boycott it even if he wanted to. But he doesn’t see global warming as a problem for Berkshire anytime soon. “I don’t think that when making an investment decision on Berkshire Hathaway   , or all companies, that climate change should be a factor in the decision-making process,” Buffett said. Munger is even more skeptical: “I think a lot of the people who claim that climate change is going to cause more hurricanes and natural disasters are over-claiming,” he said, to much applause.

Billionaires are flying private more often.

Buffett’s private jet company, NetJets, grew very little because fewer new customers bought planes. Still, only a small segment of wealthy individuals can afford their own planes, and Buffett was encouraged by the fact that current owners appear to be using their jets more often, something that declined during the recession: “The flights have picked up — the owners are using the planes more in the last six months to a year,” Buffett said.

Self-driving cars threaten Berkshire Hathaway.

There are few things that pose a competitive threat to Berkshire Hathaway, and Buffett and Munger are loath to admit those threats. Still, there’s one development that could put pressure on Berkshire, according to Buffett: self-driving cars. Buffett is a huge fan of longtime holding GEICO, the auto-insurer. But the question of auto insurance for self-driving cars that don’t crash has not yet been answered. And if futuristic cars do put GEICO out of business, says Buffett, “at least I won’t be there to see it.”

Buffett is bullish on Airbnb.

While New York regulators wage war against Airbnb, the housing rental startup, Buffett is endorsing it for its power to lower hotel prices by increasing supply. After complaining that Omaha hotels were gouging Berkshire shareholders by jacking up rates during the weekend of the annual meeting, Buffett encouraged visiting investors to go to Airbnb — hoping increased supply would lower prices.

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As stated above:  I HAVE TWO FREE TICKETS* TO BERKSHIRE HATHAWAY'S 2016 ANNUAL SHAREHOLDER MEETING (I AM NOT GOING THIS YEAR!)

*If anyone is interested please send me a PM with your story.  And on Friday, April 22, 2016, I'll pick one person to whom I'll send the two tickets for this year’s Berkshire Hathaway shareholder meeting.

_____________________________________________________

SO, HERE'S AN UPDATE ON THE FREE TICKETS

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HERE'S A HUMAN INTEREST STORY FOR YOU:  SO, A YOUNG MAN IN INDIA TOLD ME THAT HIS DREAM WHAT TO ATTEND THIS MEETING WITH HIS FATHER.

AGAIN, HE IS IN INDIA!

I RECEIVED THIS VERY PHOTO FROM HIM JUST A FEW HOURS AGO.

What are the benefits to using Silicon Valley Bank?

I've had nothing but good experiences with Silicon Valley Bank (company). I spent two weeks in San Francisco with the sole purpose of setting up a business bank account for a company I'm re-locating there. Absolutely none of the major banks would give me the time of day. I put this down to the fact I am not a United States citizen, but that should have absolutely no bearing on me getting a business bank account for a registered LLC.

After returning home to England, I reached out to Silicon Valley Bank (company) and ended up setting up a bank account within a week.

For all of their down sides (a weak and somewhat outdated online system), I'm just appreciative Silicon Valley Bank (company) has some common sense and seems to want my business.

Where can I go to find out how well-funded various U.S. pension funds are?

Census Bureau has good data for the public pension funds which you can access through their website.
http://www.census.gov/govs/retire/

A comprehensive database of both private and public pension funds, their asset holdings, and funding levels likely exist but will likely cost you a pretty penny to gain access as that data used mostly by investment professionals and fund consultants.

What's the first step in short selling your home in California?

Here are all steps that you need to set up a short sale:

Though setting up a short sale is considered as a difficult procedure, but you can easily manage it by taking care of the few factors. For an instance, you need to be aware of the requirements, the proper procedure and should find a right buyer who will be interested in buying short sale homes. For your convenience, here we are mentioning the procedure that will let you setup your home’s short sale with much ease.

Step 1: Know the requirements and get prepared

Step 2: Contact your lender and notify him about the short sale

Step 3: Hire a real estate agent

Step 4: Inform your lender about the offer you get

Step 5: Get final approval from your lender

Here you can read these tips in detail about How to Set-up a Short Sale

What exactly is a Credit Default Swap (CDS)?

CDS – Financial weapons of mass destruction.

Meaning:
In CDS, three parties are involved. The bond issuer, CDS buyer normally the bond buyer and CDS seller, normally insurance co. & Banks like AIG,etc.

The bond buyer insures himself in case the bond issuer defaults. Therefore, the bond buyer pays a premium like it's done in case of insurance to CDS seller. Incase, the bond issuer defaults then, the bond buyer i.e., CDS buyer who insured himself by paying a premium will get money from the CDS seller.

