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manishdave
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Joined: 05/Aug/2006
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   Topic: Luxories vs. Opportunity cost of money!
Posted: 22/Jun/2007 at 11:12pm |
Legend has it that Mr Ambani - the chairman, and largest shareholder of Reliance Industries, India's largest private sector company - wants to enjoy a "full view" of the Arabian Sea.
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Warren Buffet: At $27 million an acre I’d rather stare at the bathtub.
In reference to -
CM: There’s a real estate asset price bubble going in places like Laguna, Calif. and Washington, DC. A very ordinary oceanfront house in Laguna sold for $3.5 million. Figure $500,000 for construction costs; that means that the land sold for $3 million. Granted, it was an oceanfront property, and so relatively scarce. Still, the plot size was just under an eighth of an acre, which means that the land underneath a modest oceanfront house sells for around $27 million an acre.
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If there is staff of 600 ppl, one floor may be for retail.
After so many issues, how come they can maintain 46% holding? I think everybody knows answer. But even after so much of milking, that cow is getting fatter day by day.
Edited by manishdave - 22/Jun/2007 at 12:02pm
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kulman
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Joined: 02/Sep/2006
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Posted: 22/Jun/2007 at 11:49am |
Warren Buffet: At $27 million an acre I’d rather stare at the bathtub.
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Thanks Manish jee for that quote.
In an interview with CNBC, Buffet told the anchor (Liz Klaman) very interesting reasons why he doesn't like to own a yacht or a cruiseliner.
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Life can only be understood backwards—but it must be lived forwards
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tyler_durden
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Posted: 25/Jun/2007 at 1:31pm |
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undoubtedly warren is an amazing investor .. but when it comes to lifestyle then i think he lags behind...and reason behind that is very stupid (atleast for me)..he would drive his old beatle...Reason: spending 500k on a ferrari is not worth..because in 20 yrs at 24% cagr 500k would become a few million....this way buffet can never enjoy the super luxuries....its good to make money but if you cant spend it for such stupid reasons then whats the use of it.???
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If you aren't fired with enthusiasm, you will be fired with enthusiasm.
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basant
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Posted: 25/Jun/2007 at 3:23pm |
I have a different perspective on this and I have also indicated it elsewhere. It all boils down to marginal utility and price. People who have studies basic level micro economics would be able to understand it better. Now if I find interest in spending Rs 25,00,000 for a world tour I would not mind the cash. Jim Rogers divorced his first wife because she wanted to buy a sofa set and he wanted to understand the Magic of compounding. He went across trhe world in his merc and spent millions perfectly allright for him because that is how he wants to use up his wealth.
BTW I do not own a car inspite of a fact that I can afford the best ones in the country because it does not make financial sense to put in money where I lose 50% at the end of year 3 where the opportunity cost is of multiplying it a few times in 3 years
I operate from my home.
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tyler_durden
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Posted: 25/Jun/2007 at 4:10pm |
i understand your point...its absolutely fine to multiply your money but after a certain point of time and after making certain amount of money one should enjoy better things in life....
one must walk on the sand before resting on a silk carpet ... so spending money on luxuries in the begining of one's life is not advisable but if one has worked hard and has built assets for himself then there is no harm in spending the hard earned money....
i have observed this trend that people who make money from equities or via investment generally don't put lot of money in luxuries e.g: buffet, jhunjhunwala and basant ji ... whereas businessmen like: vijay mallaya, bill gates, mukesh ambani etc prefer super luxuries...maybe investors know the magic of compounding and are reluctant to lose the future value of money....and businessmen are confident of generating lots of cashflow to meet the expenses bought upon by their luxuries.......
and where buffet finds interest is tough to identify: still living in his old house, driving old beatle, no space trips, no islands, no yachts, i think he has no interests except investing 
Edited by tyler_durden - 25/Jun/2007 at 4:12pm
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If you aren't fired with enthusiasm, you will be fired with enthusiasm.
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basant
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Posted: 25/Jun/2007 at 4:24pm |
i have observed this trend that people who make money from equities or via investment generally don't put lot of money in luxuries e.g: buffet, jhunjhunwala and basant ji ... whereas businessmen like: vijay mallaya, bill gates, mukesh ambani etc prefer super luxuries...maybe investors know the magic of compounding and are reluctant to lose the future value of money....and businessmen are confident of generating lots of cashflow to meet the expenses bought upon by their luxuries.......
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You make a good point there but the investors pay from their own pocket whereas in the case of business men the minority shareholders are fleeced. Also it is impossible to change the tastes, and habits under the influence of wealth. Sunil Gavaskar could never bat like Kapil Dev!!!
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omshivaya
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Posted: 25/Jun/2007 at 4:31pm |
True Wealth has different meaning to different people Kunal ji. At some point, the very process of creating huge wealth itself becomes a big joy and a mission in life, rather than actually spending it lavishly. I have this mindset, dont know about others.
For me, the process of achieving incredible wealth(as per my standards) through investing gives me so much more joy than buying a mercedes with it. Whenever I have had the thought that someday I shall buy that dream car of mine, the fact that I would rather spend it on some poor person comes to my mind and I feel really really guilty. Thanks to God here, that he has kept my conscience somehow nagging me, now and then so that I do not do something stupid.
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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vip1
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Posted: 25/Jun/2007 at 4:36pm |
Car/Money/ Wealth is a means not and end in itself . Car is basically a means to get from point A to point B , someone might do it by walking some by scooter/Bus etc and some like Vijay Mallaya on a yatch/ Plane .
Does it make me Less Happy?
Bhai Mere , Pasand Apni Apni Khayal Apna Apna .
BTW in a Famly of 5 Adults and 2 Children we have 5 Cars , but definitely when we Had Less Number it was better .
Edited by vip1 - 25/Jun/2007 at 4:41pm
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