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Warren Buffett, deer poop and postage

February 28, 2009

Postage and Inflation

Postage and Inflation

Rocky finishes reading Warren Buffett’s annual letter, and remembers Buffett’s quote, “It’s only when the tide goes out that you learn who’s been swimming naked.”

Moments later, Rocky looks out his window to see melting snow and a half-dozen white-tailed deer. Rocky utters (with Buffett-esque solemnity,) “It’s only after the snow melts that you see all the deer poop on your lawn.”

Buffett’s letter makes interesting reading, and one paragraph catches Rocky’s eye: “The [likely consequence] of once-unthinkable dosages [of massive government action] is an onslaught of inflation.”

Rocky already owns some TIPS (Inflation-Protected Bonds), gold and other tangible assets. He wants something BIGGER, BETTER and TAX-FREE. Especially with savings accounts yielding a cool 0.0%.

Rocky drives to the post office and buys a massive speculative long position in “Forever” Postage Stamps. (The post office clerk must have thought that Rocky was laundering cash. But he was too polite to ask questions.)

Forever stamps are valid first-class postage regardless of the nominal price. Assuming that postage continues to keep pace (or exceed) inflation, this investment will compound tax-free (unlike the TIPS), and can be lawfully sold at premium to original cost.

If inflation really gets out of control, it’s likely the Post Office will cease issuance of the Forever stamps, the stamps will become priceless “collector’s items,” and Rocky will have scored a home run. Rocky’s stop-loss: becoming a junk mail distributor.

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  1. ld
    March 1, 2009 at 1:05 pm

    I believe you would owe capital gains taxes when you sell this excellent investment at a profit. Before I go to the post office, what percentage of one’s portfolio would you suggest investing in this asset class? One last question, is there an ETF that invests in these (like GLD)? If not, maybe we can start one up.

  2. Mike
    March 2, 2009 at 2:31 pm

    Just passing by.Btw, you website have great content!

    ______________________________
    Don’t pay for your electricity any longer…
    Instead, the power company will pay YOU!

  3. masteroftheuniverse
    March 2, 2009 at 7:31 pm

    Interesting….I bought some of those forever postage stamps today.

    Probably the best investment I’ve made in awhile:)

    Jeff

  4. allocator
    March 2, 2009 at 10:53 pm

    I’ve got one word for you guys trying to corner the market in forever postage stamps.

    Email.

    🙂

    Cheers,
    George

  5. March 3, 2009 at 7:35 am

    Rocky has one word for George:
    “Plastics.”

  6. masteroftheuniverse
    March 3, 2009 at 7:56 am

    With George’s interesting life, he probably ran into that situation at least once.

    Jeff

  7. allocator
    March 3, 2009 at 11:22 pm

    No, I never did quite do the Mrs Robinson thing (although my friend Bill’s wedding was fun), but I DID get hit on really aggressively by a bunch of 80-year olds when I took the Beavers (5-7 year old Scouts) on a retirement home community service outing. Must have been the man-in-uniform thing. Man were they bad – and in front of the kids.

    Cheers,
    George

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