Monday, October 31, 2016


The video of Elon Musk Unveiling Tesla's New ‘Solar Roof’ (LINK)

Expedia CEO Dara Khosrowshahi at the 2016 GeekWire Summit (video) (LINK)

Apple Should Buy Netflix - by Ben Thompson (LINK)

a16z Podcast: So Where Are We on the ‘S-curve’ for PC Devices? (LINK)

The Brooklyn Investor: Gotham's New Fund (LINK)

Notes From Capitalize For Kids Conference 2016 (LINK)

Book Review: The Vagabonds - by Ian Cassel (LINK)
Related books: 1) My Life and Work - by Henry Ford; 2) Men and Rubber: The Story of Business; 3) Edison as I know him
Book of the day (which I believe was mentioned by Allan Mecham in an interview with The Manual of Ideas): Dead Bank Walking

Saturday, October 29, 2016

Jeff Bezos talks with Charlie Rose

Link to video


Jeff Bezos shares his management style and philosophy (video) (LINK) ["The people who really excel combine gifts and hard work, and the hard work part is a choice. You get to decide that."]

Why Investors Must Be Contrarians to Outperform The Market - by Tren Griffin (LINK)

Aswath Damodaran talks with Barry Ritholtz on the Masters in Business podcast (LINK)

David Einhorn's Q3 Letter (LINK)

Bill Miller: Closet Indexers Are Killing Active Investing (LINK)

Hugh Hendry on the Macro Voices podcast [Hendry enters around the 11-minute mark.] (LINK)

Friday, October 28, 2016

Simplify, simplify...

"Our life is frittered away by detail. An honest man has hardly need to count more than his ten fingers, or in extreme cases he may add his ten toes, and lump the rest. Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail. In the midst of this chopping sea of civilized life, such are the clouds and storms and quicksands and thousand-and-one items to be allowed for, that a man has to live, if he would not founder and go to the bottom and not make his port at all, by dead reckoning, and he must be a great calculator indeed who succeeds. Simplify, simplify." -Henry David Thoreau, Walden 

Thursday, October 27, 2016


James Chanos and Kyle Bass speak with Bethany McLean at Vanity Fair's New Establishment Summit on the global economy and stock markets (video from a couple of weeks ago) [H/T @kevin_holloway] (LINK)
Related book (recommended by Chanos in the interview): The Seven Signs of Ethical Collapse
A short Interview with Bruce Greenwald (video) [H/T ValueWalk] (LINK)

Notes From Invest For Kids Chicago 2016 (LINK)

JPMorgan Pressures AmEx With Richer-Reward Business Card [H/T @TheSovaGroup] (LINK)

Surface Studio, Nintendo Switch, and the Potential of Niche - by Ben Thompson (LINK)

How I Built This podcast - Airbnb: Joe Gebbia (audio) (LINK)

Freakonomics Radio (podcast): In Praise of Incrementalism (LINK)
What do Renaissance painting, civil-rights movements, and Olympic cycling have in common? In each case, huge breakthroughs came from taking tiny steps. In a world where everyone is looking for the next moonshot, we shouldn't ignore the power of incrementalism.
What I Saw On My Wild Visit To a Beach Where the World’s Most Valuable Diamonds Wash Ashore [H/T @MerrynSW] (LINK)

The Science of Eggs [H/T The Browser] (LINK)

Books recommended by Marc Andreessen in the interview linked to yesterday: 1) The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM; 2) Bill & Dave: How Hewlett and Packard Built the World's Greatest Company; 3) The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World; 4) I Invented the Modern Age: The Rise of Henry Ford; 5) Leonardo's Lost Robots; 6) The Lunar Men: Five Friends Whose Curiosity Changed the World

Boyles Asset Management – Q3 2016 Letter Excerpt

Disclosure: I am a portfolio manager at Boyles Asset Management, LLC ("Boyles") and the fund managed by Boyles may in the future buy or sell shares of the stocks mentioned below and we are under no obligation to update our activities. This is for information purposes only and is not a recommendation to buy or sell a security. Please do your own research before making an investment decision.


Resisting Change and Searching for New Ideas

“Out of every hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace.... It is good that new ideas should be heard, for the sake of the few that can be used; but it is also good that new ideas be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race.” - Will and Ariel Durant, The Lessons of History

We are often asked how we find new ideas. While we discussed the specifics in detail in our Q1 2014 letter, the short summary is that we read a lot, run both quantitative and qualitative screens, and continually try to develop a network of philosophically like-minded investors with whom we can discuss ideas and learn. Basically, we turn over a lot of “rocks” in our search for worthy investment ideas. And of those many rocks, we deem only a select few worthy of being attractive enough to dive deeply into, and fewer still worthy of actual investment.

