Wednesday, April 1, 2020

Bill Gates op-ed: Here’s how to make up for lost time on covid-19

Link to: Bill Gates: Here’s how to make up for lost time on covid-19
There’s no question the United States missed the opportunity to get ahead of the novel coronavirus. But the window for making important decisions hasn’t closed. The choices we and our leaders make now will have an enormous impact on how soon case numbers start to go down, how long the economy remains shut down and how many Americans will have to bury a loved one because of covid-19. 
Through my work with the Gates Foundation, I’ve spoken with experts and leaders in Washington and across the country. It’s become clear to me that we must take three steps.

Howard Marks Memo: Which Way Now?

Link to Memo: Which Way Now?
How should investors think about the economy and asset values when faced with unprecedented uncertainty surrounding the effects of the coronavirus and a complete absence of guidance from analogies to the past? Read Howard Marks’s latest memo, in which he lays out the views of both the optimist and the worrier.

Tuesday, March 31, 2020

Links

"I think it’s hugely a mistake to think only about your probable misfortunes. You should also think about what’s good about your situation." --Charlie Munger (2009)

We Can’t Prevent Market Panics. We Can Control How We React. - by Jason Zweig ($) (LINK)

The Corona Crisis is Not a Black Swan: Nassim Nicholas Taleb (video) (LINK)

Viral Prohibition, Eminent Domain, and the Path Ahead - by Brent Beshore (LINK)

COVID Impacts [on media & entertainment businesses] - by Matthew Ball (LINK)

Unmasking Twitter - by Ben Thompson (LINK)

Socializing Corporate Risk-taking: Moral hazard 2.0 - by Frank K. Martin (LINK)

Absolute Return Letter, March 2020: The Economic Cost of Social Distancing (LINK)

The Oil Glut Is Getting Critical ($) (LINK)

Pressure Mounts on Insurance Companies to Pay Out for Coronavirus ($) (LINK)
Lawmakers and regulators are pressuring insurers to go beyond the legal language of policies to get cash to Americans amid the mounting cost of shutdowns from the coronavirus pandemic.
What happens to mortgage-investment firms will shed light on what may be in store for the rest of the market ($) (LINK)

The Acquirers Podcast: Long Term: Tweedy Browne (LINK)

Capital Allocators Podcast: Ben Inker – Value Investing at GMO (LINK)

Invest Like the Best Podcast: D.A. Wallach – Investing in Healthcare (LINK)

Political Economy Podcast: Ben Thompson: Big Tech monopoly, data privacy, and the rise of China (LINK)

Acquired Podcast: Adapting Episode 2: Sequoia’s Black Swan Memo (LINK)

As research progresses, the nature of our enemy is becoming ever clearer - by Matt Ridley (LINK)

Saturday, March 28, 2020

Links

MOI Global: Chris Bloomstran at Intelligent Investing in Crisis Mode 2020 (audio) (LINK)
Related previous post: Semper Augustus Investments Group: 2019 Annual Letter
What The "CARES Act" Paycheck Protection Program Means For Small Business (LINK)

Lessons from Italy’s Response to Coronavirus [H/T @Atul_Gawande] (LINK)

The Wit and Wisdom of Lee Kuan Yew (LINK)

Friday, March 27, 2020

Links

CNN coronavirus town hall Part 4: Bill Gates explains why he sounded the alarm about an impeding pandemic in 2015 and lessons the US can learn from responses in other countries. (video) (LINK)

Ed Yong was on both the Social Distance podcast and the Reset podcast discussing his article, "How the Pandemic Will End," and other things.

Wounds Heal, Scars Last - by Morgan Housel (LINK)

Steve Bregman on What to Make of the Market Right Now (audio) (LINK)

Oaktree Conversations with Portfolio Managers - Emerging Markets (video) (LINK)

The Oil Glut Is Filling Up the World’s Supertankers Fast (LINK)

Policy in a World of Pandemics, Social Media and Passive Investing (LINK)

Yaron Brook Interviews: Matt Ridley on his New Book -- How Innovation Works (video) (LINK)

A Spur to the Biotech Century Ahead - by Walter Isaacson ($) (LINK)

Carolina Stories with Steve Vafier (podcast): 2: Mills Snell – Learning in the Trenches (LINK)

Thursday, March 26, 2020

Links

Here's what's in the $2T stimulus package — and what's next (LINK)

GMO White Paper | Memo to the (Virtual) Investment Committee II: Fear and the Psychology of Bear Markets - by James Montier (LINK)

Q&A with Murray Stahl (audio recorded March 24, 2020) (LINK)

MOI Global: Isaac Schwartz on Intelligent Investing in Crisis Mode (video) (LINK)

Corporate Socialism: The Government is Bailing Out Investors & Managers Not You - by Nassim Taleb (with Mark Spitznagel) (LINK)

The curious age discrimination of coronavirus - by Matt Ridley (LINK)

The Pandemic in My Neighborhood - by Michael Lewis (LINK)

How Does the Coronavirus Behave Inside a Patient? - by Siddhartha Mukherjee (LINK)

Wednesday, March 25, 2020

Links

Bill Gates speaks with TED's Chris Anderson about COVID-19 (video) (LINK)

How Will the Coronavirus End? - by Ed Yong (LINK)

Atul Gawande on PBS NewsHour (video) (LINK)
Related article: "Keeping the Coronavirus from Infecting Health-Care Workers"
Against the Rules with Michael Lewis (podcast): Bonus Against the Rules: Help in a Crisis (LINK)

Masters of Scale with Reid Hoffman (podcast): Special: Danny Meyer on the wrenching decision to do layoffs (LINK)

David Remnick speaks to the historian John M. Barry, the author of “The Great Influenza,” about parallels between the Spanish-flu outbreak of 1918 and the current coronavirus crisis. (video) (LINK)

Marc Andreessen’s Blog Archives (LINK)

Tuesday, March 24, 2020

Client-Only Memo from Howard Marks: "Latest Update"

Link to Memo: Latest Update -- March 19, 2020
After giving our clients a few days to digest it, we’d like to share this memo from Thursday with all of our readers. We hope you’ll find it helpful.

