Wednesday, January 31, 2018


“Whenever one thing becomes a commodity, humans make something else valuable.” - Tim O'Reilly (Source)

Bill Gates discussing his efforts to find a cure for Alzheimer's, after revealing that his father suffers with the disease (video) (LINK)

Howard Marks on CNBC (video) (LINK)
Related link from last week: Howard Marks Memo: Latest Thinking
How Jamie Dimon, Jeff Bezos and Warren Buffett got together to change American health care [H/T Linc] (LINK)

Amazon Health - by Ben Thompson (LINK)

Jack Ma’s Secret to Great Customer Service - by Ian Cassel (LINK)

Latticework of Mental Models: Naive Realism (LINK)

Dan Carlin's Hardcore History Podcast: Show 61 - (Blitz) Painfotainment (LINK)
Pain is at the root of most drama and entertainment. When does it get too real? This very disturbing and graphic show looks into some case studies and asks some deep questions. WARNING Very intense subject matter.
Charles C. Mann in conversation with Tyler Cowen (podcast) (LINK)

Long Now Podcast -- Charles C. Mann: The Wizard and the Prophet (LINK)
Related books to the two links above: 1) The Wizard and the Prophet; 2) 1491; 3) 1493

Tuesday, January 30, 2018


Amazon, Berkshire Hathaway and JPMorgan Chase & Co. to partner on U.S. employee healthcare (LINK)

Winter 2018 Issue of Graham & Doddsville (LINK)
The Winter 2018 edition of Graham & Doddsville features Leon Cooperman (MBA ’67) of Omega Advisors, David Poppe and John Harris of Ruane, Cunniff & Goldfarb, C.T. Fitzpatrick of Vulcan Value Partners and Seth Fischer of Oasis Management Company. It also includes 3 student stock pitches and pictures from the 27th Annual Graham & Dodd Breakfast.
George Soros' speech at the World Economic Forum (LINK)

Decade of Easy Cash Turns Bond Market Upside Down ($) [H/T Matt] (LINK)

The Best Way to Lose $5 Billion Dollars [H/T @iancassel] (LINK)

How to Beat Amazon - by Sophie Bakalar (LINK)

Chemotherapy, a Trusty Weapon Against Cancer, Falls Out of Favor ($) (LINK)

Released today: The Culture Code: The Secrets of Highly Successful Groups - by Daniel Coyle

Monday, January 29, 2018


Bill Gates' new favorite book of all time is Steven Pinker’s Enlightenment Now, which will be released to the public next month (LINK)

Tom Gayner on the Full Disclosure podcast [H/T @svafier] (LINK)

How I Built This Podcast -- Dell Computers: Michael Dell (LINK)

Bayes and Deadweight: Using Statistics to Eject the Deadweight From Your Life (LINK)

The Bayesian Trap (video) (LINK) ["The thing we forget in Bayes' theorem is that our actions play a role in determining outcomes, and in determining how true things actually are.... So I think a really good understanding of Bayes' theorem implies that experimentation is essential. If you've been doing the same thing for a long time and getting the same result that you're not necessarily happy with, maybe it's time to change."]

Alexander Hamilton’s Deep Advice (LINK)

Ed Yong talks to producer Orla Doherty about The Making of Blue Planet II’s Incredible Deep Ocean Episode (LINK) [As I watched this episode over the weekend, I don't think I've ever watched something and said "Are you kidding me?" so many times. From the creatures I didn't know existed to the abundance of life in unexpected places, it was fantastic—and the type of thing that I hope will inspire some young people to get interested in the sciences.]

Sunday, January 28, 2018


The Science Of Thinking (video) [H/T Linc] (LINK)

Lessons from Phil Knight about Business and Being an Entrepreneur - by Tren Griffin (LINK)
Related book: Shoe Dog
IP Capital Partners' Q4 report discussing Danaher (LINK)

China's BYD wins second electric bus order in tough to crack Africa market [H/T Linc] (LINK)

RV Capital's Emerging Managers Meeting, January 2018 (video) (LINK)

Tom Gilovich on the Masters in Business podcast (LINK)

Dale Carnegie: Coming to grips with a shaper of modern American culture [H/T Linc] (LINK)
Related books: 1) Self-Help Messiah: Dale Carnegie and Success in Modern America; 2) How to Win Friends & Influence People
As Cape Town water crisis deepens, scientists prepare for ‘Day Zero’ (LINK)

Ingvar Kamprad, founder of Ikea, dies at 91 (LINK)
Related book: Leading By Design: The Ikea Story

Saturday, January 27, 2018


“Buy not on optimism but on arithmetic.” – Ben Graham

Jeremy Grantham on WealthTrack (video) (LINK)

Feed the Ducks While They Are Quacking: Time to Reduce Lower Quality Bond Positions - By Lewis Johnson (LINK)

Rob Vinall's year-end letter for RV Capital [registration required] (LINK)

RV Capital's Annual Investors Conference 2018 (video) (LINK)

The Fantastic Four That Make FANG Look Tame (LINK)

Words From the Wise: An AQR Interview with Ed Thorp (LINK)
We sat down with Ed Thorp, a pioneer in the mathematical analysis of casino games and investing, to get his insights on an array of topics from casino gambling to quantitative investing. [Interview conducted December 2, 2015]
Sir Isaac Newton: Scientific Genius, Investing Fool - by Jason Zweig (LINK)
The physicist fell even harder than previously thought for one of the worst speculative bubbles of all time
Exponent Podcast: Episode 138 — A Moat Too Far (LINK)

Why I Urge You to Watch Planet Earth: Blue Planet II - by Ray Dalio (LINK)
Related previous link: Blue Planet II Is the Greatest Nature Series Of All Time - by Ed Yong

Friday, January 26, 2018


More Davos videos of note: 1) A New Era for Global Health (Bill Gates, Atul Gawande, et al.); 2) The End of Easy Money (Ray Dalio, et al.); 3) Secrets to a Long and Happy Life (Dan Buettner, who enters around the 7:55 mark).

