Monday, May 21, 2018

Seneca quote

From "On the Happy Life":
I shall make whatever befalls me become a good thing, but I prefer that what befalls me should be comfortable and pleasant and unlikely to cause me annoyance: for you need not suppose that any virtue exists without labour, but some virtues need spurs, while others need the curb. As we have to check our body on a downward path, and to urge it to climb a steep one; so also the path of some virtues leads downhill, that of others uphill. Can we doubt that patience, courage, constancy, and all the other virtues which have to meet strong opposition, and to trample Fortune under their feet, are climbing, struggling, winning their way up a steep ascent? Why! is it not equally evident that generosity, moderation, and gentleness glide easily downhill? With the latter we must hold in our spirit, lest it run away with us: with the former we must urge and spur it on.

Sunday, May 20, 2018

Links

"There is no doubt that in exchanging a self-centered for a selfless life we gain enormously in self-esteem. The vanity of the selfless, even those who practice humility, is boundless." --Eric Hoffer, 

TED Talk -- Yuval Noah Harari: Why fascism is so tempting — and how your data could power it (LINK)

“If I Were Wrong, What Would It Look Like?” - by Morgan Housel (LINK)

Jack Bogle’s Battle (LINK)

Business Lessons about Growth from Andrew Chen (Andreessen Horowitz) - by Tren Griffin (LINK)

Bitcoin’s energy use got studied, and you libertarian nerds look even worse than usual [H/T @AlexRubalcava] (LINK)

Making Sense of Mortgages: The Problem, and the Opportunity (LINK)

John Doerr on Recode Decode (podcast and transcript) (LINK)
Related book: Measure What Matters
***

"Ideally, we like to invest in growing companies with a sustainable competitive advantage and attractive economics in combination with a management team that will intelligently redeploy or redistribute excess capital. In a world where it is difficult to find good ideas, our style is to diligently and patiently search the world for fat pitches, and then swing on the rare opportunity when we think the odds are in our favor. When times are good, we hope to invest in ideas that can double over three years. Given that we are not favorably disposed to ‘cheating’ on either valuation or quality, when ideas are harder to come by, as they are now, we are more likely to have higher than average cash levels. " --Peter Kinney and Mark Landecker, Acacia Capital (April 2007)

Friday, May 18, 2018

Links

"Charlie and I don’t think about the market. And Ben [Graham] didn’t very much. I think he made a mistake to occasionally try and place a value on it. We look at individual businesses. And we don’t think of stocks as little items that wiggle around on the paper and that have charts attached to them. We think of them as parts of businesses.... I know of no one that has been successful at...[making] a lot of money predicting the actions of the market itself. I know a lot of people who have done well picking businesses and buying them at sensible prices. And that’s what we’re hoping to do." --Warren Buffett (1999)

What Exactly Happened to David Einhorn? (LINK)

The Hidden Risk of Passive and Index Hugging - by Rick Bookstaber (LINK)

Exponent Podcast: Platforms Versus Aggregators (LINK)

Eric Topol reviews Bad Blood, John Carreyrou's book on the Theranos saga (LINK)

Scott Adams talks to Naval Ravikant (video) (LINK)

How the Enlightenment Ends - by Henry A. Kissinger (LINK)

How Tom Wolfe Changed My Life - by Scott Kelly (LINK)
Related book: The Right Stuff
"Why — that’s the most important question of all. And it doesn’t apply just to investment. It applies to the whole human experience. If you want to get smart, the question you’ve got to keep asking is: Why? Why? Why? Why? And you have to relate the answers to a structure of deep theory. And you’ve got to know the main theories. And it’s mildly laborious, but it’s also a lot of fun." --Charlie Munger (1999)

Thursday, May 17, 2018

Links

"Let everyone else call your idea crazy…just keep going.  Whatever comes, just don’t stop...I believe it’s the best advice – maybe the only advice – any of us should ever give." --Phil Knight

Bill Gates reviews "Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World With OKRs" by John Doerr (LINK)

Old Dog, New Tricks? - By Lewis Johnson (LINK)

a16z Podcast: Network Effects, Origin Stories, and the Evolution of Tech (LINK)

Malcolm Gladwell's Revisionist History Podcast: Divide and Conquer (LINK)
The complete, unabridged history of the world’s most controversial semicolon.
American Innovations Podcast: DNA - The Race for the Genome (Part 4) (LINK)

The First Urban Case of Ebola in the Congo Is a ‘Game Changer’ - by Ed Yong (LINK)