Links

Oaktree Relative Value Conversation with Howard Marks, Armen Panossian, Madelaine Jones and Justin Guichard (video) (LINK)

Seth Klarman Sees Bargains, Baupost Seeks More Capital During Chaos (LINK)

A Simple Investing Playbook for the ‘Great Cessation’ - by Jason Zweig ($) (LINK)

OSAM Update: Blizzard, Winter, or Ice Age (LINK)

Compaq and Coronavirus - by Ben Thompson (LINK)

Denmark Has a Message for America: ‘Do More—Fast!’ (LINK)

Ryan Holiday: "Stillness is the Key" | Talks at Google (video) (LINK)

NPR Short Wave Podcast: Why Is The Coronavirus So Good At Spreading? [w/ Ed Yong] (LINK)

10 Things You Should Know About WWII [H/T @wolfejosh] (LINK)

Monday, March 23, 2020

Links

BIN There, Done That: How to Reduce the Sources of Forecasting Error - by Michael Mauboussin and Dan Callahan (LINK)

Value Investing with Legends Podcast: Michael Mauboussin - Finding Value in a Crisis (LINK)

Berkshire Hathaway and the Coronavirus Crash (LINK)

Preserving Optionality: Preparing for the Unknown (LINK)

Fed Unveils Major Expansion of Market Intervention ($) (LINK)
Federal Reserve Chairman Jerome Powell’s whatever-it-takes moment arrived Monday. 
The central bank signaled it would do practically anything—extending loans to big and small businesses, backstopping funds to municipalities and purchasing hundreds of billions of dollars of government debt—to help an American economy in a race against time.
A Viral Market Meltdown IV: Preparing for a post-virus World - by Aswath Damodaran (LINK)

Francis Collins speaks about the coronavirus, his faith, and an unusual friendship. [H/T @pcordway] (LINK)

**********

For Audible Members, the current sale ($6.95 each) has many titles of note:



The Evolution of Everything by Matt Ridley

The Great Mental Models by Shane Parrish

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein

The Clayton M. Christensen Reader

Platform Revolution

Sam Walton: Made in America

Basic Economics, Fifth Edition by Thomas Sowell

The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin

Outliers by Malcolm Gladwell

Moonwalking with Einstein: The Art and Science of Remembering Everything by Joshua Foer

Proof: The Science of Booze by Adam Rogers

The Federalist Papers

The History of the United States, 2nd Edition (The Great Courses)

The Vital Question: Energy, Evolution, and the Origins of Complex Life by Nick Lane

The Origin and Evolution of Earth: From the Big Bang to the Future of Human Existence (The Great Courses)

The Joy of Science (The Great Courses)

The Disappearing Spoon by Sam Kean

The Beak of the Finch: A Story of Evolution in Our Time by Jonathan Weiner

I Contain Multitudes by Ed Yong

Joseph Campbell and The Power of Myth: Programs 1-6

Everything Happens for a Reason (And Other Lies I've Loved)

Surely You're Joking, Mr. Feynman!

Billions & Billions by Carl Sagan

Spillover by David Quammen

Sunday, March 22, 2020

Links

Keeping the Coronavirus from Infecting Health-Care Workers - by Atul Gawande (LINK)

Why the Coronavirus Has Been So Successful - by Ed Yong (LINK) [Yong also wrote a long-form article in 2018 that is worth reviewing, "The Next Plague Is Coming. Is America Ready?," in which he quotes Anthony Fauci, who is now a household name given his current role and efforts, as saying: “It’s like a chain—one weak link and the whole thing falls apart. You need no weak links.”]

How the Coronavirus Became an American Catastrophe (LINK)

This Is Your Brain on a Crashing Stock Market - by Jason Zweig ($) (LINK)

Anatomy of Fear and Greed - by Frank Martin (LINK)

Data Update 6 for 2020: Profitability, Returns and the value of Growth - by Aswath Damodaran (LINK)

Data Update 7 for 2020: Debt Delusions and Reality - by Aswath Damodaran (LINK)

Invest Like the Best Podcast: Brent Beshore – Update on Small Business and Private Equity (LINK)

Carolina Stories with Steve Vafier (podcast): 1: Josh Glover – Brilliance in the Basics (LINK)

Acquired Podcast: Adapting Episode 1: Canlis (LINK)

Stock Market Valuations - by Meb Faber (LINK)

The Meb Faber Show: #206 - Meb’s take on Investment Plans, Building and Maintaining Wealth, How Meb Invests, and Investing in the time of Corona (LINK)

Crude Contango… - by Harris Kupperman (LINK)

Harris Kupperman on Intelligent Investing in Crisis Mode | MOI Global (audio) (LINK)

The Peter Attia Drive (podcast): #99 - Peter Hotez, M.D., Ph.D.: Continuing the conversation on COVID-19 (LINK)

A vaccine for coronavirus isn't going to ride rapidly to our rescue - by Matt Ridley (LINK)

Five Good Questions Podcast: Matt Ridley - How Innovation Works (LINK)

Matt Ridley Discusses Health, Innovation, and Risk (podcast) (LINK)

Thursday, March 19, 2020

Links

Bill Gates reddit AMA about COVID-19 (LINK)

Tom Russo on Intelligent Investing in Crisis Mode (audio) (LINK)

GMO White Paper | Memo to the Investment Committee: Dare to Be Different - by James Montier (LINK)
The conventional 60/40 portfolio of today is not going to generate the kind of returns that investors say they need. Investors must seek to embrace the terrifying concept of being different. As the ghosts of many great investors past have amply demonstrated, being different is the path to investment success. However, such advice falls into the simple but not easy category, to borrow Warren Buffett’s expression.
GMO Asset Allocation: COVID-19 Update - by Ben Inker (LINK)

Common Enemies - by Morgan Housel (LINK)

Coronavirus – getting angry - by John Hempton (LINK)

Oaktree Insights: Assessing Relative Value in Credit amid Coronavirus Uncertainty (LINK)

Jim Grant on CNBC (video) (LINK)

Kyle Bass on CNBC (video) (LINK)

Tyler Cowen and Russ Roberts in conversation about COVID-19 (podcast) (LINK)

Wednesday, March 18, 2020

Links

I've been a bit behind on other reading as I've been trying to both take advantage of current volatility as well as make sure clients at Sorfis Investments have portfolios that I think will be well situated for the next 5-10 years. There is plenty of uncertainty and risk right now—both as it relates to one's physical and financial health—but there are also undervalued businesses out there with good balance sheets that will be more valuable 5, 10, and 20 years from now. 