There’s a certain attraction to new things, especially when it comes to investing, where the prospect for profits often comes attached with a management team that can tell a good story. But most of the time, when new potential investments turn up, the right course of action is to do nothing at all, as far as putting capital to work is concerned. Investing is a field in which knowledge is cumulative, so objective work properly done doesn’t get wasted. It builds a base for potential future investment, even if nothing gets done when that knowledge is gained.

Overall, we’ve been managing a fund for just about ten years, mostly focused on finding small companies, so we’ve gotten to know quite a few businesses we’d like to own, should they ever get down to the price at which we’d like to own them. When we do decide to swing the investment bat, it may occur after years of following and getting to know those companies and management teams well, as was the case with two of our larger holdings in BrainJuicer and Cambria Automobiles.

“People say that you should change your mind when the data changes; but I change my mind even when the data doesn’t change, because I reanalyze the situation every day and sometimes I just come to a better analysis. And I think actually what I said yesterday I don’t believe anymore.” - Jeff Bezos, CEO,

We’re fans of reading good business biographies, and one of the books we recently read was the story of a company called Linamar in Canada. One thing that stood out in the story was a mistake the company made when it entered a new line of business that was not as good as the company’s core business. This particular venture took a lot of time and energy of the management team and, ultimately, didn’t work out. When discussing the venture, Frank Hasenfratz (founder of Linamar) said, “How do you measure the aggravation and the time it took me and some of our other people away from doing more productive things?”

Investing is often the same way. It is easy to spend time and attention on ideas that look cheap but that maybe aren’t ideal, and even if something may be undervalued, there is an opportunity cost of spending too much time thinking about an idea and industry that might not be worth the effort required to understand and keep up with. For us, we decided that Richardson Electronics, which we discussed in our Q3 2015 letter, was one of those ideas, and have since sold the shares we held.

Richardson was trading for what appeared to be a deep value price, though the cash balance does deserve a footnote because much of it is overseas and not necessarily quickly available to be put to work in the U.S. But the negative aspects of the company—lack of profitability, high management compensation, a dual class share structure, questionable capital allocation, etc.—made us decide that even though it still looked undervalued, it was no longer worth it to continue holding and spending the time staying up-to-date on the company and industry for an investment to which we’d never allocate a large amount of capital. So we sold, moved on, and wish them luck on accomplishing the things they hope to accomplish as they continue to transition their business to what they hope is a more profitable future.

Our experience with this investment, and the quote from Jeff Bezos above, also remind us of a story told by personal finance author Jason Zweig about Daniel Kahneman. Kahneman, one of the pioneers of behavioral economics, is known by those who have worked with him to be completely willing to change his mind and throw away all of his, and his collaborators’, previous hard work in an instant if he suddenly realizes it is incorrect. This is something that is often hard to do psychologically, as the more one works on something, the more committed one tends to get—wanting that work to mean something and to lead to action. But if one can get over the mental hurdle, developing the skill to remain completely objective at all times is one of the more valuable skills one can have in any field, especially investing, where significant time is spent learning and preparing for a climax that may never come.

Zweig, in his first taste of witnessing this trait in Kahneman, asked him how he had started afresh on the research that he and his colleagues had been working on, as if all the previous work had never happened. Kahneman replied with words that Zweig said he’s never forgotten, and that we as investors should also never forget: “I have no sunk costs.”

Wednesday, October 26, 2016


How To Mentally Overachieve — Charles Darwin’s Reflections On His Own Mind (LINK)
Related recent post: The essence of Charles Darwin's disruptive genius...
Latticework of Mental Models: Denominator Blindness (LINK)

Leithner Letter No. 205-208: 26 November 2016-26 February 2017 (LINK)

Deutsche Bank Said to Review Valuations of Inflation Swaps [H/T Matt] (LINK)

The Weird Economics Of Ikea (LINK)
Related book: Leading By Design: The Ikea Story
Marc Andreessen at Startup School SV 2016 (video) (LINK)

On Machine Learning in Medicine and More (a16z video) (LINK)