Nurturing the Intelligent Fanatic in our Children - by Ian Cassel (LINK)

The Thin Line Between Bold and Reckless - by Morgan Housel (LINK)

Why Goldman and Pritzker Sank Millions Into a Startup Before Suing It for Fraud [H/T @jasonzweigwsj] (LINK)

Four Parenting Tips I Learned Hanging Out with the World’s Best Leaders - by Daniel Coyle (LINK)

11 Billion Pieces of Plastic Are Riddling Corals With Disease - by Ed Yong (LINK)

A Jawbone Is the Oldest Modern-Human Fossil Outside of Africa - by Ed Yong (LINK)

The Lovely Tale of an Adorable Squid and Its Glowing Partner - by Ed Yong (LINK)

Why Is the Naked Mole Rat So Weird? - by Ed Yong (video) (LINK)

For Kindle readers.... As regular readers of this blog are aware, and the above links show, I'm a big fan of Ed Yong's science writing and reporting, and his book is currently on sale for $2.99 on Kindle: I Contain Multitudes: The Microbes Within Us and a Grander View of Life - by Ed Yong

Thursday, January 25, 2018


For more videos from Davos, visit the World Economic Forum on YouTube. [Some that may be of interest: Sundar Pichai, Jack Ma Q&AeCommerce panelRogue Technology panelAtul GawandeThe Belt and Road ImpactTrade Tremors, The Remaking of Global Finance.]

BAUPOST’S KLARMAN WARNS: ‘The world has tilted off its axis, and we believe owners of capital should be increasingly worried’ (LINK) [I haven't seen a copy of Klarman's letter yet, so if anyone happens to have a copy that they'd be willing to share (, I'd be much appreciative. Thanks.]

The World’s Priciest Stock Market - by Robert J. Shiller (LINK)

Seth Godin chats with Brian Koppelman (podcast) [H/T @svafier] (LINK)

Freakonomics Radio (podcast): How to Become a C.E.O. - Part 2 (LINK)

Jerzy Gregorek: "Keys to Youthful Living: The Power of Enough" | Talks at Google (LINK)
Related book: The Happy Body
Investing book of the day: Private Equity Laid Bare

Will the Future Be Human?

What can we learn from a history of the future? Historian Yuval Harari takes us on a journey through technological development and challenges leaders to develop a substantive vision of what it means for society, politics, religion and ideology.

Link to video


Harari also did a Q&A session: Questioning Our Human Future

Related book: Homo Deus: A Brief History of Tomorrow

Boyles Asset Management – Q4 2017 Letter Excerpt

Incentives and Reality

“For if a person shifts their caution to their own reasoned choices and the acts of those choices, they will at the same time gain the will to avoid, but if they shift their caution away from their own reasoned choices to things not under their control, seeking to avoid what is controlled by others, they will then be agitated, fearful, and unstable.” - Epictetus 

On a recent episode of “The Knowledge Project” podcast, former Federal Bureau of Investigation negotiator Chris Voss quoted a line used often by a boss he once had: “There’s no guarantee of success, but what we guarantee is the best chance of success.”  As he described it, that quote implies that there are things that are often outside of one’s control, and that the best one can do is to control, and be committed to, a given process.  And it’s a quote relevant to the business and investing world as well.

There is only so much we can control.  We can control our improvement—more accurately, our effort to improve our process by learning the correct lessons from our own successes and mistakes, as well as from those made by others.  We can control the types of businesses in which we invest, making sure we’re investing in areas we can understand, and in businesses with futures far brighter than the stories told by their stock prices.  A wide and growing “moat” protecting that brighter future from competitors would be nice, but competitive advantages are rare, under constant attack (especially in the internet age), and usually fully reflected in stock prices. 

We can control the work we put into understanding our investments, but as outside investors, we also have to remember that there are things we can’t know.  Changes may occur within a business, or a new competitor may emerge (possibly a large one with substantial resources), and the world is messy, ever-changing, and unpredictable enough to always throw up a few surprises.  In his 2017 year-end letter, Brent Beshore, CEO of the private investment firm, discussed a dinner he was lucky enough to have last year with Berkshire Hathaway CEO Warren Buffett.  A quote from Buffett stuck firmly with Beshore after the dinner: “Price is my due diligence.”  We need to know what we know when looking at a potential investment, and know what we don’t or can’t know, but we also need to remember that what we need to know can change depending on price.  We control the prices we pay for our part-ownership of businesses, and the discipline we show in leaving ourselves enough margin for error in those prices.

