Saturday, September 22, 2018


"The number one thing that has made us successful by far is obsessive-compulsive focus on the customer, as opposed to obsession over the competitor." --Jeff Bezos (Source)

All Transcripts From The Tim Ferriss Show (LINK)

Wall Street and the “Vampire Squid”: A Brief History - by Jason Zweig (LINK)

Ray Dalio On The Economy (video) (LINK)
Related book: Big Debt Crises - by Ray Dalio (free PDF HERE)
Bruce Flatt of Brookfield on owning the backbone of the global economy ($) [H/T Linc] (LINK)

3 Investments That May Have Hit Their Peak (LINK)

A Chinese Company Reshaping the World Leaves a Troubled Trail [H/T @WallStCynic] (LINK)

‘Whatever It Takes’ - by Frank K. Martin (LINK)

Amazon and Apple at a Trillion $: A Follow-up on Uncertainty and Catalysts! - by Aswath Damodaran (LINK)

Scott Galloway | Full Video | 2018 Code Commerce (LINK)

Peter Thiel on Trump, Gawker, and Leaving Silicon Valley (video) (LINK)

Yuval Noah Harari in conversation with Terrence McNally at Live Talks Los Angeles (video) (LINK)
Related book: 21 Lessons for the 21st Century
Radiolab Podcast: Infective Heredity (LINK)
Today, a fast moving, sidestepping, gene-swapping free-for-all that would’ve made Darwin’s head spin. 
David Quammen tells us about a shocking way that life can evolve - infective heredity. To figure it all out we go back to the earliest versions of life, and we revisit an earlier version of Radiolab. After reckoning with a scientific icon, we find ourselves in a tangle of genes that sheds new light on peppered moths, drug-resistant bugs, and a key moment in the evolution of life when mammals went a little viral. 

Jeff Bezos At The Economic Club Of Washington (9/13/18)

Link to video

Thursday, September 20, 2018


"It is necessary to caution the analyst against overconfidence in the practical utility of his findings. It is always good to know the truth, but it may not always be wise to act upon it, particularly in Wall Street. And it must always be remembered that the truth that the analyst uncovers is first of all not the whole truth and, secondly, not the immutable truth. The result of his study is only a more nearly correct version of the past. His information may have lost its relevance by the time he acquires it, or in any event by the time the market place is finally ready to respond to it." --Benjamin Graham and David Dodd (Security Analysis: Sixth Edition)

Marks Investor Series featuring Howard Marks, W’67, Co-Chairman, Oaktree Capital (video) (LINK)

Oaktree’s Howard Marks says Brexit makes UK too risky to invest in (LINK)

Fool Me Three Times And I Give Up - by Morgan Housel (LINK)

Knowledge vs. Skill - by Ben Carlson (LINK)

The Holy Active Empire - by Jamie Catherwood (LINK)

Apple and Amazon at a Trillion $: Looking Back and Looking Forward! - by Aswath Damodaran (LINK)

How to Make a Killing in Gene Therapy [H/T Ian] (LINK)

Creative Prompts - by Fred Wilson (LINK)

Habits vs. Workflows - by Cal Newport (LINK)

a16z Podcast: Tesla and the Nature of Disruption (LINK)

Crazy/Genius Podcast (from last week): Can Science Cure Aging? (LINK)

Crazy/Genius Podcast: Will We Ever Stop Eating Animal Meat? (LINK)

Long Now Seminars (podcast version) -- Julia Galef: Soldiers and Scouts: Why our minds weren’t built for truth, and how we can change that (LINK)

Sam Harris speaks with Yuval Noah Harari about his new book 21 Lessons for the 21st Century (podcast) (LINK)

What Ecstasy Does to Octopuses - by Ed Yong (LINK)
Despite their wacky brains, these intelligent animals seem to respond to the drug in a very similar way to humans.
A 558-Million-Year-Old Mystery Has Been Solved - by Ed Yong (LINK)
Scientists have finally confirmed that a weird ribbed oval called Dickinsonia is an animal.

