Thursday, April 19, 2018

Links

"Well, we do have filters. And sometimes those filters are very irritating to people who check in with us about businesses - because we really can say "no" in 10 seconds or so to 90%+ of all of the things that come along simply because we have these filters. First, we want businesses that we can understand. And that filters out a lot of things. Second, we want 'em to be good businesses. How do our filters deal with fast changing technology? Very simply. If something has a significant technological component or we think future technology could hurt its business as it presently exists, we look at it as something to worry about. And it won't make it through our filters. But we have some filters in regard to people, too. We want businesses that are being run by people who we’re very comfortable with - which means people with ability and integrity. And we can do that very fast. We've heard a lot of stories in our lives." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

"We have to have an idea that is (A) a good idea and (B) a good idea that we can understand. It's that simple. So our filters are filters against consequences from our own lack of talent." --Charlie Munger (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

The Walter Schloss Archive [H/T Linc] (LINK)

Why All My Books Are Now Free (Aka A Lesson In Amazon Money Laundering) - by Meb Faber (LINK)

EconTalk Podcast: Jerry Muller on the Tyranny of Metrics (LINK)
Related book: The Tyranny of Metrics
Freakonomics Radio: Why the Trump Tax Cuts Are Terrible/Awesome (Part 2) (LINK)

What Tennis Can Teach Us About Technology - by Jonah Lehrer (LINK)

How Good Do You Want To Be? - by Ryan Holiday (LINK)

Scientists Genetically Engineered Flies to Ejaculate Under Red Light - by Ed Yong (LINK)

Wednesday, April 18, 2018

Links

"The financial world is so complex and unpredictable that a fair amount of our analyses will prove to have been flawed.... A dirt-cheap price is an anchor to windward against misperceiving current situations, or being unable to make accurate forecasts." --Marty Whitman

Martin J. Whitman, age 93, Founder of Third Avenue Management, Passes Away (LINK)
Related link: Over 30 Years of Value Insights from Martin J. Whitman
Jeff Bezos' 2017 Letter to Shareholders (LINK)

IMF issues warning on global debt (LINK) [The full report is available HERE.]

WorkLife with Adam Grant Podcast: When Work Takes Over Your Life (LINK)

Edge #512: How To Be a Systems Thinker - A Conversation With Mary Catherine Bateson (LINK)

Drugs from Bugs: Bioprospecting Insects to Fight Superbugs (LINK)

Tuesday, April 17, 2018

Links

"Markets can do anything. If you look at the history of markets, you see everything under the sun. But we have no time frame [for doing something]. If the money piles up, then it piles up. And when we see something that makes sense, we're willing to act very fast and very big. But we're not going to act on anything if it doesn't check out. You don't get paid for activity. You only get paid for being right."  --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

My Berkshire Hathaway Reflections - by Shane Parrish (LINK)

Zillow, Aggregation, and Integration - by Ben Thompson (LINK)

In the era of Donald Trump, New England’s biggest GOP donor is funding Democrats [Seth Klarman] [H/T Will & Linc] (LINK)

A $76,000 Monthly Pension: Why States and Cities Are Short on Cash (LINK)

Netflix: The Future of Entertainment or House of Cards? - by Aswath Damodaran (LINK)

A Sidelined Wall Street Legend Bets on Bitcoin [H/T @williamgreen72] (LINK)

The Rise, Reign, and Fall of W.P.P.’s Martin Sorrell - by Ken Auletta (LINK)

To Everyone Who Asks For ‘Just A Little’ Of Your Time: Here’s What It Costs To Say Yes - by Ryan Holiday (LINK)

The Shellfish Gene - by Ed Yong (LINK)

***

An excerpt from a 2011 article by Nassim Taleb and Mark Blyth ("The Black Swan of Cairo") that may be worth thinking about today:
Political and economic “tail events” are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics into the tractable randomness of blackjack. 
Most explanations being offered for the current turmoil in the Middle East follow the “catalysts as causes” confusion. The riots in Tunisia and Egypt were initially attributed to rising commodity prices, not to stifling and unpopular dictatorships. But Bahrain and Libya are countries with high GDPs that can afford to import grain and other commodities. Again, the focus is wrong even if the logic is comforting. It is the system and its fragility, not events, that must be studied—what physicists call “percolation theory,” in which the properties of the terrain are studied rather than those of a single element of the terrain.  
When dealing with a system that is inherently unpredictable, what should be done? Differentiating between two types of countries is useful. In the first, changes in government do not lead to meaningful differences in political outcomes (since political tensions are out in the open). In the second type, changes in government lead to both drastic and deeply unpredictable changes. 
And a related quote from Taleb in The Black Swan (2007):
Likewise, dictatorships that do not appear volatile, like, say, Syria or Saudi Arabia, face a larger risk of chaos than, say, Italy, as the latter has been in a state of continual political turmoil since the second war. I learned about this problem from the finance industry, in which we see “conservative” bankers sitting on a pile of dynamite but fooling themselves because their operations seem dull and lacking in volatility.

Monday, April 16, 2018

Carl Sagan on science as a way of thinking...

From The Demon-Haunted World: Science as a Candle in the Dark (published in 1995):
Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children’s or grandchildren’s time—when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness.  
The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance. As I write, the number-one videocassette rental in America is the movie Dumb and Dumber. “Beavis and Butthead” remain popular (and influential) with young TV viewers. The plain lesson is that study and learning—not just of science, but of anything—are avoidable, even undesirable.  
We’ve arranged a global civilization in which most crucial elements—transportation, communications, and all other industries; agriculture, medicine, education, entertainment, protecting the environment; and even the key democratic institution of voting—profoundly depend on science and technology. We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.



