“When we are
surprised by disappointing developments, we set aside emotion and focus solely
on the facts as they are presented; our singular focus must then be the price
at which we can buy or sell compared to our fresh assessment of value. Only
after the dust settles do we examine our successes--and especially our
failures--for lessons that could provide insight in the future.”
Thursday, February 28, 2013
Baltasar Gracián quote
“We have
little to live and much to know, and you cannot live if you do not know.” -Baltasar
Gracián, The Art of
Worldly Wisdom
Wednesday, February 27, 2013
James Grant quote
I was reminded of the quote below after reading THIS
article on ValueWalk.
“An investment is a speculation to the extent that its success is contingent on a forecast of uncertain events.” –James Grant, Mr.Market Miscalculates
“An investment is a speculation to the extent that its success is contingent on a forecast of uncertain events.” –James Grant, Mr.Market Miscalculates
John Mauldin: The Healthcare Blues
Tuesday, February 26, 2013
Monday, February 25, 2013
Steven Brill on Charlie Rose
Link to: Steven Brill on
Charlie Rose
………
Related article: Bitter
Pill: Why Medical Bills Are Killing Us
Lawrence A. Cunningham: The Essays of Warren Buffett (Third Edition)
For
interested readers (which is likely all of you), The
Essays of Warren Buffett: Lessons for Corporate America, Third Edition
will be released next week.
William Irvine Interview (May 2012)
Irvine’s new book, A Slap in the
Face: Why Insults Hurt--And Why They Shouldn't, was just released. It
is a follow-up to his book A Guide to
the Good Life.
……………..
Related previous posts:
Related books:
Sunday, February 24, 2013
Saturday, February 23, 2013
Friday, February 22, 2013
Nassim Taleb quote
“The record
shows that, for society, the richer we become, the harder it gets to live
within our means. Abundance is harder for us to handle than scarcity.” –Nassim Taleb,
Antifragile
Thursday, February 21, 2013
Wednesday, February 20, 2013
Nolan Watson: Why Mine Finance as You Know it is Dead
At the Mines and Money London conference in December 2012, Sandstorm Gold President and CEO, Nolan Watson, gave a keynote speech on resource finance.
Link
Link
You must always check six o’clock…..
A big thanks to David for passing this along. It is applicable
to investing in many ways. This is from The
Intelligent Investor (Revised Edition).
“In the Air
Force we have a rule: check six. A guy is flying along, looking in all
directions, and feeling very safe. Another guy flies up behind him (at "6
o'clock"--"12 o'clock" is directly in front) and shoots. Most
airplanes are shot down that way. Thinking that you're safe is very dangerous!
Somewhere, there's a weakness you've got to find. You must always check six
o'clock.” --U.S. Air Force Gen. Donald Kutyna
Sam Walton on Wal-Mart’s early days
The quote below is from Sam Walton:
Made In America.
“I guess everybody who knew I was going ahead with the discounting idea on my own really did think I’d completely lost my mind. I laugh now when I look back on Wal-Mart’s beginning. In 1962, the discount industry was fairly young and full of high-living, big-spending promoters driving around in Cadillacs—guys like Herb Gibson—who had the world by the tail. But it had very few of what you’d call good operators—until 1962, the year which turned out to be the big one for discounting. In that year, four companies that I know of started discount chains. S. S. Kresge, a big, 800-store variety chain, opened a discount store in Garden City, Michigan, and called it Kmart. F. W. Woolworth, the granddaddy of them all, started its Woolco chain. Dayton-Hudson out of Minneapolis opened its first Target store. And some independent down in Rogers, Arkansas, opened something called a Wal-Mart. At the time, and for quite a while after that, I can guarantee you that hardly anybody noticed that last guy. Heck, within five years, Kmart had 250 stores to our 19, and sales of more than $800 million to our $9 million. Here’s what makes me laugh today: it would have been absolutely impossible to convince anybody back then that in thirty years most all of the early discounters would be gone, that three of these four new chains would be the biggest, best-run operators in the business, that the one to fold up would be Woolco, and that the biggest, most profitable one would be the one down in Arkansas. Sometimes even I have trouble believing it.
