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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Becoming Canadian (416 comments)

I am confused about your positions on preferred stocks - what you are saying does not track with what preferred stocks are today. Preferred stock only has a limited participation in profits, and common stock almost always outperforms preferred - for good casual reasons.

On to your points. There are models of what you are suggesting, most are predate industrialization (Railroads were to first to majorly break away from this model during the 1850, other companies followed) or are in Islamic countries (they still have traditional equity, but need the preferred stock to fill in the balance sheet since they can’t take out loans). These have had a poor record with larger corporations. Most of the problems boil down to having a permanent base of capital and liquidity.

A model might be partnerships or private bank shares. However, the more owners one has the more conflicts one has. Issues show up when you have more than 50 owners. Things break down when there are more than 250. You can reference any modern partnership (law firms, accounting firms, etc.) or worker owned co-op to see the numerous flavors of issues. Every year people are cashing out – they need the money, die, whatever. The demand for cash is often high, leaving scant fund for growing the business.

REITs and Limited Partnerships are another model. They issue and redeem equity frequently. However, since they don’t have a permanent equity and limited retained earnings, their projects tend to be of shorter terms and limited focus.

However, many industries need a long term capital base. Think fab plants, ship building, mining. These take years to build - companies can’t have their capital yanked out of them in the middle of these projects. Banks are special. Take a look at the financial crisis and the bank run on its equity. Governments still restrict how much capital they can pay out. Need cash to pay for an emergency? You may not be able to do that for years. These would be a hard fit in your model.

Another model you might look at are hedge funds and private equity. Like your suggestion they have a initial pay in. However many have lockout periods of 5 to 10 years, discounts on early redemption running from 20 to 40%. The reason for this tends to be liquidity (cash is often not at hand) but valuation is hard. You suggest that a person should be able to cash at a percentage of what a company is worth? Well, what is a company worth? Evaluating private companies is notoriously subjective. Differences of 20% between different appraisers are common.

A Dutch auction would solve some of the above issues, but then you are stuck waiting for management to offer the cash out. Need the cash at some other point in time? Tough luck.
Which takes me back to my original point. Investors in startups get paid when they cash out at the IPO. Anything that reduces the value of the stock on the secondary market is going to lower the price that I cash out as, which lowers my returns, which makes me less likely to invest.

4 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Becoming Canadian (416 comments)

Well, technical the intrinsic value it is the future discounted cash flows to the shareholder. This matters for two reasons.

First, as an investor I don’t care what the company pays out, I care about what I get. If you slap a 50% tax on dividend income, I receive 50% less cash, the value of stock to me falls by 50% (if the only thing we care about is dividends). Taxes and other regulations matter.

Second, it accounts for cash other than dividends, such as when the company is sold – either in part (you sell your stock) or in whole (the company is bought out our merged). At some point I am going to need to sell it – to fund my retirement, when I die, etc. Bedsides, Berkshire Hathaway is worth something even though the CEO has said that they will not pay a dividend in the foreseeable future. Modeling that type of future discounted dividends is hard.

I am not sure what bluefoxlucid’s exact proposal is, but it sounds like gimping the secondary market. If you gimp the secondary market, I am going to get a lower price when the company is sold, which means lower returns for m, and the lower the returns are the less I will invest.

4 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Becoming Canadian (416 comments)

I think you missed my question. Why would I want to give cash (something of value) to a startup and receive stock, something that you imply is trashy and has low to no value? How do get my profits out of the company?
In the strong case (I am not sure if you are going that far) where there is no secondary market there is no way to get my investment back – I would never see a cent back of my initial investment. Weaken the case to where we only heavily discriminate against the secondary market we get some investment return but the return is still dented. The crappier the secondary market is the crappier my initial investment into a startup, the crappier the investment the less is invested

I will say that something of value is being traded on the NYSE – ownership of companies. And while that is a more abstract concept than trading oil futures over at the commodity exchange, it is just as economically important.

4 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Becoming Canadian (416 comments)

So "Schedule D" in Canada involves no long-term/short-term capital loss carryforward rules. No worries about whether a covered call was written deeply in the money and nullifies the holding period. No straddle rules. None of that shit.

I need to ask because dealing with those rules are my day job – how do Canadians avoid constructive sales?

For those who don’t know, in constructive sales one can “economically” sell a security (i.e. stock), extract the money from said sale, but delay the “actual” sell – and the associated taxes – indefinitely.

5 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Becoming Canadian (416 comments)

I am going to avoid all of the distortions and loopholes this proposal would make and assume it would work. Why would I invest in startup under your proposal? Investors care about my total return. Most of my return is going to happen when I sell the stock. The higher capital gains on the traded stock, the lower the return will be, so the stock price will be lower, so my returns will be lower as I sell my founding shares. Result? Less investment in start-ups.

There is a huge body of evidence that supports this – the higher the capital gains the lower the investment in the economy. Carving out expectations for favored business (national champions, family farms, internet startups) has had a miserable history.

5 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Not even much money (416 comments)

I am saying it ain't so.

If you look back at 2012 they made a huge profit but lost money in the 4th quarter. Same for 2013. I am saying it is a slow time of the year. It is the opposite of a Christmas Tree Farm – 3 really bad quarters with no sales and large profits, but huge sales and profits in the 4th.

There are other ways to avoid taxes but this is not one of them.

5 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Not even much money (416 comments)

errrr - the press release says they lost money for the 4th quarter, which I am going to guess is their slow time of the year. IIRC their profit last year was 820m and they have made 680m so far this year. Not billions but nothing to sneeze at either.

5 days ago
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Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings

alexander_686 Re:Think of all those poor accountants! (416 comments)

What studies are you referring too? Everything I have seen has suggested lower taxes on capital leads to move investments.

I will admit that doing studies like these are hard. You have to factor the difference between high vs. low taxation states, how taxes are raised (income vs. consumption vs. investments)that the country has to be publicly committed for the long term (i.e. 10+ years), and how capital is taxed (capital gains, wealth tax, dividend income, etc.)

5 days ago
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Neil Gaiman Confirms Movie Talks For Sandman, American Gods

alexander_686 Re:Neil, Meet Alan (35 comments)

Yes. Neil has done some good stuff already.

Alan Moore has had a horrible experience with Hollywood. Some of that is Hollywood, some of that is Moore being an anarchist who does not play well with corporations or other people. He has a hard time sharing.

about a week ago
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Neil Gaiman Confirms Movie Talks For Sandman, American Gods

alexander_686 Re:Series/Movie Reversed? (35 comments)

About a year ago the idea for American Gods was to make this a HBO series. The first season would be about 10 episodes and cover the book. Not sure what the plans were for the next 6 seasons but Neil said he had something up his sleeve.

The HBO project has been officially killed but I would not be surprised if something similar cropped up for the American Gods TV shows.

For Sandman, I have no idea. There have been some horrible scripts floating out there since the early 90s but I don’t think that is what is going forward.

about a week ago
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Double Take: Condoleezza Rice As Dropbox's Newest Board Member

alexander_686 Re:Maybe she was a figurehead (313 comments)

o.k. then - what would have been the right answer?

Direct supervision is not an answer. Indirect supervision either by multiple layers of bureaucracy (what you were talking about) or by the board were both ruled out by the board.

It is the rare case where conflicts of interest can be completely eliminated. I would argue that either of these methods would have been robust enough to minimize conflict. There are tons of cases where you have married couples working together, parent and child, etc. and organizations have come up with polices to handle and minimize the issue.

I personally feel that shipping her over to the State Department was overkill, but obviously that is not your opinion. What does that leave us with? Fire her because her boyfriend got a job? That seems unfair to her. Maybe soften the blow with a fat severance package? But that would be open to abuse. Any better ideas?

about two weeks ago
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Double Take: Condoleezza Rice As Dropbox's Newest Board Member

alexander_686 Re:Maybe she was a figurehead (313 comments)

If you are referring to Shaha Riza, that happened over at the World Bank, which is not part of the State Department or the US Government. Rice was not even involved.

