Thursday, May 31, 2018

Links

"I think that people underestimate—until they get older—they underestimate just how important habits are, and how difficult they are to change when you’re 45 or 50, and how important it is that you form the right ones when you’re young." --Warren Buffett

David Einhorn’s Greenlight Re Under Attack [H/T Linc] (LINK)

Factors from Scratch: A look back, and forward, at how, when, and why factors work - By Jesse Livermore, Chris Meredith and Patrick O’Shaughnessy (LINK)

Ben Thompson's talk at the 2018 Code Conference (video) (LINK)

Mary Meeker’s 2018 internet trends report (LINK)

Notes From Sohn Hong Kong Investment Conference 2018 (LINK)

American Innovations Podcast: DNA - Return of the Mammoths (Part 6) (LINK)

Revisionist History Podcast: A Polite Word for Liar (Memory Part 1) (LINK)

A New Genetic Clue to How Humans Got Such Big Brains - by Ed Yong (LINK)

The Increasingly Intricate Story of How the Americas Were Peopled - by Ed Yong (LINK)

Wednesday, May 30, 2018

Links

"Nothing could be more simple than to try and figure out what you find admirable and then decide...that the person you really would like to admire is yourself. And the only way you’re going to do it is take on the qualities of other people you admire." --Warren Buffett

"There is no reason, also, to look only for living models. The eminent dead are...some of the best models around. And, if...a model is all you want, you’re really better off not limiting yourself to the living. Some of the very best models...have been dead for a long time." --Charlie Munger

Thomas Peterffy's Speech on Successful Investing at The Trading Show Chicago 2018 Conference [H/T @HaydenCapital] (LINK)

User and Subscriber Businesses: The Good, the Bad and the Ugly! - by Aswath Damodaran (LINK)

Notes From London Value Investor Conference 2018 (LINK)

Are the U.S. and China Making the World Safe for Fraud? (LINK)

Videos from the ongoing 2018 Code Conference are starting to be put online (LINK)

Mind Control - By Josh Wolfe (LINK)

How to Impregnate a Rhino (Besides the usual way) - by Ed Yong (LINK)

Tuesday, May 29, 2018

Links

"A lot of things end up in the 'too hard' pile, and it doesn’t bother us.... We don’t have to be able to do everything well." --Warren Buffett

Howard Marks warns private equity standards slipping (LINK)
Private equity groups are lowering their standards over investment choices, raising money too easily and paying record prices in a shift that will lead to lower returns than the historical average for investors, according to Howard Marks, founder of Oaktree. 
Mr Marks, a billionaire investor, said private equity groups were being pushed into accepting poor terms on deals. He told the Financial Times that money managers have a “big impetus to get invested” even if it means backing bad ideas.
Why It Is Harder to Diagnose Hospital Stocks (LINK)
New accounting rules make assessing financial health more difficult for hospitals and companies that work with them
The analyst who quit his job to be a teacher and a 'Safal Niveshak' (LINK)

Invest Like the Best Podcast: The Darkest Night: Lessons from Battle and Value Investing, with Mike Zapata (LINK)

Steven Pinker chats with Jordan Peterson about his book Enlightenment Now (podcast) (LINK)

22 Rules for Creating Work That Stands the Test of Time - by Ryan Holiday (LINK)

"There are situations you will see over a long period of time...[where] it would be a mistake—if you’re working with smaller sums—it would be a mistake not to have half your net worth in.... Sometimes in securities, [you] see things that are lead-pipe cinches. And you’re not going to see them often and they’re not going to be talking about them on television or anything of the sort, but there will be some extraordinary things [that] happen in a lifetime where you can put 75 percent of your net worth or something like that in a given situation."  --Warren Buffett (2008)