I can tell you this, though: after a lifetime of swimming upstream, I am convinced that one of the real secrets to Wal-Mart’s phenomenal success has been that very tendency. Many of our best opportunities were created out of necessity. The things that we were forced to learn and do, because we started out underfinanced and undercapitalized in these remote, small communities, contributed mightily to the way we’ve grown as a company. Had we been capitalized, or had we been the offshoot of a large corporation the way I wanted to be, we might not ever have tried the Harrisons or the Rogers or the Springdales and all those other little towns we went into in the early days. It turned out that the first big lesson we learned was that there was much, much more business out there in small-town America than anybody, including me, had ever dreamed of.”
Tuesday, February 19, 2013
Alice Schroeder on Warren Buffett’s filtering process
Thanks to Will for bringing this back up to me. This quote
is from my friend Miguel Barbosa’s interview with Alice Schroeder (HERE).
“Typically,
and this is not well understood, his way of thinking is that there are
disqualifying features to an investment. So he rifles through and as soon as
you hit one of those it’s done. Doesn’t like the CEO, forget it. Too much tail
risk, forget it. Low-margin business, forget it. Many people would try to see
whether a balance of other factors made up for these things. He doesn’t analyze
from A to Z; it’s a time-waster.”
..........
That comment from Schroeder is in line with a comment Mr.
Buffett made at the Berkshire Hathaway Annual Meeting last year, when he said: "Charlie
and I have a number of filters that things have to get through before we'll
think about them."
I’ve mentioned filters on a couple of occasions (HEREand HERE),
and I’ll reiterate that I think it is one of the most important things to spend
time developing well in order to achieve “mastery” in the investment business
(note that mastery still means you’ll make plenty of mistakes, especially in
the field of investing). If your filters are good enough, it will also make it
difficult to attend conferences where you network with a lot of other
investors. Many people will try to talk to you (sometimes endlessly) about
their favorite stock idea; it won’t pass one or more of your filters, so you
will lose interest; and yet they will likely keep talking.
Monday, February 18, 2013
Seth Klarman quote
"We make no
heroic assumptions in our analysis, hoping, instead, that by compounding
multiple conservative assumptions, we will create such a substantial margin of
safety that a lot can go wrong without impairing our capital much or even at
all. We never invest just to invest and don’t bet blindly on mean reversion or
on historical relationships holding up. Our settings are permanently turned to “risk
off.”"
Eric Hoffer quote
“When our mode of life is so precarious as to make it patent
that we cannot control the circumstances of our existence, we tend to stick to
the proven and the familiar. We counteract a deep feeling of insecurity by
making of our existence a fixed routine. We hereby acquire the illusion that we
have tamed the unpredictable.” –Eric Hoffer, The True Believer
Sunday, February 17, 2013
Carl Sagan quote
"What an astonishing thing a book is. It's a flat object made from a tree with flexible parts on which are imprinted lots of funny dark squiggles. But one glance at it and you're inside the mind of another person, maybe somebody dead for thousands of years. Across the millennia, an author is speaking clearly and silently inside your head, directly to you. Writing is perhaps the greatest of human inventions, binding together people who never knew each other, citizens of distant epochs. Books break the shackles of time. A book is proof that humans are capable of working magic."
Arthur Schopenhauer reading and learning quotes
“Ignorance is degrading only when it is found
in company with riches. Want and penury restrain the poor man; his employment
takes the place of knowledge and occupies his thoughts: while rich men who are
ignorant live for their pleasure only, and resemble a beast; as may be seen
daily. They are to be reproached also for not having used wealth and leisure
for that which lends them their greatest value.