“I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it.” — Berkshire Hathaway Vice Chairman Charlie Munger 

We also control the decision to invest in the particular CEOs and management teams that are our partners while we own shares in a given business.  The people running the show are incredibly important, especially amongst the smaller companies of the world, which currently comprise all of the holdings in our portfolio.  Former New York Yankee great Yogi Berra said, “In theory, there is no difference between practice and theory.  In practice, there is.”  And in the competitive business world, things don’t always go according to plan.  Conditions change.  People change.  And sometimes customers don’t always think your new product is as great as you do.  So as an outside investor, it’s nice to have someone on your side who is incentivized to wake up every day and make the business they are running better and more valuable, and who will also make the tough decisions that need to be made when things don’t go according to plan.  As part-owners of a business, we want management teams to prosper when we prosper—and feel the pain when we feel the pain—because they are owners too.  It’s why we pay a lot of attention to management incentives and insider ownership, which is reflected in the fact that at year end, the average ownership stake by company insiders for investments in our portfolio was just more than 44%, and much of that ownership resides with the CEOs making the decisions—both the easy ones and the hard ones—at ground level.

As an example, at System1—the company responsible for much of the fund’s volatility throughout the year—founder and CEO John Kearon owns more than 26% of the company’s shares outstanding.  At the company’s peak share price in May 2017, this stake was worth more than £34 million.  At the year-end share price, this stake was worth about £12 million.  He felt the pain along with all of us other shareholders, though you may not know it by speaking with him.  He’s making the tough choices that need to be made, but he’s also laser-focused on where the company is heading during the next 5-10 years so that, if he accomplishes what he has set out to do, we will likely all have forgotten the short-term blips that occurred along the way.

While not an end-all-be-all, we firmly believe that incentives matter, in a big way.  People don’t always do what is good for them, and it’s not always easy to intelligently design an incentive system, but partnering with management teams that have significant skin in the game—both financial and reputational—is an important aspect of what we look for when trying to align our process and portfolio with the reality, and messiness, of the world.


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 any stocks mentioned above 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.

Wednesday, January 24, 2018


"What could cause a market decline? A drop in investor confidence -- perhaps the commodity that's most freely available today -- would likely be the key, but the reason is hard to foresee. "We're not expecting any surprises," people say, and that has become our new favorite oxymoron. Surprises are never expected -- by definition -- and yet they're what move the market. (If they were expected, their effects would already be priced into the market, rendering a price reaction unnecessary.) The next surprise might be geo-political (oil embargo, war in Korea), economic (tight money, slowing profit growth) or internal to the market (competition from bonds at higher interest rates, discovery of a fraud), but it's most likely to be something that no one has anticipated -- including us." - Howard Marks, September 1997 ("Are You An Investor or a Speculator?")

Jamie Dimon on CNBC (LINK)

The Arrogance and Conceit of a Well-Formed Argument | Hugh Hendry Outtake | Real Vision Video [H/T ValueWalk] (LINK)

The Break Up Of Big Tech (Scott Galloway, L2) | DLD 18 (video) (LINK)

Uber’s Next Chapter (Tanit Koch, Bild & Dra Khosrowshahi, Uber) | DLD 18 (video) (LINK)

A Tectonic Shift In The Platform Business (P. Kochikar, C. Schläffer, M. Bishop) | DLD 18 (video) (LINK)

Blockchain & Crypto-Killing Venture Capital (M. Demirors, A. Wenger, O. Bussmann) | DLD 18 (video) (LINK)

How Alibaba’s “New Retail” Disrupts JD’s World  (Part 1, Part 2, Part 3, Part 4)

Overconfidence: The mother of all biases. [H/T Daniel] (LINK)

Baby macaques are the first primates to be cloned like Dolly the Sheep (LINK)

When Your Eyes Move, So Do Your Eardrums - by Ed Yong (LINK)

Carl Sagan’s “The Pale Blue Dot” Animated (LINK)
Related previous post: Inspiration from the universe...

Tuesday, January 23, 2018

Howard Marks Memo: Latest Thinking

Link to Memo: Latest Thinking
Travel to clients abroad and preoccupation with my coming book on cycles (final draft submitted just the other day) have combined to keep me from writing a memo since September, but fortunately not from thinking.  Thus I have ideas to set down on two significant subjects: the market environment and the new tax law.  Further, I’m highly motivated to do so, since if I skip a few months, people start writing in, “Are you sick?” 


The Playing Field - by Graham Duncan [H/T @AlexRubalcava] (LINK)
Over the last decade, I’ve interviewed and assessed more than 5,000 investment managers. One of the most important things I’ve learned in that process is what separates the great investors from the rest. The great ones view investing as a game, and they know exactly what game they’re playing. It brings to mind an observation from the philosopher Kwame Anthony Appiah: “In life the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.”
Amazon Go and the Future - by Ben Thompson (LINK)

Michael Mauboussin returns for another chat with Shane Parrish on The Knowledge Project Podcast (LINK)

Ray Dalio on CNBC (LINK)

Robert Shiller on CNBC (Video 1, Video 2)

Elliott Is Doing Pretty Nicely in the Power Business [H/T Linc] (LINK)

Burger King Owner Appoints Tech Czar in Bid to Modernize Chain [H/T Linc] (LINK)

