Links

Invest Like the Best Podcast: Chris Bloomstran - An Update on Public Markets (LINK)

Related previous post: Semper Augustus Investments Group: 2019 Annual Letter

Grant’s Current Yield Podcast: Class is in session [with Bruce Greenwald] (LINK)

Broyhill Portfolio Update (LINK)

Boyar Quarterly Letter (LINK)

Greenhaven Road Capital Q1 Letter (LINK)

[More Q1 letters can be found HERE and HERE.]

The Investing Edge Podcast: Value Investor’s Edge Live #18: On The Water In The Tanker Markets With Frontline’s CEO (LINK)

Matt Ridley on The Glenn Beck Show on BlazeTV (video) (LINK)

68 Bits of Unsolicited Advice - by Kevin Kelly (LINK)

It’s my birthday. I’m 68. I feel like pulling up a rocking chair and dispensing advice to the young ‘uns. Here are 68 pithy bits of unsolicited advice which I offer as my birthday present to all of you.

I Am So Lucky - by Trey Mancini [H/T Linc] (LINK)

What you need to know about the COVID-19 vaccine - by Bill Gates (LINK)

Links

"Ben Graham always used to say you can get in more trouble in investment with a good premise than with a bad premise, because the bad premise will shout out to you immediately as being fallacious, whereas with a good premise it’ll work for awhile. Businesses are worth more money if interest rates fall and stocks rise. But then eventually the market action of the securities themselves creates its own rationale for a large crop of buyers, and people forget about the reasons and the mathematical limitations that were implied in what got them excited in the first place. And after a while, rising prices themselves alone will keep people excited and cause more people to enter the game. And therefore the good premise, after a while, is forgotten except for the fact that it produced these rising prices.... People tend to forget about the importance of the price they pay as the experience of a bull market just sort of dulls the senses generally." --Warren Buffett (1997)

What I’m thinking about this New Year’s Eve - by Bill Gates (LINK)

As the year comes to an end, I reflect on how we can make our tax system more fair.

I've posted these before, but they are once again making the rounds, so in case anyone hasn't seen them yet.... Joel Greenblatt 2005 class videos (LINK) [And related to these, there are also old Bruce Greenwald lectures online, and more recent lectures from Aswath Damodaran.]

The Market is Huge! Revisiting the Big Market Delusion - by Aswath Damodaran (LINK)

2019 Position Review - by Harris Kupperman (LINK)

As Shale Wells Age, Gap Between Forecasts and Performance Grows ($) (LINK)

The 2010s Killed the Cult of the Tech Founder. Great! - by Steven Levy (LINK)

Imagining Our Future Through Tech (video) (LINK)

Grant’s Current Yield Podcast: Home Alone (LINK)

Acquired Podcast: The Lean Startup and the Long-Term Stock Exchange (with Eric Ries) (LINK)

Books for our time: seven classics that speak to us now [H/T @jasonzweigwsj] (LINK)

10 Important Lessons We Learned from the 2010s - by Mark Manson (LINK)

Links

"Many people believe that investors must make the macro decision to be either bullish or bearish. Our preference is to be agnostic, objectively finding absolute bargains, and in their absence, holding cash. In short, we are neither bullish nor bearish. We are value-ish." --Seth Klarman

Peter Lynch: How to Find Growth Opportunities in Today’s Stock Market (LINK) ["My best stocks have been ones where I didn’t have to worry about the big picture."]

Fidelity’s Peter Lynch: Do your research, don’t ‘play’ the market (video) [H/T Linc] (LINK)

Value Investing with Legends Podcast: Bruce Greenwald - Staying on the Right Side of the Trade (LINK)

Masters of Scale with Reid Hoffman (podcast): Bill Gates — The biggest success story you haven’t heard (LINK)

Fall 2019 Exhibit | Finding the Edge: The Work and Insights of Edward O. Thorp (video) (LINK)

Druckenmiller on 2020 Outlook, Monetary Policy, U.S. Election (video) (LINK)

All Asset All Access – Insights from Research Affiliates (LINK)

Could It Be That a Minsky “Moment” Lurks in the Shadows? - by Frank K. Martin (LINK)

11 Lessons from the Success of Disney+ - by Matthew Ball (LINK)

SoftBank Vision Fund Employees Depict a Culture of Recklessness (LINK)

Key Countries Aren’t Ready for Historic Ship-Fuel Switch (LINK)

The Market Huddle Podcast: Christmas with Kuppy (LINK)

Acquired Podcast: Convoy (with CEO Dan Lewis) (LINK)

The Disruptive Voice Podcast: Choosing College: Bob Moesta and Michael Horn on Why We Hire Education (LINK)

Doctors Prescribe More of a Drug If They Receive Money from a Pharma Company Tied to It (LINK)

Farnam Street’s 2019 Annual Letter to Readers (LINK)

The Infinite Game - by Blas Moros (LINK)

I wrote an essay I wish I had been given when I graduated from college, retired from tennis, and began the transition from student-athlete to the “real world.” 