When we read, another person thinks for us: we
merely repeat his mental process. It is the same as the pupil, in learning to
write, following with his pen the lines that have been pencilled by the
teacher. Accordingly, in reading, the work of thinking is, for the greater
part, done for us. This is why we are consciously relieved when we turn to
reading after being occupied with our own thoughts. But, in reading, our head
is, however, really only the arena of some one else’s thoughts. And so it
happens that the person who reads a great deal — that is to say, almost the
whole day, and recreates himself by spending the intervals in thoughtless
diversion, gradually loses the ability to think for himself; just as a man who
is always riding at last forgets how to walk. Such, however, is the case with
many men of learning: they have read themselves stupid. … And just as one
spoils the stomach by overfeeding and thereby impairs the whole body, so can
one overload and choke the mind by giving it too much nourishment. For the more
one reads the fewer are the traces left of what one has read; the mind is like
a tablet that has been written over and over. Hence it is impossible to
reflect; and it is only by reflection that one can assimilate what one has read
if one reads straight ahead without pondering over it later, what has been read
does not take root, but is for the most part lost.”
…
“One can never read too little of bad, or too
much of good books: bad books are intellectual poison; they destroy the mind.
In order to read what is good one must make it
a condition never to read what is bad; for life is short, and both time and
strength limited.”
…
“It is because people will only read what is
the newest instead of what is the best of all ages, that writers remain in the
narrow circle of prevailing ideas, and that the age sinks deeper and deeper in
its own mire.”
…
“It would be a good thing to buy books if one
could also buy the time to read them; but one usually confuses the purchase of
books with the acquisition of their contents. To desire that a man should
retain everything he has ever read, is the same as wishing him to retain in his
stomach all that he has ever eaten. He has been bodily nourished on what he has
eaten, and mentally on what he has read, and through them become what he is. As
the body assimilates what is homogeneous to it, so will a man retain what
interests him; in other words, what coincides with his system of thought or
suits his ends. Every one has aims, but very few have anything approaching a
system of thought. This is why such people do not take an objective interest in
anything, and why they learn nothing from what they read: they remember nothing
about it.”
…
“Any kind of important book should immediately
be read twice, partly because one grasps the matter in its entirety the second
time, and only really understands the beginning when the end is known; and
partly because in reading it the second time one’s temper and mood are
different, so that one gets another impression; it may be that one sees the
matter in another light.”
Saturday, February 16, 2013
Baltasar Gracián quote
“Associate
with those you can learn from. Let friendly relations be a school of erudition,
and conversation, refined teaching. Make your friends your teachers and blend
the usefulness of learning with the pleasure of conversation.” -Baltasar
Gracián, The Art of
Worldly Wisdom
Friday, February 15, 2013
Atul Gawande quote
“A failure
often does not have to be a failure at all. However, you have to be ready for
it—will you admit when things go wrong? Will you take steps to set them
right?—because the difference between triumph and defeat, you’ll find, isn’t
about willingness to take risks. It’s about mastery of rescue.” –Atul Gawande, 2012
Williams College Commencement Address
Nassim Taleb on innovation
“How do you innovate? First, try to get in trouble. I mean
serious, but not terminal, trouble. I hold—it is beyond speculation, rather a
conviction—that innovation and sophistication spark from initial situations of
necessity, in ways that go far beyond the satisfaction of such necessity (from
the unintended side effects of, say, an initial invention or attempt at
invention)….The excess energy released from overreaction to setbacks is what
innovates!” –Nassim Taleb, Antifragile
Seth Klarman quote
“In the
financial markets, there is rarely anything new under the sun, but you can
never say you've seen it all, and what you thought you would never see can
clobber you.”
Thursday, February 14, 2013
Charlie Munger quote (diversification)
“Just give
me a few decent things to do and I’ll ignore the rest of the world.” –Charlie Munger
….......
I’m not 100% sure if that is an exact quote. I had it saved in an old email from May 3, 2010, so I’m assuming it is from Berkshire’s 2010 Annual Meeting. Next to the quote I wrote that Munger mentioned that once he found BYD, he just ignored the rest of China.
….......
