Tuesday, October 22, 2019


"If you can protect downside, you don't need to figure out upside. In fact, those will give you the best upside because markets hate them till the upside is clearly visible." --Mohnish Pabrai

How did Mohnish Pabrai inspire Guy Spier? An interview in the Aquamarine Fund's office in Zurich (video) [H/T @mstafford] (LINK)

Satya Nadella at Stanford (video) (LINK)

Oaktree Insights: Emerging Markets Equities Strategy Video (LINK)

Useful Biases - by Morgan Housel (LINK)

Netflix Versus Blockbuster (LINK)

Neumann to Get Up to $1.7 Billion to Exit WeWork as SoftBank Takes Control ($) (LINK)

Death and Deals: Sick Children Suffer, Private Equity Profits (LINK)

The Joe Rogan Experience (podcast): #1366 - Richard Dawkins (LINK)

Monday, October 21, 2019


The Internet and the Third Estate - by Ben Thompson (LINK)

25th Anniversary of Financial Shenanigans with Howard Schilit - Author Series: Financial Reporting & Analysis Edition (May 2018 video) [H/T @colemanrhawkins] (LINK)
Related book: Financial Shenanigans
Greenhaven Road Capital's Q3 Letter [H/T @mastersinvest] (LINK)

Massif Capital Q3 Letter (LINK)

Patience: An Undervalued Virtue - by Frank K. Martin (LINK)

The Acquirers Podcast: Joseph Boskovich talks with Tobias Carlisle about finding great owner/operators (LINK)

Grant’s Current Yield Podcast: Time to make the Donuts (LINK)

North Star Podcast: Ryan Holiday: Timeless Lessons From History (LINK)
Related book: Stillness Is the Key
A Textbook Evolutionary Story Is Wrong - by Ed Yong (LINK)

Sunday, October 20, 2019

Warren Buffett on share repurchases and intrinsic value

From the 1996 Berkshire Hathaway Annual Meeting:
If you’re repurchasing shares above a rationally calculated intrinsic value, you are harming your shareholders, just as if you issue shares beneath that figure, you are harming your shareholders. 
That’s a truism. Now, the tough part of that, of course, is coming up with the intrinsic value. 
A good example might be Coca-Cola. 
I think a number of people might have thought Coca-Cola was repurchasing shares at a very high price, because they’ll look at book value or P/E ratios. But there’s a lot more to intrinsic value than book value and P/E ratios. And anytime anybody gives you some simplified formula for figuring it out, forget it. 
You have to understand the business. The people who understood that business well, the management, have understood and been very forthright about saying so over the years, that by repurchasing their shares, they are adding to the value per share for remaining shareholders. 
And like I say, people who didn’t understand Coca-Cola, or who thought mechanistic methods of valuation should take precedence, really misjudged the value to the Coca-Cola Company of those repurchases. 
So we favor — when you have a wonderful business — we favor using funds that are generated out of that business to make the business even more wonderful. And we favor repurchasing shares if those shares are below intrinsic value. 
And I would say that if it’s a really wonderful business, we probably come up with higher intrinsic values than most people do. 
We have great respect, Charlie and I with — I think it’s developed over the years — we have enormous respect for the power of a really outstanding business. And we recognize how scarce they are. And if a management wishes to further intensify our ownership by repurchasing shares, we applaud. 
We own — we just went over 8 percent of the Coca-Cola Company, probably, in the last three or so months, by a very tiny fraction. But we had a second purchase one time. 
But our percentage interest in the Coca-Cola Company has gone up significantly through their repurchases. And we are better off because they have bought those shares at what looked like, to some people, perhaps, high prices. And we thought they were wrong at the time, and I think now it’s been indicated or proven. 
So, I urge you, if you’re trying to decide on the wisdom of repurchases, or of share issuances, that you don’t think in terms of book value. You don’t think in terms of specific P/Es. You don’t think in terms of any little model. 
But you think in terms of what would you really... A) pick businesses you can understand; and then think what you really would pay to be in those businesses. And that’s what counts over time, is whether the repurchases are made at a discount from that figure. 
And I would say with the companies that we own shares in — our interest in GEICO went from 33 or so percent to 50 percent over a 15-year or so period, simply through repurchases. And we benefited significantly. 
So did every other shareholder, I might add, that stayed with the company. And we benefited in no way disproportionate to them. 
But that was a very wise action on their part. And there too, they were usually buying that stock at at least double book value. And you could compare it to other insurance stocks and say, “Well, that’s too much to pay.” 
But GEICO wasn’t an insurance company that was comparable to other insurance companies. It was a very different sort of business. And they were very wise, in my view, to be following that course of action.