The Meb Faber Show (podcast): Dan Rasmussen - “The Crown Jewel of the Alternative Universe is Private Equity" [H/T Steve] (LINK) [This podcast has given me some stock-screening ideas, especially as it relates to the small and micro-cap world of investing.]
He tells us that PE has been considered the crown jewel of the alternative world, then provides a wonderful recap of its evolution – how this market outperformed for many years (think Mitt Romney in the 80s, when he was buying businesses for 4-6 times EBIT), yet its outsized returns led to endowments flooding the market with capital ($200 - $300 billion per year, which was close to triple the pre-Global Financial Crisis average), driving up valuations. Today, deals are getting done at valuations that are nowhere near as low as in the early days. And so, the outsized returns simply haven’t existed. Yet that hasn’t stopped institutional investors from believing they will.
Invest Like the Best podcast: Dr. Ben Hunt - The Three-Body Portfolio (LINK)

a16z Podcast: Beyond CES: Connected Home Devices, Voice, and More (LINK)

Heraclitus, the weeping philosopher (LINK)

Monday, January 22, 2018


"Independent inquiry is needed in your search for truth, not dependence on anyone else’s view or a mere book." — Bruce Lee (via Striking Thoughts: Bruce Lee's Wisdom for Daily Living)

Bill Miller on WealthTrack: Investing in Disruptive Technologies including Bitcoin (video) (LINK)

Seaspan Enters Into Definitive Agreements for $250 Million Unsecured 5.50% Debenture and Warrant Investment with Fairfax Financial Holdings Limited [H/T Linc] (LINK)
"We are excited about our investment and partnership with Seaspan." said Prem Watsa, Chairman and Chief Executive Officer of Fairfax. "I have known both David Sokol and Dennis Washington for many years through the Horatio Alger Association. David has one of the most outstanding records I have come across, as he built Mid American Energy from revenue of $116 million in 1991 to revenue of $11 billion in 2010, while net income increased from $27 million to $1.2 billion over the same period, representing a compound growth rate of 22.4% per year. David is a man of the highest integrity and we are proud to partner with him. Dennis, of course, is one of North America's most successful entrepreneurs and a wonderful human being."
The Fall of Travis Kalanick Was a Lot Weirder and Darker Than You Thought - by Eric Newcomer and Brad Stone (LINK)

Venezuelan Hyperinflation Explodes, Soaring Over 440,000 Percent (LINK)

EconTalk (podcast): John Ioannidis on Statistical Significance, Economics, and Replication (LINK)

New diagnostic devices will save lives and money - by Matt Ridley (LINK)

Colonoscopy? How About a Blood Test? (LINK)

Simple blood test detects eight different kinds of cancer (LINK)

Grant's Podcast: Blockchain, what is it good for? (LINK)

a16z Podcast: Mental Models for Understanding Crypto Tokens (LINK)

a16z video: The Next 3 Billion in Financial Services (LINK)

The Most Shocking Animal in the Kingdom - by Ed Yong (video) (LINK)

The power of silence in the smartphone age (LINK)
Related book: Silence: In the Age of Noise

Sunday, January 21, 2018


​Value Investor Klarman Watching for Stumbles Among ‘Unicorns’ (LINK) [And if anyone happens to have a copy of Klarman's letter that they'd be willing to share (, I'd be much appreciative. Thanks.]

Morgan Housel's presentation at last year's MicroCap Leadership Summit: What Other Industries Teach Us About Investing (video) (LINK)

Horizon Kinetics: 4th Quarter Commentary [H/T @chriswmayer] (LINK)

Future U.S. Equity Returns: A Best-Case Upper Limit [H/T The Big Picture] (LINK)

The Biggest Electric Vehicle Company You’ve Never Heard Of [H/T Linc] (LINK)
Shenzhen’s BYD, which started as a battery company, is a giant in China—and its ambitions are increasingly global.
Super Bass-O-Matic Subscriptions: Lessons from Rovco on Customer Retention - by Tren Griffin (LINK)

The techlash against Amazon, Facebook and Google—and what they can do (LINK)

Exponent Podcast: Episode 137 — Addicted to Facebook (LINK)

Why you should check email less often, and how to do it (LINK)

The World Has Never Seen an Oil Spill Like This (LINK)

‘Least Racist Person’ Is Scared of Great Whites - by Ed Yong (LINK)

Adam Grant interviews Walter Issacson about his biography of Leonardo da Vinci [H/T Linc] (LINK)
Related book: Leonardo da Vinci

Thursday, January 18, 2018


" growth, per se, tells us little about value.  It's true that growth often has a positive impact on value, sometimes one of spectacular proportions.  But such an effect is far from certain.... Growth benefits investors only when the business in point can invest at incremental returns that are enticing - in other words, only when each dollar used to finance the growth creates over a dollar of long-term market value.  In the case of a low-return business requiring incremental funds, growth hurts the investor." - Warren Buffett [expanded quote HERE]

The Art of Asking Good Questions (LINK)

Brent Beshore's 2017 Annual Letter (LINK)

The Pro-business Argument for Single-payer Healthcare [H/T Linc] (LINK)
In spring 2017, billionaire businessman Warren Buffett called the American healthcare system “the tapeworm of American economic competitiveness.” In other developed countries, healthcare is not an impediment to the business model—businesses don’t have to pay for it for their employees. In the United States, the opposite is true. Employers often pay big money to provide healthcare to their employees, decreasing the amount of capital the company has available to grow their business. Single-payer healthcare, a system in which universal healthcare coverage is provided to all citizens by the government, seems like the obvious answer for businesses to save money by avoiding healthcare costs. But Warren Buffett is one of the only large-scale businessmen to support single-payer healthcare.
Freakonomics Radio (podcast): What Does a C.E.O. Actually Do? (Part 1) (LINK)