Friday, April 13, 2018

Links

"I think the most successful investors, if they sell at all, will be selling things that end up going a lot higher - because it means they've been buying into good businesses as they've gone along." --Warren Buffett

Wait But Why: How to Pick a Career (That Actually Fits You) (LINK)

The $105 Billion ‘Ghost Stock' Blunder Rocking Markets in Korea [H/T Matt] (LINK)

A review of the book The Culture Code (LINK)

The World According to Boyar Podcast: Frank Blake, former Chairman and CEO of The Home Depot (LINK)

Adventures in Finance Podcast -- Powering Down: Beginning of the End for Tesla? (LINK) [See also: The bull case for Tesla]

Exponent Podcast: Episode 148 — Facebook Fatigue (LINK)

Sam Altman interviews Anne Wojcicki (video) (LINK)

This Hummingbird's Tail Whistles, and No One's Sure Why - by Ed Yong (LINK)

Thursday, April 12, 2018

Links

"Incidentally, the ideal purchase is something you like already when it's selling at a price that makes you want to go out and buy more. And we probably should have done more of that in the past.... That's one of the beauties of marketable securities. When you're in a wonderful business, you do get a chance periodically to double up on it or something of that sort. Were the stock market to sell a lot cheaper than it is now, we'd probably buy more of the businesses we already own. They'd certainly be the first ones we'd think about buying because they're the ones we like best." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Adam Grant on Intentional Parenting - by Shane Parrish (LINK)
[Grant]: I think when it comes to core family values, we care obviously a lot about generosity and kindness. 
One of the things that we discuss at the dinner table every week is… The conversation about “What did you do at school today?” is not that helpful. What’s much more helpful is “what’s something you did for someone else this week?” 
...We definitely want our kids to value learning. So one of the principles that we follow is any time they’re interested in learning about something, we’ll find a book on it.
Their challenge then is to learn about it, maybe to teach it to us, which is really fun.
And we get to have a whole discussion about it.
Mark Zuckerberg runs a nation-state, and he’s the king (LINK)

The Saudi Crown Prince Thinks He Can Transform the Middle East. Should We Believe Him? [H/T @kevin2kelly] (LINK)

DIA Director's 2018 Professional Reading List [H/T Phil] (LINK)

Understanding China's Rise Under Xi Jingping - by Kevin Rudd [H/T Phil] (LINK)

When a Bigger Penis Means Swifter Extinction - by Ed Yong (LINK)
For one group of tiny crustaceans, the species whose males invest most heavily in sex disappear ten times faster.

Wednesday, April 11, 2018

Links

"You don't want to be chasing down every idea. Therefore, you should have a strong presumption. You should be like a basketball coach who runs into a 7-footer on the street. You're interested to start with. Now you've got to find out if you can keep him in school, if he's coordinated and all of that sort of thing. And that's the "scuttlebutt" aspect of it. But it should be the last 20% or 10%. You don't want to get too impressed by that because you want to start with a business where you think the economics are good - where they look like 7-footers. Then you want to go out and use the scuttlebutt approach to test your original hypothesis." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Henry Kravis Discusses Founding KKR and the History of Private Equity (LINK)

The Facebook Current - by Ben Thompson (LINK)

The Knowledge Project Podcast -- Learning How to Learn (LINK)
In order to get where you want to go in work and life you need to learn. But how do we actually learn? How does the brain work? How can we accelerate our learning? To find out, Shane talks with Barbara Oakley (@barbaraoakley), who teaches the most popular massive open online course in the world, Learning How to Learn. 
Nassim Taleb talks with Brett McKay (podcast) (LINK)
Related book: Skin in the Game
WorkLife with Adam Grant Podcast: A World Without Bosses (LINK)
Being your own boss can be liberating, but it can also be paralyzing. Adam talks with author Dan Pink about the challenges of working for ourselves and visits a tomato paste company, Morning Star, that has run successfully for decades without bosses.
Bill Gates shares the story of Cacilda Fumo, an amazing woman living with HIV in Mozambique and what she’s doing to save lives (LINK)

Leonard Mlodinow: "Elastic: Flexible Thinking in a Time of Change" | Talks at Google (LINK)

Four Things Procrastinators Need to Learn (LINK)

People Who Have “Too Many Interests” Are More Likely To Be Successful According To Research [H/T @valueshadow] (LINK)

Today's Audible Daily Deal ($2.95) is a good one, and a former Bill Gates recommendation: Stuff Matters: Exploring the Marvelous Materials That Shape Our Man-Made World - by Mark Miodownik

Tuesday, April 10, 2018

Skin in the game and simplicity...

From Nassim Taleb via Skin in the Game:
Now skin in the game brings simplicity—the disarming simplicity of things properly done. People who see complicated solutions do not have an incentive to implement simplified ones. As we saw, a bureaucratized system will increase in complication from the interventionism of people who sell complicated solutions because that’s what their position and training invite them to do. 
Things designed by people without skin in the game tend to grow in complication (before their final collapse).  
There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a “scholarly” paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary. Further, there are side effects for problems that grow nonlinearly with such branching-out complications. Worse:  
Non-skin-in-the-game people don’t get simplicity.