Wednesday, September 19, 2018


I'm back in Charlotte after a great couple of weeks traveling. As often happens, I brought way more to read with me than I actually had time to read, but I did catch up on some podcasts, started a couple of new things, and was able to get through Bethany McLean's latest book, Saudi America, which I thought was especially good, well-balanced, and timely. It pairs well with Jeremy Grantham's "The Race of Our Lives Revisited," as well as the shale section in the first part of Peter Zeihan's book The Absent Superpower.

One of the Grant's podcasts also mentioned two books on cycles—one by Jim Grant himself, The Trouble With Prosperity, as well as Economics and the Public Welfare by Benjamin Anderson, which Amazon tells me I bought in 2012 and yet wasn't kind enough to also let me know where I seem to have placed it. And those books both reminded me that we are only a couple of weeks away from the book many of us have been eagerly awaiting: Mastering the Market Cycle by Howard Marks.


"Machines are there to help people, not replace them. Humans should never wait for machines. Machines wait for people. And so in this way, I find myself so far outside of the world of technology. I see so much 'technology over everything' kind of thinking where those people are like, it’s all there....I don’t even think there’s such a thing as, truly, the technology industry, right? It’s a weird construct. It’s like, technology is’s not an industry. It’s not even a strategy. It’s sort of a tactic. It’s like a tool that you use to give people more skills." --Tobi Lütke

Tobi Lütke, founder and CEO of Shopify, talks with Shane Parrish on The Knowledge Project Podcast (LINK) [In addition to the quote above, this conversation also has some great insights on culture and on creating the right environment at a company.]

Predicting the Future with Bayes’s Theorem (LINK)

You Can Time The Market, Just Not All The Time - by Jason Zweig (LINK)
Howard Marks has made a few market calls in his day, but warns that it’s harder than it looks
How Jim Chanos Uses Cynicism, Chutzpah — and a Secret Twitter Account — to Take on Markets (and Elon Musk) (LINK)

Grant’s Interest Rate Observer's piece on municipal bonds, featuring Chris Pavese of Broyhill Asset Management (LINK)

Amazon Data Leaks and Bribes Have Consequences (LINK)

How to keep up progress on global health - by Bill Gates (LINK)

For Real Vision subscribers, Michael Mauboussin had a video released discussing "The Five Behavioral Mistakes Investors Make" (LINK), and the final episode of The Jim Grant Series also aired, which was an interview with Dan Rasmussen (LINK) [If you're not a subscriber and would to join or take a free trial, you can sign up HERE.]

Ben Thompson's article from last week, as well as his latest:

The iPhone Franchise (LINK)

The European Union Versus the Internet (LINK)

And Ed Yong has continued his productive ways, writing about the latest and/or more interesting science stories of the day...

Bacteria in a Dinosaur Bone Reignite a Heated Debate (LINK)

The Genes That Never Go Out of Style (LINK)

The Three Major Cartels Behind the Downfall of Africa’s Elephants (LINK)

Wiping Out the Brain’s Retired Cells Prevents a Hallmark of Alzheimer's (LINK)

Tuesday, September 18, 2018

Seneca quote on endurance

"Fortune lashes and mangles us: well, let us endure it: it is not cruelty, it is a struggle, in which the oftener we engage the braver we shall become. The strongest part of the body is that which is exercised by the most frequent use: we must entrust ourselves to fortune to be hardened by her against herself: by degrees she will make us a match for herself. Familiarity with danger leads us to despise it. Thus the bodies of sailors are hardened by endurance of the sea, and the hands of farmers by work; the arms of soldiers are powerful to hurl darts, the legs of runners are active: that part of each man which he exercises is the strongest: so by endurance the mind becomes able to despise the power of misfortunes." --Seneca ("Of Providence")


Related quotes:

"There were two vices much blacker and more serious than the rest: lack of persistence and lack of self-control....Endure and Renounce." --Epictetus

"By endurance we conquer." --Shackleton Family Motto (“Fortitudine Vincimus”)

Monday, September 17, 2018

More from Charlie Munger on opportunity cost...

