The Next Great Wall Essay -- Encryption Technology Essays

The Next Great Wall The attacks of September 11, 2001 on the World Trade Center triggered the passing of the USA Patriot Act â€Å"to deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes."1 It passed quickly and with little debate. Soon, encryption of information became a topic to address and efforts took place to allow the government backdoor access to anything encrypted by products developed within the United States. This generated much controversy and was opposed by many organizations. It did not take long before the supporters of these encryption bills backed down. The Chinese government, on the other hand, did not go through such a process. Restrictions on encryption technology imported to or developed within China have been put forth. Their attempts at such control contrast what the United States considers is a denial of our rights to privacy even when addressing national security. The U.S. has acknowledged the significance of supporting free encryption policies while China’s restrictions have shown they are even more limiting, unenforceable and morally wrong in how it affects its citizens as well as its international neighbors. U.S. Policies Addressing encryption technology over the last 5 years has been a challenge for establishing policy in the United States. Development of advanced encryption technology heightened towards the end of the 20th century and questions on its usage soon came into play. On February 23, 1999, the Security and Freedom Through Encryption (SAFE) Act was introduced â€Å"to affirm the rights of United States persons to use and sell encryption and to relax export controls on encryption."2 In addition, o... ...urnal. (back) Moore, Tim (2003), IEEE P802.11 Wireless LANs Draft 5.1, Retrieved February 7, 2004, from the World Wide Web: IEEE (MS Word Document). (back) CNET Asia Staff (2003), China Wi-Fi codes to be controlled by 11 firms, Retrieved January 25, 2004, from the World Wide Web: CNet News. (back) Freeman, Charles W. III (2004), Deputy Assistant USTR Feb. 5 Testimony, Retrieved February 7, 2004 from the World Wide Web: USInfo.State.Gov. (back) Shim, Richard (2003), China Implements new Wi-Fi security standard, Retrieved January 25, 2004 from the World Wide Web: CNet News. (back) Shim, Richard (2003), China Implements new Wi-Fi security standard, Retrieved January 25, 2004 from the World Wide Web: CNet News. (back) Gossett, Sherie (2002), e-Freedom fighters forge new weapon, Retrieved February 7, 2004 from the World Wide Web: World Net Daily. (back)

High School vs. University Essay

Every September, high school graduates must prepare for the drastic transformation from high school to university. High school is a teaching environment which a student acquires facts and skills. University is a learning environment in which a student must take responsibility for thinking and applying what you have learned. This step in life students will either adjust to or struggle with. High school students are told university life is exciting, unpredictable, and entertaining. Also, students are informed university life is costly, demanding, and stressful. In order to adapt to the transition, students must understand and recognize the different teaching styles, testing, and grading. Teaching styles change as class sizes vary. Teachers in High school cover course material in depth and over a long period of time. Professors cover textbook material quickly. High school teachers check homework, remind students of incomplete work, and approach students if assistance is needed. Professors do not check completed homework and will assume students can complete the same tasks on tests. It is left up to the student to communicate with their professors in order to receive extensions ensuring the student will not be penalized. Professors do not approach students or notice students who are struggling. Therefore, students may approach professor in given office hours for one-on-one help. Finally, in university due to large class sizes and minimal lecture time keeping up with assignments and readings is critical. Cramming the night before a test and receiving a good grade is more likely to occur in high school, where testing in subjects is very frequent. Preparation for testing becomes more crucial in university because tests are infrequent, covering large amounts of material. Also, students in high school may be awarded a make up test normally without an explanation. Whereas in university, in order to receive a make up test a reasonable explanation must be given. Review classes are given in high school to help prepare students and give them a clear idea of the material that will be tested. Rarely, are review sessions provided for university students, if they are, professors expect participation from students who attend. Success on tests can be mastered by applying acquired knowledge to new situations or to solve new problems. The grading system becomes very important as students enter university. High school students are used to courses that are usually structured to a â€Å"good-faith effort†. In high school grades are given for most assignments. Students are also given grades for consistently good homework, which may help boost marks when test grades are low. Students who may not have a good overall mark occasionally have the opportunity to complete extra credit projects. Comparing this to university grades on tests and major papers usually provide most of the course grade. Extra credit projects are not normally allowed to raise a grade in a university course. Therefore, the â€Å"good-faith effort† is important in regard to the professor’s willingness to help students achieve good results; it will not substitute for results in the grading process. Adjustment is required for a high school graduate to be successful in university. Before entering university, high school students must be aware of these differences. Therefore, they must know how to adapt to new teaching styles, to successfully prepare themselves for testing, and the changes in grading systems. Recognizing these differences before entering a university can help prepare students for greater success.

