Thursday, May 31, 2012

Clay Christensen's Life Lessons

Thanks to Will for passing this along.


Related books:

Related previous posts:

Steve Jobs’ Appearances at the All Things Digital Conferences

Found via The Big Picture.


Also available in audio instead of video HERE.

Chanticleer Advisors Whitepaper: The Case for Small and Micro-Cap Value Investing


How Tim Cook is changing Apple

Albert victorious

IF THERE is one person who is pleased at recent events, it is Albert Edwards, currently the Societe Generale strategist but previously at Dresdner Kleinwort. He has been plugging his Ice Age thesis since 1996, arguing that much of the developed world would follow Japan in seeing both equity valuations and bond yields decline. And he has been sceptical throughout this rally, proving rather better at assessing events last year, for example, than the bulls at Goldman Sachs.

“As 30 year German bund yields slide below 2% and rapidly converge towards Japanese rates, we have a taster of what is to come in the US and UK in the months ahead. We still see US 10 year yields - even now making new all-time lows - falling below 1% as hard landings occur in china and the US. The secular equity valuation bear market began in 2000 and renewed global recession will be the trigger to catalyse the third and hopefully final, gut-wrenching phase of valuation de-rating. Expect the S&P 500 to decline decisively below its March 2009, 666 intra-day low. All hope will be crushed.”
“Amid the chaos, there is opportunity. The European cyclically-adjusted PE (CAPE) is back down to rock-bottom valuations, consistent with the bottom of previous long-term valuation bear markets and lower than that seen in March 2009. Investors are reluctant to invest amid all the ongoing chaos in the eurozone. But the macro backdrop ALWAYS looks awful when the market is this cheap. There are no such things as toxic assets, only toxic prices.”

David Einhorn: Hedge Funds Are Underweight Apple

Hedge Fund Masters Unveiled: A 'Hedge-ucation'



Bill Gross – June 2012 Investment Outlook: Wall Street Food Chain

Warren Buffett's letter to publishers and editors

From last week.

Wednesday, May 30, 2012

Howard Marks quote (understanding uncertainty)

“Risk and uncertainty aren’t the same as loss, but they create the potential for loss when things go wrong. Some of the biggest losses occur when overconfidence regarding predictive ability causes investors to underestimate the range of possibilities, the difficulty of predicting which one will materialize, and the consequences of a surprise.” –Howard Marks, The Most Important Thing Illuminated

Seth Klarman quote

“Generally, the greater the stigma or revulsion, the better the bargain.” –Seth Klarman, The Most Important Thing Illuminated

Tuesday, May 29, 2012

Howard Marks quote (emotion and ego)

“Refusing to join in the errors of the herd—like so much else in investing—requires control over psyche and ego. It’s the hardest thing, but the payoff can be enormous. Mastery over the human side of investing isn’t sufficient for success, but combining it with analytical proficiency can lead to great results.” –Howard Marks, The Most Important Thing Illuminated

Seneca quote

“All that is still to come lies in doubt: live here and now!” –Seneca, Dialogues and Essays

Hussman Weekly Market Comment: The Reality of the Situation

For nearly two years, the massive interventions of central banks have repeatedly pulled a fundamentally weak and debt-burdened global economy from the brink of resumed recession. The Federal Reserve's balance sheet is now leveraged 52-to-1, with assets having an average duration of over 5 years, suggesting that if those assets were marked-to-market, an interest rate increase of less than 50 basis points would wipe out the Fed's entire capital base. Of course, the Fed takes no marks on its assets when it reports its balance sheet, though it does occasionally take down the value of the securities in the Maiden Lane shell companies that it illegally set up to bail out Bear Stearns and other entities (in violation of Section 13(3) of the Federal Reserve Act, which Congress had to amend and spell out like a See-Spot-Run book as a result). 

GMO whitepaper: The What-Why-When-How Guide to Owning Emerging Country Debt

I Cannot Leave the Truth Unknown - By Frank Martin


Monday, May 28, 2012

Ray Dalio quote (the holy grail of investing)

From Maneet Ahuja's book, The Alpha Masters:
Dalio says if you have 15 or more good, uncorrelated bets, you will improve your return to risk ratio by a factor of five. He calls this the holy grail of investing. “If you can do this thing successfully, you will make a fortune,” he says. “You’ll get the pot of gold at the end of the rainbow.”