There’s magic in mess: Why you should embrace a disorderly desk (LINK)
Related book: Messy: The Power of Disorder to Transform Our Lives
Sample chapter from Tim Ferriss' upcoming book Tools of Titans (LINK)

10 Learnings from 10 Years of Brain Pickings (LINK)

100 Things I Learned in 10 Years and 100 Reads of Marcus Aurelius's Meditations - By Ryan Holiday (LINK)
Related books: 1) Meditations; 2) The Daily Stoic

Monday, October 24, 2016


As I catch up on readings from while I was away, the nicest surprise for me was certainly Peter Bevelin's interview over at Farnam Street. Most of the readers of this blog have probably read it by now, but it was the first interview Peter has done since the interview he did here in 2009 and, as expected, it was full of insight. While the interview is full of wisdom, one answer that especially stood out to me, and that I plan to look at frequently as a reminder from the wise, was the answer on filters, a topic I've mentioned here several times before:
And as the years have passed, I’ve found that filters are a great way to save time and misery. As Buffett says, “I process information very quickly since I have filters in my mind.” And they have to be simple – as the proverb says, “Beware of the door that has too many keys.” The more complicated a process is, the less effective it is.
Related to that topic, and in the same interview answer, Peter mentioned a great quote from Richard Feynman:
“A great deal of formulation work is done in writing the paper, organizational work, organization. I think of a better way, a better way, a better way of getting there, of proving it. I never do much — I mean, it’s just cleaner, cleaner and cleaner. It’s like polishing a rough-cut vase. The shape, you know what you want and you know what it is. It’s just polishing it. Get it shined, get it clean, and everything else.”
That quote about perfectly summarizes the process of refining the file of thoughts and reminders I mentioned at the end of a post on fundamentals, and the process of refining the memory palaces I mentioned in the post on memortation. And in the end, it summarizes the progress one makes in continuing to refine both one's investment and overall life philosophies as well. 


Now onto the rest of the links...

Walter Isaacson sits down with Amazon CEO Jeff Bezos, number one on Vanity Fair's New Establishment List (video) (LINK) ["The thing for companies is you need to be nimble and robust. So you need to be able to take a punch, and you also need to be quick and innovative and doing new things at a high speed. That's the best defense against the future. And you have to always be leaning into the future. If you're leaning away from the future, the future is going to win every time. Never, ever, ever lean away from the future."]

Essay from Michael Mauboussin et al. - Capital Allocation: Evidence, Analytical Methods, and Assessment Guidance (LINK)

The Motley Fool talks with Michael Mauboussin (LINK)

25iq: A Dozen Things I’ve Learned about Multi-sided Markets (Platforms) - by Tren Griffin (LINK)

Bill Gates on Warren, Bridge, Business Analysis and Tennis (LINK)

In Rare Interview, Ted Weschler Says He Likes Apple’s "Subscription Element" (LINK)

The $108 Billion Man Who Has Beaten the Market - by Jason Zweig (LINK)

Buffett’s Three Categories of Returns on Capital (LINK)

How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More [H/T @TheSovaGroup] (LINK)
Related quotes (from several years ago I believe): 
“We pay much better than Wal-Mart. That’s not altruism. It’s good business.” –Jim Sinegal, Costco 
“Our attitude has always been that if you hire good people and provide good wages and good jobs and more than that—if you provide careers—that good things will happen to your company.” –Jim Sinegal, Costco
FT Alphachat podcast: The life of Alan Greenspan (LINK)
Related book: The Man Who Knew: The Life and Times of Alan Greenspan - by Sebastian Mallaby
Horizon Kinetics: 3rd Quarter 2016 Commentary (LINK)

An Insight from Allan Mecham on Understanding Industrial Distribution Companies (LINK)

The Knowledge Project podcast Episode 13: Morgan Housel on Investing and Life (LINK)

Real Vision TV audio replay of a conversation with Kyle Bass, which originally aired on July 1, 2016 (LINK)

The IT Era and the Internet Revolution - by Ben Thompson (LINK)

Exponent podcast Episode 093: The Disruption of Everything (LINK)

Video: Jordan Ellenberg on the power of uncertainty and contradiction (LINK)
Related book: How Not to Be Wrong: The Power of Mathematical Thinking
The World's Happiest Man Wishes You Wouldn't Call Him That [H/T @safalniveshak] (LINK)
Related book: Happiness: A Guide to Developing Life's Most Important Skill
Released last week, one of those books I'm most excited to start reading this week: The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living

Leo Tolstoy quote

From A Calendar of Wisdom:
When you have doubts about what to do, just imagine that you might die at the end of that same day, and then all your doubts will disappear, and you will see clearly what your conscience tells you, and what is your true personal wish.  
A man condemned to immediate execution will not think about the growth of his estate, or about achieving glory, or about the victory of one group over another, or about the discovery of a new planet. But one minute before his death a man may wish to console an abused person, or help an old person to stand up, or to put a bandage on someone's injury, or to repair a toy for a child.