Related previous post: Warren Buffett on Share Repurchases

Saturday, October 19, 2019


"In baseball terms, you want to buy [a stock] in the second or third inning and get out in the seventh or eighth. Walmart was in only 15% of the United States when they were a 10-year-old public company. All they did for the next 30 years was go from 15% to 100%. The stock went up 50-fold. They had a great formula, and they just rolled with it in the United States." --Peter Lynch

Lessons from an investing legend: Former Fidelity fund manager Peter Lynch shares some of his secrets to success [H/T @TaoValue] (LINK)

Oaktree's Howard Marks on Negative Rates, Demanding Safety, U.S. Recession (video) (LINK)
Related memo: "Mysterious"
Time for Advisers to Speak to Us in Plain English - by Jason Zweig ($) (LINK)

Neil Woodford: the inside story of his rise and dramatic fall ($) (LINK)

Why It’s So Hard to Make a Better Baby Formula (LINK)

The World's Largest Geode Formed When the Mediterranean Sea Disappeared [H/T Linc] (LINK)

"Some things are inevitable. But you really shouldn't think you know when." --Howard Marks

Friday, October 18, 2019


"The vast majority of today’s negative-yield bonds are in Europe and Japan.  One of the biggest questions surrounds whether negative rates will reach the U.S. This question takes me back to my immediate response to Ian’s suggestion that I write this memo: nobody knows, and certainly not me.  When something hasn’t happened in the past, it’s impossible to be sure you know how it’ll end up.  Different people will express opinions on this subject with differing degrees of confidence.  Yet I remain certain that none of them 'know.'" --Howard Marks ("Mysterious")

Disney, IP, and "Returns to Marginal Affinity" - by Matthew Ball (LINK)

Media mogul Barry Diller: Match is in a ridiculous phase of growth (video) (LINK)

The Rental Economy Is at Risk in a Downturn ($) (LINK)

Are We on the Cusp of the Next Dot-Com Bubble? - by Derek Thompson (LINK)

Disrupting the IPO Process: Challenging the Banker-run Going-Public Model! - by Aswath Damodaran (LINK)

Sohn San Francisco Investment Conference Notes (Part 1, Part 2)

Which Way Do You Run? - by Ben Horowitz (LINK)

Six Trends Revolutionizing Games (LINK)

Hollywood’s Video Game Blind Spot (LINK)

When Medical Debt Collectors Decide Who Gets Arrested [H/T @Atul_Gawande] (LINK)

How To Academy Podcast: Rory Sutherland - How to Be Less Rational (and More Brilliant) [H/T @CravenPartners] (LINK)
Related book: Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life 
Cal Newport and James Clear in conversation (LINK)

Adults Are Getting More Food Allergies. Scientists Still Aren't Sure Why (LINK)

A Hidden World of Strange Starfish-Like Creatures in the Abyss - by Ed Yong (LINK)

Thursday, October 17, 2019

Howard Marks Memo: Mysterious

Link to Memo: Mysterious
Negative interest rates are nothing short of a mystery; they’re likely to throw off whatever we knew about the financial world and how things worked in the past. With more than $17 trillion of global debt trading at nominal yields below zero — and about double when considering inflation — this phenomenon has prompted differing perspectives about its purpose and consequences. Howard Marks offers his in this memo, in which he discusses why negative rates have become prevalent, what implications they might have, whether they will reach the U.S., and what investors can do as they navigate these uncharted waters. 