Through this essay, I hope to provide some awareness and tools, namely around self-reflection and self-awareness, how to think about how to spend your time, what to look for in a job, and the importance of coaches and mentors. 

While written through the lens of a student-athlete, hopefully some of these principles and tools apply to a broader audience.

Links

What the Hell Happened at GE? - by Geoff Colvin (LINK)

How Elon Musk became an inequality machine - by Roger Lowenstein (LINK)

Banks Won Big in Washington. What It Means for Investors - by Jason Zweig ($) (LINK)

Business Lessons from Oprah Winfrey - by Tren Griffin (LINK)

[I like Bruce Greenwald, but this is your latest reminder that smart people can often be very wrong...] Bruce Greenwald on Amazon in 2012 (video) [H/T @maxolson] (LINK)

Related previous posts: 1) Amazon is going to do to enterprise cloud companies exactly what it did to book stores (April 2013); 2) Bruce Greenwald and Judd Kahn on competitive advantage and Apple (circa 2005)

[I'm late to these, but there were interesting segments on Google and Theranos on "60 Minutes" this past Sunday.]

How To Democratize Healthcare: AI Gives Everyone The Very Best Doctor (LINK)

13D Research: “Liquidity is the new leverage” (LINK)

Dan Ariely talks to Shane Parrish on The Knowledge Project Podcast (LINK)

Exponent Podcast: Black Holes (LINK)

Ben and James continue their discussion on why aggregators and platforms are different and why it matters for big companies, competitors, and regulators.

Marc Cohodes on The Jolly Swagmen Podcast (LINK)

Einstein’s Theory of Relativity Explained in One of the Earliest Science Films Ever Made (1923) (LINK)

Book of the day: Tube: The Invention of Television

Links

FULL TRANSCRIPT: BILLIONAIRE INVESTOR WARREN BUFFETT SPEAKS WITH CNBC’S BECKY QUICK ON "SQUAWK BOX" (LINK)

Charlie Munger's Yahoo Finance interview (LINK)

10 Insights from the 2018 Berkshire Hathaway Weekend [H/T @jasonzweigwsj] (LINK)

Warren Buffett’s Lieutenants Are Increasingly Running Berkshire (LINK)

Graham & Doddsville: Spring 2018 (LINK)

Stan Druckenmiller's comments at the 2018 Alexander Hamilton Award Dinner [H/T @MulletCap] (LINK)

Confronting Tech's Titans: Schooling Wall Street on Silicon Valley | Scott Galloway Interview (Real Vision video) (LINK)

The Very First Animal Appeared Amid an Explosion of DNA (LINK)

***

Audible's latest sale, which ends May 10th, has some good titles on sale. Some of note are below:

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance - by Ron Chernow

The Rational Optimist: How Prosperity Evolves - by Matt Ridley

Bird by Bird: Some Instructions on Writing and Life - by Anne Lamott

Nothing to Envy: Ordinary Lives in North Korea - by Barbara Demick

Option B: Facing Adversity, Building Resilience, and Finding Joy - by Sheryl Sandberg and Adam Grant 

No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II - by Doris Kearns Goodwin

Into Thin Air - by Jon Krakauer

Links

Bruce Greenwald: Channeling Graham and Dodd (LINK)

A good active investing process consists of a value orientation, specialization, and, to be in the upper half of the return distribution, reliability. Buffett isn’t telling you the full story, because he doesn’t want to create competition for himself. He is saying yes, by all means do passive investing, but [he isn’t saying that] to people who understand and apply these principles in a disciplined way. Is he going to do passive investing himself? Of course not. And remember, even with this trend, 70% of people are doing active investing. And passive is not so passive. These guys jigger the models all the time. The nightmare scenario for value investors isn’t passive investing; it’s everybody takes a value approach. 

What do you tell your students? 

I tell them—which they don’t like at all—that they have to specialize. If you go to a firm, and they have you doing autos for one month and consumer nondurables for another month, and then they start you looking at financials, you aren’t going to master any of it. You are going to make stupid investment decisions, and they are going to fire you. You want to spend two to three years developing a specialty. When you get good at that, you can start to develop a second specialty. Once you appreciate what specialized knowledge of an industry looks like, then you have to be disciplined about looking in that area and at the disasters there. So if you have three specialties, two in industries hitting on all cylinders and the third is underperforming, where will you spend all your time? The underperforming one, so you can assess the probability of recovery.