Sunday, October 23, 2016

Friedrich Nietzsche quotes on amor fati ("love of fate")

"My formula for greatness in a human being is amor fati: that one wants nothing to be different, not forward, not backward, not in all eternity. Not merely bear what is necessary, still less conceal it...but love it." - Friedrich Nietzsche (via Ecce Homo)

"I want to learn more and more to see as beautiful what is necessary in things; then I shall be one of those who makes things beautiful. Amor fati: let that be my love henceforth! I do not want to wage war against what is ugly. I do not want to accuse; I do not even want to accuse those who accuse. Looking away shall be my only negation." - Friedrich Nietzsche (via The Gay Science)


Similar quote from Epictetus
"Do not seek for things to happen the way you want them to; rather, wish that what happens happen the way it happens: then you will be happy."
And another similar quote from Nassim Taleb in Fooled by Randomness: 
"Having control over randomness can be expressed in the manner in which one acts in the small and the large. Recall that epic heroes were judged by their actions, not by the results. No matter how sophisticated our choices, how good we are at dominating the odds, randomness will have the last word…..There is nothing wrong and undignified with emotions—we are cut to have them. What is wrong is not following the heroic or, at least, the dignified path. That is what stoicism truly means. It is the attempt by man to get even with probability…..stoicism has rather little to do with the stiff-upper-lip notion that we believe it means…..The stoic is a person who combines the qualities of wisdom, upright dealing, and courage. The stoic will thus be immune from life’s gyrations as he will be superior to the wounds from some of life’s dirty tricks."

Saturday, October 22, 2016

Seneca on gaining wisdom from the distinguished...

From Moral letters to Lucilius - Letter 33 (Kindle):
For this reason, give over hoping that you can skim, by means of epitomes, the wisdom of distinguished men. Look into their wisdom as a whole; study it as a whole. They are working out a plan and weaving together, line upon line, a masterpiece, from which nothing can be taken away without injury to the whole. Examine the separate parts, if you like, provided you examine them as parts of the man himself. She is not a beautiful woman whose ankle or arm is praised, but she whose general appearance makes you forget to admire her single attributes.

Related audiobook: The Moral Epistles: 124 Letters to Lucilius

Friday, October 21, 2016

Malcolm Gladwell on the most important decision he ever made

A response by Gladwell during his chat with Stephen Dubner earlier this year:
I zealously guard my cognitive time. When I was in high school, I was a very, like I said, successful runner. And I stopped. I stopped at the age of 15, not because I was doing poorly, but because I understood at that age that if I was going to continue to be a good runner, it was going to occupy an outsized place in my imagination and not leave room for other things. And I was not prepared to make that sacrifice. I consider that to be the most important decision I ever made.

Related podcast: How to Become Great at Just About Anything

Related books:

Outliers: The Story of Success

Peak: Secrets from the New Science of Expertise

Thursday, October 20, 2016

Seth Klarman and Howard Marks on price and value

From Seth Klarman, via his 2010 conversation with Jason Zweig:
In our view, there is no such thing as a value company. Price is the essential determinant in every investment equation. At some price, every company is a buy; at some price, every company is a hold; and at a still higher price, every company is a sell. We do not really recognize the concept of a value company.
From Howard Marks, via The Most Important Thing:
For a value investor, price has to be the starting point. It has been demonstrated time and time again that no asset is so good that it can’t become a bad investment if bought at too high a price. And there are few assets so bad that they can’t be a good investment when bought cheap enough. 
When people say flatly, “we only buy A” or “A is a superior asset class,” that sounds a lot like “we’d buy A at any price . . . and we’d buy it before B, C or D at any price.” That just has to be a mistake. No asset class or investment has the birthright of a high return. It’s only attractive if it’s priced right.

Wednesday, October 19, 2016

Certain types of competitive advantages travel better to new places than others...