Monday, April 9, 2018

Links

"One way to determine which is the good business and which is the bad one is to see which one is throwing management bloopers - pleasant, no-brainer decisions - time after time after time." --Charlie Munger

First Principles: The Building Blocks of True Knowledge (LINK)

An Art Leveraging A Science - by Morgan Housel (LINK)

Come easy, go easy: The Tech Takedown! - by Aswath Damodaran (LINK)

Passive Aggressive Investing and FAANG - by Rick Bookstaber (LINK)

Why the co-dependence between big tech and passive and algorithmic investing could cause far more pain than most anticipate (LINK)

Is College Worth the Cost? - by Ben Carlson (LINK)

Adventures in Finance Podcast -- Crude Awakening: The Yuan, the Dollar, and the Battle for Global Supremacy (LINK)

The full audio of Recode and MSNBC’s interview with Apple CEO Tim Cook (Recode Decode Podcast) (LINK)

Cities are the new Galapagos - by Matt Ridley (LINK)

Academia’s Consilience Crisis [H/T @mjmauboussin] (LINK)

Book of the day: Four Seasons: The Story of a Business Philosophy
[And for those especially interested in business biographies from the hotel industry, also see: 1) Be My Guest (Hilton); 2) Half Luck and Half Brains (Holiday Inn); and 3) Without Reservations (Marriott)]

Peter Kaufman on The Multidisciplinary Approach to Thinking (audio and transcript)

About the most educational 45 minutes of listening (or reading) one can receive...


.....

An excerpt always worth keeping in mind:
Lou Brock set the Major League record for stolen bases with the St. Louis Cardinals many years ago. And he once said, ‘Show me a man who's afraid of appearing foolish and I’ll show you a man you can beat every time.’ And if you’re getting beat in life, chances are it’s because you’re afraid of appearing foolish. 

Saturday, April 7, 2018

Links

"I think the world's best companies are built by fanatics. [That means that you] work day and night. Sort of don't worry about the possibility of failure. Every setback is just something to work a little bit harder at doing. And you really know what you're trying to achieve.... And you're going to change your strategy until you can get that to happen." --Bill Gates

Intelligent Fanatics Think Beyond Their Lifetime (LINK)

Business Lessons from Mark Leonard (Constellation Software) - by Tren Griffin (LINK)

"The Clock Is Ticking": Inside the Worst US Maritime Disaster in Decades [H/T @pcordway] (LINK)

Fintech Could Flop Without Big Banks (LINK)

a16z Video: Eroom’s Law (LINK)

a16z Video: What to Make of Consolidation in Healthcare? (LINK)

Exponent Podcast: There’s Always a Bigger Fish (LINK)
Ben and James discuss Microsoft’s reorganization, how Satya Nadella has managed the decline of Windows, and how it applies to Apple and services.
FT Alphachat Podcast: Benn Steil on The Marshall Plan (LINK)
Related book: The Marshall Plan: Dawn of the Cold War
An Inordinate Fondness for Wasps - by Ed Yong (LINK)

Thursday, April 5, 2018

Links

"As long as the odds are in our favor and we're not risking the whole company on one throw of the dice or anything close to it, we don't mind volatility in results. What we want are the favorable odds." --Charlie Munger

"If we have a business about which we're extremely confident as to the business results, we'd prefer that its stock have high volatility. We'll make more money in a business where we know what the end game will be if it bounces around a lot." --Warren Buffett 

Jamie Dimon's 2017 Shareholder Letter (LINK)

The eroding purchasing power of the dollar and its implications for consumption (LINK)

Why the Standard Model of Future Energy Supply Doesn’t Work (LINK)

Elroy Dimson chats with Meb Faber (podcast) (LINK)

Carl Sagan on Mystery, Why Common Sense Blinds Us to the Universe, and How to Live with the Unknown (LINK)

Book of the day [H/T Taleb]: Who We Are and How We Got Here: Ancient DNA and the New Science of the Human Past - by David Reich

Wednesday, April 4, 2018

Links

Akre Fund Reports from 1997 onward [H/T @colemanrhawkins] (LINK)

Fastenal Co-Founder Bob Kierlin’s Smart Frugality - by Sean Iddings (LINK)

When Keynes Played Art Buyer - by Jason Zweig (LINK)

A bull and a bear debate Tesla on the Quoth the Raven Podcast (LINK)

WorkLife with Adam Grant Podcast: Faking Your Emotions at Work (LINK)

David Remnick Talks to Malcolm Gladwell About Writing, Reporting, and Being Wrong (video) (LINK)

Why Whales Got So Big - by Ed Yong (LINK)

Free book download: System1 - Unlocking Profitable Growth (or you can buy the paperback HERE)

Tuesday, April 3, 2018

Links

"When we look at the future of businesses, we look at riskiness as being sort of a go/no-go valve. In other words, if we think that we simply don't know what's going to happen in the future, that doesn't mean it's risky for everyone. It means we don't know - that it's risky for us. It may not be risky for someone else who understands the business. However, in that case, we just give up. We don't try to predict those things." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Wall Street Heavies Fear a Beloved Gravy Train Is Nearing the End (LINK)

Don't Blame Jeff Immelt for GE's Stock Woes (LINK)

Bill Gates reviews “Factfulness” by Hans Rosling and Anna Rosling Ronnlund (LINK)

How Melinda Gates Is Tackling Tech's Gender Problem (Bloomberg's Decrypted Podcast) (LINK)

Invest Like the Best Podcast: Deep Basin – Earning Alpha in Energy (LINK)

After On Podcast: George Church | Bioengineering (LINK)
Related book: Regenesis: How Synthetic Biology Will Reinvent Nature and Ourselves  
Related link: Edge #464: The Augmented Human Being - A Conversation with George Church 
Can Doctors Choose Between Saving Lives and Saving a Fortune? - by Siddhartha Mukherjee (LINK)

Warren Buffett on painting his own painting...