Joel Greenblatt quote (diversification)

“Here is part of the tradeoff with diversification. You must be diversified enough to survive bad times or bad luck so that skill and good process can have the chance to pay off over the long term.” –Joel Greenblatt, The Most Important Thing Illuminated

Nassim Taleb quotes (the unexpected and the "unknown unknown")

“Plans fail because of what we have called tunneling, the neglect of sources of uncertainty outside the plan itself…..The unexpected almost always pushes in a single direction: higher costs and a longer time to completion. On very rare occasions, as with the Empire State Building, you get the opposite: shorter completion and lower costs—these occasions are becoming truly exceptional nowadays…..As I said earlier, we are too narrow-minded a species to consider the possibility of events straying from our mental projections, but furthermore, we are too focused on matters internal to the project to take into account external uncertainty, the “unknown unknown,” so to speak, the contents of the unread books.” –Nassim Taleb, The Black Swan

Seneca quote

“Just as conversation or reading or some deep reflection deceives travellers, and they discover they have reached their goal before knowing they were approaching it, so it is with this unbroken and rapid journey of life, that we make at the same pace, whether awake or asleep: those who are busy with other things do not notice it until the end comes.” –Seneca, Dialogues and Essays

Sunday, May 27, 2012

Ray Dalio quote (learn from history)

“If you’re limiting yourself to what you experienced, you are going to be in trouble. . . . I studied the Great Depression. I studied the Weimar Republic. I studied important events that didn’t happen to me.” -Ray Dalio (as quoted by Maneet Ahuja in The Alpha Masters)

Seneca quote (learning from the minds of the past)

“Since nature permits us to have a share in every age, why should we not forsake this insignificant and fleeting span of time and devote ourselves with all our minds to the past, which is vast, which is eternal, which we share with better men?” –Seneca, Dialogues and Essays

Saturday, May 26, 2012

John Mauldin: Meanwhile, Back at the Ranch

Howard Marks quote (humility)

“In my view, the road to investment success is usually marked by humility, not ego.” –Howard Marks, The Most Important Thing Illuminated

Seneca quote

“….we are never released from care if we suppose that each time we are under observation we are under scrutiny; for many things happen that expose our true selves against our will, and, though such attention to oneself may succeed, life brings neither happiness nor peace of mind to those who live it constantly behind a mask. But what great pleasure lies in that frankness that is pure and in itself unadorned, veiling no part of its character! But even a life such as this is liable to be scorned, if all things lie open to all people; for there are those who turn up their noses at whatever has become too familiar. But virtue runs no risk of being undervalued when it is put right before our eyes, and it is better to be despised for being natural than to be tormented by constant pretence. Let us, however, show moderation in the matter: it makes a considerable difference whether you live naturally or carelessly.” –Seneca, Dialogues and Essays

Friday, May 25, 2012

Darwin's Struggle: Origin Of Species


Charlie Munger quote (complexity and overconfidence)

Mentioned by Peter Bevelin in my 2009 interview with him (and it reminds me of THIS Warren Buffett quote from this year's Berkshire Meeting):

“We don’t like complexity and we distrust other systems and think it many times leads to false confidence. The harder you work, the more confidence you get. But you may be working hard on something that is false. We’re so afraid of that process so we don’t do it.” –Charlie Munger

Walter Isaacson: Benjamin Franklin: An American Life


Nassim Taleb quote

“We humans are the victims of an asymmetry in the perception of random events. We attribute our successes to our skills, and our failures to external events outside our control, namely to randomness. We feel responsible for the good stuff, but not for the bad. This causes us to think that we are better than others at whatever we do for a living.” –Nassim Taleb, The Black Swan

Thursday, May 24, 2012

Joel Greenblatt quote (mistakes)

“Many of the mistakes I have made are the same ones that I had made before; they just look a little different each time—the same mistakes slightly disguised.” –Joel Greenblatt, The Most Important Thing Illuminated

Howard Marks quote (risk and high prices)

“The greatest risk doesn’t come from low quality or high volatility. It comes from paying prices that are too high. This isn’t a theoretical risk; it’s very real.” –Howard Marks, The Most Important Thing Illuminated

Public Money Finds Back Door to Private Schools


Wednesday, May 23, 2012

Patient Capital's Q1 2012 Letter

Goldman Sachs’s Trott Tells Jury Of Buffett Deal Secrecy

Byron Trott on the September 2008 Berkshire/Goldman deal. I guess it is also a good example of Warren Buffett sticking to his commitments and doing what he says he’ll do. Even if there are billions of dollars on the line, he promised the grandkids ice cream, so Goldman would have to wait. It is also a good example of one of Ben Franklin’s 13 Virtues: “Resolution: Resolve to perform what you ought. Perform without fail what you resolve.”


Howard Marks quote (risk)

“Great investing requires both generating returns and controlling risk. And recognizing risk is an absolute prerequisite for controlling it.

Hopefully I’ve made clear what I think risk is (and isn’t). Risk means uncertainty about which outcome will occur and about the possibility of loss when the unfavorable ones do.” 

Steve Keen WSJ Video - Mountain of Debt: A Mountain of Stress on Economy


Tuesday, May 22, 2012

Seth Klarman quote (holding cash)

“In recent years, holding cash is so completely out of favor that it has become the ultimate contrarian investment.” –Seth Klarman, The Most Important Thing Illuminated

My Speech to the Finance Graduates – By Robert J. Shiller

Chanticleer Letter: Patience

My latest commentary has been posted on the Chanticleer Investment Partners website. To read this letter, please click on the link below.