From Quality Investing: Owning the best companies for the long term:
Companies that rely on unique business structures for competitive advantage at home will face the greatest difficulty expanding geographically. Advantages that derive from a unique distribution system, localized scale advantages, or favorable regulatory treatment may not be replicable abroad. The inability of grocery retailers, hospital operators, and airlines to globalize their businesses successfully testifies to this effect. 
Conversely, certain types of competitive advantages travel better to new places than others. Thanks to the globalization of travel and media, premium brands transition relatively easily into new markets. Louis Vuitton and Nike are well-known in all corners of the world, even where their merchandise is not yet available. Manufacturers operating their own stores enjoy a particular advantage, as their vertical integration makes them less reliant on a country’s infrastructure. 
The uncertainty of geographic expansion leads us to prefer companies with proven track records of successfully exporting competitive advantages into new geographic areas.

Tuesday, October 18, 2016

While mistakes teach, they should never tether...

From Driven to Succeed: How Frank Hasenfratz Grew Linamar from Guelph to Global:
While mistakes teach, they should never tether. “Entrepreneurs like me are all oddballs. We see things, we want to do things, and sometimes it’s hard to get us off that. The big danger is you get an idea and you think ‘I’m going to get into that.’ We get carried away and we think we’re good at everything and that isn’t the case,” said Frank. “It always brings you back — stick to what you know. It’s good to learn from your mistakes but it’s better to learn from your competitors’ mistakes. That doesn’t cost you anything. I made many mistakes but I can forget about them. They’re not in my mind. Don’t try to manage from yesterday. Don’t look back all the time, remember what happened back there, but look forward. If you look back all the time, you’re going to trip going forward.”

Monday, October 17, 2016

Of all the sciences, biology is the most lawless...

From The Gene: An Intimate History:
Technology, I said before, is most powerful when it enables transitions—between linear and circular motion (the wheel), or between real and virtual space (the Internet). Science, in contrast, is most powerful when it elucidates rules of organization—laws—that act as lenses through which to view and organize the world. Technologists seek to liberate us from the constraints of our current realities through those transitions. Science defines those constraints, drawing the outer limits of the boundaries of possibility. Our greatest technological innovations thus carry names that claim our prowess over the world: the engine (from ingenium, or “ingenuity”) or the computer (from computare, or “reckoning together”). Our deepest scientific laws, in contrast, are often named after the limits of human knowledge: uncertainty, relativity, incompleteness, impossibility
Of all the sciences, biology is the most lawless; there are few rules to begin with, and even fewer rules that are universal. Living beings must, of course, obey the fundamental rules of physics and chemistry, but life often exists on the margins and interstices of these laws, bending them to their near-breaking limit. The universe seeks equilibriums; it prefers to disperse energy, disrupt organization, and maximize chaos. Life is designed to combat these forces. We slow down reactions, concentrate matter, and organize chemicals into compartments; we sort laundry on Wednesdays. “It sometimes seems as if curbing entropy is our quixotic purpose in the universe,” James Gleick wrote. We live in the loopholes of natural laws, seeking extensions, exceptions, and excuses. The laws of nature still mark the outer boundaries of permissibility—but life, in all its idiosyncratic, mad weirdness, flourishes by reading between the lines. Even the elephant cannot violate the law of thermodynamics—although its trunk, surely, must rank as one of the most peculiar means of moving matter using energy.

Sunday, October 16, 2016

Leo Tolstoy quote

From A Calendar of Wisdom:
Remember how passionately you yearned in the past for many of the things which you hate or despise now. 
Remember how many things you lost trying to satisfy your former desires. The same thing could happen now, with the desires which excite you at present. Try to tame your present desires, calm them; this is most beneficial, and most achievable.

Saturday, October 15, 2016

What a man is contributes much more to his happiness than what he has...

From Arthur Schopenhauer in The Wisdom of Life:
...what a man is contributes much more to his happiness than what he has, or how he is regarded by others. What a man is, and so what he has in his own person, is always the chief thing to consider; for his individuality accompanies him always and everywhere, and gives its color to all his experiences. In every kind of enjoyment, for instance, the pleasure depends principally upon the man himself. Every one admits this in regard to physical, and how much truer it is of intellectual, pleasure. When we use that English expression, “to enjoy one’s self,” we are employing a very striking and appropriate phrase; for observe — one says, not “he enjoys Paris,” but “he enjoys himself in Paris.” To a man possessed of an ill-conditioned individuality, all pleasure is like delicate wine in a mouth made bitter with gall. Therefore, in the blessings as well as in the ills of life, less depends upon what befalls us than upon the way in which it is met, that is, upon the kind and degree of our general susceptibility. What a man is and has in himself — in a word personality, with all it entails, is the only immediate and direct factor in his happiness and welfare. All else is mediate and indirect, and its influence can be neutralized and frustrated; but the influence of personality never.

