Tuesday, April 25, 2017


5 More Life Lessons from Lunch with Warren Buffett (LINK)

Patrick O'Shaughnessy talks with Danny Moses, head trader at Frontpoint during the Big Short (LINK)

Cal Newport on taking your life back from technology (podcast) [H/T James] (LINK)
Related book: Deep Work
The March 2017 issue of Value Investor Insight (LINK)

Fred Wilson gives the first annual Georges Doriot Lecture at MIT (video) (LINK)

Homo naledi is only 250,000 years old – here’s why that matters (LINK)

How a dolphin eats an octopus without dying (LINK)

The Very Hungry Plastic-Eating Caterpillar - by Ed Yong (LINK)

'Zen And The Art of Motorcycle Maintenance' Author Robert M. Pirsig Dies At 88 [H/T @paulg] (LINK)
Related books: 1) Zen and the Art of Motorcycle Maintenance; 2) Lila: An Inquiry Into Morals
Book of the day (released yesterday): Option B: Facing Adversity, Building Resilience, and Finding Joy - by Sheryl Sandberg and Adam Grant

Monday, April 24, 2017


“A trust-based, win-win culture that’s genuine in every respect is how to take the normal levels of human effort; such as productivity, co-operation, and ingenuity; and to multiply them by five or 10 times.” -Peter Kaufman (source)

Uber’s C.E.O. Plays With Fire (LINK)

Workplace culture should be measured, just like sales or ROI (LINK)

Michael Bloomberg on 60 Minutes (video) (LINK)
The media mogul says most of his fortune will go to his foundation - viewing personal philanthropy not as a threat to democracy, but a way to get things done.
Hamdi Ulukaya on 60 Minutes (video, from 2 weeks ago) (LINK)
Hamdi Ulukaya built the best-selling yogurt brand in the U.S. after coming here 23 years ago. Today, 70% of Chobani employees are American born, 30% are immigrants and refugees.
Grab Your Pitchforks, America, Your 401(K) May Need Defending From Congress - by Jason Zweig (LINK)

Reid Hoffman on How to Be a Great Founder - by Ian Cassel (LINK)

Some great notes from a talk given by Sanjay Bakshi (LINK)

Mohnish Pabrai's two cents on Seritage Growth Properties (LINK)

Mental Model: Hanlon’s Razor (LINK)

Latticework of Mental Models: Physics Envy (LINK)

The Rise of the Freemium Business Model - by Tren Griffin (LINK)

Starting Is Easy, Finishing Is Hard - by Fred Wilson (LINK)

How Online Shopping Makes Suckers of Us All (LINK)

Tesla Has Something Hotter Than Cars to Sell: Its Story [from a couple of weeks ago] (LINK)
As Tesla shares surged past $300 this week and the company’s market value surpassed Ford’s, even its founder, Elon Musk, acknowledged on Twitter that the company was “absurdly overvalued if based on the past.” 
...“It’s nuts,” Bruce Greenwald, a professor at Columbia Business School and an expert in value investing, said of Tesla’s stock price. “Investors believe it’s going to dominate a market that no company has ever dominated before.”
How I Built This podcast -- Real Estate Mogul: Barbara Corcoran (LINK)

Russell Napier talks to James Grant (podcast) (LINK)
Related book: Anatomy of the Bear
G. Edward Griffin on the Peak Prosperity podcast [H/T ValueWalk] (LINK)
Related book: The Creature from Jekyll Island
Scientists find giant, elusive clam known as ‘the unicorn of mollusks’ [H/T Linc] (LINK)

Watch the World’s Biggest Animal Lunge for its Dinner (LINK)

For Audible members, the current 50% off sale ends tonight at 11:59 PM PT. Here are some of the under $10 audiobooks that stood out to me (i.e. better value than using a credit):

Astrophysics for People in a Hurry - by Neil deGrasse Tyson (to be released next week)

Cosmos – by Carl Sagan (to be released at the end of May)

The Demon-Haunted World: Science as a Candle in the Dark - by Carl Sagan (to be released at the end of May)

Churchill (The Great Courses)

Being Human: Life Lessons from the Frontiers of Science (The Great Courses)

Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age

Competing Against Luck: The Story of Innovation and Customer Choice

Overcomplicated: Technology at the Limits of Comprehension

The Wawa Way: How a Funny Name and Six Core Values Revolutionized Convenience

Economics in One Lesson - by Henry Hazlitt

Friday, April 21, 2017


Sanjay Bakshi’s Interview With Equitymaster (Part 1, Part 2)