Role of CDS in 2008 financial crisis:

Company normally needs fund to expand it's operation.Therefore, they issue bonds and agree to pay X rate of interest annually with the principal at the end of the period say, 5 years.
The bond buyer gets X rate of interest annually, but fears that the company wouldn't be able to pay it's principal at the end of the period. So, therefore they insured themselves by buying CDS and paying X amt. of premium regularly. Normally, the premium is 1%-2% of the insured amount because the CDS seller thinks that the bond issuer in any case wouldn't be able to default. Eg: For, $100 million insured amt. CDS buyer paid only $1 million (assuming 1% premium). If bond issuer defaulted, CDS seller  has to pay $100 million.

Why did CDS seller think that bond issuer wouldn't be able to default?

They thought so, because companies issuing bonds had huge amount of assets mainly land and houses. Even, if it's daily operations are run in losses, they wouldn't default because of the assets and the prices were going up.
But, then came the housing bubble and finally housing prices went down and this lead to chain reaction and suddenly all of them out of business and so, the bond issuer. They started defaulting.

Now, the CDS seller has to pay the insured amount to CDS buyer, from the above example which is $100 million.

John paulson, hedge fund earned around $15 billion by doing this, of which $500 million from single trade from deutsche bank. AIG, insurance company sold lot of CDS worth $ 440 billion.

How does the 2-year, 30-year treasury trade work?

The idea is to capture the spread between the yields on the 30yr bond and the 2yr note.  First, short sell 2yr notes.  You earn the cash proceeds from the sale.  You need to pay the coupon (around 0.5%), and you receive the repo rate.  Then, using the cash from your 2yr sale, purchase 30yr bonds.  You receive coupon (around 4%) and pay the repo rate.  (The repo rate is so close to zero that you can ignore it for the purposes of this discussion).

The question is: how many 30s do you buy, and how many 2s do you sell?  If you size the trade evenly, you earn that 3.5% spread each year.  But this is very risky, for two reasons.  First: what do you do after two years?  Perhaps 2yr rates are significantly higher.  When you purchase new 2s, you could be earning substantially less return.  Second: an evenly weighted position has massive exposure to the overall level of interest rates — what traders call "duration."  Suppose all interest rates, from 1mo bills to the 30yr bond, increase by 1 basis point.  The price of the 30yr bond will fall by much more than the price of the 2yr note.  Typically, if you are putting on a trade like this, you only want to bet on the spread between 2yr and 30yr rates.  You don't want to be exposed to the overall level of interest rates, so you weight the trade accordingly.

In the 2s/30s case, this means selling approximately 10 times as many 2s as 30s.  Now think about what this does for your risk.  Sure, if 2s/30s flattens (i.e. the difference in yields gets smaller), you will make money.  But instead of earning that 3.5% spread, it actually costs you money to hold this trade!  You need to pay 10 * 0.5% = 5% on your 2yr position, while receiving only 4% on your 30yr position.  Trades like this are said to have "negative carry."

Things can be simplified a little bit by using interest rate swaps instead of cash Treasuries, since there's no initial cash outlay and you don't have to deal with repo.  But given that 2yr spreads are positive and 30yr spreads are negative (at least last time I checked), the carry is even more negative.

So really, the trade isn't as simple as it might seem.  You can't capture a riskless 10.5% return!

How is the Fed's zero rate policy increasing the price of risky assets?

Investors are chasing yield as a result of the low interest rate environment.  This is increasing demand for risky assets and therefore inflating the price, as supply has not increased in tandem with demand.
 
Be forewarned of the risk distortion in portfolios that this is causing.  Interesting blog post shows a simple demonstration of how the high-yield bond market has grown.  This is dangerous given the high default rates. 
 
following Debt: Low Interest Rate Environment Driving Higher Risk
 
Makes me wonder if the Fed is creating a bubble in risky assets and when it will pop.  That could be very dangerous.
 
The Fed attempting to control the economy's ups and downs is the "Fatal Conceit" Hayek spoke of

Where can one find total US Hedge Fund assets under management?

One of the better sources out there: BarclayHedge

http://www.barclayhedge.com/rese…

According to the website, 2011 Q3 HF industry AUM totals $1.717 trillion USD.

If you have access to fund of funds or prime brokers, they will also likely have pretty comprehensive reports on the state of the hedge fund industry overall. An Aug 2011 report from Barcap I looked at a few months ago estimated total HF industry AUM at slightly under $2 trillion USD, so basically the same figure as above.