Sunday, June 16, 2019

David Abrams on catalysts and growth

We buy things with what we call a hard catalyst; so some kind of event that's going to close the gap between what you bought it at and what it's worth.  
We also buy things where there's no catalyst; so we're just owning businesses.  
In the first category, if there's a catalyst, we don't need that much growth. We need to buy it cheap and get out.  
In the second category, where there's no catalyst, we absolutely need growth. And now the growth can come in all kinds of ways. It doesn't have to come through increased revenues, although a lot of times it does. It can come from running operations more efficiently. It can come from acquisitions. It can come from buying back shares really cheap. But if there's no catalyst, we absolutely need growth.

Friday, June 14, 2019

Links

"If something is too hard to do, we look for something that isn’t too hard to do. What could be more obvious than that?" --Charlie Munger (2006)

Value Investing with Legends Podcast: Applying a Fundamental and Value-Oriented Approach to Investing [with David Abrams] (LINK)

Latticework of Mental Models: The Rashomon Effect (LINK)

Meatless Future or Vegan Delusions? The Beyond Meat Valuation - by Aswath Damodaran (LINK)

Animal Spirits - by Lewis Johnson (LINK)

Freakonomics Radio (podcast): Long-Term Thinking in a Start-Up Town (LINK)

Exponent Podcast: Game of Phones (LINK)

a16z podcast: AI and Your Doctor, Today and Tomorrow (LINK)
Related book: Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again - by Eric Topol
Wernher von Braun and The American Moonshot (LINK)

The salty ocean of Europa: Table salt found on Jupiter's moon - by Phil Plait (LINK)

Inside the Cultish Dreamworld of Augusta National (LINK)

Wednesday, June 12, 2019

Howard Marks Memo: This Time It's Different

Link to Memo: This Time It's Different
In good times, we often see the notion "this time it's different" work its way into the marketplace as investors seek to rationalize higher asset prices and continued upward movement. Today this sentiment is expressed in contexts ranging from questioning the prospect of a recession altogether to supporting the high valuations of tech companies despite their current profitless state. In his latest memo, Howard Marks discusses the outlook for nine such theories. It would truly have to be different this time around for them to hold.

Links

"It’s pretty hard in a declining business to buy things cheap enough to compensate for the decline." --Warren Buffett (2006

What’s Warren Buffett Up to in Europe? [H/T Linc] (LINK)

The Meb Faber Show (podcast): John Huber - Stock Prices Fluctuate Much More Than The Underlying Businesses (LINK)

Paul Tudor Jones on JUST Capital, U.S. Recession, and Gold (video) (LINK)

Kyle Bass Sees Hong Kong Politics 'Speeding Up' Pressure on Dollar Peg (video) (LINK)
Related letters from Bass: 1) "The Quiet Panic in Hong Kong"; 2) "Trouble in Hong Kong- Part Deux"
Leonardo da Vinci’s Huge Notebook Collections, the Codex Forster, Now Digitized in High-Resolution: Explore Them Online (LINK)

For Kindle readers, there are a couple titles of note currently on sale:

Tubes: A Journey to the Center of the Internet

Junkyard Planet: Travels in the Billion-Dollar Trash Trade

Tuesday, June 11, 2019

Links

Mary Meeker’s 2019 internet trends report | Code 2019 (SLIDES, VIDEO) [More videos from the Code Conference can be found HERE.]

Invest Like the Best Podcast: Jerry Neumann – Why Venture is Hard (LINK)

Capital Allocators Podcast: Patrick O’Shaughnessy – O’Shaughnessy Asset Management (LINK)

The Incredible Creative Power of the Index Card - by Ryan Holiday (LINK)

Edge #542: The Brain Is Full of Maps - A Talk By Freeman Dyson (LINK)

Monday, June 10, 2019

Links

"With all of these new helpers in the world, they talk about doing deals. That is not the mindset at Berkshire. We are trying to welcome partners. It’s a total different mindset. The guy who’s doing a deal, he wants to do the deal and unwind the deal and — not too far ahead and make a large profit, et cetera, and that’s not our mindset at all. We like the things that we can buy and that never leave us, and we like the relationships that last and are fruitful, not just for us, but for the people working there and the customers and everybody else." --Charlie Munger (2006)

Tech and Antitrust - by Ben Thompson (LINK)

How Aldi, a brutally efficient grocery chain, is upending America's supermarkets [H/T @pcordway] (LINK)

50 Things I’ve Learned in the First 90 Days of Running a Company [H/T @BrentBeshore] (LINK)

Meet the Money Whisperer to the Super-Rich N.B.A. Elite (LINK)

Secrets of Sand Hill Road (Venture Capital and How to Get It) — Know Venture Capital Before You Get Married to a Venture Capitalist - by Tren Griffin (LINK)
Related book: Secrets of Sand Hill Road
How I Built This Podcast: Allbirds: Tim Brown & Joey Zwillinger (LINK)

Venture Stories Podcast: A Deep Dive on Education with Dani Grant (LINK)

Dan Carlin's Hardcore History: Addendum (podcast): EP8 Caesar at Hastings (LINK)

‘Drunken Monkey’ Hypothesis: Was Booze an Advantage For Our Ancestors? (LINK)

**********

Markets can be weird and irrational stat of the day (via @charliebilello from last Friday):
5-Year Bond Yields, June 2015...
Greece: 17%
US: 1.75% 
5-Year Bond Yields, Today...
Greece: 1.68%
US: 1.82%

Friday, June 7, 2019

Links

"I think that the chances we’ll have another 60 or 70 years with no nuclear devices used on purpose is pretty close to zero. So, I think you’re right to worry about it, but I don’t, myself, think there’s much that any of us can do about it, except be as sensible as we can and take the consequences as they come." --Charlie Munger (2006

"The only thing you can do about it — but you only have one vote — is to elect leaders who are terribly conscious of the problem and who devote a significant part of their thought and energy into minimizing it. You can’t eliminate it. The genie is out of the bottle. And you would like to have the leaders of the major countries of the world regarding it as a primary focus. Actually, in the 2004 campaign, I think that both candidates said it was the major problem of our time. But they probably suffer from the same feeling that I do, that it’s very hard to address." --Warren Buffett (2006

Excerpt of Jeff Bezos' fireside chat at re:MARS 2019 (video) (LINK) [I'll post the full video on the blog when/if it becomes available.]