These Lizards Are Full of Green Blood That Should Kill Them - by Ed Yong (LINK)

Wednesday, May 16, 2018

Links

"Change for the sake of change, as we see in architecture, food, and lifestyle, is frequently the opposite of progress. As I have explained in Antifragile, too high a rate of mutation prevents locking in the benefits of previous changes: evolution (and progress) requires some, but not too frequent, variation." --Nassim Taleb, Skin in the Game

GMO Quarterly Letter: Is Investing Starting to Get Difficult Again? I Hope So - by Ben Inker (LINK)

96-Year-Old Secretary Quietly Amasses Fortune, Then Donates $8.2 Million [H/T @pcordway] (LINK)

Whole Foods to offer Amazon Prime members 10 percent off on sale items (LINK)

Earth and the moon are shown as tiny specks in the dark expanse of space in a fascinating image taken from 620,000 miles away [H/T Daniel] (LINK)

Hippos Poop So Much That Sometimes All the Fish Die - by Ed Yong (LINK)

A New Theory Linking Sleep and Creativity - by Ed Yong (LINK)

Book of the day [H/T Patrick O’Shaughnessy]: Seeing like a State: How Certain Schemes to Improve the Human Condition Have Failed

"Each of us has what I call an ensemble of stochastic life paths–the choices we make. You make each choice in life based on your understanding of the possibility that it will take you where you want to be. But you don’t determine the outcome, only the probabilities. Each path leads to more choices: a cascade to echo all the other cascades that rule our lives. Choosing the path is the extent of your control–beyond that, it’s out of your hands. You choose, and then life rolls the dice." --Art De Vany, The New Evolution Diet

Tuesday, May 15, 2018

Links

"The speed of information really doesn’t make any difference to us. It’s the processing and finally coming to some judgment that actually has some utility...it’s a judgment about the price of a business or a part of a business, a security, versus what it’s essentially worth. And none of that involves anything to do, really, with quick information. It involves getting good information.... We’re not looking for needles in haystacks or anything of the sort...We like haystacks, not needles, basically. And we want it to shout at us." --Warren Buffett (1994)

"I’ve said in investing...that there’s more than one way to get to heaven. And there isn’t a true religion in this, but there’s some very useful religions." --Warren Buffett (1994)

Spies, Crime, and Lightning Strikes: The Value of Probabilistic Thinking (LINK)

Two Berkshire Takeaways and Thoughts on Competitive Markets - by John Huber (LINK)

The Moat Map - by Ben Thompson (LINK)

Stop Reading So Much - by Sean Iddings (LINK)

Invest Like the Best Podcast: Tren Griffin – Pulling the Thread (LINK)

Grant's Podcast: Loan sharks (LINK)
Adam Cohen, founder of Covenant Review, joins Grant’s for an insightful overview of our loosey-goosey credit market.
27 Incredibly Useful Things You Didn’t Know Chrome Could Do (LINK)

Best Evidence Yet For Water Plumes Erupting Off Europa (LINK)

The Hole Where All The Success Leaks Out (LINK)

Book of the day [H/T Jim Chanos]: A World Lit Only by Fire - by William Manchester 

Monday, May 14, 2018

Links

"One of the interesting things about investment is that there’s no degree of difficulty factor. I mean, if you’re going to go diving in the Olympics and try to win a gold medal, you get paid more, in effect, for certain kinds of dives than others because they’re more difficult. And they properly adjust for that factor. But in terms of investing, there is no degree of difficulty. If something is staring you right in the face and the easiest decision in the world, the payoff can be huge. And we get paid, not for jumping over 7-foot bars, but for stepping over 1-foot bars.... Now maybe we cast out too many things as being too hard and thereby narrow our universe. But I’d rather have the universe be...interpreted as being a little smaller than it really is, than being interpreted as larger than it is." --Warren Buffett (2005)

Mohnish Pabrai's Lecture at Columbia Business School (video) (LINK)

Notes From Sohn New York Investment Conference 2018 (LINK)

Business Lessons from Jess Lee (Sequoia Capital) - by Tren Griffin (LINK)

a16z Podcast: The Oral History of TrialPay – Obstacles and Opportunities in Payments (LINK)

Mike Massimino on The James Altucher Show (podcast) (LINK)
Related book: Spaceman: An Astronaut's Unlikely Journey to Unlock the Secrets of the Universe
American Innovations (a new podcast hosted by Steven Johnson): DNA (Part 1, Part 2, Part 3)