Policy in Theory and Practice

What is the social administrative tradition? Social administration developed when the welfare state was undergoing a period of growth, when there was a high level of optimism about its potential achievements and a high degree of consensus about the fundamentals such as Education, the National Health Services, and public housing. Social administration was concerned with social needs and problems, and with the response to the problems; social policy. It became regarded as the natural provider of welfare, apparently at the expense of others. Social administration is linked to the growth and development of welfare services, which have existed since the turn of the century, but were expanded and consolidated in the 1940s. It adopts a rational approach to solving social problems, which are often thought of as having an objective existence. Social services provided by the state were viewed as the proper method for causing progressive change. Fabianism was a movement designed to promote democratic socialism. The impact of Fabianism, as a coherent set of ideas, held that socialism in Britain was well-matched with the institutions of state and should, therefore, be implemented through a parliamentary system. Supporters of Fabianism wanted to utilise academic knowledge on social problems to create pressure on the state to research and conduct in-depth analysis in order to influence welfare reforms. The ideological and empirical alliances with Fabianism were associated with a concern regarding policy action; specifically what is done by policy action and how it is done, rather than why this is done. Two hugely prominent members of the Fabian Society were Sydney and Beatrice Webb. This couple believed that collective provision for welfare through the state was essential in order to develop a British capitalist society. Social policy in Britain became more concerned with the practical issues of education for experimental research on recognized problems – social administration tradition. During the decades of the 1960’s and 1970’s the view of Social administration as social policy became discredited, and since then a more holistic approach to social policy developed. What is meant by liberal welfarism? Liberalism welfarism is about protection of the individual in terms of freedom, markets and kind limits the state. Welfare in liberal philosophy is not something that is provided but something that is achieved and developed through the free and independent actions of a free will. The welfare of each individual promotes the well-being of the entire society by increasing the sum total of freedom in which its members live. Liberalism promotes equality of opportunities that is rooted in an inequality of outcomes. Freedom is intrinsically linked to responsibility, so as the state takes over in the role of providing welfare for the population a diminished freedom also means diminished individual responsibility. This is damaging to society, and in order to minimise the damage the state must take a less central role. It was thought that the state should refrain from interfering in economic processes such as income policies, laws regarding minimum wage and employment protection legislation, w hich in turn would decrease the role of trade unions in economic and political life. This forms the foundation for a legal background which enables individual freedom along with economic prosperity, and has been of great influence in economic, political and social welfare. The economic policy of laissez-faire was an attitude in which the government refused to interfere. This eventually began to give way to a new collective ideal called new-liberalism, which imagined the state playing a positive in the enhancement of social problems. New liberalism led to a transformation in the nature of and relations between the state and the market. Explain the parliamentary policy-making process. Within the parameters of British state, the central state may be considered to be crucial as it is where many decisions are made. Constitutionally Britain operates a tripartite division of powers between the legislature, the judiciary and the executive. Crucial to this is the role of the Prime Minister and the Cabinet, which are pivotal in the making of policy. The job of the legislature is to debate and consider the introduction of new laws. Members of parliament exercise the power through the system of Parliamentary committees, where they are able to question Ministers and senior Civil Servants. New legislation passes through the laborious process of First, Second and Third Readings in the House of Commons, interspersed with detailed discussion of a Bill’s content at the Committee stage. A Bill will then receive consideration from the House of Lords, and during this process the MP’s and Lords from the government and the opposition have the opportunity to question and debate the principles and provisions of new legislation, and to suggest amendments. Finally a Bill receives Royal Assent and passes into law as an Act of Parliament. Detail the New Right critique of the welfare state. During the 1970’s both the Conservative and Labour Party attempted to halt the apparent economic decline, yet neither were successful. Both parties experiences an increase of radical activity in the far wings of the party. The ‘New Right’ formed as a branch of the Conservative Party, campaigning for a break from the previous reliance on Keynesianism as part of economic and social policy.From 1979-1997, Britain was governed by a