John Medina: "Brain Rules for Aging Well" | Talks at Google (LINK)
Related video: Arthur De Vany - Renewing Cycles
A Popular Algorithm Is No Better at Predicting Crimes Than Random People - by Ed Yong (LINK)

Why Did Two-Thirds of These Weird Antelope Suddenly Drop Dead? - by Ed Yong (LINK)

Wednesday, January 17, 2018


“Nothing any good isn’t hard.” - F. Scott Fitzgerald

Beyond the Bitcoin Bubble - by Steven Johnson (LINK)

Changing Your Mind - by Ian Cassel (LINK)

Facebook's Motivations - by Ben Thompson (LINK)

Bob Dylan as Economic Prophet - by Mark Spitznagel (LINK)

The Last Place on Earth Where Everyone Still Loves Kmart [H/T Matt] (LINK)
The Kmart store in Guam is located 6,000 miles west of California in the Pacific Ocean, well past the easy reach of Target , Wal-Mart or Amazon Prime. 
The store, open 24 hours a day, also seems beyond the reach of time itself. Inside, it feels more like 1980, when Kmart ruled the big-box retail market. 
...The company doesn’t disclose sales for individual stores, but a former executive said the two-decade-old Guam Kmart produces slightly more than $100 million in annual sales—about three times the revenue of the next-highest grossing store. The average Kmart store had sales of $9 million, according to retail consultancy eMarketer, down 20% since 2012.
a16z Podcast: Reinventing Food (LINK)

Rory Sutherland in conversation with Richard Shotton on the O Behave Podcast (LINK)
Related book: The Choice Factory: 25 behavioural biases that influence what we buy
A review of Niall Ferguson's book, The Square and the Tower (LINK)
Related video: Niall Ferguson on History’s Hidden Networks (also available in podcast format)
Speaking of Niall Ferguson, I think we can safely say 'Buffett 1, Ferguson 0' on Ferguson's November 2009 comment about Berkshire's purchase of Burlington Northern: Niall Ferguson on Charlie Rose

And a week or so after Ferguson was on Charlie Rose, Warren Buffett and Bill Gates did a CNBC Town Hall event together, and Buffett said the following, which is worth reviewing:
"So it's a terrible mistake to look at what's going on in the economy today and then decide whether to buy or sell stocks based on it. You should decide whether to buy or sell stocks based on how much you're getting for your money, long-term value you're getting for your money at any given time. And next week doesn't make any difference because next week, next week is going to be a week further away. And the important thing is to have the right long-term outlook, evaluate the businesses you are buying. And then a terrible market or a terrible economy is your friend. I don't care, in making a purchase of the Burlington Northern, I don't care whether next week, or next month or even next year there is a big revival in car loadings or any of that sort of thing. A period like this gives me a chance to do things. It's silly to wait. I wrote an article. If you wait until you see the robin, spring will be over."

Tuesday, January 16, 2018


"Charlie Munger says that he wants to shoot fish in a barrel, but only after all the water has been let out.... When I look at the people that I would normally think of as very good investors, basically, those folks are really good investors but they aren't fishing where the fish are. And it doesn't matter how good of a fisherman you are if you're not fishing where the fish are." - Mohnish Pabrai (Source)

Poker, Speeding Tickets, and Expected Value: Making Decisions in an Uncertain World (LINK)

Greenlight Capital's Q4 Letter (LINK)

TV, retail, advertising and cascading collapses - by Benedict Evans (LINK)

Want Your Group to Learn Faster? Press Pause - by Daniel Coyle (LINK)
Related book: The Culture Code: The Secrets of Highly Successful Groups
Collective hallucinations and inefficient markets: The British Railway Mania of the 1840s [H/T Linc] (LINK)
Abstract.  The British Railway Mania of the 1840s was by many measures the greatest technology mania in history, and its collapse was one of the greatest financial crashes. It has attracted surprisingly little scholarly interest. In particular, it has not been noted that it provides a convincing demonstration of market inefficiency. There were trustworthy quantitative measures to show investors (who included Charles Darwin, John Stuart Mill, and the Bront¨e sisters) that there would not be enough demand for railway transport to provide the expected revenues and profits. But the power of the revolutionary new technology, assisted by artful manipulation of public perception by interested parties, induced a collective hallucination that made investors ignore such considerations. They persisted in ignoring them for several years, until the lines were placed in service and the inevitable disaster struck.
Invest Like the Best Podcast: Crypto-pocalypse, with Preston Byrne (LINK)

A New Clue to the Mystery Disease That Once Killed Most of Mexico (LINK)

Blue Planet II Is the Greatest Nature Series Of All Time - by Ed Yong (LINK)
Across seven episodes of Blue Planet II, viewers are treated to a number of wondrous images. Orcas stun schools of herring by slapping them with their tails. Cuttlefish mesmerize shrimp by splaying out their arms and sending moving clouds of pigment across their skin, like a living gif. Mobula rays cavort in the deep, stirring glow plankton as they move, creating an ethereal scene that looks like a clip from Moana. Cutthroat eels slink into a lake of super-salty water at the bottom of the ocean, and some tie themselves into knots in the throes of toxic shock. Pods of bottlenose dolphins and false killer whales meet in the open ocean, greeting each other as if reuniting with old friends. 
The series first aired in the United Kingdom last year and finally premieres in the United States this Saturday. It is the latest program from the BBC’s indefatigable Natural History Unit—arguably the greatest producers of such documentaries in the world.
Mine Your Acre of Diamonds (LINK)