The Dot-Com Boom and Bust - by Tren Griffin (LINK)

Assembling a Dream Team: How Gender Diversity Can Strengthen Your Team - by Michael Mauboussin, et al. (LINK)

Aldi case study (2005) (LINK)

The Panera Bread Story – Told by Founder Ron Shaich (LINK)

a16z Podcast: Quantum Computing, Now and Next (LINK)

92nd Street Y: Sheryl Sandberg and Adam Grant in Conversation with Katie Couric (video) (LINK)

Related book: Option B: Facing Adversity, Building Resilience, and Finding Joy

92nd Street Y: A mind-expanding tour of the cosmos with Neil deGrasse Tyson and Robert Krulwich (video) (LINK)

Related book: Astrophysics for People in a Hurry

Links

"I think that a life properly lived is just learn, learn, learn all the time. And I think Berkshire's gained enormously from these investment decisions by learning, through a long, long period. Every time you appoint a new person that's never had big capital allocation experience, it's like rolling the dice. We're way better off having done it for so long. But the decisions blend; and the one feature that comes through is the continuous learning. If we had not kept learning, you wouldn't even be here. You'd be alive probably, but not here." -Charlie Munger (47:48-48:35 of the YouTube video from the annual meeting)

"I think we have one other advantage: A lot of other people are trying to be brilliant and we're just trying to stay rational. It's a big advantage." -Charlie Munger (1:17:29)

I'm back after a fun weekend in Omaha. For those that missed the Berkshire Hathaway Annual Meeting, the replay is available HERE. And it also appears to be on YouTube HERE. The Wall Street Journal also had some good coverage HERE. 

***

Warren Buffett, Charlie Munger and Bill Gates also appeared on CNBC this morning. Here are links to those videos (Someone also seems to have put the CNBC show on YouTube HERE): 

Buffett: I should have had better insight into Google 

Buffett: If I had to short or buy Google, I'd buy it  

Buffett: Little price sensitivity for Apple  

Buffett: There are a lot of possibilities with IBM's Watson

Buffett: I've got the cure for AI...  

Buffett: I don't put too much weight in any given election

Buffett: I've never made a trade based on GDP

Buffett: Natural gas prices help railroads

Buffett: Housing improving but not booming

Buffett: Credit card sales tell a lot about the consumer

Buffett: 3G has followed the standard capitalist formula

Buffett: Productivity is the 'guts' of capitalism

Buffett: United made a mistake in initial response

Buffett: Airline passengers are very price conscious

Buffett: Wells Fargo obviously incentivized the wrong thing

Buffett: High load factor and airlines

Buffett: If you pay big prices for something, you're counting on earnings

Buffett: 5 highest value companies don't take capital

Buffett: Jeff Bezos was brillant

Buffett: Stocks a bargain if you think rates stay low

Charlie Munger: We should have single-payer medicine

Charlie Munger: There's a lot to be said for health care for all

Buffett: Health-care bill huge tax cut for the rich

Fixing America's health-care system

Buffett: I'm very suspicious of dynamic scoring

Bill Gates: State Department helps us 'perform miracles'

Bill Gates: You need health care, education and opportunity to escape poverty trap

Charlie Munger: Lot of idiotic deals in venture capital

Charlie Munger: Every failure stings

Buffett: I don't make investment decisions based on who's president

Buffett: 'Unlimited' resources of our friendship

***

Other links...

Warren Buffett Isn’t Retiring but Some of His Lieutenants Are (LINK)

Look Back and Learn: A History of Mutual Funds - by Jason Zweig (LINK)

Quantitative Investing: A Crisis Waiting to Happen - by Jason Zweig (LINK)

Related book: The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction - by Richard Bookstaber

A Dozen Lessons on Finance and Business from Ambrose Bierce - by Tren Griffin (LINK)

The Brooklyn Investor blog discusses Fairfax India Holdings (LINK)

Horizon Kinetics: 1st Quarter Commentary [H/T ValueWalk] (LINK)

What to Do When You Fail in China (Pt 1): Danone vs. Carlsberg Beer - by Jeffrey Towson (LINK)

Bill Gurley On Transforming Health Care - The Ezra Klein Show (podcast) (LINK)

How I Built This podcast - Lonely Planet: Maureen & Tony Wheeler (LINK)

Exponent podcast: Episode 113 — WeChat, China, and Apple (LINK)

Bruce Greenwald and Joseph Stiglitz discuss globalization at Columbia Business School's 2017 Reunion Weekend (video) [H/T ValueWalk] (LINK)

Tyler Cowen on EconTalk (podcast) (LINK)

Related book: The Complacent Class

Steve Keen on the Macro Voices podcast (LINK)

Related book (recently released): Can We Avoid Another Financial Crisis?