Wednesday, October 16, 2019


On Howard Marks’ Memos (LINK)

Portrait of an Inessential Government Worker - by Michael Lewis (LINK)
Related book: The Fifth Risk (upcoming paperback edition)
Google and Ambient Computing – by Ben Thompson (LINK)

Why New Technology Is A Hard Sell - by Morgan Housel (LINK)

Acquired Podcast: Season 5, Episode 5: Atari (LINK)

How Salesforce Closed the Pay Gap Between Men and Women (LINK)
In an excerpt from his new book, Marc Benioff says he initially didn't believe any pay gap was pervasive in the first place.
Tuning up photosynthesis to feed the world - by Bill Gates (LINK)

Tuesday, October 15, 2019


"Wealth is not his that has it, but his that enjoys it." --Benjamin Franklin

Jeff Bezos’s Master Plan (LINK)

Fall 2019 issue of Graham & Doddsville (LINK)

The Heilbrunn Center's Schloss Archive is also worth going back and checking out periodically (LINK)

The Knowledge Project Podcast: #68 Daniel Kahneman: Putting Your Intuition on Ice (LINK)

Exponent Podcast: 175 — The Abyss Stares Back (LINK)

The Next Big Idea Podcast: Malcolm Gladwell and David Epstein on the Keys to Success (LINK)
Related book: Range: Why Generalists Triumph in a Specialized World

Monday, October 14, 2019


"The businesses at the top of my portfolio are not necessarily going to be the ones that perform the best over the long term but are the ones I know will perform." --Chris Bloomstran [Source

1986 article: How to Tame the Casino Society - by Warren E. Buffett [H/T Linc] (LINK)

Non-Ergodicity and its Implications for Businesses and Investors - by Sanjay Bakshi (LINK)

A Big Little Idea Called Ergodicity (Or The Ultimate Guide to Russian Roulette) (LINK)

Nassim Nicholas Taleb on Skin in the Game (video) (LINK)
Related book: Skin in the Game
Robert G. Hagstrom on Liberal Arts Investing (video) (LINK)

Making a Killing with Bethany McLean (podcast): Tesla, and why "Elon Musk doesn't care about you" (LINK)

The Acquirers Podcast: Big Decisions: Michael Mauboussin talks luck, skill, success, risk, mean reversion and the base rate (LINK)

Robert Iger talks with Oprah Winfrey about his career at Disney (video) (LINK)
Related book: The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company
Yuval Noah Harari & Steven Pinker in conversation (video) (LINK)

The world is uniting to help this group - by Bill Gates (LINK)
Bill Gates delivers a speech at the Global Fund Replenishment conference in France.
The Many Contradictions of Thomas Edison - by Derek Thompson (LINK)
Related book: Edison - by Edmund Morris
It's only $4.99. But Costco's rotisserie chicken comes at a huge price (LINK)

A tweetstorm from Tren Griffin about wholesale transfer pricing power (LINK)

Why So Negative? - by Peter Zeihan (LINK)

What Economists (Including Me) Got Wrong About Globalization - by Paul Krugman (LINK)

Odd Lots Podcast: Why Governments Haven’t Learned The Lessons Of Japan (LINK)

The New Yorker Radio Hour (podcast): New Yorker Writers on Hong Kong, and Nixon After Tiananmen Square (LINK)

The New Yorker: Politics and More Podcast: Trump’s Abandonment of the Kurds Appeases Erdoğan and Infuriates Republicans (LINK)
Dexter Filkins joins Dorothy Wickenden to discuss how the incursion into Syria is affecting one of the most volatile regions in the world, and what it could mean for Trump’s Presidency.
5 Tenets of a Negative Self-Help - by Mark Manson (LINK)

Magnetars are the most powerful magnets in the Universe. Here's how they're made. - by Phil Plait (LINK)

What Made Me Reconsider the Anthropocene - by Peter Brannen (LINK)

Investment Masters: Learning From Chris Bloomstran

Link to: Investment Masters: Learning From Chris Bloomstran:
Whilst I’m a long-time avid follower of all of the Investment Masters, and I have to say a veritable devourer of their collected wisdom, there is nothing more valuable to me as an investor than actually speaking with these amazing people. Whether it’s a meeting at Berkshire, the odd telephone dialogue or even an interview, all of these interactions deepen my understanding of their unique views on financial and business matters and for that matter, the investment world. 
Recently I had a wonderful opportunity to Interview Chris Bloomstran of Semper Augustus. Chris is a veteran of the Investment Fraternity and a recognised Master; The stocks in his portfolio have compounded at 4.7% above the S&P 500 since launching Semper Augustus more than 20 years ago. I’ve always valued what he has to say and our interview was no exception. 
We covered many topics in the few hours in which we spoke, and I am incredibly grateful to Chris for being so open in sharing his knowledge and experience. I have collected the gems from our interview below.

Related links: