Confidence = Valuation

[libertad]

Can one be confident that a McDonald's cheeseburger that costs $4.50 in one country is worth $1.00 in another ?

Can one be confident that a house is worth $700,000 when an identical one right beside it just sold for $230,000 ?

Then why would a lender be confident about making 10 percent down $700,000 loans ?.....Thus keeping up with government aspirations ?

Likewise....can one be confident that a bank who loaned out over 2/3's of its assets when prices were $700,000.....is still worth its own valuation when prices were $700,000 ?

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Can one buy assets based on the confidence that credit will remain constant no matter what the economic conditions ?

When credit used to be responsible for 70% of the previous prices......for 10% of the previous prices ?

What is a proper percentage of price by credit.....by cash ?

When a proper percentage is agreed upon....can one be confident in the price ?

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Prices = Confidence and asset availability....

 

[nutmeg]

When a proper percentage is agreed upon....can one be confident in the price ?

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Imo, collectively no, individually yes. We are in short supply of leaders. The fed bail out I don't think inspires much or any confidence in the same way as the private sector would.

 

[libertad]

Exactly....and let us guess why.....


The government produces nothing...it just transfers cash flow from those that can....

THE PRIVATE CAPITALISTIC SECTOR

This is where confidence counts.....

 

[nutmeg]

Now what??

Buffett bought some GS and GE = garbage picker. I'm not inspired are you? Was this a vote of confidence?

 

[libertad]

Buffett is just dollar cost averaging over a long period of time.....

Most people cannot play the game that way.....

Lots of $, time, and patience....

To the tune of 10+ years....

As you already know , he is just starting to average into fear....

He may have no further price points....or several price points....and he does not know when this will be either....
Nobody does....