From his 2003 talk at the University of Nebraska at Lincoln:
I can do anything in the world I want to do but what I want to do is run Berkshire Hathaway. Now why do I want to run it that way? There's a couple of things: 
A) I get to paint my own painting. I go down there every day and I feel like Michelangelo working on the Sistine Chapel or something. Nobody else may think it's a great painting, but I get to paint my own painting. I do not have people second-guessing me. I do not have people saying 'Why don't you use a little more red paint, or blue paint. Why don't you paint a seascape instead of a landscape.' I get to do my own thing. It's a form of creativity. It's exactly like somebody feels that's a professional golfer, or like somebody feels that's a painter. They're not doing it for the money, primarily. They're doing it because they like doing something well and that happens to be down the route of their talents.  
And the second thing I like, frankly, is I like applause. I like appreciation. So I like having shareholders who feel good about what I've done.... Everybody in our family has got all of their money in Berkshire, and so those people are counting on me. And that's kind of fun to have something where you can actually deliver for other people and change their lives in positive ways. 

Monday, April 2, 2018

Links

"Hang on to your hat. Hang on to your hope. And wind the clock, for tomorrow is another day." --E. B. White [Source]

The End of Windows - by Ben Thompson (LINK)

How do wars affect stock prices? (LINK)

Mutual Fund Observer, April 2018 (LINK)

Charley Grant, columnist for the Wall Street Journal, on the Hidden Forces podcast discussing Tesla (LINK)

How to Serve a Deranged Tyrant, Stoically - by Ryan Holiday (LINK)

Books of the day:

Letters of Note: Volume 1

Letters of Note: Volume 2

Warren Buffett's 2003 talk at the University of Nebraska at Lincoln


Link to video


[H/T George]

Sunday, April 1, 2018

Links

“People create their worlds with the tools they have directly at hand. Faulty tools produce faulty results. Repeated use of the same faulty tools produces the same faulty results. It is in this manner that those who fail to learn from the past doom themselves to repeat it. It’s partly fate. It’s partly inability. It’s partly… unwillingness to learn? Refusal to learn? Motivated refusal to learn?” -Jordan Peterson, 12 Rules for Life [H/T Taubes]

This circulated several years ago, but in case any readers have never seen it [H/T @FocusedCompound].... Notes from Joel Greenblatt’s Special Situation Class at Columbia Business School from 2002 through 2006

The New 2018–2019 Uber Cannibals - by Mohnish Pabrai (LINK)

How to Talk to People About Money - by Morgan Housel (LINK)

Domino’s Pizza Founder Tom Monaghan’s Five Priorities for Success - by Ian Cassel (LINK)

Friar Tuck Financial Services: A Classic Unbundle/Re-bundle Strategy - by Tren Griffin (LINK)

Facebook and the Awakening of Our Private Selves - by Rick Bookstaber (LINK)

Scott Galloway, Prof. NYU Stern School of Business – Keynote | OMR18 (video) (LINK)

The History of Singapore: The Miracle of Asia (Full Documentary) [H/T Tim Ferriss] (LINK)
Related book (which a mentor of mine once said was probably the most useful book ever written): From Third World to First: The Singapore Story - 1965-2000
Einstein’s Theory of Special Relativity (MetaLearn Podcast) (LINK)

Book of the day [H/T Josh Wolfe]: Immortality: The Quest to Live Forever and How It Drives Civilization – by Stephen Cave 

Thursday, March 29, 2018

Links

"It isn't the learning that's so hard, but the unlearning." -Charlie Munger

Honoring Toys “R” Us Founder Charles Lazarus - by Ian Cassel (LINK)

The Boyar Value Group has started a podcast, The World According to Boyar, and Chris Mayer is the first guest (LINK)

Why Kim Jong Un Went to China - by Evan Osnos (LINK)

Pmarca Guide to Personal Productivity [H/T @chriswmayer] (LINK)

On Analog Social Media - by Cal Newport (LINK)

What is this galaxy doing without a dark matter halo? - by Phil Plait (LINK)

Freeman Dyson’s life of scientific delight (LINK)
Related book: Maker of Patterns: An Autobiography Through Letters

***

Another 1996 Berkshire Hathaway Annual Meeting excerpt via OID:
Munger: We have such a fingers and toes-style around here. Warren often talks about these discounted cash flows, but I've never seen him do one.  
Buffett: Some things you only do in private, Charlie.  
Munger: Yeah. If it isn't perfectly obvious that it's going to work out well if you do the calculation, then he tends to go on to the next idea.
Buffett: That's true. It's sort of automatic. If you have to actually do it with pencil and paper, it's too close to think about. It ought to just kind of scream at you that you've got this huge margin of safety.

Wednesday, March 28, 2018

Links

"We generally look at businesses and believe that change is likely to work against us. We do not think we have great ability to predict where change is going to lead. We think we have some ability to find businesses where we don't think change is going to be very important." -Warren Buffett (1996 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Meet the billionaire whisperer who united Bezos, Buffett and Dimon (LINK)

Mohnish Pabrai Lecture at Peking University (Guanghua School of Mgmt) - Dec 22, 2017 (video) (LINK)

The Rise and Fall of Circuit City (LINK)

Special Commentary from FPA: Rare Bond Market Conditions Set Up Complacent Investors for Subpar Returns (LINK)

How Astronauts Build Trust (WorkLife with Adam Grant Podcast) (LINK)

Divided by DNA: The uneasy relationship between archaeology and ancient genomics (LINK)

Tuesday, March 27, 2018

Links

"If you buy a stock and it goes down and that upsets you, it obviously means you think the market knows more about the company than you do. In that case you're the patsy. If you want to buy more because you know the business is worth just as much as when you bought it, perhaps a little more, so you buy more, it's the patsy." -Warren Buffett [H/T OID]

Ray Dalio: "Principles: Life and Work" | Talks at Google (LINK)
Related book: Principles: Life and Work
Stratechery 4.0 - by Ben Thompson (LINK)

What I’ve Learned from Jordan Peterson - by Russ Roberts (LINK)