Note: This is my opinion and not a recommendation to buy or sell a security. Please do your own research before making an investment decision.

*****

"It was psychologically painful in 1999 to give up making money on the way up and to expose yourself to the career risk that comes with looking like an old fuddy duddy. Similarly today, it is both painful and career risky to part with your increasingly beloved cash, particularly since cash has been so hard to raise in this market of unprecedented illiquidity. As this crisis climaxes, formerly reasonable people will start to predict the end of the world, armed with plenty of terrifying and accurate data that will serve to reinforce the wisdom of your caution. Every decline will enhance the beauty of cash until, as some of us experienced in 1974, ‘terminal paralysis’ sets in. Those who were over invested will be catatonic and just sit and pray. Those few who look brilliant, oozing cash, will not want to easily give up their brilliance. So almost everyone is watching and waiting with their inertia beginning to set like concrete. Typically, those with a lot of cash will miss a very large chunk of the market recovery. There is only one cure for terminal paralysis: you absolutely must have a battle plan for reinvestment and stick to it." --Jeremy Grantham, March 2009 ("Reinvesting When Terrified")

Two Things We Know With High Confidence - by Morgan Housel (LINK)

A Viral Market Meltdown III: Pricing or Value? Trading or Investing? - by Aswath Damodaran (LINK)

Why Are Markets So Volatile? It’s Not Just the Coronavirus. ($) (LINK)

Howard Marks says the market is ‘pricing in a bad scenario’ and there is value for investors (video) (LINK)

FPA Crescent Fund: First Quarter Preliminary Update (LINK)

Lux Capital memo on the Coronavirus (LINK)

How small businesses can cut expenses (LINK)

Bernanke and Yellen: the Federal Reserve must reduce long-term damage from coronavirus ($) (LINK)

The Surreal Weekend (LINK)

America’s Restaurants Will Need a Miracle - by Derek Thompson (LINK)

Amazon Prioritizes Medical Supplies, Household Staples From Merchants Amid Coronavirus ($) (LINK)

Detroit Car Makers to Temporarily Close U.S. Plants Over Virus Concerns ($) (LINK)

Costco Buys Logistics Firm From Sears Owner for $1 Billion ($) (LINK)

The U.K.’s Coronavirus ‘Herd Immunity’ Debacle - by Ed Yong (LINK)

The Patients Who Can’t Have Surgery Because of the Coronavirus - by Sarah Zhang (LINK)

Defining Information - by Ben Thompson (LINK)

Invest Like the Best Podcast: Dan Rasmussen – Investing Through a Crisis (LINK)

The Acquirers Podcast: Steady Hands: How the leaders of four SME businesses are weathering the Coronavirus storm (LINK)

a16z Podcast: Labs for Diagnostics: Then, Now, and Next (LINK)

Acquired Podcast: The Top 10 Acquisitions of All-Time (LINK)

The James Altucher Show (podcast): 560 - Critical Coronavirus Update: The BEST and The WORST Case Scenarios with Johns Hopkins Dr. Marty Makary (LINK)

Why Americans Are Dying from Despair - by Atul Gawande (LINK)

Tuesday, March 17, 2020

Howard Marks on how to detect and respond to market cycle extremes...

Finally in discussing how to detect and respond to market cycle extremes, I want to return once more to the widespread panic that followed the bankruptcy filing by Lehman Brothers in September 2008. 
Although the sub-prime mortgage crisis originated in a small corner of the financial and investment world, the impact was soon felt widely, particularly by the financial institutions that had underestimated the risk in mortgage backed securities and thus invested too heavily in them. As a result of the threat to these essential institutions, the impact metastasized to the stock and bond markets in all countries—and then to economies all around the world—in the form of the Global Financial Crisis. 
Thus, as I described earlier, money market funds and commercial paper had to be guaranteed by the U.S. government. A number of prominent banks and financial institutions failed or had to be bailed out/rescued/absorbed. No one knew how far the carnage would spread. The equity and debt markets collapsed. Now the generalizing was on the negative side: “the financial system could totally melt down” in a vicious circle without end. 
Since the generalizations were on the downside, the error-making machine went into reverse. No greed, only fear. No optimism, only pessimism. No risk tolerance, only risk aversion. No ability to see positives, only negatives. No willingness to interpret things positively, only negatively. No ability to imagine good outcomes, only bad. Thus we reached the day on which I had the discussion mentioned back on pages 131–132, in which the pension fund head was unable or unwilling to accept that any assumption regarding possible defaults could be conservative enough. 
What was the essential observation? Here’s what I wrote in “The Limits to Negativism” (October 2008): 
Contrarianism—doing the opposite of what others do, or “leaning against the wind”—is essential for investment success. But as the credit crisis reached a peak last week, people succumbed to the wind rather than resisting. I found very few who were optimistic; most were pessimistic to some degree. Some became genuinely depressed—even a few great investors I know. Increasingly negative tales of the coming meltdown were exchanged via email. No one applied skepticism, or said “that horror story’s unlikely to be true.” Pessimism fed on itself. People’s only concern was bullet-proofing their portfolios to get through the coming collapse, or raising enough cash to meet redemptions. The one thing they weren’t doing last week was making aggressive bids for securities. So prices fell and fell, several points at a time—the old expression is “gapped down.” 
The key—as usual—was to become skeptical of what “everyone” was saying and doing. One might have said, “Sure, the negative story may turn out to be true, but certainly it’s priced into the market. So there’s little to be gained from betting on it. On the other hand, if it turns out not to be true, the appreciation from today’s depressed levels will be enormous. I buy!” The negative story may have looked compelling, but it’s the positive story—which few believed—that held, and still holds, the greater potential for profit. 
At this market cycle extreme, all the news truly was negative . . . and certainly not imaginary. The only questions I received were “How far will it go?” and “What will be the effects?” Given that asset prices reflected nothing but abject pessimism regarding these things—I’d say near-suicidal thinking—the key to profiting lay in recognizing that even in the face of uniformly bad news and a very poor outlook, pessimism can be overdone, and thus assets can become too cheap. 
It was the excessiveness of the prevailing pessimism that led me to write “The Limits to Negativism” at the credit market’s low ebb in October 2008. In it I pointed out, as mentioned in the chapter on attitudes toward risk, that the superior investor’s essential skepticism “calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.” That variety of skepticism was totally lacking in the market’s darkest days, of course. 
Shortly after Lehman’s bankruptcy filing on September 15, 2008, Bruce Karsh and I reached the conclusion that (a) no one could know how far the financial institution meltdown would go, but (b) negativity was certainly rampant and very possibly excessive, and assets looked terribly cheap. Thinking strategically, we decided that if the financial world ended—which no one could rule out—it wouldn’t matter whether we’d bought or not. But if the world didn’t end and we hadn’t bought, we would have failed to do our job. 
So we bought debt aggressively. Oaktree invested more than a half a billion dollars a week over the fifteen weeks from September 15 through the end of the year. Some days we thought we were going too fast, and some days too slow; that probably meant we had it about right. The world didn’t end; the vicious cycle of financial institution implosion stopped with Lehman Brothers; the capital markets reopened; the financial institutions came back to life; debt was again able to be refinanced; bankruptcies turned out to be very few relative to history; and the assets we bought appreciated substantially. In short, paying heed to the cycle was rewarded.

