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Discussion: (12 comments)

  1. Max Planck

    “Now here’s the kicker: Nobody who pays taxes and has ever done this exercise has failed (while sober) to use after-tax cash flows in this calculation. Somewhere in the spreadsheet there is a number, say 20%, or 28%, or a Gallic 75%, representing the taxes you’ll pay on the assumed cash flow”

    None of us will face this quandary.

    Slow morning, huh, Jim?

    1. MacDaddyWatch

      Who farted?

  2. Todd Mason

    The idea is the most important aspect in the kind of analysis Asness lays out — demand that is not being met or not at a price given the economies of X. Corporations would not be sitting on $1 trillion in cash if such ideas abounded. Asness also skips the part about subtracting a risk-free rate of return from expected ROI. That return today is negative in real terms. Corporations are paying for the privilege of doing nothing.

  3. Paul Ryan’s drinking buddies, er surrogates, lack sobriety. First, the grumpy economist and now Asness.

    Microsoft and Apple were both born at the margin with a cap gains tax rate of 45%.

    1. rightasreign

      The op-ed makes it clear that some investments will be made at almost any tax rate, but that the important analysis is at the margin, where those projects that are not super-winners, but winners none-the-less at one tax rate, are not at a higher tax rate.

      But throw your childish insults around instead of thinking.

      1. Piss off.

        Do you really want to see what investment is? It’s not quant investment like Asness. Asness trades, he doesn’t invest. The problem with Cliff is he doesn’t understand the difference between a numerator and a denominator when it comes to discounted cash flow.

        Real investment in equipment and software. Those low cap gains rates during the pathetic Georgie Porgie investment era enabled a plethora of carried interest for Asness but piss poor investment for the economy. The correlation between low cap gains tax and high investment is bullshit.

        1. Antisocialist

          Asness’s firm is an investment manager with low turnover and paying ordinary income taxes (I see mainly mutual funds and long only stuff)

          But just lie little leftist, it is what u people do. You learn words like carried interest and repeat them wrongly like moronic children.

          All the man said is taxes matter AT THE MARGIN unlike what Bufett the left wing liar said to support his left wing buddy no matter what the truth. Do you disagree, AT THE MARGIN? You will avoid question.

          Truth hurts huh comrade.

  4. MacDaddyWatch


    I wonder if the SAGE ever heard of the MUNI-BOND MARKET?

    MUNI BONDS are all about taxes–that’s the only reason why this market exists. How could this phony hypocrite never have heard of the the trillion dollar muni market?

    Has Buffet ever heard of the PREFERRED STOCK dividend tax exemptions when the preferred stock is purchased by another corporation?

  5. Thomas Sullivan

    Of course tax rates matter when making investment decisions. Buffett is doubling down on his insane decision to back Obama. This economy stinks, and Obama and liberal policies are the reason.

  6. Jon Murphy

    It seems to me that taxes matter quite a bit. Maybe when you are the second richest American, you can afford to invest in a pet project that has little-to-no post-tax NPV, but for the rest of us who invest for future consumption (retirement planning, for example), taxes do matter.

    1. Todd Mason

      How’bout the ceos who are saying raise taxes already?

      Or the 61 percent of Rs who say raise taxes already?

      Feeling lonely?

      1. Jon Murphy

        That wasn’t what I was talking about.

        Buffet said taxes don’t go into consideration when making investment decision.

        I am calling bullshit on that.

        That’s all. I am not discussing the effectiveness or need for taxes. I am saying that taxes most certainly do go into the thought process when making an investment.

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