“The mentality from which the OLPC springs is the same mentality which in past centuries created the missionary programs—that we, the west, know what’s good for the rest of the world. The technology of choice then was the printing press, so we sent missionaries armed with stacks of bibles. These days we have computers, so we send out modern missionaries (of our western lifestyle, including consumerism, global warming, and credit default swaps) armed with computers.

“Leverage-obsessed Wall Street has been broken for eight years now. Just two years in the late 1990s, 1996 and 1997, saw more IPOs than the last eight years combined. The ratio of mergers and acquisitions to IPOs has gone from roughly 1:1 from 1996 to 2000 to 6:1 during 2001 through 2008.

A $100 million high-growth revenue company is no longer an interesting candidate for an IPO, potentially a $1 billion company with some nurturing and capital. Instead, it becomes a piece of some large company. With its fate no longer in its hands, the company loses its key management and its vision. We are replacing potentially great companies with underperforming divisions of mature companies.

Once Wall Street recovers from its leverage hangover, the $100 million technology company will once again become an attractive investment. Value creation and financial returns will again be aligned.

“Senator Obama’s 20-month conversation with the electorate now enters a new phase. There is a sense of ownership, a kind of possessive entitlement, on the part of the people who worked to elect him. The shorthand for his organizing Web site, “MyBO,” says it all.

“Bubbles have two components: a trend that prevails in reality and a misconception relating to that trend. In real estate, the trend consists of an increased willingness to lend and a rise in prices. The misconception is that the value of the real estate is independent of the willingness to lend. That misconception encourages bankers to become more lax in their lending practices as prices rise and defaults on mortgage payments diminish. That is how real estate bubbles are born.

Markets that are prone to bubbles should be regulated. It is impossible to prevent bubbles from forming, but it should be possible to keep them within tolerable bounds. Regulators such as the Fed, the Treasury, and the SEC must accept responsibility for preventing bubbles from growing too big. So far they have explicitly rejected that responsibility.

“I probably make as many mistakes as any investor. But I usually discover them quicker and correct them before they cause too much harm.

“Look around the world, and extra money is piling up in all sorts of places. Japanese corporations are recording record profits, but not doing much spending. Chinese companies are on an investment tear, but the country is getting so much money from exports that it has billions to spare.

Access to global savings has enabled the U.S. private and public sectors to fund a big increase in housing construction, health-care spending, and military outlays—all without boosting inflation or pushing up interest rates.

But the global economy is having a tough time absorbing the unanticipated flood of funds. Instead of going into productive investments, cheap money may be overheating spending and sending asset prices soaring too high, setting the stage for a future bust.

The savings surge also means that governments are not being penalized for running budget deficits. Cheap capital will give politicians the opportunity to waste the money on items that don’t boost long-term growth.

If low rates eventually pave the way for productive investment by governments and businesses, that would benefit investors. But until this happens, they must choose between accepting lower returns or taking on added risk.

“Buffett is unique in his eagerness to explain how and why he does what he does. Underlying the desire to explain what he’s up to is the wish to be proved right—Buffett regards himself as living proof that the efficient market theory of market pricing is wrong.

“Don’t tell me what you’re doing, tell me what you’ve stopped doing. It requires courage, but it can be a tremendous relief to abandon a project. The practical result is the same—the project doesn’t get done—but deliberate abandonment eliminates guilt and frees up emotional energy.

“Values are acquired. That which is imposed is dogma.

“Putting out a product in hopes of getting a lot of eyeballs is a young man’s business model, a business model without considering connections. Deciding to make connections for your business isn’t conscious. When something happens, the first thing that pops in your head is “Boy, Fred needs to hear about this”. How many Freds you know dictates how often that idea pops in your head. A 30 year old generally has more business connections than a 20 year old. People simply follow business plans as they occur to them.