Related previous posts:

Arthur Schopenhauer quote

Arthur Schopenhauer reading and learning quotes

Friday, October 14, 2016

No one making and selling what he knows to be a poor thing can hope to continue to succeed...

From Harvey Firestone in Men and Rubber: The Story of Business:
If our tires were better than any others manufactured, and I believed they were, then we could sell them at a price higher than out competitors charged. The public is always willing to pay for quality. If we were just fooling ourselves about the quality being better, then the public would not pay us an extra price and we should fail. The real test was of product. Cutting the quality was urged on me, but it did not impress me as being an alternative. If we lowered our quality and frankly turned out poor tires, then we should eventually have to fail, because no one making and selling what he knows to be a poor thing can hope to continue to succeed.  
It all gets around to the service you are trying to render. I believe in keeping prices low, for, regardless of service, there is no real profit in high prices, because high prices automatically cut down volume. But the only possible way to lower prices and still keep business is to save in the cost of manufacturing by improved processes. Quality must go up, not down, and if a competitor lowers his quality, that is exactly the time for you to raise yours. Our competitors did not lower their qualities--they did not have to do that in order to get under our prices, for their manufacturing facilities were better and their volume so much larger than ours. We met the test; we were selling the highest-priced tire on the market, but our sales kept up steadily. We were not put out of business. Competition rarely puts any one out of business--a man usually puts himself out of business either by not making a good article or by wrong methods in sales or finance.

Seth Klarman on buying early

"Sometimes buying early on the way down looks like being wrong, but it isn't. You must buy on the way down. There is far more volume on the way down than on the way back up, and far less competition among buyers. It is almost always better to be too early than too late, but you must be prepared for price markdowns on what you buy." -Seth Klarman

Thursday, October 13, 2016


I will be without internet for about the next week and a half. I have some quotes and book excerpts scheduled, but this will be the last compilation of links during that time.

A review of the book Inside the Investments of Warren Buffett: Twenty Cases (LINK)

Interview with Curtis Jensen (Part 1) (LINK)

KKR Said to Write Off First Brazil Deal Amid Aceco Legal Battles (LINK)

The President in Conversation With MIT’s Joi Ito and WIRED’s Scott Dadich (LINK)

Amazon challenges Apple and Spotify with new music streaming service (LINK)

How I practice Stoicism, the nuts and bolts - by Massimo Pigliucci (LINK)

Hot and spicy pain signals get blocked in naked mole-rats (LINK)

Watch How Bizarre 'Water Monsters' Get a Second Chance (video) (LINK)

Earthrise, From the Moon (LINK)

And related to the above, or in case you haven't watched them in a while: 1) Carl Sagan - Pale Blue Dot; 2) The Most Astounding Fact About the Universe

Wednesday, October 12, 2016


Cash Is Piling Up Faster Than Warren Buffett Can Invest It (LINK)

Wells Fargo CEO Stumpf retires effective immediately; Tim Sloan to take over (video plays) (LINK)

Elon Musk’s Wild Ride (LINK)

Brad Katsuyama Q&A: ‘I Don’t Think We Would Have Survived If It Was Just Hype’ (LINK)
Related book: Flash Boys
What Today’s Startups Can Learn From’s Failure (LINK)

Chat and the Consumerization of IT - by Ben Thompson (LINK)

Free on Kindle through Saturday: Bill Belichick's Red Team: 5 Tools of Thinking from the Patriots Head Coach - by Michael Dariano

Book of the day: Diamonds, Gold, and War: The British, the Boers, and the Making of South Africa

Previous post I was thinking about today: Stay with simple propositions...

Quote of the day (related to the post above): "Part of that [having uncommon sense], I think, is being able to tune out folly, as distinguished from recognizing wisdom. You've got whole categories of things you just bat away so your brain isn't cluttered with them. That way, you're better able to pick up a few sensible things to do." -Charles Munger

Tuesday, October 11, 2016


Clayton Christensen's latest book (with his co-authors), Competing Against Luck: The Story of Innovation and Customer Choice, was released last week for those who have yet to see it. His Google Talk is HERE. And the WSJ review of the book is HERE.