Warren Buffett visits Texas Capitol and "Buffett Bill" is born [H/T Linc] (LINK)

Richard Branson's 70 must-read books (LINK)

On Neo-Cons and their Mental Defects – by Nassim Nicholas Taleb (LINK)

He Rides a Decrepit Bike and Owns a French Vineyard: The Unconventional World of Bank CEO Bob Wilmers (LINK)

Stress and Comfort: Careful What You Wish For - by Morgan Housel (LINK)

Sure, Stocks Are Overvalued. Now What? - by Ben Carlson (LINK)

Paul Tudor Jones Says U.S. Stocks Should ‘Terrify’ Janet Yellen (video plays) (LINK)
Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid. 
The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years. That measure -- the value of the stock market relative to the size of the economy -- should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him. 
Managers expecting the worst each have a pet harbinger of doom. Seth Klarman, who runs the $30 billion Baupost Group, told investors in a letter last week that corporate insiders have been heavy sellers of their company shares. To him, that’s “a sign that those who know their companies the best believe valuations have become full or excessive.”
Chat With Traders podcast Episode 121: Tactics for better decision making, and skill versus luck w/ Michael Mauboussin (LINK)

Adventures in Finance Podcast: Episode 12 - Bass and Burbank, A Masterclass (LINK) [The Bass/Burbank part is from a Real Vision TV chat in March of 2015, and the audio of that can also be found HERE.]

Quora raises $85 million to expand internationally and develop its ads business (LINK) [Sam Altman also discussed Y Combinator's reasons for investing HERE.]

Exponent podcast: Episode 111 — Lamentation Not Condemnation (LINK)

The World’s Strangest Mammal Can Survive 18 Minutes Without Oxygen - by Ed Yong (LINK)
Oxygen makes up around 20 percent of the air around you. If it fell to 5 percent, you’d pass out after 3 minutes or so. Then, your brain would start to die. To fuel itself, this gas-guzzling organ requires a constant supply of sugar and oxygen—even when you’re not doing anything. Without the vital gas, ions flood across the barriers of neurons, causing internal havoc, and forcing them to self-destruct. “There’s probably more than a hundred things that will kill brain cells if you turn off the oxygen,” says Thomas Park, from the University of Illinois at Chicago. 
Within minutes, you’d be dead. And hours after that, a naked mole-rat in the exact same conditions would be happily walking around—the picture of health. Imagine a disembodied index finger that’s been soaking in the bath for too long, and has teeth at the end. That’s a naked mole-rat. These weird rodents live in large underground colonies with nesting chambers the size of footballs. In these cramped subterranean quarters, oxygen levels often fall as low as 6 percent. And yet, these animals cope with this hypoxia.
Bill Nye Saves the World premiers on Netflix today (LINK)

Books of the day:

Uranium: War, Energy, and the Rock That Shaped the World

The Undersea Network

The Network: The Battle for the Airwaves and the Birth of the Communications Age

Thursday, April 20, 2017


I Interviewed Warren Buffett. He Told Me 10 Things Every Successful CEO Must Learn - by Jeff Cunningham [H/T Linc] (LINK) [The video interview, from a couple of years ago, is available HERE.]

Bill Gates on Tropical Diseases, Trump and Brexit (video) [H/T Matt] (LINK)

Former Harvard Money Whiz Jack Meyer Tries to Regain His Edge (LINK)

Missing Billionaire Has Ties to China’s Military (LINK)

Are You Prepared? - by Ian Cassel (LINK)

Simplicity and the power of not doing stupid things (LINK)

Replay of the MoAF Live Stream Event with Aswath Damodaran from last week (video) (LINK)
Related book:  Narrative and Numbers: The Value of Stories in Business 
Grant's Podcast Episode 8: How not to get rich (LINK)

Facebook and the Cost of Monopoly - by Ben Thompson (LINK)

W. Brian Arthur on the Hidden Forces podcast (LINK)

Blood From Human Umbilical Cords Can Rejuvenate Old Mouse Brains -  by Ed Yong (LINK)

Boyles Asset Management – Q1 2017 Letter Excerpt

Delayed Gratification

“You’re looking for people who will delay gratification; who will focus on building a moat; who will focus on building a franchise; who will focus on the longevity of the business.” -Sanjay Bakshi, Adjunct Professor of Finance, Management Development Institute, India

In a recent podcast interview, when discussing the importance of investing in businesses and management teams that are willing to forgo near-term earnings in order to increase long-term value, Professor Sanjay Bakshi mentioned the compound interest formula as being a useful tool to help one think about building that kind of long-term value.  