TED Talk - Hans Rosling: Religions and babies

Hans Rosling had a question: Do some religions have a higher birth rate than others -- and how does this affect global population growth? Speaking at the TEDxSummit in Doha, Qatar, he graphs data over time and across religions. With his trademark humor and sharp insight, Hans reaches a surprising conclusion on world fertility rates.


‘Wall Street Maneet’ Ahuja, 27-Year-Old Squawk Box Producer, Has Ways of Making Them Talk


Bill Ackman's J.C. Penney Presentation from the Ira Sohn Conference

Found via ValueWalk.

Larry Page on Charlie Rose

Placing the American Gas Boom in Perspective - By Vaclav Smil

Neil Gaiman Addresses the University of the Arts Class of 2012

Found via Tim Ferriss, who says this speech rivals the one given by Steve Jobs in 2005.


Howard Marks quote (risk and psychology)

“The most dangerous investment conditions generally stem from psychology that’s too positive. For this reason, fundamentals don’t have to deteriorate in order for losses to occur; a downgrading of investor opinion will suffice. High prices often collapse of their own weight.” –Howard Marks, The Most Important Thing Illuminated

Santangel's Review: Summary of David Einhorn’s Comments at the Greenlight Re Annual Meeting


More detailed notes from The Brooklyn Investor blog HERE

The Austrians and the Swan: Birds of a Different Feather – By Mark Spitznagel

Found via Zero Hedge.

Barry Ritholtz on the Facebook IPO

Warren Buffett and Elon Musk Speak to Matthew Bishop About Giving

Monday, May 21, 2012

Grand Rapids bar owner brews success with a passion for beer

Found via the Corner of Berkshire & Fairfax.

Street of Walls Q1 Report on Hedge Fund Positions

Highlights from Hedge Fund Intelligence Report:

Albert Edwards: Latest data raises red flags likely to burst China’s bubble

Hussman Weekly Market Comment: Liquidation Syndrome

John Mauldin: Dr. Frankenstein's Europe

In today's letter we explore the options that the eurozone faces in order to stay together, and what it all means for some of the countries involved. While I have written for a very long time about the probability of Greece exiting the eurozone, the actuality is fraught with risk, not just for Europe but for the world economy. What happens in the next few months will impact us all for a very long time. Indeed, this is one of those years, as Lenin noted, when decades happen. There is a lot to cover, and in future weeks we will go into more detail, but today let's just step back and see if we can get the larger picture.

Philip Tetlock: Why Foxes Are Better Forecasters Than Hedgehogs

Found via The Big Picture.

Why Foxes Are Better Forecasters Than Hedgehogs from The Long Now Foundation on


Related previous post: Hedgehogs and Foxes

Dalio's World

Found via The Big Picture.

Nassim Taleb on BBC


Simoleon Sense Episode #4: Conversation with David DiSalvo - What Makes Your Brain Happy & Why You Should Do The Opposite

Friday, May 18, 2012

Kelpie Capital write-up on Zicom Group

Great overview of a stock that is currently one of our favorite ideas at Chanticleer. The stock closed today at $0.17 AUD, which is about 70% of tangible book value. We think the management team is very familiar with value investing and Warren Buffett as well. Click on the paragraph below for Kelpie Capital's full write-up.

Disclosure: I am a portfolio manager at Chanticleer Advisors and Chanticleer Investment Partners and the fund and separate accounts Chanticleer manages own shares in Zicom Group. We may in the future buy or sell shares and are under no obligation to update our activities. This is not a recommendation to buy or sell a security. Please do your own research before making an investment decision.

Cat On Boat Plays With Dolphins

Found via the Naked Capitalism blog.

Thursday, May 17, 2012

Kedrosky: Could Be Messy Ride to Facebook Valuation (video)

May 17 (Bloomberg) -- Bloomberg contributing editor Paul Kedrosky discusses the outlook for Facebook’s growth. He speaks on Bloomberg Television’s “StreetSmart.”

Steven Romick on Bloomberg (video)

Bill Gates: An Energy Briefing with Daniel Yergin: Understanding Energy Solutions



Related link: Bill Gates' book review of The Quest

Jeffrey Gundlach on Bloomberg (video)

Notes from the Ira Sohn Conference

Via Market Folly:

Angel No More: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

Wednesday, May 16, 2012

Mohnish Pabrai’s Presentation at the Ben Graham Centre’s Value Investing Conference

The conference took place on April 25, 2012.


For other presentations, go HERE

Einhorn Moves the Markets Again (CNBC video)



Related link: ValueWalk's notes from Einhorn's presentation

Meredith Whitney on JPMorgan's Mess


Raghuram Rajan on Bloomberg (video)


Japanese pension fund switches to gold

Nassim Taleb quote (experts)

“You cannot ignore self-delusion. The problem with experts is that they do not know what they do not know. Lack of knowledge and delusion about the quality of your knowledge come together—the same process that makes you know less also makes you satisfied with your knowledge.” –Nassim Taleb, The Black Swan

TEDxSanAntonio - Benny Lewis - Fluent in Three Months - Rapid Language Hacking


The Benefits Of Being Bilingual – By Jonah Lehrer