Trump vs. the “Deep State” - by Evan Osnos (LINK)

This school proves that universities can be bigger and better - by Bill Gates (LINK)

The New Ebola Outbreak Could Take 'Three, Maybe Four' Months to Control - by Ed Yong (LINK)

Friday, May 11, 2018

Links

"All we want to be in is businesses that we understand, run by people that we like, and priced attractively compared to the future prospects." --Warren Buffett (1994)

The 2018 Berkshire Hathaway Annual Meeting video and transcript (LINK)

How To Acquire Your First Small(er) Company (LINK)

Nikola Tesla Could Have Been The Richest Man Ever (LINK)

The World According to Boyar Podcast: Episode 3 with Steve Einhorn (LINK)

Adventures in Finance Podcast --  Collective Wisdom: The best pieces of advice ever received by Real Vision contributors (LINK)

Why Walmart bought Flipkart — in five charts (LINK)

Crypto’s Big Lie - by Parker Thompson [H/T Collaborative] (LINK)
As I was reflecting on the hype and greed in the crypto market this weekend, I was reminded of an amazing Buffett quote (not about crypto) I think about often during hype cycles, as relayed by Brian Chesky: 
Chesky to Bezos: “Jeff, what’s the best advice Warren Buffett ever gave you?” 
Bezos: “[I asked Warren,] your investment thesis is so simple…you’re the second richest guy in the world, and it’s so simple. Why doesn’t everyone just copy you?” 
Buffett: “Because nobody wants to get rich slow.”
Exponent Podcast: Episode 151 — Two by Twos (LINK)
The differences between Facebook, Google, Microsoft and Apple specifically, and the differences between aggregators and platforms generally.
The myopia boom (from 2015) [H/T Linc] (LINK)
Short-sightedness is reaching epidemic proportions. Some scientists think they have found a reason why. 
In honor of his centennial, the Top 10 Feynman quotations (LINK)

***

"The cardinal defect of instability may not be regarded, therefore, as menacing the long-range development of common stocks as a whole. It does indeed exert a powerful temporary effect upon all business through the variations of the economic cycle, and it has permanently adverse effects upon individual enterprises and single industries. But of these two dangers, the latter may be offset in part by careful selection and chiefly by wide diversification; the former may be guarded against by unvarying insistence upon the reasonableness of the price paid for each purchase." --Benjamin Graham & David Dodd, Security Analysis

Thursday, May 10, 2018

Links

Adam Grant and Malcolm Gladwell in conversation (podcast) (LINK)

Daniel H. Pink: "When: The Scientific Secrets of Perfect Timing" | Talks at Google (LINK)

The spectacular power of Big Lens [H/T Linc] (LINK)

Deep fiber: the next internet battleground [H/T market folly] (LINK)

A 2007 interview with Bob Iger (podcast) (LINK)

The Tim Ferriss Show: Cindy Whitehead — How to Sell Your Company For One Billion Dollars (LINK) [The Valeant story starts around the 1:18:19 mark for those interested.]

The Deep Time of Walden Pond (LINK)
Related book: Walden

The first question when looking at a potential investment...

Morning Session - 1995 Meeting 
33. First question when looking at an investment 
AUDIENCE MEMBER: Hello, my name is Peter Bevelin from Sweden. 
What is the absolutely first question you ask yourself when you look at a potential investment? And do you and Mr. Munger ask yourself the same first question? 
WARREN BUFFETT: Yeah. Well, I think — I don’t ask myself whether Charlie’s going to like it because — (laughter) — that will be a tough one. 
No, the first question is, can I understand it? And unless it’s going to be in a business that I think I can understand, there’s no sense looking at it. 
There’s no sense kidding myself into thinking that I’m going to understand some software company, or some biotech company, or something of the sort. What the hell am I going to know about it? I mean, you know, I can — so that’s the first threshold question. 
And then the second question is, you know, does it look like it has good economics? Has it earned high returns on capital? You know, does it strike me as something that’s likely to do that? And then I sort of go from there. 
How about you, Charlie? 
CHARLIE MUNGER: Yeah. We tend to judge by the past record. By and large, if the thing has a lousy past record and a bright future, we’re going to miss the opportunity. 