Conservative Party that was under Thatcher’s leadership and was inspired by the New Right, and was rooted in economic liberalism combined with social conservatism. According to the work of the theorist Friedman Britain began to build up a neo-liberal analysis of state welfare during this time. His main argument was that public expenditure was being driven up by the increase of state intervention within welfare services. This interfered with the operation of the market economy. The New Right arguing that free welfare services only encouraged useless people to become dependent upon benefits and provided no incentive for families to protect themselves and their welfares through savings. The Conservatives tried to shift the costs of welfare through changes in taxation and the benefits system, burdening the poor and disadvantaged, and this served only to increase the amount of citizens who were in need of state support. This was further intensified by policies that sought to achieve wage discipline through mass unemployment. Neo-liberals wanted to roll back the state and reduce the role of the government, with the aim to restoring Britain’s international competitiveness. Welfare benefits were seen as detrimental to labour market flexibility, as they kept up wages. Bibliography Alcock, C, Payne,S, Sullivan, M, 2004, Introducing Social Policy, Essex, Pearson. Baldock, N, et al, 2012, Social Policy, 4edt, Oxford, Oxford University Express. Loney, M, Boswell, D, Clarke,J, 1988, Social Policy & Social Welfare, Milton Keynes, Open University.

Speech on Belonging

Belonging is usually defined as being accepted into and by members of a family, group, class, race, community or school. The term belonging means something different to everyone but most people will come up with the words acceptance, security and identity. In this speech I have chosen to talk about the aspects of belonging and not belonging in two of Peter Skrzynecki’s Poems, Migrant Hostel and 10 Mary Street and also in the 1997 film ‘Titanic’. In Peter Skrzynecki’s Migrant Hostel, he talks about the 2 years of his life that he and most of his family lived in a Migrant hostel in Parkes after coming to Australia after World War 2 from Poland and leaving most of his family and polish heritage behind. This poem gives the responder a sense of confusion about whether he belongs or not to this migrant hostel. Skrzynecki creates this confusion by contrasting the family’s sense of belonging to the hostel with the family’s confusion about whether or not they actually belonged to the Australian soil. Although the migrant hostel was their home for 2 years there was always so many people coming and going that it didn’t really feel like a home which made it really hard to create a sense of belonging as a community. Techniques used by Skrzynecki to create this sense of confusion about belonging are juxtaposition or contrast for example in the last stanza on the 6th line â€Å"Needing its sanction To pass in and out of lives That had only begun Or were dying† This can be referred to as when people arrive at the hostel their lives are just beginning as they have a second chance to start their lives over again and forget about the past and what has happened and concentrate on the future and then when they leave the hostel they feel lost because they are on unknown land and they feel they don’t really fit in with the Australian lifestyle as they have their own background and heritage to maintain. This uote could also mean the opposite when they leave they have a chance to start over and renew there lives again and when they are in the hostel they are trapped and don’t know what to do or who they are. Symbolism is another technique Skrzynecki uses in this poem. In ‘Migrant hostel’ he uses birds as a symbol of being trapped. For example the third stanza ‘For over two years We lived like birds of passage- Always sensing a change In the weather: Unaware of the season Whose track we would follow’ This example shows how the people in the hostel where hardly allowed outside, which shows that they were basically trapped inside and away from everyone else. Another technique Skrzynecki uses is rhetorical device; this technique shows the confusion of the people inside the hostel, for example in the first stanza 6th line â€Å"That left us wondering who would be coming next. † This example shows the confusion the people had, and how uncertain things were for them, they didn’t know who was going to come through the gate next or who was going to leave. Also in this poem Skrzynecki uses an extended metaphor. In this poem the bird symbol is also used as the extended metaphor. In this poem he uses refers to a homing pigeon to deepen the sense of instinctual behavior for example in the second stanza 1st line ‘Nationalities sought Each other out instinctively Like a homing pigeon Circling to get its bearings’ this example shows how the people are coming together and finding each other through their background and where they came from. The last technique that Skrzynecki uses in this poem is similes. For example n the last stanza 4th line ‘As it rose and fell like a finger’ this particular simile refers to the gate out the front of the hostel, it shows how they were isolated from the rest of the country by that gate and that they had no control over when that gate opened or closed. It makes the hostel sound like a jail. In Skrzynecki’s poem ‘10 Mary Street’ he is describing his life in his fir st ever home on Australian soil, this poem has a greater sense of belonging as he is more comfortable in Mary street, and he has a greater sense of belonging to his family, his home, his school, his community and is comfortable with his migrant past. Skrzynecki and his family lived at 10 Mary Street for 19 years before the house got knocked down. During this poem Skrzynecki has no sense of doubt or uncertainty about who he is or where he is going. This poem gives a strong sense of happiness and content within his life as the language is light and joyful, as he remembers certain things about that house and life within it. Skrzynecki uses techniques such as personification