Sunday, March 15, 2020

Links

"In the main, therefore, slumps are experiences to be lived through and survived with as much equanimity and patience as possible. Advantage can be taken of them more because individual securities fall out of their reasonable parity with other securities on such occasions, than by attempts at wholesale shifts into and out of equities as a whole. One must not allow one’s attitude to securities which have a daily market quotation to be disturbed by this fact." --John Maynard Keynes

Gates to Leave Boards of Microsoft, Berkshire Hathaway (LINK)
Microsoft Corp. co-founder Bill Gates is stepping down from the company’s board of directors, marking the biggest boardroom departure in the tech industry since the death of longtime rival and Apple Inc. co-founder Steve Jobs. 
Mr. Gates, who also is vacating his board seat at Berkshire Hathaway Inc., intends to focus more on his philanthropic efforts. He will continue to serve as a technical adviser to Microsoft Chief Executive Satya Nadella, the software company said late Friday.
Coronavirus and Insurance Policies: What Is Covered? ($) (LINK)

Stocks Are in Chaos. Control the One Thing You Can. - by Jason Zweig ($) (LINK)

Remember: You Don’t Control What Happens, You Control How You Respond - by Ryan Holiday (LINK)

Himalaya Capital Hosts Discussion on COVID-19 with Experts from China (video) [H/T @ShaiDardashti] (LINK)
Li Lu, Founder and Chairman of Himalaya Capital, hosted a video conference on March 13th, 2020 between three leading COVID-19 experts from China to share their valuable experiences fighting the virus on the frontlines over the past two months with leading scientists, health practitioners, and policy makers in the United States.
How A Country Serious About Coronavirus Does Testing And Quarantine (video) (LINK)

Inside the Rope with David Clark (podcast): 59: John Hempton - Central Banks aren’t the answer to Coronavirus (LINK)

Hidden Forces Podcast: Passive Investing’s Role in the Coronavirus Market Melt-Down & Prospects for a Melt-Up | Mike Green (LINK)

The Peter Attia Drive Podcast: #97 - Peter Hotez, M.D., Ph.D.: COVID-19: transmissibility, vaccines, risk reduction, and treatment (LINK)

The Peter Attia Drive Podcast: #98 - Peter Attia, M.D. and Paul Grewal, M.D.: Coronavirus (COVID-19) FAQ (LINK)

The Man Who Saw the Pandemic Coming (LINK)

Friday, March 13, 2020

Links

"There’s always a lot of things wrong with the world. Unfortunately, it’s the only world we’ve got. So we live with it, and we deal with it. But the beauty of it is this system works very well. I don’t have the faintest idea what’s going to happen in business or markets in the next year or two years. But the one thing I know is that, over time, people will live better and better in this country. We have a system that works. It unleashes human potential. " --Warren Buffett (2009)

Berkshire Hathaway cancels the in-person shareholder events around its Annual Meeting (LINK)
The annual meeting will be held at 3:45 p.m. on May 2nd as scheduled. However, we will not be able to allow shareholders to physically attend the meeting, and all special events are canceled. 
...Yahoo has confirmed that it will stream the meeting. They have provided great coverage in the past, and you can watch what takes place in Omaha from your armchair.
Corona Panic (Part II) - by Morgan Housel (LINK)

Invest Like the Best Podcast: Bryan Krug – An Update on Corporate Credit (LINK)

Invest Like the Best Podcast: Bill Gurley and Chetan Puttagunta – An Update on Consumer & Enterprise Venture Capital (LINK)

Exponent Podcast: 183 — A Search for Everything (LINK)

On Being with Krista Tippett (podcast): Carlo Rovelli — All Reality Is Interaction (LINK)
Related books: 1) The Order of Time; 2) Seven Brief Lessons on Physics
Book Notes: Why We Get Sick (LINK)

The Last Giraffes on Earth - by Ed Yong (LINK)
The planet’s tallest animal is in far greater danger than people might think.

Wednesday, March 11, 2020

Links

Warren Buffett sat down with Yahoo Finance Editor-in-Chief Andy Serwer to discuss the market volatility (video) (LINK)

Zero Trust Information - by Ben Thompson (LINK)

Invest Like the Best Podcast: Deep Basin – Oil Price War and Its Implications (LINK)

Planet MicroCap Podcast: Scott Miller, Founder of Greenhaven Road Capital (LINK)

WorkLife with Adam Grant (podcast): The Real Reason You Procrastinate (LINK)

The Joe Rogan Experience: #1439 - Michael Osterholm (LINK)
Related book: Deadliest Enemy: Our War Against Killer Germs

Tuesday, March 10, 2020

Links

What Benjamin Graham Would Tell You to Do Now: Look in the Mirror - Jason Zweig ($) (LINK)

The great investors and extreme volatility (LINK)

Different Kinds of Decline - by Morgan Housel (LINK)

Why Democracy Is on the Decline in the United States - by Evan Osnos (LINK)

Invest Like the Best Podcast: Peter Zeihan - Dis-United Nations (LINK)
Related book: Disunited Nations
Coronavirus: The Real Risks and Human Biases behind the Panic - by Mark Manson (LINK)

Coronavirus is the wolf on the loose - by Matt Ridley (LINK)

Rory gets a good read (LINK)
Books helped fuel last year’s PLAYERS win and now Rory McIlroy has moved on to other titles in preparation for his title defense