In the real world, you have to find something that you can understand that’s the best you have available. And once you’ve found the best thing, then you measure everything against that because it’s your opportunity cost. That’s the way small sums of money should be invested. And the trick, of course, is getting enough expertise that your opportunity cost — meaning your default option, which is still pretty good — is very high.... Most people aren’t going to find thousands of things that are equally good; they’re going to find a few things where one or two of them are way better than anything else they know. And the right way to think about investing is to act thinking about your best opportunity cost. 
Reviewing the comments from Buffett and Munger on opportunity costs over the years has made me make a slight change to my investment process. Now, multiple times a week I go over the key aspects and thesis (about a paragraph or two in length) for each of the things I am actually invested in. This serves two key purposes:
  1. Opportunity Cost: Like the quote from Munger above, it allows me to always have my opportunity cost at the top of my mind when looking at new ideas, thus helping to improve the idea-filtering process.
  2. Disconfirming Evidence: By constantly reviewing my reasons for owning something, I hope to be able to more quickly identify evidence that may opposed to those reasons, thus increasing my ability to recognize mistakes faster as well as using the practice of searching for disconfirming evidence as a way to train myself to be more objective
For those looking to grow a money management business, it can also help in one's marketing efforts. While many people may want to conclude that just finding great ideas will lead to a successful business, or that being able to tell every bit of minutiae about a given holding can display one's skill—the truth is that more often than not, being able to clearly articulate the key points in a thesis is what will get someone's initial attention. From there, the level of detail one goes into will vary by potential investor, but showing some clarity helps the marketing which helps drive one's business. And as Ben Franklin said, "Drive thy business or it will drive thee."

Friday, September 14, 2018

Thinking of what can go wrong

The quote from Warren Buffett below, from the 2000 Berkshire annual meeting, goes well with THIS Seth Klarman quote and, especially, the 'What can go wrong?' section in THIS post.

"When we look at businesses, we try to think of what can go wrong with them. We try to look [for] businesses that are good businesses now, and we think about what can go wrong with them. If we can think of very much that can go wrong with them, we just forget it. We are not in the business of assuming a lot of risk in businesses. That doesn’t mean we don’t do it inadvertently and make mistakes, because we do. But we don’t intentionally, or willingly, voluntarily, go into situations where we perceive really significant risk that the business is going to change in a major way." --Warren Buffett

Thursday, September 13, 2018

Warren Buffett on P/E ratios and the future looking different from the present

One of the best buys we ever made was in 1976 when we bought a significant percentage — what became through repurchases — 50 percent of GEICO at a time when the company was losing a lot of money and was destined to lose a lot of money in the immediate future. 
And, you know, the fact they were losing money was not lost on us, but we thought we saw a future there that was significantly different than the current situation. 
So it would not bother us in the least to buy into a business that currently was losing money for some reason that we understood, and where we thought that the future was going to be significantly different. 
Similarly, if a business is making some money — there’s no P/E ratio that we have in mind as being a cutoff point at all. There are businesses — I mean, you could have some business making a sliver of money on which you would pay a very, very high P/E ratio. 
...There are all kinds of decisions that involve the future looking different, in some important way, than the present. Most of our decisions relate to things where we expect the future not to change much. 
But you get this — well, American Express was a good example. And when we bought it in 1964, a fellow named Tino DeAngelis had caused them incredible trouble. You know, it was one of those decisions that looked, for a time, as if it could break the company. 
So, we knew — if you’d been charging for what Tino had stolen from the company against the income account that year, or the legal costs that were going to be attached to it, you were looking at a significant loss. 
But the question was, what was American Express going to look like 10 or 20 years later? And we felt very good about that. 
So there are no arbitrary cutoff points. But there is that focus on, how much cash will this business deliver, you know, between now and Kingdom Come? Now as a practical matter, if you estimate it for 20 years or so, the terminal values get less important. 
So — but you do want to have, in your mind, a stream of cash that will be thrown off over, say, a 20-year period, that makes sense discounted at a proper interest rate, compared to what you’re paying today. And that’s what investment’s all about. 