The Mozart in the Machine - by Yuval Noah Harari [H/T The Browser] (LINK)

The Meaning Of Life In A World Without Work Society - by Yuval Noah Harari (LINK)

Related book: Homo Deus

How a Frog Became the First Mainstream Pregnancy Test - by Ed Yong (LINK)

Book of the day [H/T Chris]: Freedom's Forge: How American Business Produced Victory in World War II

***

On a separate note, I'm also looking to try and find a PDF of all of the past issues of Outstanding Investor Digest. There are a few issues and/or sections of issues floating around for free online, but given the quality of the information, it would be great to have them all. And given the difficulty of communicating with OID, even if one is willing to pay to have them, I thought I'd check in and see if anyone out there has already compiled them and might be willing to share. If yes, my email address is: valueinvestingworld@gmail.com. Thanks!

Links

“A trust-based, win-win culture that’s genuine in every respect is how to take the normal levels of human effort; such as productivity, co-operation, and ingenuity; and to multiply them by five or 10 times.” -Peter Kaufman (source)

Uber’s C.E.O. Plays With Fire (LINK)

Workplace culture should be measured, just like sales or ROI (LINK)

Michael Bloomberg on 60 Minutes (video) (LINK)

The media mogul says most of his fortune will go to his foundation - viewing personal philanthropy not as a threat to democracy, but a way to get things done.

Hamdi Ulukaya on 60 Minutes (video, from 2 weeks ago) (LINK)

Hamdi Ulukaya built the best-selling yogurt brand in the U.S. after coming here 23 years ago. Today, 70% of Chobani employees are American born, 30% are immigrants and refugees.

Grab Your Pitchforks, America, Your 401(K) May Need Defending From Congress - by Jason Zweig (LINK)

Reid Hoffman on How to Be a Great Founder - by Ian Cassel (LINK)

Some great notes from a talk given by Sanjay Bakshi (LINK)

Mohnish Pabrai's two cents on Seritage Growth Properties (LINK)

Mental Model: Hanlon’s Razor (LINK)

Latticework of Mental Models: Physics Envy (LINK)

The Rise of the Freemium Business Model - by Tren Griffin (LINK)

Starting Is Easy, Finishing Is Hard - by Fred Wilson (LINK)

How Online Shopping Makes Suckers of Us All (LINK)

Tesla Has Something Hotter Than Cars to Sell: Its Story [from a couple of weeks ago] (LINK)

As Tesla shares surged past $300 this week and the company’s market value surpassed Ford’s, even its founder, Elon Musk, acknowledged on Twitter that the company was “absurdly overvalued if based on the past.” 

...“It’s nuts,” Bruce Greenwald, a professor at Columbia Business School and an expert in value investing, said of Tesla’s stock price. “Investors believe it’s going to dominate a market that no company has ever dominated before.”

How I Built This podcast -- Real Estate Mogul: Barbara Corcoran (LINK)

Russell Napier talks to James Grant (podcast) (LINK)

Related book: Anatomy of the Bear

G. Edward Griffin on the Peak Prosperity podcast [H/T ValueWalk] (LINK)

Related book: The Creature from Jekyll Island

Scientists find giant, elusive clam known as ‘the unicorn of mollusks’ [H/T Linc] (LINK)

Watch the World’s Biggest Animal Lunge for its Dinner (LINK)

For Audible members, the current 50% off sale ends tonight at 11:59 PM PT. Here are some of the under $10 audiobooks that stood out to me (i.e. better value than using a credit):

Astrophysics for People in a Hurry - by Neil deGrasse Tyson (to be released next week)

Cosmos – by Carl Sagan (to be released at the end of May)

The Demon-Haunted World: Science as a Candle in the Dark - by Carl Sagan (to be released at the end of May)

Churchill (The Great Courses)

Being Human: Life Lessons from the Frontiers of Science (The Great Courses)

Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age

Competing Against Luck: The Story of Innovation and Customer Choice

Overcomplicated: Technology at the Limits of Comprehension

The Wawa Way: How a Funny Name and Six Core Values Revolutionized Convenience

Economics in One Lesson - by Henry Hazlitt

Links

James Chanos and Kyle Bass speak with Bethany McLean at Vanity Fair's New Establishment Summit on the global economy and stock markets (video from a couple of weeks ago) [H/T @kevin_holloway] (LINK)

Related book (recommended by Chanos in the interview): The Seven Signs of Ethical Collapse

A short Interview with Bruce Greenwald (video) [H/T ValueWalk] (LINK)

Notes From Invest For Kids Chicago 2016 (LINK)

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

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

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

Freakonomics Radio (podcast): In Praise of Incrementalism (LINK)

What do Renaissance painting, civil-rights movements, and Olympic cycling have in common? In each case, huge breakthroughs came from taking tiny steps. In a world where everyone is looking for the next moonshot, we shouldn't ignore the power of incrementalism.