“A Child Called It” by Dave Pelzer

The book â€Å"A Child Called It† by author Dave Pelzer quickly became my favorite book for many reasons but the most important was because it taught me that sometimes people don’t appreciate the wonderful things they have in life, until it’s too late.Reading is a huge part of my everyday life and has given me many hours of enjoyment. I read to gain information, for relaxation and entertainment, like reading the daily newspaper allows me to find out what is happening around the world, in other countries and in our local area, allows me to relax and offers a few laughs.I love finding new and interesting books to read, so one day when I asked my sister for suggestions in finding a book to read, she told me to read â€Å"A Child Called ‘It’† by author, David Pelzer.I read in this book, about one of the worst cases of child abuse, ever reported in the state of California, which has been documented by the child, in this book.David Pelzer provides a very detailed outline of his terrible life after growing up as a son of an alcoholic mother and a father, who stood by and watched the abuse.The story takes a circular trip around the many years of abuse of the boy. He begins by telling us what ended the torment and pain, and continues through the pages, telling us about the haunting years that followed.In one section of the book, Pelzer speaks of the unthinkable horror his mother put him through by explaining that when he was younger, Dave and his family were considered the â€Å"perfect† family but one day his mother and father began drinking and developed problems in their relationship.Dave began experiencing the worst treatment, imaginable. His mother quickly began   treating him as a nobody or an â€Å"It†. His dad wouldn’t address the problems that reeked havoc in his life, which caused Dave to hate him.Dave’s mother did many horrible things to him that he will never forget. He was singled out fo r abuse by his mother, since he had two brothers that never received their mother’s harsh beatings and cruelty.David’s mother would starve him for weeks at a time, without giving him even a morsel of food, so he had to steal food from stores and the school, in order to survive.    One day he stole hot dogs from the school cafeteria and someone caught him. When he got home his mother made him puke it up and then eat it, again. She was so cruel that she almost went to the extent of making David eat his baby brother’s feces.Another incident occurred   when David was cleaning the kitchen floor for his mother. She suddenly stormed into the kitchen and started yelling at him, â€Å"You’ve made my life a living hell! Now it’s time I show you what hell is like!†She took him by the arm, turned on the gas stove, and burned the flesh right off his arm. She proceeded to make him take off his clothes and lay on top of the flames.She tortured him for no other reason, other than her own sick pleasure. She also made him drink ammonia, wear tattered clothes and sleep in the garage. She even had the nerve to stab David and never took him in for medical help.Not only was David banned from the family, but from the public, as well. Pelzer was granted only one change of clothing a year, which he wore daily, to school.He was unable to bathe and was often viewed   as a disgrace, by neighbors and school officials. This touching story ended with David reciting the â€Å"Lord’s Prayer† and praying for God to save him from his life of abuse.Finally, a caring policeman shows up and frees David from the prison he has endured for too many years.The sequel to this book is called â€Å"The Lost Boy.† This story offers detailed claims of the horrible abuse that David’s mother had inflicted upon him but nothing can help you to understand why someone could cause such terrible pain for their own child, especially when the other two brothers are treated with respect.We learn in this book about the struggle for survival, after David’s mother tries to turn everyone against him. She became successful at convincing everyone around David and since they believe that she is a good mother, no one believes him when he cries for help and each attempt at receiving help, he fails.It’s really sad to know that David’s dad never tried to help him and to watch as his dad is terribly controlled by the woman, who abuses him.This intense child abuse seems unbearable, especially for a young child. David’s story about survival, brings a queasy feeling to one’s stomach and stabs at the heart. Pelzer dedicated his life to pleasing his mother, fearing death that come to him, at any moment. His never ending hope kept gave him just enough strength to recover from the last painful fight.Pelzer had lived in, what looked like from the outside world, an average American family, who took vacation s, ate dinner as a family and spent the holidays together, with the one exception of `The Boy` that was continually beaten down, both mentally and physically.