Wednesday, May 9, 2018

Links

"The notion of 'Keep Showing Up.' I wish I would have got that earlier, because I think it would have been easier to endure through some very difficult periods of time. I wish I would have learned that early in my business career.... I would have liked to have somebody tell me: 'Paul, keep showing up.'" --Paul Black [when asked about what life lesson he wished he'd have learned earlier in life, via the podcast below]

Capital Allocators Podcast: Paul Black - Gratitude, Fun, and Growth Stocks (LINK) [There is a great discussion on assessing company culture starting at the 17:50 mark, as well as a recommendation of the book The Culture Cycle. His example describing Whole Foods' culture as having an 'absence of fear' reminded me of some of Peter Kaufman's comments about the importance of trust—among businesses, relationships, and puppies.]

Mohnish Pabrai, Guy Spier and Raamdeo Agrawal interviewed by ET Now at the Berkshire Hathaway Annual Meeting (video) (LINK)

Nobody Planned This, Nobody Expected It - by Morgan Housel (LINK)

“Principles for Success”: an ultra mini-series (about 30 minutes total) overview of Ray Dalio's ideas (LINK)

Tech’s Two Philosophies - by Ben Thompson (LINK)

a16z Podcast: The Case Against Education, From Signaling to Rainbow’s End (LINK)
Related book: The Case against Education
Surgical Checklists Save Lives — but Once in a While, They Don’t. Why? - by Siddhartha Mukherjee (LINK)

Ebola Returns Just as Trump Asks to Rescind Ebola Funds - by Ed Yong (LINK)

Tuesday, May 8, 2018

Links

"So many people think if they just hire somebody with the appropriate labels they can do something very difficult. That is one of the most dangerous ideas a human being can have.... You don’t have to hire out your thinking if you keep it simple." --Charlie Munger (1994 Berkshire Hathaway Annual Meeting)

"You don’t have to do — we’ve said this before — but you don’t have to do exceptional things to get exceptional results. And some people think that if you jump over a seven-foot bar that the ribbon they pin on you is going to be worth more money than if you step over a one-foot bar. And it just isn’t true in the investment world, at all.... The big thing to do is avoid being wrong." --Warren Buffett (1994 Berkshire Hathaway Annual Meeting)

7 surprising things you’ll learn on Dollar Street - By Bill Gates (LINK)

Don’t Fake It ‘Till You Make It. Do This Instead. - by Ryan Holiday (LINK)

My god. It *is* full of stars. - by Phil Plait (LINK)

The Man Who Changed the World, Twice  - by David Brooks (LINK)

***

I've mentioned Carl Van Doren's biography of Benjamin Franklin before (thank you Daniel for the recommendation), and as I go through the old Berkshire Hathaway Annual Meeting videos and transcripts, this comment from Munger about the book caught my eye:
"I am rereading a book I really like, which is Van Doren’s biography of Benjamin Franklin, which came out in 1952, and I’d almost forgotten how good a book it was. And that’s available in paperback everywhere. We’ve never had anybody quite like Franklin in this country. Never again."

Monday, May 7, 2018

Links

FULL TRANSCRIPT: BILLIONAIRE INVESTOR WARREN BUFFETT SPEAKS WITH CNBC’S BECKY QUICK ON "SQUAWK BOX" (LINK)

Charlie Munger's Yahoo Finance interview (LINK)

10 Insights from the 2018 Berkshire Hathaway Weekend [H/T @jasonzweigwsj] (LINK)

Warren Buffett’s Lieutenants Are Increasingly Running Berkshire (LINK)

Graham & Doddsville: Spring 2018 (LINK)

Stan Druckenmiller's comments at the 2018 Alexander Hamilton Award Dinner [H/T @MulletCap] (LINK)

Confronting Tech's Titans: Schooling Wall Street on Silicon Valley | Scott Galloway Interview (Real Vision video) (LINK)

The Very First Animal Appeared Amid an Explosion of DNA (LINK)

***

Audible's latest sale, which ends May 10th, has some good titles on sale. Some of note are below:

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance - by Ron Chernow

The Rational Optimist: How Prosperity Evolves - by Matt Ridley

Bird by Bird: Some Instructions on Writing and Life - by Anne Lamott

Nothing to Envy: Ordinary Lives in North Korea - by Barbara Demick

Option B: Facing Adversity, Building Resilience, and Finding Joy - by Sheryl Sandberg and Adam Grant 

No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II - by Doris Kearns Goodwin

Into Thin Air - by Jon Krakauer

Sunday, May 6, 2018

Links

"Any place you can find somebody that gives you insights into things you didn't understand before—and maybe makes you a better person than you would have been before—that's very lucky and you want to make the most of it." --Warren Buffett