What I Saw On My Wild Visit To a Beach Where the World’s Most Valuable Diamonds Wash Ashore [H/T @MerrynSW] (LINK)

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

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

Links

If you'd like to listen to the Code Conference talks in a podcast app, they are available via the 'Recode Replay' podcast.

Bill and Melinda Gates at Code Conference 2016 (video) (LINK) [I don't see a complete video yet, but the full discussion appears to be on the podcast.]

Elon Musk at Code Conference 2016 (video) (LINK)

Sundar Pichai at Code Conference 2016 (video) (LINK)

Mary Meeker's 2016 internet trends presentation (LINK)

London Value Investor Conference Notes 2016 (LINK)

Bruce Greenwald and Joseph Stiglitz discussed the state of the economy at Columbia Business School's 2016 Reunion (video from mid-April) (LINK)

Ben Franklin and the Virtues and Ills of Pursuing Luxury (LINK)

Books of the day:

How Brands Grow: What Marketers Don't Know

How Brands Grow: Part 2: Emerging Markets, Services, Durables, New and Luxury Brands

Links

Oaktree Insights - Strategy Primer: Investing in Mezzanine Debt (LINK)

Spring 2016 Issue of Graham & Doddsville (LINK)

Horizon Kinetics' latest in their index series: How Indexation is Creating New Opportunities for Short-Sellers, And Why This Should Alarm Ordinary Buyers of Stock and Bond ETFs (LINK)

Bruce Greenwald's Talk at GuruFocus Value Conference Notes (LINK)

Mutual Fund Observer, May 2016 (LINK)

David Einhorn's Q1 Letter [H/T ValueWalk] (LINK)

The Absolute Return Letter - May 2016 (LINK)

Audio interview with James Grant discussing his piece in Time magazine (~13 minutes) [H/T ValueWalk] (LINK)

Yanis Varoufakis: "And the Weak Suffer What They Must?" | Talks at Google (LINK)

Everything as a Service - by Ben Thompson (LINK)

How Uber conquered London [H/T @iancassel] (LINK)

Coupang: The $5 Billion Startup Filling Amazon's Void In South Korea (LINK)

The Secret Culprit in the Theranos Mess [H/T The Big Picture] (LINK)

Duncan Clark: "Alibaba: The House That Jack Ma Built" | Talks at Google (LINK)

Related book: Alibaba: The House That Jack Ma Built

Exponential Wisdom Podcast - Episode 21: Inside the Future of Healthcare (LINK)

Latticework of Mental Models: The Two Systems of Thinking (LINK)

Related book: Thinking, Fast and Slow

Evolution’s Next domain, the Symbology - by Nick Gogerty (LINK)

Related book: The Nature of Value: How to Invest in the Adaptive Economy

David MacKay - final interview and tribute (video) (LINK)

Related book: Sustainable Energy - Without the Hot Air

Life As We Know It - By Bill Gates (LINK)

Related book: The Vital Question: Energy, Evolution, and the Origins of Complex Life

If you're interested in blockchain technology, I've seen a couple of mentions of the new book The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology.

Book of the day [Bill Gates and Charlie Munger both mentioned they just read it. Munger said he enjoyed it but was disappointed with the conclusions.]: The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War

Links

Two great additions to the value investor's library were just released:

Concentrated Investing: Strategies of the World's Greatest Concentrated Value Investors 

Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor

Latticework has posted an excerpt from the Boyles Q1 letter, where we discussed our largest new purchase during the quarter (LINK)

Stop Crashing Planes: Charlie Munger’s Six-Element System (LINK)

Warren Buffett recalls the craziest question ever asked at Berkshire Hathaway’s annual meeting (video) (LINK)

An article about Bruce Greenwald's comments at the Minsky Conference [H/T ValueWalk] (LINK)

Raghuram Rajan’s Frank Careers Advice for Graduating Students [H/T @jasonzweigwsj] (LINK)

Constellation Software's elusive CEO (2014 article) [H/T @LockStockBarrl] (LINK)

How To Use Fear Before It Uses You (LINK)

Seneca: on the firmness of the wise person (LINK)

Links

If you want to be like Warren Buffett and Bill Gates, adopt their voracious reading habits [H/T @jasonzweigwsj] (LINK)

Bruce Greenwald: The Death of Manufacturing (video) [H/T ValueWalk] (LINK) [The full video of that session at the 2016 Minsky Conference is available HERE. And more videos from the conference are avalaible HERE.]

Jim Chanos and the art of short-selling (27-page transcript PDF) [H/T @BarbarianCap] (LINK) [Or you can also listen to the audio of this Alphachatterbox podcast HERE.]

