Related previous post: Semper Augustus Investments Group: 2019 Annual Letter
Berkshire Hathaway Inc. Vice Chairman Charlie Munger, 95, spoke to Wall Street Journal reporters Nicole Friedman and Jason Zweig for six hours over dinner in his Los Angeles home on April 23. He covered a wide array of subjects. Here is an edited transcript from that conversation and a follow-up telephone discussion.
Related book (which a mentor of mine once said was probably the most useful book ever written): From Third World to First: The Singapore Story - 1965-2000Einstein’s Theory of Special Relativity (MetaLearn Podcast) (LINK)
Saturday marks an annual day of celebration for value investors: the release of Warren Buffett’s latest letter to Berkshire Hathaway Inc. shareholders.The nation that thrived by ‘nudging’ its population [H/T @mikedariano] (LINK)
Singapore has grown from almost nothing in 50 years. And this well-regarded society has been built up, partly, thanks to the power of suggestion.Xi's Debt Crackdown Goes Into Hyperdrive With Anbang Takeover (LINK)
Related book: Machine, Platform, Crowd: Harnessing Our Digital FutureExponent Podcast: Episode 142 — Google and Antitrust (LINK)
What have I learned since 1973? Some more basic unchangeables about human beings and human societies, the ways in which they can be made to do better, and the ever-present danger of regression and even collapse…I realize how very fragile a civilized society is…I have also come to understand the insignificance of personal achievements. For at 60, more than at 50, comes the realization of the transient nature of all earthly glories and successes, and the ephemeral quality of sensory joys and pleasures, when compared to intellectual, moral, or spiritual satisfactions…I have wondered how much of what I am is nature and how much was nurture? Would I have been a different person if I had not been tempered through the crucible of struggle?…Having taken life-and-death decisions and gone through one acute crisis after another, my perspectives, ambitions, and priorities have undergone a fundamental and, I believe, permanent, transformation. I may not have changed in my physical, mental, and emotional make-up, the hardware side. But the software side, my responses to God, glory, or gold, has been conditioned by my experiences. In other words, however capacious the hardware (nature), without the software (nurture), not much can be made of the hardware.
Related book: Meditation for Fidgety SkepticsAncient Infant's DNA Reveals New Clues to How the Americas Were Peopled - by Ed Yong (LINK)
This is truly stunning: Scientists have released a video showing evolution in action.
They built a table more than a meter long and put down a culture agent that allows bacteria (specifically, E. coli) to grow. But they set it up in a very interesting way. At each end of the table they allowed the bacteria to grow freely. But just inside these free zones they slathered a broad swath of an antibacterial substance, at a dose just more than enough to kill the critters. Then, next to those, they put down stripes at a dose 10 times that needed to kill them. Next to those were stripes 100 times the lethal dose, and then finally, in the center, a hyper-deadly patch 1,000 times stronger than needed to kill the original strain.
The video of what happens is staggering.
Howard Marks, co-chairman of Los Angeles–based Oaktree Capital Group , who appeared at the conference by video link, said he has taken the plunge and invested in oil-related assets. He also suggested that shares of social-media companies are too rich for the value crowd.
Marks, addressing about 450 attendees at London’s Queen Elizabeth II Conference Centre, blamed lower interest rates for distorting valuations. “Lower base interest rates have made all assets relatively more attractive than they otherwise would have been,” he said.
The manager said he doesn’t consider oil a value investment because it is impossible to calculate its intrinsic value. But he said he has made “oil-related investments,” which he wouldn’t specify, since January, when West Texas Intermediate, the U.S. benchmark crude, slipped below $30 a barrel.
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Investing By Design - by Chris Pavese (LINK)There was plenty of talk about emerging markets. James Montier, on the asset-allocation team at GMO, says they are genuinely cheap versus developed markets, especially after resources and financial stocks are stripped out. Jean-Marie Eveillard, formerly a portfolio manager at First Eagle Investment Management and now a board trustee, sees potential in India. “I am much more positive in the long term about India than I am about China,” he said.
Related book: The Selfish GeneBook of the day [H/T Scott Adams]: Impossible to Ignore
"Life is what you make of it. You are dealt a pot of cards. Your DNA is fixed by your mother and your father....Your job is to make the best of the cards that have been handed out to you. What can you do well? What can you not do well? What are you worse at? If you ask me to make my living as an artist, I'll starve; because I just can't draw.... But if you ask me...to argue a point out, I'll get by. [Those are] the cards I was handed out, and I make use of them. Don't try and do something you are not favored by nature to do."
Related previous post: A quick diversification thought...