Amazon Private Label Brands [H/T @emilyleldridge] (LINK)

Recode Media Podcast: Matthew Ball on Amazon vs Apple vs Netflix vs Disney, and how he built a digital media career by writing for free (LINK)
Related articles: Netflix Misunderstandings, Parts 1-7; "Nine Reasons Why Disney+ Will Succeed (And Why Four Criticisms are Overhyped)
The Deal Hidden in Your 401(k) - by Jason Zweig ($) (LINK)
For many investors, the Roth 401(k) offers some distinct advantages. But your plan administrator may not be steering you the right way.
Stanley Druckenmiller on CNBC (video) (LINK)

JPMorgan's London Whale Saga Ends Quietly as Fed Drops Its Order (LINK)

Did James make the right Final Jeopardy bet? - By Tim Urban (LINK)

D-Day: An American Legacy (narrated by Jocko Willink) (video) (LINK)

**********

I visited Normandy and the D-Day beaches for the first time last year (details via my better half HERE). One of the more striking things to me was the length of beach the soldiers had to cross to get to land. It's a trip a highly recommend, and it's something I think can appeal and move even those not inclined to normally study history in their spare time.

Thursday, June 6, 2019

Links

"We don’t play big trends. We don’t think about demographic trends or anything of the sort.... Big trends, they just don’t mean that much. There’s too much money to be made from year to year to think about things that take decades to manifest themselves." --Warren Buffett (2006

Brilliant stock picker John Neff, who ran Vanguard's Windsor Fund and built Penn’s endowment, dies at 87 (LINK)

Terry Smith presents the full Fundsmith FEET 2019 Annual Shareholders' Meeting (video) (LINK)

A 2017 paper from Ernst & Young: "Getting ROIC right" [H/T @_inpractise] (LINK)
Related paper: "Calculating Return on Invested Capital" (Mauboussin, Callahan); Related book (2006): Cash Return on Capital Invested: Ten Years of Investment Analysis with the CROCI Economic Profit Model
The Joe Rogan Experience (podcast): #1309 - Naval Ravikant (LINK)
Related podcast: Naval: How to Get Rich: Every Episode
The Ezra Klein Show (podcast): Michael Lewis reads my mind (LINK)

Conversations with Tyler (podcast): Russ Roberts on Life as an Economics Educator (LINK)

Standard Deviations Podcast: Brent Beshore - Building a “Baby Berkshire” (LINK)

Crazy/Genius Podcast: Influencers: Frauds or the Future of Online Commerce? (LINK)

Venture Stories Podcast: A Deep Dive On InsureTech with Karn Saroya and Sheel Mohnot (LINK)

Solvable Podcast: Homelessness is Solvable (LINK)
Malcolm Gladwell talks to Rosanne Haggerty about ending homelessness for everyone. Forever.
Kevin Kelly on Still Untitled: The Adam Savage Project Podcast (LINK)

AI: Hype vs. Reality Podcast: AI On The Job (LINK)

Humane: A New Agenda for Tech (video) [H/T @harari_yuval] (LINK)

The Deep Sea Is Full of Plastic, Too (LINK)

Tuesday, June 4, 2019

Links

"It’s not what you buy that determines your results, it’s what you pay for it." --Howard Marks (Mastering the Market Cycle)

Crypto Pioneer Pays $4.57 Million for Lunch With Warren Buffett (LINK)

The Couple Who Feds Say Scammed Berkshire Hathaway for Millions (LINK)

Apple’s Audacity - by Ben Thompson (LINK)

The controversy over WeWork’s $47 billion valuation and impending IPO, explained (LINK)

Stanley Druckenmiller at The Economic Club of New York (video) (LINK)

The Absolute Return Letter - June 2019: The Cost of Rising Populism (LINK)

A ‘Bridge’ to China, and Her Family’s Business, in the Trump Cabinet (LINK)
Elaine Chao has boosted the profile of her family’s shipping company, which benefits from industrial policies in China that are roiling the Trump administration.
A Massacre, Erased [H/T Linc] (LINK)
China tried to repress the memory of the brutal crackdown in Tiananmen Square. Thirty years later, Beijing is still terrified of its legacy.  
Related articles to the above: 1) In China, I'd Be Dead - by Li Lu (1989); 2) Drama of Li Lu's Life Recounted in Documentary Film (1995); Related book: Moving the Mountain: From the Cultural Revolution to Tiananmen Square - by Li Lu
The Peter Attia Drive Podcast: #56 - Jocko Willink (Part II of II) (LINK)

The Mutation Meant to Help the CRISPR Babies Could Be Harmful - by Sarah Zhang (LINK)

Science Friday Podcast: SciFri Extra: Remembering Murray Gell-Mann (LINK)

TED Talk: "Everything happens for a reason" -- and other lies I've loved | Kate Bowler (LINK)
Related book: Everything Happens for a Reason: And Other Lies I've Loved