Monday, August 10, 2015


Berkshire Hathaway Inc. to Acquire Precision Castparts Corp. for $235 Per Share in Cash (~$37.2 billion) (LINK)

Warren Buffett on CNBC this morning, discussing the deal and other things (videos) [UPDATE: The transcript is available HERE.]:
Warren Buffett: Why we bought Precision Castparts 
Warren Buffett: Precision deal 'very high multiple' 
Warren Buffett: Precision CEO loves what he does 
Warren Buffett on IBM: I feel fine 
Media selloff not enticing: Warren Buffett 
Warren Buffett: It's tough to push rates higher
The Value Investor Insight issue from April where Francois Rochon discussed Precision Castparts (LINK)

A Microsoft Executive’s Investing Answer: Charlie Munger (LINK)
Related book: Charlie Munger: The Complete Investor
A few great quotes, via Max (LINK)

Mental Model: Misconceptions of Chance (LINK)

GMO white paper: The Idolatry of Interest Rates, Part II: Financial Heresy (free registration required) (LINK)
James Montier follows up with "Financial Heresy," Part II in his take on interest rate idolatry. Included is a response to James' thoughts from Ben Inker, "Potential Utility in an Equity Risk Premium Framework."
The Miracle of SolarCity [H/T Abnormal Returns] (LINK)
Related book: Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future [I also started the audiobook this weekend, and the narration is great so far.]
Bob Olstein on Wall Street Week (video) (LINK) [I liked this quote: "I would fire anybody who values a company on EBITDA."]

Hussman Weekly Market Comment: Thin Slices from the Top of a Bubble (LINK)
“You need to know very little to find the underlying signature of a complex phenomenon…. This is the gift of training and expertise – the ability to extract an enormous amount of meaningful information from the very thinnest slice of experience.” 
Malcolm Gladwell, Blink 
The ability to make accurate decisions in the face of overwhelming amounts of information can require a great deal of experience, but what does that experience actually do? My impression is that experience – studied and absorbed carefully – nurtures the ability to see and identify subtle elements in the landscape, and eventually to recognize patterns. Accurate decision-making doesn’t rely on weighing and deliberating over every detail of that landscape. As Malcolm Gladwell brilliantly writes in Blink, accurate decisions often rely on “thin-slicing” – a kind of pattern recognition that perceives and filters out the very few factors that actually matter. 
That’s not to suggest that simplicity, in and of itself, is the objective. Ockham’s Razor doesn’t merely say that the simplest explanation is usually the best; it requires that the explanation must also be consistent with the evidence. Likewise, Einstein joined his advice that “A theory should be made as simple as possible,” with the essential condition “but not so simple that it does not conform to reality.”
How to Watch This Week's Perseid Meteor Shower (LINK)