Invest Like the Best Podcast: Live Ep.1, With Peter Attia, M.D. (LINK)
This week’s episode was the first one that I’ve recorded live. It was the second dinner in what I expect to be a long series where I bring together 30 people from a variety of backgrounds to discuss an interesting and emerging topic, whether that be cryptocurrencies, health, cannabis investing, or some other compelling, emergent thing.
Bill Gates reviews Turtles All the Way Down by John Green (LINK)

Monday, March 26, 2018

Links

“Unfortunately in this kind of work, where you are trying to determine relationships based upon past behavior, the almost invariable experience is that by the time you have had a long enough period to give you sufficient confidence in your form of measurement, just then new conditions supersede and the measurement is no longer dependable for the future.” -Benjamin Graham ("Securities in an Insecure World")

Berkshire-Backed USG Rejects $5.9 Billion Takeover by Knauf [H/T Linc] (LINK)

Martin Capital Management 2017 Annual Report [H/T Linc] (LINK)

Intelligent Fanatics Leverage Antifragility (LINK)

Inside the Strange Odyssey of Hedge-Fund King Eddie Lampert (LINK)

Seth Godin Keynote: Customer Service in the Age of AI (video) [H/T Tamas] (LINK)

Matt Ridley writing about Britain's energy options (LINK)

Hidden Forces Podcast: Can We Learn to Invest in the Future? | Meditations on Passion, Randomness, and Optionality with Josh Wolfe (LINK)

The Skift podcast: The Airbnb Threat (LINK)
This episode of the Skift podcast goes all in on Airbnb and the competitive threat it poses to traditional hotel companies and booking sites.
Dan Pink chats with Tim Ferriss (podcast) (LINK)
Related book: When: The Scientific Secrets of Perfect Timing
‘That’s $425,000 right there’ — the anxious launch of a gene therapy with a record sticker price [H/T @DrSidMukherjee] (LINK)

How to Search on Google: 31 Google Advanced Search Tips [H/T @ChrisPavese] (LINK)

Patrick O'Shaughnessy on Twitter with a must-read thread (in the category of "life is short") (LINK)

Saturday, March 24, 2018

Links

Warren Buffett plans to make public a video archive of about 20 years of past Berkshire Hathaway Inc. shareholder meetings ($) [H/T Vishal] (LINK)

Giverny Capital 2017 Annual Letter to Partners (LINK)

Business Lessons from Robert Smith of Vista Equity Partners - by Tren Griffin (LINK)

Debt, Loans, & Credit Quality: The Devil is in the Details - by Frank K. Martin (LINK)

a16z Video: When (and How) Biology Becomes Engineering (LINK)

Orion's filaments of star birth - by Phil Plait (LINK)

Friday, March 23, 2018

Links

"A really wonderful business is very well protected against the vicissitudes of the economy and competition over time. And I'm talking about businesses that are resistant to effective competition. Three of those will be better than 100 average businesses.  And they'll be safer. There's less risk in owning three, easy-to-identify, wonderful businesses than in owning 50 well known and big businesses. Bad things won't happen to those three. That's one of the characteristics of a wonderful business.  If my own family's fortunes for the next 30 years were dependent on the income from a group of businesses, I can assure you that I'd rather pick three businesses from those we own than own a diversified group of 50." -Warren Buffett [via OID]

AB InBev CEO on Global Growth and SABMiller Acquisition (video) (LINK)

13D Research: The corporate bond market sends a clear message (LINK)

Wayne Huizenga, Empire-Builder in Videos and Trash, Dies at 80 (LINK)
Related book: The Making of a Blockbuster
Shkreli vs. Holmes: 2 Frauds, 2 Divergent Outcomes. Were They Fair? (LINK)

At Columbia, Revisiting the Revolutionary Students of 1968 [H/T @RogerLowenstein] (LINK)

Steven Pinker’s 10 Favorite Books (LINK)

Exponent Podcast: Episode 146 — Facebook’s Real Mistake (LINK)

Bill Irvine talks about his book A Slap in the Face: Why Insults Hurt--And Why They Shouldn't (podcast) (LINK)

What Makes Whales Strand Themselves Together? - by Ed Yong (LINK)

Thursday, March 22, 2018

Links

"The great personal fortunes in this country weren't built on a portfolio of 50 companies. They were built by someone who identified one wonderful business." -Warren Buffett

Prem Watsa's 2017 letter to shareholders (released a couple of weeks ago) [H/T ValueWalk] (LINK)

What Protects Us From Exploitation? - by Russ Roberts (LINK)

Brian Grazer: "A Career in Curiosity" | Talks at Google (LINK)
Related book: A Curious Mind: The Secret to a Bigger Life
The Blind Fish That Should Have Diabetes, But Somehow Doesn't - by Ed Yong (LINK)

***

Another 1996 Berkshire Hathaway Annual Meeting excerpt via OID:
Wall Street reports haven't helped. But annual reports.... 
Buffett: It's amazing how well you can do in investing really with what I'd call "outside" information. I'm not sure how useful inside information is. But there's all kinds of "outside" information around as to businesses. And you don't have to understand all of them. You just have to understand the ones you're thinking about investing in. And you can. But no one can do it for you. 
In my view, you can't read Wall Street reports and get anything out of them. You've got to get your arms around it yourself. I don't think we've ever gotten an idea from a Wall Street report. However, we've gotten a lot of ideas from annual reports. Charlie? 
Where it all begins and ends.... 
Munger: It takes a long time to read an annual report - even if the business is a comparatively simple one. If you're really trying to understand it, it's not a bit easy. 
Buffett: Yeah. On average, in a business we're really interested in - where we know what to skip to some extent and what to read - we'll spend 45 minutes or an hour on a single annual report. If there are six or eight companies in the industry, that's going to be six to eight hours. And then there are quarterlies and a lot of other [material].... 
The way you learn about businesses is by absorbing information about 'em, deciding what counts and what doesn't and relating one thing to another. That's the job. 
You can't get that by looking at a bunch of little numbers on a chart bobbing up and down or by reading market commentary, periodicals or anything of the sort. That won't do it. You have to understand the businesses. That's where it all begins and ends. 