The Most Important Question We Never Ask: And then what? (LINK)

Less is more: what does mindfulness mean for economics? (LINK)

Hussman Weekly Market Comment: Lessons From The Iron Law of Equilibrium (LINK)

It’s largely forgotten that during the 2000 top formation, the S&P 500 lost 12% from July-October 1999, recovered to fresh highs, retreated by nearly 10% from December 1999 to February 2000, recovered to fresh highs, experienced another 10% correction into May, recovered to a new high in total return (though not in price) on September 1, 2000, retreated 17% by December, and by January 2001 had recovered within 10% from its all-time high, and was unchanged from its level of June 1999. 

Likewise, during the 2007 top formation, the S&P 500 corrected nearly 10% from July to August, recovered to a fresh high in October, corrected over 10% into November, recovered nearly all of it by December, followed with a 16% loss, and by May 2008 had recovered within 9% of its all-time high, and was unchanged from its level of October 2006. 

In 1954, John Kenneth Galbraith offered a similar narrative of the top-formation leading up to the 1929 crash: “The temporary breaks in the market which preceded the crash were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed that the end had come. On various of these occasions the Times happily reported the return to reality. And then the market took flight again. Only a durable sense of doom could survive such discouragement. The time was coming when the optimists would reap a rich harvest of discredit. But it has long since been forgotten that for many months those who resisted reassurance were similarly, if less permanently, discredited.” 

I continue to have little doubt that the current market cycle will be completed by a 40-55% market collapse, with near-zero total returns for the S&P 500 on a 10-12 year horizon. Meanwhile, however, we have to accept that central banks have wreaked havoc on the ability of the financial markets to usefully allocate capital toward productive ends. Relevant warning signs that would normally prevent misallocation and malinvestment have been repeatedly disabled in the advancing half-cycle since 2009.

Book of the day: The Wit and Wisdom of Lee Kuan Yew

The Past, Present, and Future of Value Investing: A discussion with Professor Bruce Greenwald

Link to video: The Past, Present, and Future of Value Investing: A discussion with Professor Bruce Greenwald

Columbia Business School was the birthplace of value investing. To celebrate the School’s storied history over the past 100 years, Professors Bruce Greenwald and Tano Santos sat down on February 8th to discuss the investing philosophy. 

Santos, the David L. and Elsie M. Dodd Professor of Finance and co-director of the Heilbrunn Center for Graham & Dodd Investing, interviewed Greenwald on value investing’s past, present, and future. Professor Bruce Greenwald, is the Robert Heilbrunn Professor of Finance and Asset Management and the co-director of the School’s Heilbrunn Center for Graham & Dodd Investing. Described by the New York Times as “a guru to Wall Street’s gurus,” Professor Greenwald is a leading authority on value investing and a celebrated Columbia faculty member who has received the School’s Presidential Teaching Award for educational excellence.

[H/T Lukas]

Links

The inner lives of animals are hard to study. But there is evidence that they may be a lot richer than science once thought. [H/T Will] (LINK)

Related previous post: The Worst Crime in History - by Yuval Noah Harari

Bruce Greenwald Resource Page (LINK)

Don’t Break Up the Banks. They’re Not Our Real Problem. - by Steve Eisman [H/T ValueWalk] (LINK)

The above also reminded me of a recent Eisman interview which I don't think I linked to yet, HERE, with the excellent quote/advice below.

Is there any wisdom you can impart to average investors? 

Do your own homework. I can’t overstate the importance of this. When things start to go bad, speaking to the management of the company may be the worst thing you can do. You can walk away thinking things are okay when in fact they’re not, because seeing outside your own paradigm is sometimes the hardest thing to do.

Stocks That Triple In One Year (LINK)

Hussman Weekly Market Comment: When Stocks Crash and Easy Money Doesn't Help (LINK)

Credit default swaps continued to soar last week, particularly among European banks. Given that risks surrounding China and the energy sector are widely discussed, European banks continue to have my vote for “most likely crisis from left field.” 

With regard to the stock market, I suspect that the first event in the completion of the current market cycle may be a vertical loss that would put the S&P 500 in the mid-1500’s in short order. That area is a widely-recognized “role-reversal” support level matching the 2000 and 2007 market peaks, and would at least bring our estimates of prospective 10-year S&P 500 nominal total returns to about 5%, which seems a reasonable place for value-conscious investors to halt the initial leg down.

Links

What They Don’t Teach You in Business School (LINK)

Thoughts on Fastenal (LINK)

Bill Miller on CNBC (videos) [H/T ValueWalk] (LINK)

Paul Graham: Default Alive or Default Dead (LINK)

The Upside of Having to Pee - by Jonah Lehrer (LINK)

When Prime Minister David Cameron is giving an important speech, or in the midst of difficult negotiations, he relies on a simple mental trick known as the full bladder technique. The name is not a metaphor. Cameron drinks lots of liquid and then deliberately refrains from urinating, so that he is “desperate for a pee.” The Prime Minister believes that such desperation comes with benefits, including enhanced clarity and improved focus. 

