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“We will not fund a company that — where we think that it is going to chew up money in the future.”
“Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.”
leghorn wrote:https://www.forbes.com/sites/sergeiklebnikov/2020/05/02/warren-buffett-sells-airline-stocks-amid-coronavirus-i-made-a-mistake/#53d5ddda5c74
He is selling up and getting out of Dodge. The industry seems to be a money eating monster. He got burnt very badly multiple times before but he kept coming back to Aviation and investing more despite public pronouncements that he is done with Aviation for ever more. There is something about the industry that distorts the ability to perceive of even the most hard-nosed investor.
I'm down about 50k on those shares at the moment.
I had thought that by buying in to Airbus instead of a Carrier I was diversifying my risk somewhat i.e you get rich in a Gold rush by selling pickaxes and spades, not prospecting; boy, was I wrong.
I have €5k to invest tomorrow morning and I'm done with aviation. With even the biggest of them struggling to survive the next 6 months the risks of complete and total wipeout are too great.
Anyhow, rather than making this all about myself my point is that Aviation and Civil Aviation in particular is capable of eating huge amounts of wealth and delivering nothing in return.
To those of you who see it as a hobby, interest or profession you should be thankful to all the misguided investors.
PM wrote:This may be a minority view but buying shares to get rich is pretty dubious ethically. At the extreme, we have thousands of people who just move money around, creaming off a percentage here and there, but who don't contribute anything to the common good.
Wasn't it shareholder value, short-term profits, and so on that got Boeing into trouble?
I'd like people to do an honest day's work for an honest wage than to buy shares in the hope and expectation that they can sell them later at a profit.
I do hope that capitalism doesn't survive the current crisis.
But, of course, it will. It always does.
leghorn wrote:PM wrote:This may be a minority view but buying shares to get rich is pretty dubious ethically. At the extreme, we have thousands of people who just move money around, creaming off a percentage here and there, but who don't contribute anything to the common good.
Wasn't it shareholder value, short-term profits, and so on that got Boeing into trouble?
I'd like people to do an honest day's work for an honest wage than to buy shares in the hope and expectation that they can sell them later at a profit.
I do hope that capitalism doesn't survive the current crisis.
But, of course, it will. It always does.
This is an example of uninformed virtue signalling. If you have a pension fund then you are in the game too.
I'm buying shares in a hope of being able to provide for myself and a hope that they'll retain worth.
Get down off your soapbox there now.
PM wrote:This may be a minority view but buying shares to get rich is pretty dubious ethically. At the extreme, we have thousands of people who just move money around, creaming off a percentage here and there, but who don't contribute anything to the common good.
rfields5421 wrote:PM wrote:This may be a minority view but buying shares to get rich is pretty dubious ethically. At the extreme, we have thousands of people who just move money around, creaming off a percentage here and there, but who don't contribute anything to the common good.
That is what ALL savings type programs/ plans are. Unless you plan to put your money in a cookie jar and hope it is worth something when you are too old to work, you invest in some scheme where other people use your savings to 'make money' from the efforts of others.
Investing in a bank, or a local savings and loan (are there any left in the US?) is people pooling their money to loan it to other people, hoping those people pay back more money than was loaned to them.
As far as getting rich, I doubt most people expect to do that. They try to keep the combined value of their investments ahead of what they have invested as higher costs increase the cost of living. Yes, we all marvel at the few that make really big money in investing. Most just hope to be comfortable in retirement. To even be able to retire without being forced to continue working until their dying day.
PM wrote:Wouldn't it be better if governments ensured various safety nets to protect people from unemployment, old age, illness, etc.? Some governments seem able to do it quite successfully. Others ... less so.
rfields5421 wrote:PM wrote:Wouldn't it be better if governments ensured various safety nets to protect people from unemployment, old age, illness, etc.? Some governments seem able to do it quite successfully. Others ... less so.
The math of a government safety net requires that the number of people contributing to the safety net by working increases continually in-order to provide the funding to supports those others.
Inherent also in the process is the raising of the retirement/ old age if the rate of increase of the number of contributing workers decline. As health care improves, and longevity improves - the 'old age' number rises. Those over the traditional retirement age are forced to continue working as long as their health allows them to work. It is essential if the 'safety net' is to survive long term.
ALL safety net costs come from the taxes on people WORKING today. Companies do not pay taxes - their customers, the buyers of their goods, the users of their service pay the taxes.