Purinex, Inc Warren Buffett Essay

1. What is the possible meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically, what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? Answer1: The increase in the stock price of Scottish Power plc and Berkshire Hathaway indicate a market approval for the acquisition and created value for both buyers and sellers. Answer2: a. the possible meaning of the changes in stock price is due to the fact that the deal created value for both buyers and sellers; Berkshire was more diversified after the acquisition. b. The $2.55 billion gain in Berkshire’s market value of equity implied that the intrinsic value of PacifiCorp was good because it fell within the range of competitors based on the following calculations: $2.55 billion / 312/18 million = $8.17 – Berkshire is willing to pay this premium for each share of PacifiCorp 5.1 billion / 312.18 million = $16.30 per share of PacifiCorp $8.17 + 16.30 = $24.47 (see Exhibit 9) Answer3: The possible explanations in the change in stock price for Berkshire would be for a couple of reasons. One of them is that investors invest based on the behavioral finance theory which implies that their investments are driven by psychological factors. These factors would be that believing that Mr. Buffet is the guru of investment, therefore he is right and it must be a very good investment. Moreover looking at the financial statements of march 2005 we see that the book value of PacifiCorp = 3377.1 Billions/312.12 million shares =$10.82 per share. However, the increase of 2.17 billion dollars at the day of the announcements of Berkshire implies that that true value of PacifiCorp should be higher if we divide the 2.17 billions /312.12 million shares we have that the PacifiCorp share should have a $ 6.95 dollar value higher. 2. Based on the multiples for comparable regulated utilities, what is the range of possible values for PacifiCorp? What questions might you have about this range? Answer1: a. we find the range of possible values for PacifiCorp in Exhibit 10. i. Revenue median of $6.252 Billion, mean of $6.584 Billion. ii. EBIT median of $8.775 Billion, mean of $9.289 Billion. iii. EBITDA median of $9.023 Billion, mean of $9.076 Billion. iv. Net Income median of $7.596 Billion, mean of $7.553 Billion. v. EPS median of $4.277 Billion, and a mean of $4.308 Billion. vi. Book value median of $5.904 Billion, mean of $5.678 Billion. b. Question about revenue; the implied value of PacifiCorp is giving impractical results for range of revenue as compared to EBIT, EBITDA, & Net income (Expected: Revenue > EBITDA > EBIT > NI). Answer2: Alliant E. Corp Low price P/E =23.50/1.42=16.55 High price P/E =28.80/1.42=20.28 Cinergy Corp Low price P/E =34.90/1.42 =16.23 High price P/E =42.60/2.15=19.81 NSTAR Low price P/E =22.70/1,79=12.75 High price P/E =27.20/1.78 =15.28 SCANA Corp Low price P/E =32.80/2.34=14.02 High price P/E =39.70/2.34 =16.93 WEC Low price P/E =29.50/2.62=11.26 High price P/E =34.60/2.62 =13.21 Industry average low price P/E=14.20 Industry average high price P/E =17.11 PacifiCorp EPS =0.81 Stock price of PacifiCorp= EPS x (P/E industry) Range of PacifiCorp possible values Low price >0.81Ãâ€"14.20= $11.50 High price >0.81Ãâ€"17.11=$13.86 Possible value for PacifiCorp using EBITDA Total value Company =market value + net debt Market multiple =total value company /EBITDA EBITDA Alliant E. Corp= 7.45x NSTAR 7.53x SCANA Corp 9.25x WEC 8.47x Average =8.18x Total value of company = Market multiple X EBITDA PacifiCorp’s EBITDA=1093.30 Market multiple =8.1 Value of PacifiCorp = 8.18Ãâ€"1093.30 =8,943.19 million dollars 3. Assess the bid for PacifiCorp. How does it compare with the firm’s intrinsic value? As an alternative, the instructor could suggest that students perform a simple discounted cash-flow (DCF) analysis. Answer1: If you use CAPM for the simple DCF analysis: K=rf+B(rm-rt) rf =5.762K=5.762+.75(10.5-5.762) B=.75=9.32%=Discount rate rm=10.5 $5.1/(1+.0932)=$4.76 => it is in range of the rest of the comparable firms. Answer2: 4. How well has Berkshire Hathaway performed? How well has it performed in the aggregate? What about its investment in MidAmerican Energy Holdings? Answer1: Overall, Berkshire Hathaway has performed brilliantly in the last 40 years. Berkshire’s class A shares have been among the highest-priced shares on the New York Stock Exchange, in part because they have never had a stock split and never paid a dividend, retaining corporate earnings on its balance sheet in a manner that is impermissible for private investors and mutual funds. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 40 years. Answer2: It has performed very well. Berkshire Hathaway has consistently outperformed the market since its inception in 1965. In 1977, the firm’s year end closing share price was $107; on May 24, 2005 the closing price on its Class A shares reached $85,500. Berkshire has had an annual increase of wealth of 24% since 1965, which is more than double the 10.5% of the average increase for other large stocks. It started out with a decline due to inflation, technological change, and intensifying competition from foreign competitors, but has recuperated well after closing the textile side of their business. Berkshire Hathaway had recently been performing below S&P 500 Index according to Exhibit 1, from April 2005 to May 2005. Scottish Power had consistently outperformed the S&P 500 Index from March to May 2005. This probably was one aspect that attracted Berkshire to purchase PacifiCorp. We believe that it was a good investment. In 2002 they owned 9.9% of the voting interest and 83.7% of the economic interest in the equity of MidAmerican. This allows them to have a major stake in the company without violating utility laws, which has proven to be successful for them. According to Exhibit 6, MidAmerican Holdings had a net earnings of 170 million in 2004, but compared to 2003 net earnings of 416 million, MidAmerican had a net loss from 2003-2004. Acquiring PacifiCorp would supply much needed new, more profitable investments to raise their net income in 2005. Answer3: Performance of Berkshire since 1977 to 2005 PV=102 FV=85500 N=28 I=34% ` S & P performance since 1977 to 2005 PV =96 FV=1192 N=28 I=9.42 Berkshire has outperformed S & P by 24.58% 5. What is your assessment of Berkshire’s investments in Buffett’s Big Four: American Express, Coca-Cola, Gillette, and Wells Fargo? Answer1: They invested in well established and successful firms. They put a lot of money up front for these investments, but since have made substantial gains for their investment. The total cost to Berkshires investment in the Big 4 was $3.832 Billion, but the market value of their investment was $24.681 Billion. This means that Berkshire’s current gain on their investment in the big 4 is $20.849 Billion. Their gain is 5.44 times their investment I would have to say that these were very well thought out and successful investments. Answer2: Buffet’s approach of investments is based on the fundamental analysis of the company itself. It is based on simplicity and consistency of its operation history, attractiveness of long term prospects, quality of management and firm’s capacity to create value. The big four, Coca-Cola, American Express, Gillette and Wells Fargo have all these characteristics. For instance Coca- Cola has been in business since 1919(Reuters). It is a multinational with the biggest market share worldwide. Coca-Cola’s finished beverage products bearing its trademarks are sold in more than 200 countries (reuters.com). Buffet looks at what the consumers are looking for and what the general economic trend is at that time and what it will be over time. He researches a company as a whole and looks at what people want and what people are transitioning into in the future. For instance most of his investments in the big four were done in 1992. During these 13 years we can see how well the big four have performed compare with the S& P 500 S & P 500 At January 1992 adjusted to dividends and splits =408.78 At December 2005 adjusted to dividends and splits =1248.29 n=13 Return =8.96% American Express. Price at January 1992 adjusted to dividends and splits =4.02 Price at December 2005 adjusted to dividends and splits =49.68 N= 13 Return =21.34% Wells Fargo Price at January 1992 adjusted to dividends and splits =2.69 Price at December 2005 adjusted to dividends and splits =28.25 N=13 Return =19.82% Coca-Cola Price at January 1992 adjusted to dividends and split =14.5 Price at December 2005 adjusted to dividends and splits 37.50 N=13 Return =7.50% 6. From Warren Buffett’s perspective, what is the intrinsic value? Why is it accorded such importance? How is it estimated? What are the alternatives to intrinsic value? Why does Buffett reject them? Answer1: a. the discounted value of the cash that can be taken out of a business during its remaining life. Intrinsic value is per-share progress. Buffett assessed intrinsic value as the present value of future expected performance. b. Because