.....

This new study suggests that the discrepancy depends on timing. When self-control tasks are performed sequentially, such as resisting the urge to eat a cookie and then working on a tedious puzzle, the ego gets depleted; the will is crippled by its own volition. However, when two self-control tasks are performed at the same time, our willpower is boosted: we perform better at both tasks. “We often do not realize the many situations in our daily lives where we’re constantly exerting self control and how that affects our capacity,” wrote co-author Iris Blandón-Gitlin in an email. “It is nice to know that we can also find situations where our mental resources can be facilitated by self-control acts.” 

There are some obvious takeaways. If you’re trying to skip dessert, then you should also skip the bathroom; keep your bladder full. The same goes for focusing on a difficult activity  – you’re better off with pressure in your pants, as the overlapping acts of discipline will give you even more discipline. That said, don’t expect the mental boost of having to pee to last after you relieve yourself. If anything, the ego depletion effect might then leave you drained: All that willpower you spent holding it in will now hold you back.

Teeth from China reveal early human trek out of Africa (LINK)

Book of the day [H/T to the friend who recommended I listen to the LSE podcast with Trott]: One Plus One Equals Three: A Masterclass in Creative Thinking

Investing quote of the day: "There are ways of looking for stocks that take advantage of specialization and of these human tendencies to buy lottery ticket stocks, which investors do because they think they know more than they do. We are refining valuation methodologies all the time by carefully looking at and thinking about what outstanding practitioners like Warren Buffett do and integrating that into consistent, remarkably effective strategies." -Bruce Greenwald

Links

Seth Klarman’s Presentation To Bruce Greenwald’s 2010 CBS Class (video) [H/T ValueWalk] (LINK)

Tren Griffin joins the a16z Podcast to talk about his book on Charlie Munger (LINK)

Related link: A Dozen Things I’ve Learned from Charlie Munger about Inversion (including the Importance of being Consistently Not Stupid)

Jason Zweig talks with Barry Ritholtz on the Masters in Business podcast (LINK)

Related book: The Devil's Financial Dictionary

James Grant on WealthTrack (video) [H/T Will] (LINK)

Richard Duncan on CNBC (video) (LINK)

Hussman Weekly Market Comment: The Beauty of Truth and the Beast of Dogma (LINK)

In short, my view is that activist Fed policy is both ineffective and reckless (and the historical data bears this out), and that the Federal Reserve has pushed the financial markets to a precipice from which no gentle retreat is ultimately likely. Similar precipices, such as 1929 and 2000, and even lesser precipices like 1906, 1937, 1973 and 2007 have always had unfortunate endings (see All Their Eggs in Janet’s Basket for a review). A quarter-point hike will not cause anything. The causes are already baked in the cake. A rate hike may be a trigger with respect to timing, but that’s all. History suggests we should place our attention on valuations and market internals in any event.

A review of Robert Hagstrom’s book Latticework: The New Investing (LINK)

WHAT MAKES UBER RUN (LINK)

Matt Ridley: Genetics is good for you (LINK)

How This Cave-Dwelling Fish Lost Its Eyes to Evolution (LINK)

Homo Naledi, New Species in Human Lineage, Is Found in South African Cave (video and article) (LINK) [I loved this quote from the article, which is true in science, investing and many other things as well: "The finding, like so many others in science, was the result of pure luck followed by considerable effort."]

Book of the day: Time, Love, Memory: A Great Biologist and His Quest for the Origins of Behavior

Links

The BIS Annual Report (LINK)

Steve Keen: "If you want to understand Greece today, read Wynne Godley from 1992." (LINK)

The Bruce Greenwald Method [H/T @mjmauboussin] (LINK)

Steven Romick’s Speech To CFA Society Of Chicago [H/T ValueWalk] (LINK)

We will therefore continue to focus our energies on the search for great businesses at good prices or decent businesses at great prices. We try and keep it simple. I confess that I didn’t always operate this way. In my early years, I ended up too much in the weeds. I had to know everything about a company and its industry. I’ve since learned that knowing less is okay as long as you have identified the one to three things that will drive the company. We believe exactness offers little so we prefer to establish a potential range of outcomes instead. We’d rather be directionally right rather than precisely wrong. 

We spend a lot of time asking such questions as: “How does the business work?” “Why does this opportunity exist?” And then, “What if?” Knowing that successful investing is as much about finding winners as it is about avoiding losers, we invert a favorable thesis so as to see it through less rose-colored lenses, all of which hopefully limits negative surprises. 