"If you're going to live a long time, you have to keep learning. What you formerly knew is never enough. So if you don't learn to constantly revise your earlier conclusions and get betters ones...you're like a one-legged man in an ass-kicking contest." --Charlie Munger

The "Warren Buffett Archive" CNBC website that features recordings of every shareholder meeting since 1994 with synchronized transcripts (LINK)

If you missed the Berkshire Hathaway 2018 Annual Shareholders Meeting, you can watch it HERE. It should also be available in podcast format soon HERE (the current podcast episodes are last year's meeting). 

Hilcorp Energy – Unlocking the Superpower of Incentives - by Ian Cassel (LINK)

How to Create An Antifragile Life, and A Stock Portfolio (A Personal Experiment) - by Vishal Khandelwal (LINK)

This Isn’t Your Grandfather’s Expansion - by Frank K. Martin (LINK)

Kyle Bass: Inflation will be a global phenomenon (video) (LINK)

Exponent Podcast: Episode 150 — Round Numbers (LINK)

Benedict Evans talks with Barry Ritholtz on the Masters in Business podcast (LINK)

Adventures in Finance podcast: Episode 65 - A Revolution is underway (LINK)

Math and Analogies (video) (LINK)

The quote that Jeff Bezos has had hanging on his fridge for years:
"To laugh often and much; to win the respect of the intelligent people and the affection of children; to earn the appreciation of honest critics and endure the betrayal of false friends; to appreciate beauty; to find the beauty in others; to leave the world a bit better whether by a healthy child, a garden patch, or a redeemed social condition; to know that one life has breathed easier because you lived here. This is to have succeeded." --Ralph Waldo Emerson

Friday, May 4, 2018

Warren Buffett on CNBC


Link to video

Discipline, hard work, and practice...

A Charlie Munger quote from Poor Charlie's Almanack:
If you're going to be an investor, you're going to make some investments where you don't have all the experience you need. But if you keep trying to get a little better over time, you'll start to make investments that are virtually certain to have a good outcome. The keys are discipline, hard work, and practice. It's like playing golf—you have to work on it.  
If you don't keep learning, other people will pass you by.

Thursday, May 3, 2018

Ray Dalio's five steps to success

This was an answer from Dalio near the end of his podcast chat with Shane Parrish (Farnam Street Learning Community members can also access the transcript):
As I say, there are five steps to success. 
First, your goals. You want to have audacious goals. You have to know what the goals are. 
Second, on your way to your goals you’re going to have your problems, your mistakes. So you have to identify and not tolerate your problems. 
Then, third, you have to diagnose your problems to get at the root cause. Root cause may be your weaknesses or somebody else’s weaknesses or maybe the mistakes. You’ve got to diagnose them deeply.
Once you have the diagnosis, then you have the fourth step, which is design what you’re going to do differently in the future. And then once you have that design, then fifth step is you’ve got to do it. You have to follow through with those results. And you keep doing that and it produces this looping, as I’m calling it, this evolutionary process. 
It’s that process....this five-step process, that we’re always living by. Mistakes instinctually cause the change. 
...Our whole attitude about mistakes has changed dramatically. It’s like mistakes trigger puzzles. If I solve the puzzle, I get a gem. 
So the puzzle is....What should I [have done] differently that would’ve produced a different result? That’s a principle. You write down the principle. The gem is the principle that lets you do better in the future. It’s that kind of accumulation of learning and making the connection between the mistakes and the learning. That’s the process.


[Slightly edited for clarity.]

Wednesday, May 2, 2018

Links

"We basically believe that when you're talking about quality, [you're talking about] the level of certainty you have that a business will perform as you expect it to perform over a very long period of time." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

"The investment game always involves considering both quality and price. And the trick is to get more quality than you pay for in price. It's just that simple." --Charlie Munger (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Sanjay Bakshi on "hot states" and doing dumb things (LINK)

Fixing financial aid - By Bill Gates (LINK)

Another Weird Deal Upsets CDS Traders (LINK)

The imminent and potentially globally-destabilizing threat of automation in the apparel industry. (LINK)

Divine Discontent: Disruption’s Antidote - by Ben Thompson (LINK)

The Knowledge Project Podcast: A Conversation with Patrick Collison, CEO and co-founder of Stripe (LINK)

Did Einstein really say that? (LINK)