Monday, March 9, 2020

Links

"In your actions, don’t procrastinate. In your conversations, don’t confuse. In your thoughts, don’t wander. In your soul, don’t be passive or aggressive. In your life, don’t be all about business." --Marcus Aurelius

We’ll Get Through This - by Morgan Housel (LINK)

The Most Important Media Businesses of the (Past &) Future - by Matthew Ball (LINK)

OPEC, R.I.P. ($) (LINK)

Companies That Got Out of China Before Coronavirus Are Still Tangled in Its Supply Chains ($) (LINK)

The Acquirers Podcast: Jeff Gramm (LINK)
Related book: Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism
The Peter Attia Drive Podcast: #96 - David Epstein (LINK)
Related book: Range: Why Generalists Triumph in a Specialized World
The Jolly Swagman Podcast: #81: In The Foothills Of A Pandemic - Yaneer Bar-Yam (LINK)

Nassim Nicholas Taleb & Yaneer Bar-Yam  discuss the reaction to the Coronavirus (video) (LINK)

HBR IdeaCast (podcast): Real Leaders: Ernest Shackleton Leads a Harrowing Expedition (LINK)
Related book: Endurance: Shackleton's Incredible Voyage

Friday, March 6, 2020

Links

"Our model is a seamless web of trust that’s deserved on both sides. That’s what we’re aiming for. The Hollywood model, where everyone has a contract, and no trust is deserved on either side, is not what we want at all." --Charlie Munger (2009)

Howard Marks on Bloomberg TV discussing his latest memo (video) (LINK)

Sam Zell on CNBC (video) (LINK)

The End of Pay-TV - by Matthew Ball (LINK)

How To Manage Change (LINK)

Value Investing with Legends Podcast: David Samra - Leveraging Fundamentals to Remain Relevant (LINK)

One Doctor’s Life on the Coronavirus Front Lines. ‘If We Fail, What Happens to You All?’ ($) (LINK)

Coronavirus: The Black Swan of 2020 - Sequoia Capital Publication (LINK)

Scott Adams and Naval Ravikant talk about Coronavirus (video) (LINK)

The Tim Ferriss Show (podcast): #413: Tyler Cowen on Rationality, COVID-19, Talismans, and Life on the Margins (LINK)

Freeman Dyson’s Letters Offer Another Glimpse of Genius (LINK)

Wednesday, March 4, 2020

Links

"GEICO to me is very much like Costco. And one of the reasons it’s succeeded is that they really feel a holy duty to have a wonderful product at a very low price. A lot of people talk that game, but very few have it just right down under the body and soul of the company. But GEICO does, and companies like that do tend to grind ahead over time.... It’s easy to talk the game, but living the game is something else. I mean, it’s against the human nature of many entrepreneurial people to try and get the price down and the service quality up all the time." --Charlie Munger (2014)

How to Hedge a Coronavirus ($) (LINK)
Universa, managed by Mark Spitznagel, a protégé of “The Black Swan: The Impact of the Highly Improbable” author Nassim Nicholas Taleb, managed a little over $4 billion in assets as of the end of 2018. Claude Bovet, founder of Lionscrest Capital and a long time investor in the fund, estimates that Universa’s tail risk hedging strategy, representing part of its capital, earned more than 1,000% in a matter of days.
Market Corrosion and the Catalyst of COVID-19 - by Frank K. Martin (LINK)

How Are You Different? - by Ian Cassel (LINK)

Death, Taxes, and Three Other Inevitable Things - by Morgan Housel (LINK)

Invest Like the Best Podcast: Jeff Lawson – How to Build a Platform (LINK)

Venture Stories Podcast: Jerry Neumann on Technological Revolutions, Picking Winners, and VC Returns (LINK)

The Knowledge Project Podcast: #77 Mike Maples: Living in the Future (LINK)

Second Order Risk - by Kevin Kelly (LINK)

Coronavirus Is No 1918 Pandemic (LINK)

What’s the Difference Between Dark Matter and Dark Energy? (LINK)

Tuesday, March 3, 2020

Howard Marks Memo: Nobody Knows II

Link to Memo: Nobody Knows II
I wrote most of this memo over this past weekend, on the heels of the tumultuous seven-day correction.  But I couldn’t get it out on Monday, and that day the S&P 500 rallied by 4.5%, or 135 points, for the biggest point gain in its history.  I just can’t update it daily to take into account every rise or fall (or rate cut).  And my real goal – as usual – is to suggest how to think about developments, not to say “buy” or “sell.”  So please read this memo as of Sunday afternoon – whatever the markets have done since – and let me show how I assess the recent events.

Monday, March 2, 2020

Links

"Our approach is really to try and learn vicariously. But there’s a lot of mistakes that I’ve repeated, I can tell you that. The biggest one, probably — or the biggest category over time — is being reluctant to pay up a little for a business I knew was really outstanding, or to continue to buy it at higher prices when I knew it was outstanding. The cost of that has been many, many billions. And I’ll probably keep making that mistake. The mistakes are made when there are businesses you can understand and they’re attractive and you don’t do something about it. I don’t worry at all about the mistakes that come about because when I met Bill Gates, I didn’t buy Microsoft or something. That’s not my game. Most of our mistakes have been mistakes of omission rather than commission." --Warren Buffett (1997)

The Hollywood Drama That Cost a BlackRock Fund $75 Million - by Jason Zweig ($) (LINK)

U.S. Airlines Face Test as Epidemic Spreads ($) (LINK)

We all need to change how we live our lives to fight this generation of pandemics - by Matt Ridley (LINK)

Corona Panic - by Morgan Housel (LINK)

How the Horrific 1918 Flu Spread Across America (2017 article) [H/T @rationalwalk] (LINK)
Related book: The Great Influenza: The Story of the Deadliest Pandemic in History
1997 article from Malcolm Gladwell: "The Dead Zone" (LINK)
Seven bodies buried in the Arctic tundra might solve the riddle of the worst flu pandemic in history—and might help us prevent it from happening again.
Absolute Return Letter, March 2020: Five Lessons from History (2/5) (LINK)

Innovations in payments (BIS Quarterly Review) (LINK)

Stripe Teardown: How The $35B Payments Company Plans To Supercharge Online Retail [H/T @david_perell] (LINK)