I also think it was also a complete hack political job taking Wolfowitz down. He is dating a girl, he then becomes her boss (with 2 or 3 layers of bureaucracy between them, so it is not like he is doing performance reports or salary decisions on her), but before he becomes the boss the girlfriend is moved from her job so there can no hint on impropriety. The whole thing smells rank.

about two weeks ago
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Double Take: Condoleezza Rice As Dropbox's Newest Board Member

alexander_686 Re:Oh why not? (313 comments)

Maybe – hindsight is 20/20. Everybody believed that the US would win the initial ground war. The long game was a different matter. My point is that the neocons felt that a small military force could rapidly democratize Iraq – that the population was yearning for a western democratic system. Some neocons where talking about probably regime change in Syria and Iran within a few years. Widely optimistic.

From what I have read about counter insurgency / pacification, it takes large committed force years on the ground to get the job done.

about two weeks ago
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Double Take: Condoleezza Rice As Dropbox's Newest Board Member

alexander_686 Re:Oh why not? (313 comments)

That is not quite true. To simplify, she was a neocon who was overconfident of what US military force could do. That would put her on the side of Dick Cheney, but on the opposite side of Rumsfeld and Powell who were urging caution.

I will second you point on that she is very sharp but that her management of the state department was subpar.

about two weeks ago
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Navy Debuts New Railgun That Launches Shells at Mach 7

alexander_686 Re:Aiming and targeting? (630 comments)

IIRC, the shells will have a guidance system that will allow them to be guided, which is something that they will need if they plan on hitting a moving target – it does take over a minute for the shell to travel 100+ miles – the target will not be in the place where it was when the shell was launched.

about two weeks ago
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Navy Debuts New Railgun That Launches Shells at Mach 7

alexander_686 Re:Power? (630 comments)

Yes. It is going to be powered by (indirectly) by diesel, which is flexible – in the sense that it is widely available, can be used for lots of things, etc. It does not have its own oxidizer, so it is safer to handle, has higher energy density, etc. So a single ship could fire more rounds at a lower cost than a traditional big gun battle ship.

Energy is not the issue – it is the rate of fire. Diesel engines power the supper capacitors, they discharge to fire the gun, and then fill them up again. I have read that this cycle might be measured in minutes instead of seconds. How big of an issue that it will be is a big question.

about two weeks ago
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Smart Car Tipping Trending In San Francisco

alexander_686 Re:San Fran = the new Detroit (371 comments)

So, the German and Japanese bosses who move manufacturing plants to the US are assholes? If that is true, since they are exploiting lower American wages for their unadulterated greed, how come they are not failing like American manufactures?

about two weeks ago
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Smart Car Tipping Trending In San Francisco

alexander_686 Re:San Fran = the new Detroit (371 comments)

No – those are challenges to Detroit. They might explain why Detroit is no longer the undisturbed, preeminent auto manufacturing center of the world. The rest of the world got better. Those are some of the external factors that I was eluding too. It does not explain the failure to evolve and adapt. The failure to respond is an internal factor that lies on the doorstep of Detroit and the Big 3 - these factors they did have control over.

about two weeks ago
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Smart Car Tipping Trending In San Francisco

alexander_686 Re:San Fran = the new Detroit (371 comments)

But what caused the decline in American manufacturing? I can point to certain self-destructive behaviors on both the management and labor side that drove the Detroit auto sector into the ground. Heck, I can even point to the city management and city unions for their fair share. Did they face some hard external challenges? Yes, they did – but the ultimate responsibility of their failure lays in Detroit.

And I can say this as a trained economist and historian. (armature status today, but still.)

about two weeks ago
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New US Atomic Clock Goes Live

alexander_686 Re:Mod parent up (127 comments)

No, the weight of a kilogram is completely arbitrary. They are trying to fix it to something but right now it is just a weight.