That formula is:


a = the total amount after n years
p = the principal investment amount
r = the annual interest rate (or annual return)
n = the number of years the rate is earned

All too often, companies and their shareholders focus too much on the r variable in the equation.  They want instant gratification with high profit margins and high growth in earnings per share without having to wait.  This causes many management teams to pass on investments that would create long-term value, but look bad in the short run.  It can cause companies to make as much money as they can off of their present customers in order to report good quarterly numbers, instead of offering a fair price that creates goodwill and a long-term win-win relationship with those customers.

Some companies, however, are able to look past maximizing short-run r and instead focus on maximizing n in order to create maximum long-term value, and happy customers.  Amazon and Costco are probably two of the most commonly cited examples.  As they’ve grown and achieved economies of scale over time, they’ve continued to share those benefits with customers by keeping prices low and by continuing to add benefits to their respective membership bases, with little to no increase in the price of membership.  This not only makes for happy customers that then spend more with those companies, it makes those businesses harder to compete with over time.  As Amazon.com CEO Jeff Bezos said in a 2011 interview with Wired:
“If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people.  But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.  Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.”

We are often asked about the traits we look for in the businesses in which we invest, and near the top of our list are management teams that understand capital allocation and are willing to take a long-term view in building a durable business.  This is especially true among many of the smaller businesses that we’ve spent much of our time analyzing, and it is why we place so much emphasis on making sure that management incentives are aligned with us as shareholders.  System1 Group is a great example of a company with the desired traits we look for, and that’s why we continue to hold shares despite their rise and increased position size in our portfolio.  We believe the company is both benefiting from past investments, as well as continuing to make new investments and do the things it needs to do to become a much more valuable business a decade from now than it is today.  We are happy being partners with a skilled and well-aligned management team.

Capitalizing on businesses that operate on a long timeline of value creation is only possible if we operate with a long-term view as well.  We have to judge our investments, and potential investments, on their actions and business results, not the movements of their stock prices.  If the business performs, the stock price will eventually follow; whether that happens in five months or five years is hard to predict.

But a long-term investment horizon must also be married with an investment process willing to continually question investment theses.  All too often long-term investments are the names given to things that don’t work out in the short-term.  When one spends a lot of time getting to know a business and management team before investing—as we do—it can be hard to change one’s mind quickly, or at all, as one doesn’t want to feel like all that time was wasted learning things one didn’t act upon.  But staying intellectually honest while looking at many businesses, and only investing in the few where we think the odds are significantly in our favor, is how we think we can gain an advantage over time.


Disclosure: I am a portfolio manager at Boyles Asset Management, LLC("Boyles") and the fund managed by Boyles may in the future buy or sell shares of the stocks mentioned below and we are under no obligation to update our activities. This is for information purposes only and is not a recommendation to buy or sell a security. Please do your own research before making an investment decision.

Wednesday, April 19, 2017

Howard Marks Memo: Lines in the Sand

Link to Memo: Lines in the Sand
In my 2016 year-end review, which went only to clients, I included a discussion of the use of subscription lines by closed-end funds in areas such as private equity, real estate, distressed debt and private credit. It’s my impression that their use has become fairly pervasive in recent years, and in response to clients’ requests and market trends, Oaktree has utilized subscription lines in some of its newer funds. 
That year-end note prompted some interesting and spirited discussion of lines and their merit and effect. Thus I decided to write this memo on the topic for general circulation.

Tuesday, April 18, 2017


The Kindle version of To Pixar and Beyond is on the Kindle Daily Deal list for $2.99. And if you buy it, you can also add the Audible version for another $4.99.