Some comment on the Twitter buyout rumours - by John Hempton  (LINK)

a16z Podcast: Truce for Mobile, Battle for VR (LINK)

Macro Musings podcast: Claudio Borio talks with host David Beckworth about financial stability, the Triffen dilemma and international monetary policy (LINK)

Interview with Ryan Holiday for Stoic Week (LINK)
Related book: The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living
Now is never (but here comes tomorrow) - by Seth Godin (LINK)

Book of the day: The Adams-Jefferson Letters: The Complete Correspondence Between Thomas Jefferson and Abigail and John Adams

Resisting change and new ideas

From The Lessons of History by Will and Ariel Durant, and plenty applicable to the investment process and the search for new investment ideas:
Out of every hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace.... So the conservative who resists change is as valuable as the radical who proposes it—perhaps as much more valuable as roots are more vital than grafts. It is good that new ideas be heard, for the sake of the few that can be used; but it is also good that new ideas be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race.... Out of this tension...comes a creative tensile strength, a stimulated development, a secret and basic unity and movement of the whole.

Monday, October 10, 2016


25iq: A Half Dozen Things I’ve Learned from Robert Cialdini’s book “Influence” - by Tren Griffin (LINK)
Related books: 1) Influence: The Psychology of Persuasion; 2) Pre-Suasion
Paul Lountzis on Differential Insights (video presentation) (LINK)
Over the last twenty years, technology and the internet has made financial information and secondary research a click-a-way for almost every investor. Today more than ever, investors need to focus on qualitative analysis, scuttlebutt, and field based research to gain an advantage. At our MicroCap Leadership Summit, value investor Paul Lountzis gave a great presentation on acquiring differential insights, those unique strategic insights that bring the numbers to life.
Steven Bregman's (Horizon Kinetics) slides from the Grant's conference [H/T ValueWalk] (LINK) [There are a few other presentations from the conference available HERE.]

Hurricane Matthew to Test Catastrophe-Bond Market (LINK)
Just over half of outstanding $22 billion in catastrophe bonds held by pension plans and other big investors have some exposure to Florida storms
Uber Slayer: How China’s Didi Beat the Ride-Hailing Superpower (LINK)

Inside Rocket Internet’s Ailing Startup Factory (LINK)

60 Minutes video: Artificial intelligence positioned to be a game-changer (LINK)

60 Minutes video: Gorilla Doctors (LINK)

Mike Dariano summarizes an interview that Tom Brokaw did discussing his life (LINK)

New Wonderland Podcast with Steven Johnson: Airplanes, Zoos, and Infinite Chickens (Or, Why Do Humans Like To Play?) (LINK)

Book of the day [H/T @Sanjay__Bakshi]: Structured Analytic Techniques for Intelligence Analysis

Friday, October 7, 2016


Exploring the latticework: Some reflections and a list of around 100 cross-disciplinary mental models - by Chetan Parikh (LINK)

Mars Buys Out Buffett Preferred Stake That Paid 5% Dividend (LINK)

Ray Dalio's Remarks at the 40th Annual Central Banking Seminar [H/T Barry Ritholtz] (LINK)

The Howard Marks Investor Series at The Wharton School: A Conversation with Stephen A. Schwarzman (video from April 2016) [H/T ValueConferences] (LINK)

Deutsche Bank: A Greek Tragedy at a German Institution? - by Aswath Damodaran (LINK)

Flash crash sees the pound gyrate in Asian trading (LINK)

The Most Overlooked Trait of Investing Success - by Morgan Housel (LINK)

MailChimp and the Un-Silicon Valley Way to Make It as a Start-Up [H/T @BaseHitInvestor] (LINK)

Theranos Retreats From Blood Tests (LINK)
Company led by Elizabeth Holmes will shut down facilities and shed more than 40% of its workforce
Behind The Crash Of 3D Robotics, North America's Most Promising Drone Company (LINK)

Venture capitalist Marc Andreessen explains how AI will change the world [H/T Barry Ritholtz] (LINK)

Exponent podcast: Episode 091 — Google’s New Business Model (LINK)

Seth Godin: Do what you're good at, or... (LINK)

The Cato chronicles, part VI: the legacy (LINK)
Related book: Rome's Last Citizen: The Life and Legacy of Cato, Mortal Enemy of Caesar