A atomic clock works by counting the vibrations in an atom. The atomic clock fails when it miscounts the vibration of an atom, causing the error. The new clock is so good at counting that errors rarely occur.

about two weeks ago

Submissions

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Microsoft to Buy Nokia's Devices Unit for $7.2 Billion

alexander_686 alexander_686 writes  |  about 8 months ago

alexander_686 (957440) writes "On the heels of CEO Steve Ballmer announcing his resignation, it looks like Microsoft is going to be buying Nokia’s handset unit. Nokia is currently a big cheerleader for the Window’s 8 phone. Stephen Elop was a Microsoft employee, then Nokia’s CEO, and is now stepping down. He will be the head of the handset division after the sale is finial. Elop is the current front runner to replace Ballmer when he steps down in a year."
Link to Original Source
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Microsoft may invest $1B-$3B in Dell buyout

alexander_686 alexander_686 writes  |  about a year ago

alexander_686 (957440) writes "We have talked about Michele Dell In Buyout Talks With Private-Equity Firms

Now the Talk is that Microsoft may invest 1 to 3 billion. I personally doubt Microsoft is going for majority ownership but it would be a significant stake. Dell is worth around 22b to 25b. Speculation is that investors would put up 5 to 7b in equity, borrowing the rest. You can do the math to determine the ownership percentage. As a point of reference, Michele Dell’s stock is worth 3.6b

We know about Microsoft’s relationship with Nokia – both in terms of ownership, swap of key personal, and the Window’s phone. Is this a repeat?"

Link to Original Source
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AT&T- Verizon collude to offer poor service

alexander_686 alexander_686 writes  |  about a year ago

alexander_686 writes "I recently found a very good about article How AT&T and Verizon Manipulate Your Smartphone by Susan Crawford. It’s the 2nd excerpt from her book “Captive Audience.”

The two kinds of Internet-access carriers, wired and wireless, have found they can operate without competing with each other. The cable industry and AT&T- Verizon have divided up the world much as Comcast and Time Warner did; only instead of, “You take Philadelphia, I’ll take Minneapolis,” it’s, “You take wired, I’ll take wireless.”

I am a free market type of guy. I do recognize the abuse that can come from natural monopolies that utilities tend to have, but I have never considered this type of collusion before."
Link to Original Source

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SEC investigates Netflix CEO Reed Hastings over Facebook Posting

alexander_686 alexander_686 writes  |  about a year ago

alexander_686 (957440) writes "SEC investigates Netflix CEO Reed Hastings on Facebook Posting

Hastings said in the filing the SEC is questioning his July 1 Facebook posting, seen by 200,000 followers, in which he said customers watched “over 1 billion hours” of videos on Netflix in June. He had previously posted on his company blog that members were viewing “nearly a billion hours per month.”

Rarely, outside of Carl Sagan, have I heard people saying that one billion not significant."

Link to Original Source
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Knight Trading Losses

alexander_686 alexander_686 writes  |  about a year and a half ago

alexander_686 writes "Apparently old code never dies – it comes back to haunt you.

From Bloomberg, "Knight Capital Group Inc. (KCG)’s $440 million trading loss stemmed from an old set of computer software that was inadvertently reactivated when a new program was installed, according to two people briefed on the matter.""

Link to Original Source
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Harvard and MIT to provided online classes

alexander_686 alexander_686 writes  |  about 2 years ago

alexander_686 writes "Harvard and MIT are launching edX with 60 million dollars to offer “low fee” online classes. No word yet on classes offered or who will be teaching. No college credit but certificates will be offered.

The technology used will be open source. Other institutions will be invited at a later date.

I hope low cost means low cost. (Under $25) I have really enjoyed the Stanford University free online classes."

Link to Original Source
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The Nook: From Android to Windows?

alexander_686 alexander_686 writes  |  about 2 years ago

alexander_686 writes "It looks like Microsoft is buying a large chunk of Barnes & Noble, specifically the Nook and it’s college businesses. While nobody has said anything specific, I think the writing is on the wall on what the next OS system for the next nook is going to be."
Link to Original Source

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