The Acquirers Podcast: Passive Agro: Michael Green on the looming threat from passive indexing, shorting XIV and what value guys can do (LINK)

Hidden Forces Podcast: Disunited Nations: The Scramble for Power in an Ungoverned World | Peter Zeihan (LINK)
Related book: Disunited Nations
Dan Carlin's Hardcore History: Addendum Podcast: EP10 Strangelove Whisperings (LINK)

Origin Stories Podcast: 41: Tribes Old and New (LINK)

The Five Revolutions in Cancer Treatment (LINK)

Jack Welch, Legendary CEO of General Electric, Dies at Age 84 (LINK)

Friday, February 28, 2020

Links

"In the world of modern finance, a love of numbers has replaced a desire for critical thinking. As long as something has a number attached to it, then it is taken as gospel truth. Research shows that people are often fooled by the use of pseudoscience. Simply making things sound complex makes people believe them more! Risk managers, analysts and consultants are all guilty of using pseudoscience to promote an illusion of safety. We all need to be on our guard against the artificial deployment of meaningless numbers. Critical thinking and scepticism are the most unrated (and scarce) tools in our world." --James Montier ("Mind Matters," April 29, 2008)

How to respond to COVID-19 - by Bill Gates (LINK)

The Great Buenos Aires Bank Heist [H/T Linc] (LINK)

Gotta Go Fast: Why Gaming IP Is Finally Taking Off in Film/TV - by Matthew Ball (LINK)

Exponent Podcast: 182 — Scale Scale Scale (LINK)

The Disruptive Voice Podcast: 48. Disrupting Healthcare with Dr. Mahek Shah (LINK)

Grant’s Current Yield Podcast: The Empire Strikes Out (LINK)

Know Your Risk Radio (podcast): Raoul Pal (LINK)

The Coronavirus and How Political Spin Has Worsened Epidemics - by Evan Osnos (LINK)

Freeman Dyson, Visionary Technologist, Is Dead at 96 (LINK)
Related previous link (other links and books included): Freeman Dyson on Living Through Four Revolutions (2011 lecture)
"I don't particularly care [if the things I'm doing] are important or not. I'm not driven by a passion to dig out the deep secrets of nature. I'm much more interested just in exercising my skills as best I can and enjoying life." --Freeman Dyson

Thursday, February 27, 2020

Links

Lucky Problems (LINK)

Controlling the Pendulum of Emotions - by Ian Cassel (LINK)

Charles Schwab on The David Rubenstein Show (video) (LINK)

Roblox Valued at $4 Billion as Investors Bet on Future of Gaming ($) (LINK)
Andreessen Horowitz leads investor group in latest $150 million funding round for popular videogame hub
Up to 91% More Expensive: How Delivery Apps Eat Up Your Budget (LINK)

Infinite Loops Podcast: Jim Chanos – Financial Frauds and Manias: Past, Present, Future (LINK)

The Tim Ferriss Show (podcast): #412: Josh Waitzkin on Beginner’s Mind, Self-Actualization, and Advice from Your Future Self (LINK)

Alfred North Whitehead’s Awe-Inspiring Focus (LINK)

Roger Lowenstein reviews the book Dark Towers [H/T @pcordway] (LINK)

The introduction to Peter Zeihan's latest book, Disunited Nations (LINK)

Matt Ridley: Officially Introducing My Latest Book, "How Innovation Works" (LINK)

Wednesday, February 26, 2020

Links

"One of the most notable behavioral traits among investors is their tendency to overlook negatives or understate their significance for a while, and then eventually to capitulate and overreact to them on the downside.  I attribute a lot of this to psychological failings and the rest to the inability to appreciate the true significance of events. As negatives accumulate – whether they surface for the first time or just are finally recognized as significant – eventually a time comes when they can no longer be ignored, and instead they come to be treated as being of overwhelming importance." --Howard Marks ("On the Couch," January 2016)

Amazon Empire: The Rise and Reign of Jeff Bezos (video) (LINK)
FRONTLINE examines Amazon CEO Jeff Bezos’ ascent to power and the global impact of the empire he built. The film also investigates the darker side of the company’s rapid growth, and the challenge of trying to rein in the power of the richest man in the world.
Summary version of the Credit Suisse Global Investment Returns Yearbook 2020 (LINK)

Email Addresses and Razor Blades - by Ben Thompson (LINK)

Brent Beshore interviews Trish Higgins and Will Thorndike at Capital Camp 2019 (video) (LINK)

This is Not 1999 - by Eric Cinnamond (LINK)

Leithner Letter No. 245-248 (26 March – 26 June 2020) (LINK)

A Viral Market Meltdown: Fear or Fundamentals? - by Aswath Damodaran (LINK)

Invest Like the Best Podcast: Niko Canner – Become a Perfect Instrument (LINK)

Planet MicroCap Podcast: 109 - Boring is Beautiful with Brent Beshore, Founder and CEO of Permanent Equity (LINK)

Trailblazers with Walter Isaacson (podcast): Theme Parks: Where Tech Meets Thrills (LINK)

Hidden Forces Podcast: Market Nihilism: Price Discovery in a World Where Nothing Matters | Ben Hunt & Grant Williams (LINK)

Edge #566: Waiting for "The Final Plague" - A Talk with Nathan Wolfe [January 2009] (LINK)

You’re Likely to Get the Coronavirus - by James Hamblin (LINK)
Most cases are not life-threatening, which is also what makes the virus a historic challenge to contain.
Book of the day: Spillover: Animal Infections and the Next Human Pandemic - by David Quammen

"Those who have knowledge don't predict. Those who predict don't have knowledge." --Lao Tzu

Monday, February 24, 2020

Links

Howard Marks on investor psychology during coronavirus fears (video) (LINK)

How to Write Usefully - by Paul Graham (LINK)

100 Little Ideas - by Morgan Housel (LINK)

Finite and Infinite Games: Two Ways to Play the Game of Life (LINK)

What the E*Trade Deal Tells You About the New Investing Game - by Jason Zweig ($) (LINK)

13 Metrics for Marketplace Companies (LINK)

The Future Will Be Genetically Engineered (LINK)

Exponent Podcast: 181 — Competing with Spotify and Regulating Acquisitions (LINK)
Related article: "The Daily Update Podcast"
Venture Stories Podcast: Scaling and Network Effects with Anu Hariharan (LINK)

Highlights from Matt Ridley's reddit AMA (LINK)

Why have so many of our recent viruses come from bats? - by Matt Ridley (LINK)

The Strange Influence the Sun Has on Whales - by Ed Yong (LINK)

CNBC's full interview with Berkshire Hathaway CEO Warren Buffett


Link to video

Sunday, February 23, 2020

Clayton Christensen quote

From the article "How Will You Measure Your Life?":

“If you study the root causes of business disasters, over and over you’ll find this predisposition toward endeavors that offer immediate gratification. If you look at personal lives through that lens, you’ll see the same stunning and sobering pattern: people allocating fewer and fewer resources to the things they would have once said mattered most.” --Clayton Christensen 

..........