Wednesday, October 5, 2016


The Carroll Culture: "He Focuses On Your Purpose Beyond The Game" (LINK) [If anyone knows of other articles describing great cultures like this, please feel free to pass along. Thanks. And while I've only read one of them so far, I've seen recommended that three of the best books on examples of great cultures are the three listed at the top of the list HERE.]
Of all the things that help shape Carroll’s philosophy on coaching—on life really—one of the most important is an idea that sounds simple, but is actually rather complex in its application: helping people be the best they can be. And an important distinction to make here is that the focus isn’t on helping an athlete be the best football player he can be, but on helping that individual be the best person he can be. Take care of that first, and the football part will follow
Nassim Taleb's Foreword to Ed Thorp’s Memoirs, A Man for All Markets (LINK)
Ed was initially an academic, but he favored learning by doing, with his skin in the game. When you reincarnate as practitioner, you want the mountain to give birth to the simplest possible strategy, and one that has the smallest amount of side effects, the minimum possible hidden complications. The genius of Ed is demonstrated in the way he came up with very simple rules in Black Jack. Instead of engaging in complicated combinatorics and memory–challenging card counting (something that requires one to be a savant), he crystallizes all his sophisticated research into simple rules. Go to a Black Jack table. Keep a tally. Start with zero. Add one for some strong cards, minus ones for weak ones, and nothing for others. It is easy to just increment up and down mentally, bet larger when the number is high, smaller when it is low, and such a strategy is immediately applicable by anyone with the ability to tie his shoes or find a casino on a map. Even while using wearable computers at the roulette table, the detection of edge was simple, so simple that one can get it while standing on a balance ball in the gym; the fanciness resides in the implementation and the wiring.
Google and the Limits of Strategy - by Ben Thompson (LINK)

Amazon rolls out Prime Reading, giving Prime members free access to more than 1,000 books and magazines (LINK)

Weird orange crocodiles found gorging on bats in Gabon’s caves (LINK)

Cod may have regional accents, scientists say (LINK)

Tuesday, October 4, 2016


Value Investor or Value Pretender: Which Are You? - by John Mihaljevic (LINK) [Great article. Reason #9 is one I see so often, and why it is often hard to mingle in large groups of investors. I try to filter carefully these days, but so many pitches I hear and see center around a great expected IRR because the person making the pitch is assuming an 8x or 10x P/E multiple expands to something closer to 15x, as an example. Especially if one is investing in quality businesses, there is a better way to think about expected return.]

Bill Gross' October 2016 Investment Outlook (LINK)

Tim Harford on the FT Alphachatterbox podcast discussing his latest book (released today), Messy: The Power of Disorder to Transform Our Lives (LINK)

Tony Robbins discusses the concept of "chunking" and how to approach tasks so you can get them done (video) (LINK)

The Cato chronicles, part V: death (LINK)
Related book: Rome's Last Citizen: The Life and Legacy of Cato, Mortal Enemy of Caesar
How Big Can a Black Hole Get? (LINK)

Monday, October 3, 2016


Bruce Berkowitz on WealthTrack (video) (LINK) ["This mania for all things indexation will lead to disaster.... Indexation in general is a good idea.... But there are some assumptions there."]

Liquidity Risk Increases at Fairholme [Berkowitz touched on this a bit on the video above.] [H/T Will] (LINK)

Barron's discusses Liberty Media (LINK)

Mike Dariano discusses what he learned from reading Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger (LINK)

25iq: A Dozen Things You can Learn by Reading “The Success Equation” by Michael Mauboussin (LINK)

Horizon Kinetics -- Under the Hood: What's in Your Index? The Value of Cash (LINK)

Mutual Fund Observer, October 2016 (LINK)

The Absolute Return Letter - October 2016 (LINK)

Venture Capital: It is a pricing, not a value, game! - by Aswath Damodaran (LINK)

Michael Hudson reviews James Galbraith's Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe (LINK)

Sam Altman’s Manifest Destiny (LINK)
Is the head of Y Combinator fixing the world, or trying to take over Silicon Valley?
Question Everything You Know About Fitness - by Tim Ferriss (LINK)
Related book (December release date): Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers
TED Talk - Ellen Jorgensen: What you need to know about CRISPR (LINK)

Mission accomplished: Rosetta crashes into comet (LINK)

The Cato chronicles, part IV: the clash with Cicero (LINK)

Book of the day: Edison as I know him - by Henry Ford