Tuesday, September 29, 2015

Links

Catching back up after a few days in Miami...

PBS Program: E.O. Wilson – Of Ants and Men, premieres Wednesday, September 30, 2015 (LINK)
Related book: Journey to the Ants: A Story of Scientific Exploration
A Dozen Things Learned from Charlie Munger About The Berkshire System (LINK)
Related book: Charlie Munger: The Complete Investor
The latest from Michael Mauboussin: Sharpening Your Forecasting Skills (LINK)

Elizabeth Holmes on CNBC (video) (LINK)

Sequoia Fund Managers Suffer $1.2 Billion Loss as Valeant Falls (LINK)
Related link: Ruane, Cunniff & Goldfarb Investor Day Transcript (May 2015)
Carl Icahn's 'Danger Ahead' video (LINK)

With Glencore, Commodity Rout Beginning to Look Like a Crisis (article and video) (LINK)

Aswath Damodaran: No Mas, No Mas! The Vale Chronicles (Continued)! (LINK)

a16z Podcast: Advertising vs. Micropayments in the Age of Ad Blockers (LINK)

The Pulse podcast on disruptive innovation in higher education (LINK)
Related book: Hire Education: Mastery, Modularization, and the Workforce Revolution
Hussman Weekly Market Comment: Valuations Not Only Mean-Revert; They Mean-Invert (LINK)
For decades now, I’ve regularly detailed the historical evidence linking equity valuations to actual subsequent long-term returns in stocks. An important feature of historically reliable measures of valuation is that they mute the impact of cyclical fluctuations in profit margins. Current earnings – or analyst estimates of expected “forward” earnings – should not be taken at face value, because profit margins are not permanent. The most reliable measures of broad market valuation are actually driven by revenues, not earnings. For a review, including the arithmetic linking valuations to actual subsequent market returns, see Ockham’s Razor and the Market Cycle and Margins, Multiples, and The Iron Law of Valuation. 
It’s sometimes argued that the long-term expected return on stocks is simply the expected long-term growth rate of earnings, dividends and the like, plus the prevailing dividend yield. While this would be true if valuations were held constant for all of eternity, the fact is that elevated and depressed valuations tend to normalize over time, which investors know as “mean reversion.” As a result, higher valuations are systematically related to lower subsequent long-term market returns, and lower valuations are systematically related to higher subsequent long-term market returns.
Some advice from Jeff Bezos [H/T @derekhernquist] (LINK)
He said people who were right a lot of the time were people who often changed their minds. He doesn’t think consistency of thought is a particularly positive trait. It’s perfectly healthy — encouraged, even — to have an idea tomorrow that contradicted your idea today. 
... 
What trait signified someone who was wrong a lot of the time? Someone obsessed with details that only support one point of view. If someone can’t climb out of the details, and see the bigger picture from multiple angles, they’re often wrong most of the time.
Notes on the book Diaminds: Decoding the Mental Habits of Successful Thinkers (Part 1, Part 2, Part 3, Part 4, Part 5)

‘Find your passion’ is terrible career advice [H/T @cfchabris] (LINK)
Related book: So Good They Can't Ignore You: Why Skills Trump Passion in the Quest for Work You Love
'Snakeskin' Pluto revealed in planetary close-up (LINK)