Friday, February 21, 2020

Semper Augustus Investments Group: 2019 Annual Letter

Once again, Chris Bloomstran's year-end letter is a must-read. Like last year, this is great to read in tandem with Warren Buffett's annual letter, which will be released in the morning.


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And if you want to review all of Chris' deep dives into Berkshire, I recommend his 2015 letter, followed by his 2016 interview with Kate Welling, then the 2016 letter, 2017 letter, 2018 letter, and 2019 letter.

Thursday, February 20, 2020

Links

Note to the hardcore Berkshire and investing readers: Warren Buffett's letter to shareholders will be released on Saturday and, as we've done for the past few years, Chris Bloomstran's annual letter will also be released here on the blog tomorrow. Chris was hoping to keep things much shorter than the 112-pager from last year, but it's looking like it'll come in a bit longer than that for this year. So make sure your printer is full of paper and ink, and check back here during the second half of the day tomorrow for the Semper Augustus Investments Group 2019 Annual Letter. 

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"Conservatism may cause investors to refrain from making some investments that in hindsight would have been successful, but it will also prevent some sizable losses that would ensue from adopting less conservative business valuations." --Seth Klarman

The Best Thing You Can Do for Your Work Is Take a Walk - by Ryan Holiday (LINK)

The Knowledge Project Podcast: #76 Frank Stephenson: Pushing the Limits of Innovation (LINK)

Superinvestors and the Art of Worldly Wisdom Podcast: #32: Christopher Cole On Appreciating Risk (LINK)

Walter Isaacson reviews the book Franklin & Washington: The Founding Partnership by Edward J. Larson (LINK)

How often do severe solar storms pummel the Earth? - by Phil Plait (LINK)

A Huge Discovery in the World of Viruses - by Ed Yong (LINK)

What's Next for COVID-19? [H/T @Atul_Gawande] (LINK)
Containment of the coronavirus would make an enormous difference to health around the world. Is it still possible?

Tuesday, February 18, 2020

Links

"The cost of every deal we do is measured by the second best deal that’s around at a given time, including doing more of some of the things we’re already in." --Warren Buffett (2001)

"Charlie and I always figure that our cost of capital is what could be produced by our second best idea. And then our best idea has to exceed that." --Warren Buffett (2014)

Twenty Years of Owning Berkshire Hathaway (LINK)

Broyhill 2019 Annual Letter (LINK)

Risk and loss aversion in ergodicity economics (LINK)

The a16z Marketplace 100 (LINK)

The Cutting Room Files, Part 7: Europe - by Peter Zeihan (LINK)

Bob Iger on The Bill Simmons Podcast (LINK)

Ben Thompson on The Bill Simmons Podcast (LINK)

The Acquirers Podcast: Dylan Grice (LINK)

Macro Voices Podcast: #206 Chris Cole: Optimizing portfolio construction for changing times [22:02 mark] (LINK)

Capital Allocators Podcast: Dan Rasmussen (LINK)

Acquired Podcast: Sequoia Capital Part II (with Doug Leone) (LINK)

Sir William Osler’s Advice to Students: Practice Concentrating on Hard Things (LINK)

The Cascading Consequences of the Worst Disease Ever - by Ed Yong (LINK)

Friday, February 14, 2020

No master plan...

From Warren Buffett at the 1997 Berkshire Hathaway Annual Meeting
30 years ago we didn’t know we would be in the insurance business.  
We have no master plan. Charlie and I did not sit down in 1960 — early ’65 — and say, “We’re going to do this and that,” and all that.  
We’re going to try and do sensible things as we go along. The more money we have, the harder it is to find sensible things. But that’s the criterion.
Insurance is certainly a major area of opportunity for us. It’s been a major opportunity.  
In certain fields we have a terrific advantage for the three reasons I laid out in the annual report. We have capital strength, and a willingness to take on risk, and a speed of action, and a certainty of payment, that in aggregate no one matches.  
Now, how much demand there is for that depends on circumstances in the business and how much supply there is at lower prices that we think don’t make sense is another question. But I think we’ll do OK in insurance over time. 
From Warren Buffett at the 2001 Berkshire Hathaway Annual Meeting
We don’t have a master plan. Charlie and I do not sit around and strategize or talk about the future of various industries or do anything of that sort. It just doesn’t happen. We don’t have any reports. We don’t have any staff. We don’t have any of that.  
We try to survey the whole financial field. We try to look at what comes in and look for things we understand, where we think they have a durable, competitive advantage, where we like the management, and where the price is sensible.  
We had no idea two or three years ago, that we would be the 87 percent owner of the largest broadloom carpet company in the world. 
We don’t plan these things. But I would tell you in a general way that 20 or so years from now, we will own a lot more businesses. 
...So we have no more master plan now than we had back in 1965 when we bought the textile mill, really. I mean, we had a lousy business. I didn’t realize it was as lousy as it was when I got into it. And we just had to start trying to deploy capital in an intelligent way.... That’s our business and we enjoy it.
From Charlie Munger in 2013
Therein lies a lesson in life. I think most lives work best when you simply react intelligently to the opportunities and difficulties you encounter, and just take the results as they fall.  
Some people think that by master planning, you will solve everything, but what I find is that the master plan gets a life of its own, and people believe it because they previously decided on that then, and they make all kinds of mistakes.  
(Thomas) Carlyle was a very smart man, and one of his favorite sayings was, the task of man is not to see what lies dimly in the distance but to do what lies clearly at hand. [Ed: actual quote: “Our main business is not to see what lies dimly at a distance, but to do what clearly lies at hand.”]