Josh Waitzkin on finding your own way...

"[There's] this theme of finding your own way. One of the most common mistakes that I see people make—whether you're talking about kids or adults—in the learning curve is trying to do it like someone else does it; whether it's your dad, or your hero, or Michael Jordan, or Tiger Woods, or whatever the sport is. There are people who are at the top, and you can try to do it like somebody else, but that's very different from trying to figure out the relationship to the art which is completely your own." -Josh Waitzkin (Source)

Wednesday, March 21, 2018

Warren Buffett and Charlie Munger on float and insurance in 1996

Transcribed comments via Outstanding Investor Digest from the 1996 Berkshire Hathaway Annual Meeting: 
Our cheap, plentiful float springs from competitive advantage.

Buffett: You achieve that in this business only by having some kind of competitive advantages. You won't do it just by having an ordinary insurance company - because an ordinary insurance company is not a good business.

We have it in certain respects because of our attitude toward the business. Our financial strength gives us certain advantages. And we have it in the case of GEICO because of a very low cost operation. And it's up to us to try and figure out ways to maximize each one of those competitive advantages over time.  
We've built those advantages. In 1967, we weren't looked at that way in the insurance business. We've built a position of competitive strengths. And GEICO had it without us. But we bought into it over time. 
Would I accept $7 billion for our float? The answer is no.... 
Buffett: So it's a very important asset. And you ought to pay a lot of attention over the years to what's happening with that asset - both as to growth and cost. And that will aid you in calculating intrinsic value.... 
But I will tell you this: We have $7 billion of float presently.... And if I were offered $7 billion for that float and did not have to pay tax on the gain, but would thereafter have to stay out of the insurance business forever - a perpetual non-compete in any kind of insurance - would I accept that?   
The answer is no. 
That's not because I'd rather have $7 billion of float than have $7 billion of free money. 
It's because I expect the $7 billion to grow. 
It would have been a mistake - and one I'd have made. 
Buffett: If I'd been offered that trade 27 years ago of $17 million for the float we had at that time with no tax to be paid - float for which we'd just paid $8.7 million - in return for us to have gotten out of the insurance business, I might have said yes.... 
Munger: You would've.

Buffett: Yeah.

Munger: But he keeps learning. That's one of his strengths.

Buffett: That's probably true in this case. I'm not sure in other cases. But it would've been a terrible mistake. It would have been a mistake to do it 10 or 12 years ago with $300 million of float. And today, a tax-free payment of $7 billion would not compensate us adequately for giving up the opportunity of being in the insurance business forever at Berkshire - even though it'd be a $7 billion pure addition to equity. So we wouldn't take it. In fact, we wouldn't even think about it very long. 
So, as Charlie says, that isn't the answer we'd have given some years back. But it's a very valuable business. 
It's not automatic. But if they're run right and nurtured....

Buffett: It has to be run right - as does GEICO, the reinsurance business, National Indemnity and the homestate companies.... And it's not automatic. 
But they have the people, the distribution, the reputation, the capital strength and other competitive advantages in place. And, if nurtured, I think they become more valuable as time goes by. 


[H/T Linc]

[And if anyone happens to, by any chance, have a copy of the August 27, 1992 Outstanding Investor Digest issue that they could pass along, I'd be much appreciative. Thanks.]

Links

"The odds are very good that there'll be opportunities from time to time. You cannot study financial history and observe the way markets and people behave and not believe that. Will we do something in the next five years? I can't say. In ten years, yes, we will." -Warren Buffett, 1988 Berkshire Hathaway Annual Meeting [via OID] [H/T Linc]

Why Edward Thorp Owns Only Berkshire Hathaway ($) (LINK)
Q: What’s in your portfolio now? 
A: One good stroke of good fortune was meeting Warren Buffett in 1968. It led me to realize that I needed to invest in Berkshire Hathaway (ticker: BRK.A), although I didn’t do it until 1982. It’s my single investment in the stock market. It’s like a broad value-stocks equity index. I hold it in lieu of VTSAX [the Vanguard Total Stock Market fund]. It does about as well with no current taxes to pay. VTSAX has dividends that are taxed annually. I also have some hedge funds, but I consider them not as good as Berkshire, so I use them to spend and finance other things I do. 
Q: Why not go out and find better investments, as you did in the past? 
A: When I was 35, I had lots of time and less money, so doing 10% or so better than the index, with little risk, was attractive and fun. At 85, the marginal value of time is higher and the marginal value of money is lower. These are strong disincentives when I can make a long-run 10% or so by doing nothing.
Warren Buffett’s vision for NetJets is now the company mantra, new Europe CEO says [H/T @pcordway] (LINK)

Whitney Tilson reflects on the end of his hedge fund (LINK)

The Cambridge Analytica Scandal, in 3 Quick Paragraphs (LINK)

WorkLife with Adam Grant Podcast: Is Your Personality More Flexible Than You Think? (LINK)

Peter G. Peterson, a Power From Wall St. to Washington, Dies at 91 (LINK)

Bertrand Russell’s Advice to People Living 1,000 Years in the Future: “Love is Wise, Hatred is Foolish” (LINK)

There are a couple of great deals on Kindle books today ($2.99):

Never Split the Difference: Negotiating As If Your Life Depended On It

WTF?: What's the Future and Why It's Up to Us

Tuesday, March 20, 2018

Links

"Our outlook for inflation is always the same. We feel there's a big bias toward inflation - both in the U.S. and around the world. But our objective is not to profit from it as much as it is to avoid disaster. Our outlook leads to our buying businesses with the same characteristics that are good in low inflation - namely pricing flexibility, high returns on capital, profits received in cash and so forth." - Warren Buffett, 1988 Berkshire Hathaway Annual Meeting [via OID] [Related link: Warren Buffett’s Comments on Inflation]