I’m not 100% sure if that is an exact quote. I had it saved in an old email from May 3, 2010, so I’m assuming it is from Berkshire’s 2010 Annual Meeting. Next to the quote I wrote that Munger mentioned that once he found BYD, he just ignored the rest of China.
The Ketchup Conundrum - By Malcolm Gladwell
In light of Berkshire’s acquisition, I thought this 2004
Gladwell article might be interesting to revisit. Personally, I use Trader Joe’s
organic ketchup instead of Heinz.
Link to: The Ketchup Conundrum
Link to: The Ketchup Conundrum
Wednesday, February 13, 2013
IBM makes Watson the size of a pizza box, starts offering cloud access to doctors
My Apology - By Jonah Lehrer
Thanks to Barry for passing this along. I think there is a lot of wisdom in the talk that can apply to investors, especially the parts about putting the right procedures in place to avoid mistakes. I was once again reminded of habits and checklists.
Ray Dalio quote
“The bets are zero sum. In order for you to beat me in the game, it’s like poker, it’s a zero sum game. We have 1,500 people that work at Bridgewater, we spend hundreds of millions of dollars on research, and so on. We’ve been doing this for 37 years and we don’t know that we’re going to win. We have to have diversified bets. So it’s very important for most people to know when not to make a bet. Because if you’re going to come to the poker table, you’re going to have to beat me, and you’re going to have to beat those who take money. So the nature of investing is that a very small percentage of the people take money essentially in that poker game away from other people who don’t know when prices go up whether that means it’s a good investment or if it’s a more expensive investment.”
Chris Martenson interviews Mark Sisson
Link
................
Related book: The Primal Connection: Follow Your Genetic Blueprint to Health and Happiness
Related link: Mark's Daily Apple
Tuesday, February 12, 2013
Monday, February 11, 2013
Saturday, February 9, 2013
Daniel Kahneman quote
“As you become skilled in a task, its demand for energy
diminishes. Studies of the brain have shown that the pattern of activity
associated with an action changes as skill increases, with fewer brain regions
involved. Talent has similar effects. Highly intelligent individuals need less
effort to solve the same problems, as indicated by both pupil size and brain
activity. A general “law of least effort” applies to cognitive as well as
physical exertion. The law asserts that if there are several ways of achieving
the same goal, people will eventually gravitate to the least demanding course
of action. In the economy of action, effort is a cost, and the acquisition of
skill is driven by the balance of benefits and costs. Laziness is built deep
into our nature.”
Friday, February 8, 2013
Leonardo da Vinci quote
“One can have
no smaller or greater mastery than mastery of oneself.” —Leonardo da Vinci
Albert Edwards excerpt...
And while we are on the theme of mission creep, the incoming Bank of England Governor Mark Carney has given the clear impression from his statements over recent weeks that he does not agree with Mervyn King’s comments that QE is reaching the limits of effectiveness. Carney is willing to be much more aggressive – at least George Osborne will be pleased. In his evidence on Thursday to the Treasury select committee he repeated his idea that if existing QE measures fell short, central banks should consider shifting to targeting nominal gross domestic product, which would allow them to respond much more aggressively to a downturn in economic output and place as much weight on supporting growth as reining in inflation.
Now personally I have no great ideological attachment to inflation targeting as opposed to any other method to control inflation, but I note with alarm the tendency of policymakers to become more and more interventionist in their monetary experiments. It may be that central bankers will keep control of the tiger they are riding, but history suggests that central bank intervention may make things worse in the long run rather than better. Marc Faber’s comment that he is so bearish that he sometimes wants to throw himself out of the window really resonates with me when I see what the central bankers are doing.
In 2005 I described Alan Greenspan as an economic war criminal when most others had decided he was “the greatest central banker who ever lived”, Hence I note with alarm that some commentators are so excited about the appointment of Mark Carney to the Bank of England Governorship that now he Carney, is now being dubbed “the world’s greatest central banker”. Oh dear! From everything I have read so far I fear that in the fullness of time he will have more similarities with Alan Greenspan than just this unwanted accolade and his legacy will be equally destructive.