3 ways to go broke - Liquor, Ladies and Leverage

[djefferis]

Great quote from the late Charlie Munger - reminded of it today by an article on Warren Buffet.

Smart man - he made Buffett into the wealthiest man in the world following his advice. Gamblers would be wise to follow this philosophy.

 

[jjgold]

Yep all three for suckers

 

[fishhead]

Let's get RIPPED men and buy some hookers.

-SLICKFAZZ-

 

[maltedhopsfrenzy]

WTH is ‘leverage’?

 

[BigJay]

WTH is ‘leverage’?

 

[carolinakid]

for sure gambling and women and drinking do not mix......now that a real gamble if you do it

 

[carolinakid]

also it call buying on margin crazy by some lol, i have over 100,000 out there now but i use puts and calls to cover my ass, because if it drop to a certain price you have only a few days to put up the cash to even it out

 

[fishhead]

GL CK

 

[Tanko]

Charlie Munger was a smart man.

Liquor --> always leads to mistakes
Ladies --> always leads to mistakes
Leverage --> always leads to mistakes

 

[carolinakid]

gambling 101 never mix gambling and ladies

 

[edawg]

Munger and Buffet are garbage both absolute losers in life that people are brainwashed to think they are winners.

 

[jjgold]

Most people that trade short term get destroyed that’s proven fact

 

[BigJay]

WTH is ‘leverage’?

also it call buying on margin

Oh my God, the Dukes will corner the entire frozen orange juice market.

Trading Places (1983) clip with quote Oh my God, the Dukes will corner the entire frozen orange juice market. Yarn is the best search for video clips by quote. Find the exact moment in a TV show, movie, or music video you want to share. Easily move forward or backward to get to the...

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[BigJay]

WTH is ‘leverage’?

also it call buying on margin

 

[KingKolzig]

Had to spank off cause woman therapist today

 

[djefferis]

Munger and Buffet are garbage both absolute losers in life that people are brainwashed to think they are winners.

Go against them and they will crush you. Munger is now deceased - and Buffett is not as involved in the day to day of Berkshire Hathaway - but the company has built itself on the principle of buying simple to understand business and then cutting cost at every possible point - and engaging only management/employees committed to doing things “their way” - while also pressuring the competition into submission via killing margins to gain share - then expanding the margins when they have a foothold.

Look at every business they run - Insurance, rail roads, energy or food. They invest only to break up and sell parts for a profit - or to dominate by killing competition with razor thin profit margins only they can sustain with their management and backing.

You might be a loser - but when you’re playing banker at Monopoly and can dip into the bank - it’s much easier to win the game. Learned that lesson around age 7 and Berkshire proves it applies in business still. Hard to win going against someone who is betting you will fail - and has the resources and capital to ensure it.

 

[edawg]

Go against them and they will crush you. Munger is now deceased - and Buffett is not as involved in the day to day of Berkshire Hathaway - but the company has built itself on the principle of buying simple to understand business and then cutting cost at every possible point - and engaging only management/employees committed to doing things “their way” - while also pressuring the competition into submission via killing margins to gain share - then expanding the margins when they have a foothold.

Look at every business they run - Insurance, rail roads, energy or food. They invest only to break up and sell parts for a profit - or to dominate by killing competition with razor thin profit margins only they can sustain with their management and backing.

You might be a loser - but when you’re playing banker at Monopoly and can dip into the bank - it’s much easier to win the game. Learned that lesson around age 7 and Berkshire proves it applies in business still. Hard to win going against someone who is betting you will fail - and has the resources and capital to ensure it.

 

[djefferis]

Amazes me the people who just don’t understand how margin works.

They will talk about how they would never invest using it - but walk around with a pocket full of credit cards - a car note snd a mortgage. Like WTF are you thinking - you say margin is for suckers - but you are literally laying more in interest while “investing” in your future/retirement.

Yea - maxing out leverage to buy a stock that you read about on a message board that’s going to innovate the way we broadcast opera or something is stupid. Taking solid dividend payers/decent yielding bonds and locking up as much as possible while reasonably utilizing a margin loan is not.

My employer allows me a margin loan at no interest of 1/5 of my salary - to be used to buy company stock. Say I make 100k a year - that’s a 20k interest free loan. I can buy 21.5k a year in company stock at a 15% discount to market - and it yields 3% - so I buy shares at 85% of value using a margin loan - make 3% for holding them and as long as the value remains stable for 24 months - I can sell and pay only long term capital gains on my return of roughly 10%. That’s a pretty effective use of margin to me. Yes - I risk share price dropping - but again pretty stable employer, 3% dividend yield supports it’s a mature company and hey - if the share price drops 40% tomorrow - my guess is I have bigger problems at work than a depressed share value - I’m probably on the chopping block for someone younger and cheaper.

 

[Tanko]

A lot of people misunderstand the value in employee stock purchase plans. Sure they are usually profitable but not as much as it appears on first glance.

Company A offers employee stock at 10% discount. The money comes right out of his check (after taxes of course). If you buy $10,000 worth of the stock for $9,000, you won't actually net $1,000 profit (assuming the stock price never changes, there are no capital gains taxes, and you sell it right away for no fees).

The company will add the $1,000 difference to your pay as taxable income. This boosts your total income for the year.

If you're in a 22% bracket, the stock costs you $9,220. The $9K you used to buy the stock plus the 22% tax on the $1K given to you by the company. Net profit assuming stock value never changes is $780 not $1,000. Still a great deal.

Additional Items:

• If you're about to cross a tax bracket, the "profit" may be even less.
• Also, many companies require that you hold the stock a minimum amount of time (6 mo., 1 yr, or longer). Could the stock lose value? Could you have secured more profit from that $9k elsewhere?

 

[edawg]

Billionaire cheapskates made their money shorting and busting out companies in trouble.