Wednesday, September 12, 2018


Thank you to everyone who responded to last week's post. Those responses and kind words were much more than I expected, and I really appreciate it. A stop in London has given me a little internet access, and a little time to catch up on some items of note from the past week. 


Warren Buffett's in depth interview with Andrew Ross Sorkin on the 2008 financial crisis (video) (LINK) ["Confidence comes back one at a time, but fear is instantaneous.... Fear just spreads like nothing you've ever seen.... That's the advantage I've got, frankly. It isn't I.Q. It's [that] I'm not going to get fearful about the United States over time."]

When You Lose 99.9%, You’ve Lost More Than Money - by Jason Zweig ($) (LINK)

Bruce J. Flatt "Durable Principles for Real Asset Investing" | Talks at Google (LINK)

Can Mark Zuckerberg Fix Facebook Before It Breaks Democracy? - by Evan Osnos (LINK)

“Skin in the Game” - Nassim Nicholas Taleb Speech At RPI's Media & War Conference (video) (LINK)

Elon Musk talks with Joe Rogan (Video, Podcast)

Risk, Uncertainty and Ignorance in Investing and Business – Lessons from Richard Zeckhauser - by Tren Griffin (LINK)

The Decision Matrix: How to Prioritize What Matters (LINK)

Ben Thompson chats with Shane Parrish (podcast) (LINK)

Ray Dalio's Template For Understanding BIG DEBT CRISES [H/T Bill] (Sign Up for Free PDF, or Buy the Book)

How Self-Driving Cars Could Ruin the American City (podcast) (LINK)

Trailblazers with Walter Isaacson -- Batteries: The Power of Portable Power (podcast) (LINK)

Trillion Dollar Toppers: Market Triggers, Value Drivers and Pricing Catalysts! - by Aswath Damodaran (LINK)

13D Research: Big box stores were never economic development (LINK)

How 3D printers are preparing students for life after high school - By Bill Gates (LINK)

Steven Johnson on the a16z Podcast discussing his new book Farsighted: How We Make the Decisions That Matter the Most (LINK)

Doris Kearns Goodwin on The Tim Ferriss Show: The Life Lessons and Success Habits of Four Presidents (podcast) (LINK)

Sam Harris speaks with Jonathan Haidt about his new book The Coddling of the American Mind (podcast) (LINK)

Robert Lustig, M.D., M.S.L.: fructose, processed food, NAFLD, and changing the food system (podcast) (LINK)

Kobe Bryant: Mamba Mentality and The Mind of a Champion (podcast) (LINK)

oGoLead Leadership Podcast: Tom Brady, New England Patriots Quarterback (Part 1, Part 2)

Ed Yong has also been busy writing about the latest and/or more interesting science stories of the day...

What Was Lost in Brazil’s Devastating Museum Fire (LINK)

A Once-Captive Dolphin Has Introduced Her Friends to a Silly Trend (LINK)

This Tiny Songbird Rolls Its Head to Break Its Victim’s Neck (LINK)

Humans Are Destroying Animals’ Ancestral Knowledge (LINK)

Wait, So How Much of the Ocean Is Actually Fished? (LINK)

An Ancient Crosshatch May Be the Earliest Drawing Ever Found (LINK)

The mystery of learning...

From The Master Algorithm by Pedro Domingos:
If you’re a parent, the entire mystery of learning unfolds before your eyes in the first three years of your child’s life. A newborn baby can’t talk, walk, recognize objects, or even understand that an object continues to exist when the baby isn’t looking at it. But month after month, in steps large and small, by trial and error, great conceptual leaps, the child figures out how the world works, how people behave, how to communicate. By a child’s third birthday all this learning has coalesced into a stable self, a stream of consciousness that will continue throughout life. Older children and adults can time-travel–aka remember things past, but only so far back. If we could revisit ourselves as infants and toddlers and see the world again through those newborn eyes, much of what puzzles us about learning–even about existence itself–would suddenly seem obvious. But as it is, the greatest mystery in the universe is not how it begins or ends, or what infinitesimal threads it’s woven from. It’s what goes on in the small child’s mind–how a pound of gray jelly can grow into the seat of consciousness.