Monday, January 15, 2018


Fiat Chrysler’s Marchionne: The Future of Cars Will Be Electric and Commoditized (LINK)

Adapt or Die Is Marchionne’s Stark Farewell Message to Carmakers [H/T Matt] (LINK)

Alibaba's AI Outguns Humans in Reading Test [H/T Linc] (LINK)

Is Amazon Going to Rule the World? (video) [H/T The Big Picture] (LINK)

Everyone Is Getting Hilariously Rich and You’re Not (LINK)

Harvard Study Shows Why Big Telecom Is Terrified of Community-Run Broadband [H/T Techmeme] (LINK)

I Kid you not, this Mifid rule relies on a bent coin - by John Kay (LINK)

How I Built This Podcast -- LinkedIn: Reid Hoffman (LINK)

Bill James on EconTalk (podcast) (LINK)

Chemists go green to make better blue jeans (LINK)

Saturday, January 13, 2018


 "It may seem a comparatively easy matter to determine that one enterprise is more promising than another. But it is by no means so easy to establish that one common stock at a given price is clearly preferable to another stock at its current price." - Benjamin Graham and David Dodd (Security Analysis: Sixth Edition)

Advisers at Leading Discount Brokers Win Bonuses to Push Higher-Priced Products - by  Jason Zweig and Anne Tergesen (LINK)
At Fidelity, Schwab and TD Ameritrade, employees win extra pay and other incentives to put clients in products that are more lucrative for them, and the firm 
Investors who seek advice from discount brokerage firms might assume the counsel they get is impartial, given how these firms have rejected the old Wall Street model of working on commissions. 
In fact, advisers at some of the biggest discount brokerage firms make more money if they steer clients toward more-expensive products, according to disclosures from the firms and people who used to work at them. That means customers could end up with investment products and services that are costlier than they need.
What would confound market participants the most in 2018? (LINK)

Josh Steiner: Global Housing Market Analysis [his podcast section starts around the 22-minute mark, and the slide deck to go with it] (LINK)

Adventures in Finance Podcast -- Charge!: The Bull Case for Tesla (LINK)
At long last, a Tesla bull steps up to retort Mark Spiegel’s bear case on the electric car company. Rob Maurer, host of the Tesla Daily podcast, makes an impassioned case for both the company and the stock. 
The Importance of Deep Fun [H/T @AdamMGrant] (LINK)

Want a Learning Culture? Put this Video on Repeat (LINK)
...innovation is about a willingness to get obsessed with solving a problem. About embracing the pain of feedback and improve a little bit each time. About wiping out a bunch. And about having a group rooting you on. 
For groups, this means having leaders that embrace the discomfort of this entire painful, insane, rewarding process.

Jocko Willink on accountability

"From a leadership perspective, I always say that accountability is a tool, but it should not be your leading tool. I've worked with a lot of companies along the way...where their answer to every problem that they're having is that they just need to have more accountability. And it sounds great because, let's face it, if you're my employee and I need you to do x, y, and z every day, and every day I sit there and watch you do x, y, and z.... I've held you accountable for doing them and they get done 100% because I've watched you. But where the problem comes is that I don't just have you as my employee. I've got a team of 15 people and I've got other things that are happening, so I can't watch 15 people.... I can't hold everyone accountable. So accountability from a leadership perspective, it doesn't really work because no leader has the time to hold everyone accountable for every single task that they're doing. So what we actually want to do is we want to lead people. That's what our goal is."  - Jocko Willink  (Source


Related books: 

Friday, January 12, 2018


The Thrill of Uncertainty - by Morgan Housel (LINK)

Dan Pink speaks with Brett McKay about his new book, When: The Scientific Secrets of Perfect Timing (podcast) [H/T Abnormal Returns] (LINK)

Exponent Podcast: Episode 136 — It’s All 1s and 0s (LINK)

a16z Podcast: Revisiting the Gene (LINK)

Robert Sapolsky speaks to CBC Radio Quirks & Quarks (LINK)
Related book: Behave: The Biology of Humans at Our Best and Worst 
Brain Cells Share Information Using a Gene that Came From Viruses - by Ed Yong (LINK)

Animals Have Culture, Too - by Ed Yong (video) (LINK)

The mysterious cycles of ice ages - by Matt Ridley (LINK)

Some great thoughts on network effects from Anu Hariharan on Twitter:
  • Often misunderstood - Network Effects is not the same as scale
  • One simple way to test for that is ask this question - what is the “barrier to exit” for the user?
  • If the barrier to exit for the user is low, then there is no network effect. This implies it is easy for users to switch from your service
  • Ride sharing services (Uber, Lyft) don’t have a network effect (in other words demand side economies of scale). Users often switch apps if it takes longer than 5 mins ETA or if there is surge pricing on one
  • However ride sharing does have supply side economies of scale and therefore opportunity for select players to have monopolistic share in a market
  • On the other hand apps like Facebook, LinkedIn have very strong network effect - because the barrier to exit for the user is really high!
  • A user has invested time and effort in building a social graph on these platforms with connections, history of exchanges and in some cases even maintain them. It is not easy for customers/ users to switch easily and therefore the “barrier to exit” for the user is really high