We have a choice about where to aim the lens of our attention. We can relive past injustices, settle old grudges and nurse festering sores. We can imagine failure, build up its potential for destruction, calculate its odds. Or, we can imagine the generous outcomes we're working on, feel gratitude for those that got us here and revel in the possibilities of what's next.Tony Robbins now has a business podcast (LINK)
Related book: From Third World to First: The Singapore Story - 1965-2000Secret Tut Chamber? Egypt Calls Experts To Examine Evidence (LINK)
Related 2002 documentary: World of Mysteries - Tutankhamun
GMO's 1Q 2015 Letter includes Ben Inker's discussion on long-term government bonds in "Breaking Out of Bondage" and Jeremy Grantham's "Are We the Stranded Asset? (and other updates)," a discussion of long-term growth prospects in the U.S. as well as an update to "The Race of Our Lives" (1Q 2013).A few sets of notes from the Markel Meeting in Omaha, HERE, HERE and HERE.
Related book: The Little Book That Builds WealthSpring 2015 Issue of Graham & Doddsville (LINK)
The US private-equity investor could be in line for a $40m profit from the sale of two ships it acquired in a court-forced sale last summerThe strange case of Oaktree and Iran’s revolutionary guards (LINK)
At present, the most reliable measures we identify indicate that the S&P 500 is about 128% above the levels that would be historically associated with 10% long-term returns, and imply a net loss, including dividends, for the S&P 500 over the coming decade. Including a broader range of alternate (if slightly less reliable) measures brings that overvaluation to about 114% above historical norms, and results in our expectation of S&P 500 nominal total returns averaging just 1.5% annually over the coming decade.
I should emphasize that our total return projections embed the assumption of future growth in nominal GDP and S&P 500 revenues of 6% annually, despite the fact that these measures have grown at a rate of only 3.4% annually over the past 10-15 years. The reason we haven’t slashed our assumed growth rates is that historically, nominal growth and interest rate effects tend to cancel out in these projections. Specifically, if we get continued slow growth over the coming decade, we’re also likely to see depressed interest rates go hand-in-hand with that. The slower growth would negatively affect returns, but the lower interest rates could positively affect returns by encouraging somewhat higher terminal valuations. Historically, the 10-year Treasury yield has a positive correlation with nominal GDP and S&P revenue growth over the preceding decade, while stock valuations based on market cap/GDP or price/revenue have a negative correlation with nominal growth rates over the preceding decade. What we observe across a century of history is that those two effects repeatedly cancel out.
De Gaulle, because he had tremendous guts; Deng, because he changed China from a broken-backed state, which would have imploded like the Soviet Union, into what it is today; and Churchill, because any other person would have given up.
I do not wish to be remembered as a statesman. First of all, I do not classify myself as a statesman. I put myself down as determined, consistent, and persistent. I set out to do something, and I keep on chasing it until it succeeds. That is all. Anyone who thinks he is a statesman needs to see a psychiatrist.
Related book: From Third World to First: The Singapore Story - 1965-2000"60 Minutes" had three interesting segments last night, including one with Neil deGrasse Tyson (video) (LINK)
Last week, the Federal Reserve Open Market Committee (FOMC) began its statement on monetary policy indicating that recent data “suggests that economic growth has moderated somewhat.” While the Fed removed the phrase that “it can be patient in beginning to normalize the stance of monetary policy”, the Fed’s weaker view of the economy prompted an immediate retreat in Treasury yields, an abrupt drop in the foreign exchange value of the U.S. dollar, a surge in stock prices, and an upward spike in the dollar price of gold and oil. The basic thesis of all of these moves is that the Fed may wait longer before increasing the rate of interest that it pays to banks on idle cash reserves (viz., “raising interest rates”).
We agree – partly. As I noted a week ago, “From my perspective, it remains unclear whether the Fed will resist the temptation to defer hiking interest rates, given what we observe as a deteriorating economic landscape.” The problem for investors is that along with the initial moves in Treasury yields, the dollar, stocks, gold, and oil that followed the FOMC statement, we also saw credit spreads widen rather than narrow last week, while our measures of market internals continue to show divergences that indicate a shift investor preferences toward increasing risk aversion.
Related book: Setting the Table: The Transforming Power of Hospitality in BusinessBarry Ritholtz talks to Meb Faber (LINK)
Related book: Global Asset Allocation: A Survey of the World's Top Asset Allocation StrategiesThe Implosion Of A Warren Buffett Wannabe (LINK)
Related previous posts:
Days of Reflection for Man Who Defined Singapore
Charlie Rose: 2009 Interview with Lee Kuan Yew
Related book: From Third World to First : The Singapore Story: 1965-2000
Found via Simoleon Sense.
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Related previous post: Charlie Rose: 2009 Interview with Lee Kuan Yew