Investing is Hard - by Ian Cassel (LINK)

On Social Media and Its Discontents - by Cal Newport (LINK)

Ryan Holiday speaks with James Altucher about his latest book, Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue (podcast) (LINK)

What’s Next for Humanity: Automation, New Morality and a ‘Global Useless Class’ (LINK)

The Death of the Last Male Northern White Rhino Won’t Change the Species' Fate - by Ed Yong (LINK)

Monday, March 19, 2018

Links

What I read during 2017 and a few book recommendations - by Tamás Vincze (LINK)

Understanding Speed and Velocity: Saying “NO” to the Non-Essential (LINK)

To Control Your Life, Control What You Pay Attention To (LINK)

Good news is gradual, bad news sudden - by Matt Ridley (LINK)

Buffett and Munger on Discount Rates and How They Read Annual Reports [H/T @HurriCap] (LINK)

How the Bear Stearns Meltdown Wrecked Something More Valuable than Money - by Jason Zweig ($) (LINK)

The Facebook Brand - by Ben Thompson (LINK)

Stream On: An IPO Valuation of Spotify! - by Aswath Damodaran (LINK) [Though maybe he's a little too optimistic on content costs continuing to drop.]

Business Lessons from Jack Ma - Alibaba and the 40 SaaS - by Tren Griffin (LINK)

Leithner Letter No. 222-225 (a sample chapter from The Bourgeois Manifesto) (LINK)

Wing's IoT Startup State Of The Union [H/T @AlexRubalcava] (LINK)

Patrick Collison (CEO of Stripe) Reddit AMA [H/T @sarthakgh] (LINK)

Scott Galloway on breaking up tech's big Four (podcast) (LINK)
Related book: The Four
How I Built This Podcast -- LARABAR: Lara Merriken (LINK)

a16z Podcast: How to Live Longer and Better (LINK)

Book of the day: Tectonic Shifts in Financial Markets: People, Policies, and Institutions - by Henry Kaufman

Friday, March 16, 2018

Links

"When everything seems to be going against you, remember that the airplane takes off against the wind, not with it." -Henry Ford [H/T @vitaliyk]

Amazon Strategy Teardown [H/T Market Folly] (LINK)

Why America needs to invest in its future: Lessons from the U.S. steel industry’s demise (LINK)

Jeremy Grantham on the [i3] Podcast [H/T Abnormal Returns] (LINK)

Adventures in Finance Podcast -- Commercial Break: What the Ad industry’s struggles say about the economy (LINK)

Exponent Podcast: Episode 145 — Qualcomm, Patents, and Innovation (LINK)

The Predictable March of Corpse-Eating Microbes - by Ed Yong (LINK)

Book of the day [H/T @vitaliyk]: The Virgin Banker: My Life in Finance - by Jayne-Anne Gadhia

Thursday, March 15, 2018

Links

U.S. Airline Industry: A Rorschach Test for Investors (LINK)

Ironies of Luck - by Morgan Housel (LINK)

The Man Behind the DC Rainmaker Gear-Review Empire [H/T @pkedrosky] (LINK)

Contract Interpretation 2.0: Not Winner-Take-All But Best-Tool-For-The-Job - by Lawrence Cunningham (LINK)
To illuminate its importance and value — call it contract interpretation 2.0 — this Essay turns to Warren Buffett’s contracting philosophy and practices. The famous investor and businessman is also a polyglot teacher, and his approach to contracts, especially acquisition agreements and employment arrangements, illustrates the imperative of using the right tool for the job.
Audit transparency disclosures give investors new tools [H/T @jciesielski] (LINK)

What a psychiatrist learned from 87,000 brain scans (video) (LINK)

Daniel Amen: "The Brain's Warrior Way" | Talks at Google (LINK)

An Older Origin for Complex Human Cultures - by Ed Yong (LINK)

A Twist in Our Sexual Encounters With Other Ancient Humans - by Ed Yong (LINK)

Why Earth's History Appears So Miraculous - by Peter Brannen (LINK)

No, space did not permanently alter 7 percent of Scott Kelly’s DNA (LINK)
Scientists studying Scott found that much of his gene expression changed while in space, and about 93 percent of his expression levels went back to normal when he got home. However, 7 percent of his genes related to the immune system, DNA repair, bone formation, and more were still a little out of whack when he returned. These genes are referred to as the “space genes,” according to NASA. 
That’s still a cool result, but it doesn’t mean his genetic code is significantly different. “To have 7 percent of his gene expression changed after the spaceflight does not mean that 7 percent of the DNA changed, or that those changes were necessarily due to mutations,” Nichole Holm, a geneticist at UC Davis who did not work on the Twins Study, wrote to The Verge in an email.

Wednesday, March 14, 2018

Links

"One, remember to look up at the stars and not down at your feet. Two, never give up work. Work gives you meaning and purpose and life is empty without it. Three, if you are lucky enough to find love, remember it is there and don't throw it away." -Stephen Hawking

The Power of Detachment (LINK)
Piramal Enterprises has the rare distinction of generating annualized shareholder return of 30% over 29 years till 2017. And the architect behind this stunning performance is Ajay Piramal.
Theranos and Silicon Valley's 'Fake It Till You Make It' Culture (LINK)

Billionaire Raises His Bet on Containerships (LINK)

Not a Single Japanese 10-Year Bond Traded Tuesday (LINK)

WorkLife with Adam Grant (podcast): The Team of Humble Narcissists (LINK)

Jordan Peterson on taking responsibility for your life (video) (LINK)
Related book: 12 Rules for Life: An Antidote to Chaos
What a Giant Soda Stream Reveals About the Fate of Corals - by Ed Yong (LINK)

Stephen Hawking (1942–2018) (LINK)

The Universe and Beyond, with Stephen Hawking [aired 10 days ago] (video) (LINK)
This year’s season finale of StarTalk on National Geographic TV was Neil deGrasse Tyson's interview with Stephen Hawking. In memory of his passing, and in celebration of his life, we offer that episode for you here, now, commercial free.