Sunday, May 27, 2018

Rules vs. Habits

From Dan Ariely and Shane Parrish's chat on The Knowledge Project:
Dan Ariely: Having rules actually protects us. Imagine you invited me to do something and I said, “I’m sorry. I have a rule. I don’t give more than 10 talks a year, or I don’t do X, or Y, or Z.” You would not feel good saying, “Oh, would you please break your rules once for me?” The moment you have a rule, you basically are elevating something for yourself and for other people. You are creating a standard from it and it helps you protect yourself. 
If you think about religions—religions basically create rules and that’s incredibly important for the survival of the decision. So, I think we do need to think about the areas in our life where we don’t behave well and try to create rules for them. 
Shane Parrish: Why rules and not habits? 
Dan Ariely: Actually, you can think about habits, rules, and rituals as a continuum. Habits are those things that we do without thinking. When you think about the standard definition, a habit is something you do without thinking. You bite your nails, or slouch, or whatever it is. You can’t have a habit of running. You don’t go running and then you say, “Oh, where am I? I have no idea. I was running.” 
So, for things that are deliberate and take action, you need something more than a habit, but now you have rules and you have rituals, and there are differences between them. Rituals basically create a higher order meaning. Actually, both rules and rituals have one nice feature, which is that violating them one time, violates the principle. Right? 
So, imagine you have a rule that says, “I always recycle.” If you always recycle, one day not recycling is breaking your rule. Or think about somebody like a vegetarian. If you are vegetarian, you never eat meat. It’s not that you say, “I mostly don’t eat meat.” You create this rule that says, “I never do, I always do.” 
That helps you understand better where you are on this range. It helps you live according to your standards. 
If you said, for example, “I’m going to eat dessert on only one out of every four days,” odds are that you would cheat yourself. You will end up eating more dessert that you wanted. But if you have the rule that says, “I never eat dessert,” or, “I only eat dessert on Saturday,” that would be easier for you to keep. 
Then the most interesting one is rituals. Where rituals are, it’s not that they’re—the behavior itself becomes rewarding. If you think about ritualistic handwashing, for example, or whatever it is. You don’t have to wait for the outcome, but the ritual itself makes the behavior better. 
Shane Parrish: I think I’ve seen that with just anecdotally with friends, the difference between people who say, “Oh, I’m trying to eat healthier,” versus, “I don’t eat dessert.” Then, so if you’re saying, you don’t, you’re trying to eat healthier then every time you have to make this decision to eat healthier. Whereas, if your rule is, “I don’t eat dessert,” it’s almost like the decision is made for you, and then your default path changes and you have to make the exception to it. 
Dan Ariely: Exactly. That’s why it’s so much easier. Right? Whenever you can create the rule for behavior, and even if you give up some flexibility, it’s probably a good idea. 

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Saturday, May 26, 2018

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

Thursday, May 24, 2018

Links

"There’s a huge difference in the business that grows and requires a lot of capital to do so, and the business that grows, and doesn’t require capital. And I would say that, generally, financial analysts do not give adequate weight to the difference in those. In fact, it’s amazing how little attention is paid to that. Believe me, if you’re investing, you should pay a lot of attention to it.... Some of our best businesses that we own outright don’t grow. But they throw off lots of money, which we can use to buy something else. And therefore, our capital is growing, without physical growth being in the business. And we are much better off being in that kind of situation [than] being in some business that, itself, is growing, but that takes up all the money in order to grow, and doesn’t produce at high returns as we go along. A lot of managements don’t understand that very well, actually." --Warren Buffett (1994)

Roger Lowenstein reviews John Carreyrou's book Bad Blood [H/T Phil] (LINK)

Revisionist History Podcast: “Burden of Proof” (LINK)
In 2013, Malcolm gave a talk at the University of Pennsylvania on the subject of proof. How much evidence do we need of the harmfulness of some behavior, before we act? The lecture was about the long-ago fight over miner’s asthma — and about the unexpected death of a Penn student named Owen Thomas. Revisionist History returns to the question at the heart of the the talk, with a visit to Owen Thomas’s family.
American Innovations Podcast: DNA - Testing Times (Part 5) (LINK)

Elizabeth Gilbert talks with Krista Tippett (podcast) (LINK)

Edge #515: Sexual Double Standards - A Conversation With Martie Haselton (LINK)

Vaccines Alone Won’t Beat Ebola - by Ed Yong (LINK)

The Asteroid That Smote the Dinosaurs Burned the Birds Out of Trees - by Ed Yong (LINK)

Wednesday, May 23, 2018

Links

David Tepper's Commencement Speech at Carnegie Mellon University (video) (LINK)

