Thanks for the comment and question.

You’re right… Deferred taxes in many cases are things like NOL’s and tax credits. But they can also be float.

I’m going to continue to explain the complexities of the confusion around float in coming posts. But know for now the post above and what Munger is talking about deferred taxes – liabilities in this case – should be viewed as float and not NOL’s.

Why?

Because only net deferred tax assets should be considered NOL’s.

Deferred tax assets and liabilities listed on the balance sheet – not net – are float. The difference is subtle but important. And thanks to your question I now plan to write a post explaining the differences.