Thursday, January 11, 2018


"It seems [Fred] Wilson was correct that software alone is a commodity. In the language of legendary investor Warren Buffett, pure software companies don't have an effective "moat" to defend their business; it's easy for competitors to storm the barricades and overwhelm them. Since most software industries have relatively low barriers to entry—especially today, when startup costs are lower than ever—it's practically guaranteed that a competitor will come along and offer customers similar software that's either better or cheaper. That's where network effects come in.... Networks are much harder to duplicate than features are.... Successful platforms have strong moats in the form of their networks and operate at a scale that positions them to dominate their industries." (via Modern Monopolies: What It Takes to Dominate the 21st Century Economy)

Bruce Wayne vs. Leonardo da Vinci - by Christopher Pavese (LINK)
Related book: Leonardo da Vinci
The Most Powerful Research Tool is a Great Network - By Lewis Johnson (LINK)
Disruptive Regulations are coming: This Could Give Shipping Investors Multiple Ways to Win 
The two changes he noted are global environmental standards sponsored by the International Maritime Organization.  The first is the “Ballast Water Management Convention” that went into force late last year.  It requires that newly built ships have waste-water treatment equipment that purifies ballast water to certain minimum levels.  After September 2019, ships that were built before these standards came into force will need a costly upgrade to their equipment to meet this standard for the vessels to pass their periodic inspections.  
The second standard will be implemented in 2020.  I was amazed to learn that the world’s biggest 25 ships emit more sulfur than the entire world’s fleet of cars!  Accordingly, the regulation’s goal is to limit this pollution.  Ship-owners must achieve this goal and have several ways to do so, such as retooling to switch to a less polluting fuel like gas or methanol or by installing scrubbers to lower concentrations of pollutants.
Lessons from the 1980s for disruption. (LINK)

Hype Meets Reality as Electric Car Dreams Run Into Metal Crunch [H/T Matt] (LINK)

When Biology Becomes Engineering (video) (LINK)

Sebastian Junger: "Hell on Earth: The Fall of Syria and the Rise of ISIS" | Talks at Google (LINK)

On the doorstep of victory - By Bill Gates (LINK)
The world is closer than ever before to wiping out polio. 
Last year, the world saw the fewest number of polio cases—just 21, according to the latest figures. 
That’s incredible, especially when you consider that just 30 years ago, there were 350,000 cases of polio per year worldwide.

Wednesday, January 10, 2018


"[The economics profession] has been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject, and a lot of overconfidence has been removed from the economics profession over the last 20 years. They've been really surprised." - Charlie Munger (on CNBC this morning)


Berkshire Hathaway Boosts Its Board Size (LINK)
Warren Buffett has elevated two longtime Berkshire Hathaway Inc. executives to vice chairman roles at the company, all but confirming years of speculation that one of them is in line to replace him. 
Berkshire said Wednesday that it is expanding its 12-member board of directors by two and naming Gregory Abel and Ajit Jain to fill the spots.
Eddie Lampert: Enhancing Our Liquidity and Accelerating Our Return to Profitability (LINK)

Good Luck Spending Your KodakCoins (LINK)

I Made My Shed the Top Rated Restaurant On TripAdvisor - by Oobah Butler [H/T Santangel's Review] (LINK)

Panel remarks by Claudio Borio: A blind spot in today's macroeconomics? (LINK)
A standard presumption in today's macroeconomics is that when making sense of first-order macroeconomic outcomes we can treat the economy as if its output were a single good produced by a single firm. This means that issues of resource misallocation can be safely ignored. But the link between resource misallocations and macroeconomic outcomes may well be tighter than we think. This speech illustrates the point with reference to two examples that highlight the link between finance and macroeconomics: the impact of resource misallocations induced by financial booms and busts on productivity growth, and an intriguingly close relationship between the growing incidence of "zombie" firms and declining interest rates since the 1980s.
When Humans War, Animals Die - by Ed Yong (LINK)

Why dolphins are deep thinkers (from 2003) [H/T @juliagalef] (LINK)
At the Institute for Marine Mammal Studies in Mississippi, Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean. 
Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

"Accounting is but an aid to business thinking, not a substitute for it." - Warren Buffett [H/T CIO]

Tuesday, January 9, 2018


'Moneyball' Author Michael Lewis: How I Knew When to Quit a Fancy Wall Street Job to Follow My Dream [H/T Linc] (LINK)
Related book: When to Jump: If the Job You Have Isn't the Life You Want (the audiobook looks like it is read by those who contributed stories to the book)
Ray Dalio’s Secret Sauce – The Truth Machine and The Good Life (LINK)
Related book: Principles
Invest Like the Best Podcast: Creative Investing, with CoVenture’s Ali Hamed (LINK)

Capital Allocators Podcast: Michael Mauboussin – Active Challenges, Rational Decisions and Team Dynamics (LINK)

How do alligators survive the winter weather in a frozen pond? (LINK)

Great Barrier Reef: rising temperatures turning green sea turtles female [H/T Linc] (LINK)

Super-Black Is the New Black - by Ed Yong (LINK)
Feathers on birds of paradise contain light-trapping nanotechnology that makes some of the deepest blacks in the world.