Nassim Nicholas Taleb on Self-Education and Doing the Math (podcast and transcript) (LINK)

James Montier talks to Meb Faber (podcast) (LINK)

The Pygmalion Effect: Proving Them Right (LINK)

The Bill Gates Line - by Ben Thompson (LINK)

Walmart's India (Flipkart) Gambit: Growth Rebirth or Costly Facelift? - by Aswath Damodaran (LINK)

CDS Creativity Is Everywhere (LINK)

How a Pyramid Scheme Doomed the World’s Largest Amphibians - by Ed Yong (LINK)

Tuesday, May 22, 2018

Links

Some great compilations, via @AustinValue, on Charlie Munger, Warren BuffettBerkshire Transcripts (1994-2018), and Ben Graham.

Markel Brunch Notes [H/T Linc] (LINK)

Bill Gates' Summer Books for 2018 (LINK)
The books: 1) Leonardo da Vinci - by Walter Isaacson; 2) Everything Happens for a Reason and Other Lies I’ve Loved - by Kate Bowler; 3) Lincoln in the Bardo - by George Saunders; 4) Origin Story: A Big History of Everything - by David Christian; 5) Factfulness - by Hans Rosling, with Ola Rosling and Anna Rosling Ronnlund
Grant's Podcast: Surf and turf (LINK)
Jonathan Tepper, chief editor of Variant Perception, and John Hempton, chief investment officer of Bronte Capital Management, share their macro and micro expertise on corporate concentration and corporate fraud. 
Invest Like the Best Podcast: Data, Decisions, and Basketball with Sam Hinkie (LINK)

Where Humans Meet Machines: Intuition, Expertise and Learning [H/T @morganhousel] (LINK)
Erik Brynjolfsson, Director, MIT IDE, speaks with Nobel Laureate, Daniel Kahneman about AI decision-making
The Origins of Us (LINK)

Monday, May 21, 2018

Seneca quote

From "On the Happy Life":
I shall make whatever befalls me become a good thing, but I prefer that what befalls me should be comfortable and pleasant and unlikely to cause me annoyance: for you need not suppose that any virtue exists without labour, but some virtues need spurs, while others need the curb. As we have to check our body on a downward path, and to urge it to climb a steep one; so also the path of some virtues leads downhill, that of others uphill. Can we doubt that patience, courage, constancy, and all the other virtues which have to meet strong opposition, and to trample Fortune under their feet, are climbing, struggling, winning their way up a steep ascent? Why! is it not equally evident that generosity, moderation, and gentleness glide easily downhill? With the latter we must hold in our spirit, lest it run away with us: with the former we must urge and spur it on.

Sunday, May 20, 2018

Links

"There is no doubt that in exchanging a self-centered for a selfless life we gain enormously in self-esteem. The vanity of the selfless, even those who practice humility, is boundless." --Eric Hoffer, 

TED Talk -- Yuval Noah Harari: Why fascism is so tempting — and how your data could power it (LINK)

“If I Were Wrong, What Would It Look Like?” - by Morgan Housel (LINK)

Jack Bogle’s Battle (LINK)

Business Lessons about Growth from Andrew Chen (Andreessen Horowitz) - by Tren Griffin (LINK)

Bitcoin’s energy use got studied, and you libertarian nerds look even worse than usual [H/T @AlexRubalcava] (LINK)

Making Sense of Mortgages: The Problem, and the Opportunity (LINK)

John Doerr on Recode Decode (podcast and transcript) (LINK)
Related book: Measure What Matters
***

"Ideally, we like to invest in growing companies with a sustainable competitive advantage and attractive economics in combination with a management team that will intelligently redeploy or redistribute excess capital. In a world where it is difficult to find good ideas, our style is to diligently and patiently search the world for fat pitches, and then swing on the rare opportunity when we think the odds are in our favor. When times are good, we hope to invest in ideas that can double over three years. Given that we are not favorably disposed to ‘cheating’ on either valuation or quality, when ideas are harder to come by, as they are now, we are more likely to have higher than average cash levels. " --Peter Kinney and Mark Landecker, Acacia Capital (April 2007)