Thursday, February 13, 2020

Links

"Another thing to avoid is extremely intense ideology because it cabbages up one's mind. You see a lot of it in the worst of the TV preachers. They have different, intense, inconsistent ideas about technical theology, and a lot of them have minds reduced to cabbage. And that can happen with political ideology. And if you're young, it's particularly easy to drift into intense and foolish political ideology and never get out. When you announce that you're a loyal member of some cult-like group and you start shouting out the orthodox ideology, what you're doing is pounding it in, pounding it in, pounding it in. You're ruining your mind, sometimes with startling speed. So you want to be very careful with intense ideology. It presents a big danger for the only mind you're ever going to have." --Charlie Munger (Poor Charlie's Almanack, Talk Ten: USC Gould School of Law Commencement Address)

First, Do No Harm - by Ben Thompson (LINK) [Thompson was also on a panel for a Public Workshop on Venture Capital and Antitrust: VIDEO.]

Hidden Forces Podcast: The Decline of Active Management, the Rise of Market Nihilism, & the Fall of the Roman Republic | Mike Green (LINK)

Conversations with Tyler (podcast): Tim Harford on Persuasion and Popular Economics (LINK)

Ryan Holiday interviews Tim Ferriss (podcast) (LINK)

Ezra Klein with Malcolm Gladwell: Why We’re Polarized (video) (LINK)

China’s “Iron House”: Struggling Over Silence in the Coronavirus Epidemic - by Evan Osnos (LINK)

Tuesday, February 11, 2020

Links

For those that are going to the Fairfax Financial Annual Meeting in April and are looking to attend other events around the meeting, discount rates for the YYX Toronto Value Symposium are available

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What “Bullet-Proof Investing” Means to Me? - by Sanjay Bakshi (LINK)

Crisis Investing: How to Maximize Returns During Market Panics (LINK)

Winter 2020 issue of Graham & Doddsville (LINK)

The Flaws of "Subscription Fatigue", "SVOD Fatigue", and the "Streaming Wars" - by Matthew Ball (LINK)

Writing in a Business Context - by Jerry Neumann (LINK)

Some great notes from the book Capital Account: A Fund Manager Reports on a Turbulent Decade, 1993-2002 (LINK)
Related previous posts: 1) THE TENETS OF CAPITAL CYCLE ANALYSIS; 2) Ed Chancellor on the capital cycle...; 3) More from Ed Chancellor on focusing on industry supply...
Can We Have Prosperity Without Growth? (LINK)

Chemical Toxicity and the Baby Bust: Unexpected threats to human fertility and, hence, chemical companies - by Jeremy Grantham (LINK)

Naked Mole Rats Seem More Alien Than Mammal. What Explains Their Weirdness? (LINK)

Monday, February 10, 2020

Links

Famed investor Charlie Munger shares insights into the ‘basic math of life’ at Redlands Forum [H/T @robertmackenzie)] (LINK) [Hopefully a video of this conversation, as well as the Daily Journal Annual Meeting occurring later this week, will become publicly available.]

The Gates Foundation's 2020 Annual Letter from Bill and Melinda Gates (LINK)

The Coming Retirement Crisis Part II - by Raoul Pal (video) (LINK)

Why We're in the Biggest Financial Bubble in History (w/ Steve Bregman & Mike Green) (video) (LINK)

Odd Lots Podcast: Why The Rise of Passive Investing Might Be Distorting The Market (w/ Mike Green) (LINK)

Hidden Forces Podcast: The Hundred Year Portfolio: How to Grow & Protect Generational Wealth | Christopher Cole (LINK)
Related paper: "The Allegory of the Hawk and the Serpent"
EconTalk Podcast: Marty Makary on the Price We Pay (LINK)
Related book: The Price We Pay: What Broke American Health Care--and How to Fix It
The Ezra Klein Show (podcast): Tim Urban on humanity’s wild future (LINK)
Related link: "The Story of Us"
In Praise of Irrationality (LINK)
Related book: Alchemy
Mental Models in Space (LINK)
Related book: An Astronaut's Guide to Life on Earth
Yuval Noah Harari Gives the Really Big Picture (LINK)
Related book: Sapiens

Friday, February 7, 2020

Links

"The basic reason for the cyclicality in our world is the involvement of humans. Mechanical things can go in a straight line. Time moves ahead continuously. So can a machine when it’s adequately powered. But processes in fields like history and economics involve people, and when people are involved, the results are variable and cyclical." --Howard Marks ("The Most Important Thing")

Bond Funds Are Hotter Than Tesla - by Jason Zweig ($) (LINK)

Dan Rasmussen - Five Investing Heresies (video, from last year) (LINK)

The Next Frontier in Storytelling Universes and the Never Ending Desire for More - by Matthew Ball (LINK)

The concentration of economic power has led to spectacular investment returns (LINK)

Technocracy: Will What We Love Ruin Us? - by Frank K. Martin (LINK)

History is Only Interesting Because Nothing is Inevitable - by Morgan Housel (LINK)

Grant’s Current Yield Podcast: Impossible is extinct (LINK)

The Disruptive Voice Podcast: Micromobility and The Future of Transportation: A Conversation with Horace Dediu (LINK)

"Shall I tell you now, in a word, the sum of human duty? Patience, where we are to suffer; and prudence in things we do." --Seneca

Thursday, February 6, 2020

Links

"I think most people get very few, what I call, no-brainer opportunities, where it’s just so damned obvious that this is going to work. And since they are very few and they may be separated by periods of years, I think people have to learn to have the courage and the intelligence to step up in a major way when those rare opportunities come by." --Charlie Munger (1997)

"Yeah. You've got to be willing to take a really big bite. And it’s crazy if you don’t. And it’s crazy if you dabble around at the edges, so you’re not prepared to take a big bite when the time comes." --Warren Buffett (1997)

Why it only costs $10k to ‘own’ a Chick-fil-A franchise [H/T @cristinagberta] (LINK)
The chicken chain is known for having the lowest entry cost of any major fast-food franchise — but there’s a catch.
Vanguard Broadens Reach With Entry Into Private Equity ($) (LINK)

Ray Dalio's response to the recent WSJ article on him and Bridgewater (LINK)

Corner Office from Marketplace (podcast): Janet Yellen and David Malpass on global economic slowdown (LINK)

1,000 True Fans? Try 100 (LINK)