Monday, January 8, 2018


Complexity Bias: Why We Prefer Complicated to Simple (LINK)

Latticework of Mental Models: Impact Bias (LINK)

2017 Capital Link Invest in Greece Forum - Global Investor Panel (video featuring Kyle Bass, and others) [H/T ValueWalk] (LINK)

Meltdown, Spectre, and the State of Technology - by Ben Thompson (LINK)

Sammy Hagar: Content Marketing/Bundling/Brands/Pricing Power - by Tren Griffin (LINK)

Inside the Amish town that builds U2, Lady Gaga, and Taylor Swift's live shows [H/T @benthompson] (LINK)

Biology, the New (Old) Technical Debt… and What That Means for Healthcare Innovation - by Vijay Pande (LINK)

Artificial intelligence will be a symbiosis, not a replacement - by Matt Ridley (LINK)

The Real (and Imaginary) Benefits of Multitasking [H/T @AdamMGrant] (LINK)
Related previous post: Jeff Bezos on multi-tasking

Sunday, January 7, 2018

Take a simple idea and take it seriously...

From the beginning of Mohnish Pabrai's Lecture at Boston College a few weeks ago (and slightly edited for clarity):
There's a saying...'Take a simple idea and take it seriously.' And I think that's a really important thing to keep in mind. And I think when you look at lots and lots of extremely successful people right at the pinnacle of their careers, when you break it down, that quote is at the epicenter of how they got there. Usually it's not something earth-shattering. Usually it's something very simple, but they were intense about it, and they were just fanatical about it. And that's usually the fanaticism and intensity around a simple idea that gets you to the promised land.

Related previous posts:

The world's best companies are built by fanatics...

Charlie Munger on high quality businesses and management

Finding an edge, and the intelligent fanatic that was Sam Walton

Friday, January 5, 2018


“When any person offers you a chance to earn lots of money without risk, don’t listen to the rest of their sentence. Follow this and you’ll save yourself a lot of misery.” - Charlie Munger

Best value investing resources for 2018 (LINK)

The Fallacy of Instant Success - by Ian Cassel (LINK)

Making History By Doing Nothing - by Morgan Housel (LINK)

When Things Don’t Make Any Sense - by Ben Carlson (LINK)

Brent Beshore talks with Aaron Watson (2-part podcast) [H/T Abnormal Returns] (LINK)

Treating Disease by Nudging the Microbes Inside Us - by Ed Yong (LINK)

Mammoths resurrected, geoengineering and other thoughts from a futurist | Stewart Brand and Chris Anderson (video) (LINK)

Thursday, January 4, 2018


Warren Buffett Shares the Secrets to Wealth in America [H/T Matt] (LINK)

Bracing Yourself for a Possible Near-Term Melt-Up (A Very Personal View) - by Jeremy Grantham (LINK)

December 2017 Issue of Value Investor Insight (LINK)

The Cashless Society Has Arrived—Only It’s in China [H/T Matt] (LINK)

The Knowledge Project Podcast -- The Art of Letting Other People Have Your Way: Negotiating Secrets from Chris Voss (LINK)
Related book: Never Split the Difference
Aubrey de Grey, PhD: "The Science of Curing Aging" | Talks at Google (LINK)

What’s the difference between stoicism and Stoicism? (LINK)

Book of the day (released this week): The Elephant in the Brain: Hidden Motives in Everyday Life

Wednesday, January 3, 2018


"History does not repeat itself in the same way each time, but certain trends and consequences are constants. If you do not know history, you think short term. If you know history, you think medium and long term." - Lee Kuan Yew (via Lee Kuan Yew: The Grand Master's Insights on China, the United States, and the World)

Mohnish Pabrai On The Irrelevance Of Buying Stock Outside Circle Of Competence And Realty Stocks (video) [H/T @VJ_Rabindranath] (LINK)

Outfoxed by Small-Batch Upstarts, Unilever Decides to Imitate Them (LINK)

In Israel, Teva has become more than just a drug company. But its future is now in question [H/T @CGrantWSJ] (LINK)

Pharma, under attack for drug prices, started an industry war (LINK)

My Father's Body, at Rest and in Motion - by Siddhartha Mukherjee (LINK)

ABC News’ Dan Harris on Ambition, Mindfulness and Reaching Peace of Mind (LINK)
Related book: Meditation for Fidgety Skeptics
Ancient Infant's DNA Reveals New Clues to How the Americas Were Peopled - by Ed Yong (LINK)

Tuesday, January 2, 2018


“The best way out is always through.” - Robert Frost

Looking For New Year Inspiration? Meet Chuck Feeney--The James Bond Of Philanthropy [H/T Linc] (LINK)

Making China Great Again - by Evan Osnos (LINK)

Eurasia Group's Report on the Top Political Risks for 2018 (LINK)

Google X and the Science of Radical Creativity (from November) [H/T @Atul_Gawande] (LINK)

How Do Animals See the World? - by Ed Yong (video) (LINK)

1967 Interview with Lee Kuan Yew (Video, Transcript)

Monday, January 1, 2018


Christopher Pavese summarizes Man’s Search for Meaning by Viktor Frankl (LINK)

Ray Dalio Suggests You Think About What Journey You're On (LINK)
Related books: 1) The Hero with a Thousand Faces; 2) Principles
MoviePass. Premature Scaling? - by Tren Griffin (LINK)

Less Phone, More Nature: 34 Resolutions For a Better 2018 - by Jason Zweig (LINK)

Grant's Podcast: Periodical table (LINK)

Why American doctors keep doing expensive procedures that don’t work [H/T Chris] (LINK)
Related book: Unhealthy Politics: The Battle over Evidence-Based Medicine
The immensity of the Universe, and our place in it (LINK)