Scott Galloway - How Amazon is Dismantling Retail (video) [H/T @MarceloPLima] (LINK)

Invest Like The Best Podcast: REALLY Private Equity, with Royce Yudkoff and Rick Ruback (LINK)

Steve Ballmer puts the entire government in a spreadsheet (video plays) (LINK)

Popular Gold Miner ETF To Change Dramatically [H/T @chriswmayer] (LINK)

a16z Podcast: The Science of Extending Life (LINK)

South Carolina hospitals see major drop in post-surgical deaths with nation’s first proven statewide Surgical Safety Checklist program (LINK)
Related book: The Checklist Manifesto
Drone spots humpback whales and orcas moving in on cloud of fish (LINK)

Monday, April 17, 2017


Mohnish Pabrai on CNBC (video) [H/T Matt] (LINK)

No Worship Without Skin in the Game - by Nassim Nicholas Taleb (LINK)

Frank and Steven’s Excellent Corporate-Raiding Adventure (LINK)
Two law professors tried to mimic big activist hedge funds, investing their retirement savings in a small, languishing public company and trying to shake it up. Here’s what happened.
How I Built This podcast -- 1-800-GOT-JUNK?: Brian Scudamore (LINK)
Brian Scudamore didn't dream of a life hauling away other people's trash. But when he needed to pay for college, he bought a $700 pickup truck, painted his phone number on the side, and started hauling. Now 1-800-GOT-JUNK? makes over $200 million in annual revenue.
O Behave podcast: Episode 3 - Deceit and Self - Deception (with Robert Trivers) (LINK)
An engaging and wide-ranging conversation between evolutionary biologist Robert Trivers and Ogilvy & Mather vice-chairman Rory Sutherland. Podcast hosted by Ogilvy Change behavioural researchers Julia Stainforth and Maddie Croucher.
Bill Belichick reveals his 5 rules of exceptional leadership (article and video) [H/T Matt] (LINK)

This new solar-powered device can pull water straight from the desert air [H/T Linc] (LINK)

Receding glacier causes immense Canadian river to vanish in four days [H/T Linc] (LINK)

Sunday, April 16, 2017


"When we can’t find anything exciting in which to invest, our “default” position is U.S. Treasuries, both bills and repos. No matter how low the yields on these instruments go, we never “reach” for a little more income by dropping our credit standards or by extending maturities. Charlie and I detest taking even small risks unless we feel we are being adequately compensated for doing so. About as far as we will go down that path is to occasionally eat cottage cheese a day after the expiration date on the carton." -Warren Buffett (2003 Letter to Shareholders)

BC2017 - Nitin Nohria Interviews Jorge Paulo Lemann and Warren Buffett (full video interview, starting at about the 5:15 mark) [H/T ValueWalk] (LINK)

A Dozen Lessons about Business Valuation from the Iridium Debacle - by Tren Griffin (LINK)
Related video: "Eccentric Orbits: The Iridium Story" | Talks at Google (BOOK)
The Marketing Genius of the Toothpick King (LINK)

Is American Retail at a Historic Tipping Point? (LINK)

Amex, Challenged by Chase, Is Losing the Snob War [H/T Linc] (LINK)

Linamar: Driving for More of the Auto-Parts Market [H/T @chriswmayer] (LINK)
Related book: Driven to Succeed: How Frank Hasenfratz Grew Linamar from Guelph to Global 
Related previous post: Linamar and being entrepreneurial
One of the Best Investment Books I’ve Read in a While - by Ben Carlson (LINK)
Related book: Bull: A History of the Boom and Bust, 1982-2004 [Warren Buffett also mentioned this book in his 2003 Letter to Shareholders.]
India’s ID system is reshaping ties between state and citizens (LINK)
Related link: Raoul Pal, Paying Attention
Exponent podcast: Episode 110 — Moral Hazard (LINK)

Audiobook of the day (I believe this is the audio of the PBS program mentioned by Boyd Varty in his fantastic chat with Patrick O’Shaughnessy.): The Power of Myth

Thursday, April 13, 2017


"Sometimes there are plentiful opportunities for unusual return with less-than-commensurate risk, and sometimes opportunities are few and risky. It’s important to wait patiently for the former. When there’s nothing clever to do, it’s a mistake to try to be clever." -Howard Marks (via the presentation below)

The slides from Howard Marks' presentation ("The The Truth about Investing") are available HERE.

Via Negativa: Wisdom Through Subtraction (LINK)

David Einhorn Ratchets Up Pressure on GM (LINK)

Apollo Asia Fund: the manager's report for 1Q2017 (LINK)

Bill Gross' April 2017 Investment Outlook (LINK)

Buyout Firms Are Magically -- and Legally -- Pumping Up Returns [H/T Matt] (LINK)

How Canada completely lost its mind over real estate [H/T Matt] (LINK)

The Long-Ignored Reptile Rewriting the Prologue to the Dinosaur Story - by Ed Yong (LINK)

Book of the day (to be released in May) [H/T @Sanjay__Bakshi]: The Wisdom of Finance: Discovering Humanity in the World of Risk and Return