Unemployment is supposed to be a temporary condition. If the skills of the worker are insufficient to obtain employment in the current job market, any safety net REQUIRES that person to return to a contributing working role as soon as possible. Either through retraining or acceptance of a position in a different skill area and a lower salary than previously. The only acceptable reason for continued unemployment is disability/ long term illness. Even if the only work available for the unemployed is picking up trash thrown in public places by the inconsiderate. That is not a demeaning job. It is a positive contribution to the public good.
But companies must have economic incentives to HIRE people. Even 'over qualified' people. And economic penalties if they decrease the size of the labor force. Otherwise the company is transferring the costs of supporting displaced/ redundant workers onto the general public. I submit that a company should have no economic advantage in transferring such 'reduced labor' costs to the public sector in order to profit the investors.
I will admit the US based health care for profit system is a joke. Why the people of a supposed 'leader' of the world economy consider the profits of insurance companies and mega-sized medical companies more important than the efficient delivery of health care to the needy is beyond me.
Why people are willing to accept the restrictions placed upon them by unreasonable health insurance plans, I simply do not understand. The average private insurance US worker has less freedom about choosing access to a doctor, less freedom about getting specialty referrals, less access to realistic cost medicines - that most people in Europe or other developed nations.
I'm fully aware that my views are conflicting with the way that I've lived the last 50+ years of my working life. It took me many years to understand how the system is rigged to push the costs of my life onto my children and grandchildren and someday great-grandchildren.
That's also how the world worked before there were safety nets. No 'old age' retirement. No expensive health care.
The simple fact that I'm nearing age 70, and most of my current friends and acquaintances in my social circles are actually older than me, means a safety new with retirement at age 65 is financially unsustainable. Most of my friends and I COULD work. If we had to support ourselves, rather than taking 'safety net' retirement payments to allow us to CHOOSE to not work.
Much of that is choosing to spend personal savings upon my chosen post-working lifestyle, rather than investing that money in my grandchildren.
BravoOne wrote:So I wonder how he feels about his NetJets and Flight Safety investments?
Elite wrote:Perhaps this will give the US aviation industry a chance to reset? The airlines have been a joke for some time now. Customer service is non-existent. Anyone who has flown with an Asian or Middle Eastern airline will know that the US airlines are third world in almost all aspects. Hopefully, management can take this opportunity and do a complete revamp of the staff... but this may be too hopeful.
flyguy89 wrote:Elite wrote:Perhaps this will give the US aviation industry a chance to reset? The airlines have been a joke for some time now. Customer service is non-existent. Anyone who has flown with an Asian or Middle Eastern airline will know that the US airlines are third world in almost all aspects. Hopefully, management can take this opportunity and do a complete revamp of the staff... but this may be too hopeful.
This is such an over-the-top ridiculous statement. I've flown airlines all around the world and the US carriers the past few years have been pretty top-notch in my experience. About the only laggard in my opinion has been American, but honestly my flights with DL, UA, WN, and AS have always been great...both hard and soft product compared to many of their international peers.
rfields5421 wrote:The math of a government safety net requires that the number of people contributing to the safety net by working increases continually in-order to provide the funding to supports those others.
Inherent also in the process is the raising of the retirement/ old age if the rate of increase of the number of contributing workers decline. As health care improves, and longevity improves - the 'old age' number rises. Those over the traditional retirement age are forced to continue working as long as their health allows them to work. It is essential if the 'safety net' is to survive long term.
rfields5421 wrote:If the skills of the worker are insufficient to obtain employment in the current job market, any safety net REQUIRES that person to return to a contributing working role as soon as possible. Either through retraining or acceptance of a position in a different skill area and a lower salary than previously. The only acceptable reason for continued unemployment is disability/ long term illness. Even if the only work available for the unemployed is picking up trash thrown in public places by the inconsiderate. That is not a demeaning job. It is a positive contribution to the public good.
PM wrote:Put very simply (not to say - before you do - simplistically!), there is quite enough wealth in the world to give everyone an adequate standard of living, a good education, decent health care, and a pension. Obviously, it's not easy but, if the will was there, we'd manage without the super-rich billionaires and their super yachts.
Sokes wrote:We also need billionaires, Elon Musk being the best example. In "The constitution of liberty" Hayek argues that new technology is always extreme expensive. There have to be very rich people who can afford to not think economical. Again Tesla comes to mind. There are several more excellent arguments with which Hayek celebrates inequality.
petertenthije wrote:Sokes wrote:A lot of the people that are now complaining at China, share the short term vision. China, on the other hand, looks long term. A completely different mind-set from the western view.