if focuses on ability to earn returns in excess of the cost of capital, not accounting profit. Only logical way is to evaluate the relative attractiveness. c. The gain in intrinsic value could be modeled as the value added by a business above and beyond the charge for the use of capital in that business. d. Accounting profit, performance of Berkshire by its size, consolidated reported earnings e. Accounting reality was conservative, backward looking, and governed by GAAP (measures in terms of net profit). Investment decisions should be based on economic reality. This includes intangible assets such as patents, trademarks, special managerial expertise, reputation, etc. Answer2: The definition of intrinsic value according to Mr. Buffet is the present value of all future expected cash flows or performance. The measurements of intrinsic value are focused on the ability of the company to earn a return in excess of the cost of capital including the opportunity cost. Intrinsic value is not based only on the net profit. Alternatives to intrinsic value: 1) Accounting profit. Mr. Buffet believes that the true value of a company is based on its intrinsic value not on its accounting profit. Financial statements prepared by accountants are conformed around rules that do not adequately represent the economic reality of business. 2) Technical analysis. Mr. Buffet rejects the technical analysis that attempts to predict the stock prices based on momentum of trends. He believes in long term investment. 3) Efficient market hypothesis. Mr. Buffet rejects the efficient market hypothesis theory (EHM). He believes that there are opportunities out there. Investing should be based on information analysis of the company. 7. Critically assess Buffett’s investment philosophy. Be prepared to identify points where you agree and disagree with him. Answer1: Warren Buffett has a very simple method of investment strategy compared to other investors. Buffett’s philosophy is defined in 8 elements. We will discuss whether we agree or disagree with each one individually. We agree with Buffett’s first element of analyzing economic reality of investments. Most investors focus on financial statements and net profit, but don’t take into consideration intangible assets such as management experience and patents. We also agree with Buffett’s second element of lost opportunity cost comparison. By analyzing expected returns of an investment compared to the rate of return of using that same investment money in another investment, Buffett takes a simple idea that everyone uses in almost every decision, and applies it to a much more complex investment strategy. Everyone weigh’s the alternative when making a decision, whether that decision is a choice of a coffee or a coke or something more complex like a college education versus not getting an education. Buffett uses the third element of intrinsic value instead of book value or historical data to determine his investment choices. We agree with this element, but do believe a combination of the two methods would work better to show historically how the company has performed, and how much that company will be worth in the future. The rate of return reflects more of the economic value of an investment. In the fourth element, Buffett measures performance by per share basis. We do agree with his reasoning for using this method, but we think overall performance should be measured as well to show a better figure of what the whole is worth compared to the parts. The fifth element is one that we don’t agree with. Buffett uses a 30 year U.S. Treasury Bond Rate of Return instead of the traditional CAPM rate, because he believes that his investments are so solid, they don’t need risk factored in. We disagree with his choice for rate of return because all investments have a degree of risk, and return should be factored according to that level of risk. Buffett not believing in risk is like someone not believing we breathe air. Even though we can’t see it, it is still there. The sixth element is also a point of disagreement for me. Buffett says he doesn’t believe in diversification of investments, even stating that diversification is considered protection against ignorance. What Buffett does not realize is that by saying he does not believe in diversification, he is being a hypocrite. Berkshire Hathaway itself is a massively diverse company with several subsidiaries and holdings in many different industries from apparel to energy. Buffett may own most of his