... 

Stocks ask you different questions at different prices. One needs fewer answers at a low price versus a high price. For example, a container ship company priced as if its vessels are worth just scrap value requires only a couple of questions like, “How much cash might be burned before the market rebounds?” and “Can its balance sheet support that?” Whereas if you bought that same container ship company with good current cash flow but day rates are at highs and its stock is trading at two times book value, you’d be far more dependent on the sustainability of the day rate. You’d then have to ask whether or not the management team would spend their free cash flow wisely. In the first case, you’d worry less about their capital allocation decisions because they’d be lacking free cash flow and financial flexibility. 

Scott Adams: How Do You Avoid Email? (LINK)

TED Talk - Chris Urmson: How a driverless car sees the road (LINK)

Brad Feld speaks at Big Omaha 2015 (video) (LINK)

Sam Harris and Dan Carlin in podcast discussing American interventionism, the war on terror, and related topics (LINK) [And on a related-to-podcasts note, thanks to Max for telling me about the Overcast app, which is great for listening to podcasts.]

Matt Ridley: Invasive species are the greatest cause of extinction (LINK)

Cephalopod Week Wrap-Up (LINK)

Book of the day [H/T @dccommonsense]: The Wages of Destruction: The Making and Breaking of the Nazi Economy

Links

Bruce Greenwald: An Alternative Explanation of the Great Recession (video) [H/T ValueWalk] (LINK) ["What I'm going to start talking about, because this is a Minsky conference, is something that Hyman Minsky identified that's been largely overlooked now. Which is that the notion that balance sheet crises are something novel I hope has Hyman Minsky rolling over in his grave. Because not only did he identify in qualitative terms a sequence of balance sheet crises -- which by the way fill an important gap in Keynesian theory. The problem with basic Keynesian models is that they're not cyclical models."]

Related books from Hyman Minsky: Stabilizing an Unstable Economy; Can It Happen Again?: Essays on Instability and Finance; John Maynard Keynes (Minsky's re-interpretation of the Keynesian Revolution)

No Ordinary Disruption: the four global forces breaking all the trends (LINK)

In a new book, No Ordinary Disruption, the three leaders of the McKinsey Global Institute, McKinsey's business and economics research arm, argue that the world is now roughly in the middle of a dramatic transition as a result of four fundamental disruptive trends: growth and urbanisation in emerging markets, technological disruption, increasing connectivity, and the ageing of populations. None of these disruptions, on its own, is a surprise. The unique challenge is that they are happening at the same time - and on a huge scale, creating second-, third-, and even fourth-order effects that are scarcely possible to anticipate. As they collide, they will produce change so significant that much of the management intuition that has served us in the past will become irrelevant, causing us to reset our collective intuition.

Paul Volcker warns on health of US state finances [H/T Matt] (LINK)

Related report: Truth and Integrity in State Budgeting

Brain Pickings: The Dalai Lama’s Daily Routine and Information Diet (LINK)

Related book; The Open Road: The Global Journey of the Fourteenth Dalai Lama 

Camera traps provide treasure trove of African animal pics (LINK)

Links

Elizabeth Holmes on Charlie Rose (video) (LINK) [And the video of her May commencement speech at Pepperdine which is mentioned in the interview, is HERE. "Success is not a result of spontaneous combustion. You must set yourself on fire."]

Richard Thaler talks to Google about his new book, Misbehaving: The Making of Behavioral Economics (video) [H/T ValueWalk] (LINK)

How a curmudgeonly old reporter exposed the FIFA scandal (LINK)

Related books: Foul!: the Secret World of Fifa; Bribes, Vote Rigging and Ticket Scandals (2006); Omertà: Sepp Blatter's FIFA Organised Crime Family (2014)

Bruce Greenwald on Challenges Finding Opportunities [H/T ValueWalk] (LINK) [There are also a few more videos from First Eagle, HERE.]

InvestingByTheBooks interviews William Green about his book, The Great Minds of Investing (LINK)

Why Did John Malone Invest in Lions Gate? (LINK)

Meet the Journalist Who Fooled Millions About Chocolate and Weight Loss (LINK) [This also reminds me of an article Peter Bevelin mentioned in one of my interviews with him: Why Most Published Research Findings Are False.]

How Ink Is Made (video) [H/T The Late Show Podcast] (LINK)

The Pillars of Creation: What's changed? (LINK)

In Michael Lombardi's interview with Shane Parrish, he mentioned Evan Thomas' biography of Robert Kennedy as being one that had a big influence on him. It looks like Thomas is set to come out with a biography on Richard Nixon in a couple of weeks, which Walter Isaacson recently recommended: Being Nixon: A Man Divided