Tuesday, January 27, 2015


Apollo Asia Fund: the manager's report for 4Q2014 (LINK)
Amidst all these distractions, I omitted to post a link to GMO's 3Q report, with another compelling exposition from Jeremy Grantham on what I consider the key issue of our time. While acknowledging short term benefits from the fall in the oil price, as income is transferred from producers to consumers with a greater propensity to spend, he explains with great clarity why the current fall in the oil price 'does nothing to offset the squeeze on the total economy from rising costs', and provides some alarming illustrations of the magnitude of that squeeze. We differ on coal: as mentioned here six months ago, the usage of coal in Asia is rising and not falling, as oil and gas production falters. However, Grantham's central message could hardly be clearer - or further from complacent assumptions of business-as-usual. '... other parts of the complex economic system have to be sacrificed to retain the ability to acquire sufficient oil... if oil costs continue to rise the trade-offs become more and more painful. Our complex system has been trained by experience to deal with steady growth. Now it must deal with slowing growth and one day it may face contraction. In this changed world we can only guess how robust the stressed system will be. We may hope it will be tough but quite possibly it will be brittle. At the extreme it might even threaten the viability of our current economic system. It is vital therefore, if we want to reduce these stresses, to emphasize fuel efficiency, reduce wastage of all kinds, and encourage the rapid development of sustainable "alternative" forms of energy... Clearly the writing is on the wall. It is now up to our leadership and to us as individuals to read it and act accordingly.' First read the rest: 'The Beginning of the End of the Fossil Fuel Revolution (from Golden Goose to Cooked Goose)'. 
If only we knew how to invest accordingly. Portfolio turnover in 2014 was low, at 12%. With the world in turmoil, we may well need to make more changes in the year ahead. Some of the changes we made earlier have not, as yet, gone to plan. Suggestions, as always, are welcome.
See’s Candies Case Study (LINK)

One Powerful Success Secret I Learned from Warren Buffett (Hint: It’s Not about Investing) (LINK)
Related book: Daily Rituals: How Artists Work
Buffett, 'Dilbert' creator Scott Adams differ on passion [H/T Will] (LINK)
Related book: How to Fail at Almost Everything and Still Win Big
Scott Adams: Speed is the New Intelligence (LINK)

The Shake Shack Economy [H/T The Big Picture] (LINK)

Mark Hanson's latest on the housing market (LINK)

Ray Kurzweil’s Mind-Boggling Predictions for the Next 25 Years (LINK)
Related book: Bold: How to Go Big, Create Wealth and Impact the World
William Ury, co-author of the Charlie Munger recommended Getting to Yes: Negotiating Agreement Without Giving In, is out with a new book; Getting to Yes with Yourself