Tuesday, March 13, 2018

Links

Elon Musk's interview at SXSW 2018 (video) (LINK)

Qualcomm, National Security, and Patents - by Ben Thompson (LINK)

Bill Gates chats with Jorge Aguilar, the superintendent of the Sacramento City United School District (LINK)

The Knowledge Project Podcast -- Company Culture, Collaboration and Competition: A Discussion With Margaret Heffernan (LINK)

Invest Like the Best Podcast: World After Capital, with Albert Wenger (LINK)

How Psychopaths See the World - by Ed Yong (LINK)

Monday, March 12, 2018

Links

"I'm curious. I want to know how things work. And even more importantly, I want to know what's going to happen. And what's going to happen is often related to what has happened." -Seth Klarman

BPIAA 2017 Distinguished Alumni Honoree Video: Seth & Michael Klarman [H/T ValueWalk] (LINK)

3 Tips from Warren Buffett on Becoming a Better Person (LINK)

Half Life: The Decay of Knowledge and What to Do About It (LINK)

Latticework of Mental Models: Benford’s Law (LINK)

Making it Look Easy is Hard Work - by Ben Carlson (LINK)

The Best and Worst Performing Stocks Since the March 2009 Start of this Historic Bull Market [H/T Abnormal Returns] (LINK)

Audience vs. Traffic - by Scott Galloway (video) (LINK)

The Quest to Bring 3-D Printed Homes to the Developing World [H/T Linc] (LINK)

Britain's housing crisis is caused by the wrong kind of regulation - by Matt Ridley (LINK)

Freakonomics Radio Extra: Satya Nadella Full Interview (LINK)

Three Key Questions About Donald Trump’s Summit with Kim Jong Un - by Evan Osnos (LINK)

Supervolcano Goes Boom. Humans Go Meh? - by Ed Yong (LINK)

Saturday, March 10, 2018

What made Leonardo da Vinci a genius?

From Leonardo da Vinci by Walter Isaacson:
What made Leonardo a genius, what set him apart from people who are merely extraordinarily smart, was creativity, the ability to apply imagination to intellect. His facility for combining observation with fantasy allowed him, like other creative geniuses, to make unexpected leaps that related things seen to things unseen. “Talent hits a target that no one else can hit,” wrote the German philosopher Arthur Schopenhauer. “Genius hits a target no one else can see.” Because they “think different,” creative masterminds are sometimes considered misfits, but in the words that Steve Jobs helped craft for an Apple advertisement, “While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do. 
What also distinguished Leonardo’s genius was its universal nature. The world has produced other thinkers who were more profound or logical, and many who were more practical, but none who was as creative in so many different fields. Some people are geniuses in a particular arena, such as Mozart in music and Euler in math. But Leonardo’s brilliance spanned multiple disciplines, which gave him a profound feel for nature’s patterns and crosscurrents. His curiosity impelled him to become among the handful of people in history who tried to know all there was to know about everything that could be known. 
There have been, of course, many other insatiable polymaths, and even the Renaissance produced other Renaissance Men. But none painted the Mona Lisa, much less did so at the same time as producing unsurpassed anatomy drawings based on multiple dissections, coming up with schemes to divert rivers, explaining the reflection of light from the earth to the moon, opening the still-beating heart of a butchered pig to show how ventricles work, designing musical instruments, choreographing pageants, using fossils to dispute the biblical account of the deluge, and then drawing the deluge. Leonardo was a genius, but more: he was the epitome of the universal mind, one who sought to understand all of creation, including how we fit into it.

Friday, March 9, 2018

Links

The Greatest Mentor-Mentee Relationship Ever - by Ian Cassel (LINK)
Related book: Edison As I Know Him - by Henry Ford
Buybacks & the Instant Gratification of Financial Engineering - by Frank Martin (LINK)

Amazon's Checking Account Push Shows Next Target: Swipe Fees [H/T Matt] (LINK)

Adventures in Finance Podcast: Blue Steel: Tariffs, Trade and Trump (LINK)
Related books: 1) The Accidental Superpower; 2)  The Absent Superpower
Jim Grant on the Macro Voices Podcast [The Grant segment starts around the 14-minute mark] (LINK)

Exponent Podcast: Episode 144 — 90s Alt Forever (LINK)

Wei’s Wisdom: How to read broadly (LINK)

Book of the day (to be released next month): The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting

***

"Most of economics is perceived to be incentives and disincentives. So, skin in the game would be to incentivize people if they do well, and also disincentivize them. But that's not it. No. Skin in the game for me is about filtering. It's evolution. You cannot have evolution if you don't have skin in the game. In other words, you are filtering people out of the system. And I give the example of bad drivers. Now, why is it that on a highway, when I drive on a highway, you don't, I don't really encounter people who are, you know, go tapioca and drive crazily, kill 30 people? Why doesn't it happen? Well, it doesn't happen because bad drivers kill themselves. Partly because they kill themselves, and also partly because, okay, we catch them....we filter them out of the system by taking away their driver's license. And we're good at doing that, for those who have survived. So...this is filtering. Filtering is necessary for the functioning of nature. Necessary for the functioning of anything. And that's called evolution." -Nassim Taleb (Source)