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Berkshire Hathaway Inc. Message Board

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    • baltbear@ymail.com baltbear Dec 8, 2011 8:12 PM Flag

      ecker,
      :"And it's not a zero sum game. Societies as a whole can become wealthier. Compare life now for the 99%'ers with life a 100 years ago. "
      completely correct.
      but: so what??
      almost all of that gain over 100 years came from throwing much of the wealth gain back towards the >makers<, not managers.
      starting in the 80s, that process began to reverse. with the actual effect that the wealth creation "engine" has chocked, leaving mostly paper shufflers.
      simple metrick:
      how many of those from 1860-1960 bounced into the 1% by being engineers, chemists, inventors---
      and how many 1990-2010 got there by finance...

    • mornin geeps, to keep it simple lets use brb. if brkb buys back 5 million shs but issues 10 million new shs as a result of option grants exercised our % ownership of the company has been reduced yearly , right ?
      for apple, the issued and out will increase about 2 % a year going forward according to value line , so far, they never bought back a share , they are building up cash, so insiders etc are taking 2 % of the company away from shareholders yearly, maybe forever, it adds up bud.

      btw, when a company goes public the SEC limits how much the company can pay, combined, in the aggregate, to underwriters, insiders, founders, promotors, to get public to ptotect the buyers of the ipo. Thats part of the reason in my later deals the SEC made me disclose in the prospectus that i may be deemed a , finder, founder, affiliate, promotor, etc of the issuer. I want public companies to offer better disclosure and transparency with respect to what % of the company insiders will take yearly of the equity of the company via option grants forever. AND how those shs are taxed these days since both parties of on the take sbags may have passed new and improved rules since my day. For all i know they passed a new rule, IF members of CONgress got at least 25 % of your hot IPO, insiders sell their stock tax free, nothing would shock me at this point, nothing. IF members of both parties can trade stock based on legislation they are working on that isnt public, can they pass that info on to their biggest CONtributors too, is that legal ? sheet, where i do send a check to obama and newt, i wanna buy the crips and the bloods, why gamble ?

      its complicated geeps, very complicated , just know that every morning that you wake up, BOTH PARTIES are trying hard to lower your standard of living and take from your family members too, both. shameful bro shameful.

    • So, if I understand you HC, some companies buy back stock, not to retire it, and thereby increase book value per share, but simply to distribute it to senior employeees, as incentive stock options, as part of their remuneration.
      As such, it is simply part of the cost of doing business, and adds nothing to the value of the stock.
      Had it been bought back and retired, its value could have been added to a dividend distribution, for the benefit of shareholders. Right?

    • Of course. Have we met?

    • buffett says incomes above a million should pay more than 15-20 % on long term gains you dont agree ? couples with long term gains above 1 mil, 5 mil, some number cant pay 25 % on those gains in exchange for spending cuts ?

    • I get your point. I'm not a big fan of how incentive stock options are used either. It's just not typically a taxation issue.

    • as usual brky you miss the point and change the topic. regardless of the effective tax rates are insiders in most companies taking 1,2,3 % of the equity a year, yes or no ? who gets rich, the insiders and employees getting stock or the partners ? a good reason to own brkb, no ? guess what i did the 80s and 90s brkybro, but i paid 20 % on long term gains more than a fair rate.

    • If you go out-of-pocket to exercise the option, I suppose so. But that almost never happens.

    • brkahoo,

      NQSOs you pay ordinary income tax on, but Incentive Stock Options, no. It's easy to get in the habit of assuming HC is getting things wrong, but insider profiteering is what he knows.

      Here's a link:
      http://www.salary.com/Articles/ArticleDetail.asp?part=par414

    • if you CONvert options into common hold it two years and sell, you pay tax at ordinary income rates ? since when ? do companies ever pay the tax on 10b5 sales ? btw, even if those profits are taxed at 75 %, did they take equity from current shareholders and dilute us down ? who gets rich in the long term ?

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