stock in his own company, but he knows by diversifying Berkshire, he will avoid adding more risk, which is exactly the strategy that is used by other investors when diversifying their stocks. We agree with the seventh element that investment decisions should be made by doing proper research on information about the company, and not by following an anonymous tip or a gut feeling. Finally, we agree with the eighth element that a firm’s management and shareholders should have the same goals for the firm. Management should have most of their wealth in company stock so as to serve the shareholders better in day-to-day decision making that affects the value of their investments. Answer2: Mr. Buffet does not believe in diversification. We believe that diversification helps in times like the one that the market is having right know. For instance stock value of American Express in the last year has ranged from $53 a year ago to $15 dollars this week resulting in a loss of 70 % and also the market value of Wells Fargo is down by 65% (yahoo finance). If you compare those two companies with the S & P during the last year it is only down by 40%. This also means that market risk is still there. We believe that Mr. Buffet has not had a situation in the economy such as the one that the country is having now. Even he, the guru of investments is losing money, so we know that the risk is there. We agree on his philosophy on investing behavior. It should not be driven by emotion or hunch but should be a well thought out plan that came about by information, analysis and self-discipline. If you go by hunch or emotion then anyone can work you up and sell you the worst deal of your life, but make you think it is the best one you will ever get. We agree with his belief on the alignment of owners and investors. It is always a good thing when the owner has more than 50% of his net worth invested in the company because the goal would definitely be increasing shareholder wealth. 8. Should Berkshire Hathaway’s shareholders endorse the acquisition of PacifiCorp? Answer1: Yes, PacifiCorp will add around $250 million in net income for MidAmerican Holdings if PacifiCorp keeps at its same net income pattern of the last two years. This added net income will increase shareholder wealth in Berkshire Hathaway and provide a stable long term investment for the future. Also, since PacifiCorp’s intrinsic value is comparable to the industry, Berkshire is not adding much more risk to their portfolio. Berkshire should look at adding more of these type safer investments to their portfolio. Answer2: The Berkshire Hathaway shareholders should endorse the acquisition of PacifiCorp. It took a while for Mr. Buffet to finally invest their cash equivalents because he was looking for an â€Å"elephant† which is a company that makes significant gains. Factors that make it a good acquisition include the fact that PacifiCorp is a low-cost energy producer but has the biggest market share among the energy companies which is 1.6 million customers divided among 6 states plus the intrinsic value of the company is much higher than the market value of PacifiCorp.

PARTY PLATFORMS Essay Example | Topics and Well Written Essays - 250 words

PARTY PLATFORMS - Essay Example Democrats demand that the state meet all the funds required for education while Republicans are more inclined towards privatization of educational funding (2010 State Republican Party Platform, 12; Texas Democratic Party). Regarding giving education to all who are living in the United States, Democrats have a more flexible stand towards non-citizens (2010 State Republican Party Platform, 12; Texas Democratic Party). Democrats are for daytime juvenile curfew while Republicans are against it (2010 State Republican Party Platform, 14; Texas Democratic Party). Democrats also want the state to support community colleges, which Republicans disagree with, as they want the students and parents to fund community colleges (2010 State Republican Party Platform; Texas Democratic Party). b. Position II. On Immigration Democrats have a more lenient stand towards illegal immigrants than the Republicans (2010 State Republican Party Platform; Texas Democratic Party). Republicans declare that they are dead against â€Å"amnesty in any form leading to citizenship, or legal status for illegal immigrants† (2010 State Republican Party Platform, 20). But democrats want to have helpful legislation for legalization of illegal immigrants who want to stay (Texas Democratic Party).