Jeff Bezos’ Letter to Shareholders

Link to: Jeff Bezos’ Letter to Shareholders

We have the good fortune of a large, inventive team and a patient, pioneering, customer-obsessed culture – great innovations, large and small, are happening everyday on behalf of customers, and at all levels throughout the company. This decentralized distribution of invention throughout the company – not limited to the company’s senior leaders – is the only way to get robust, high-throughput innovation. What we’re doing is challenging and fun – we get to work in the future. 

Failure comes part and parcel with invention. It’s not optional. We understand that and believe in failing early and iterating until we get it right. When this process works, it means our failures are relatively small in size (most experiments can start small), and when we hit on something that is really working for customers, we double-down on it with hopes to turn it into an even bigger success. However, it’s not always as clean as that. Inventing is messy, and over time, it’s certain that we’ll fail at some big bets too.

William H. Browne's Presentation at the Ivey Business School (February 25, 2014)

Link to video: Mr. William H. Browne, Managing Director, Tweedy, Browne Company LLC

The Hungry Microbiome: why resistant starch is good for you

For something part health, part biology related, here's a decent 4-minute overview on resistant starch, which I mentioned briefly before, HERE. I haven't posted a whole lot of health stuff lately, which is an interest of mine that comes and goes, but I put links to some things that have been useful for me below.

Link to video

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Three links that give a great overview of resistant start and how to get started trying it:

A Gut Microbiome, Soil-Based Probiotic, and Resistant Starch Primer For Newbies

The Definitive Guide to Resistant Starch

How to Conduct a Self Experiment: Resistant Starch

Not resistant starch related, but here are three health books that I recommend. There are certainly some differences between them, but most of the key ideas are the same:

Perfect Health Diet: Regain Health and Lose Weight by Eating the Way You Were Meant to Eat

The New Evolution Diet: What Our Paleolithic Ancestors Can Teach Us about Weight Loss, Fitness, and Aging

The Primal Blueprint: Reprogram your genes for effortless weight loss, vibrant health, and boundless energy

And if you don't want to read a whole book or just want an easy summary, this one is still my favorite: Archevore Diet

There are some additional supplements recommended in Perfect Health Diet that I may add to my list one of these days, but for the most part I personally have been experimenting with...

Fish Oil and Vitamin D: Recommended by most of the things I read, the ones I take are:

Carlson Labs Norwegian Cod Liver Oil

Carlson Labs Super Daily D3 2000IU Supplement

Resistant Starch and Probiotic

As the articles above mention, there are likely some benefits to varying your sources, especially adding in some whole food sources (like a green banana), but I'm personally starting with 1-4 tablespoons of Bob's Red Mill Potato Starch a day mixed in cool water that I also use to wash down 1-3 capsules a day of 1 of the 3 (or maybe 1 of each) probiotics Richard Nikoley recommended, which are THIS, THIS, or THIS.

Glutathione and BCAA (branched-chain amino acids)

Art De Vany recommends those from Guardian, which you can find HERE. Sometimes their shipping speeds have been inconsistent, so I've also tried experimenting with alternate versions of those supplements HERE and HERE.

I take the fish oil and vitamin D pretty regularly, and have also been taking the resistant starch and probiotic regularly as I experiment with that. I take the Glutathione and BCAA less often, and a little more randomly.

A book and a stock…

I don’t know much about it yet, but I noticed Coca-Cola Amatil Limited (CCL in Australia; CCLAF on the Pink Sheets) popping up on some screens and hitting a new 52-week low. If you know a lot about it and have some thoughts, I’d love to hear them: valueinvestingworld@gmail.com

I searched for the company on Amazon and this book popped up, which looks interesting as well: Coca-Globalization: Following Soft Drinks from New York to New Guinea

Charlie Munger checklist quote

Via Whitney Tilson’s notes from the 2007 Wesco Annual Meeting:

I’m a great believer in solving hard problems by using a checklist. You need to get all the likely and unlikely answers before you; otherwise it’s easy to miss something important.

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Related previous post: Charlie and Checklists

Related book: The Checklist Manifesto: How to Get Things Right

React intelligently; take the results as they fall

A lesson from Charlie Munger, via notes from the 2013 Daily Journal Annual Meeting:

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.”)

Howard Marks Memo: Dare to Be Great II

Link to: Howard Marks Memo: Dare to Be Great II

In September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results.  I’ve had some additional thoughts on the matter since then, meaning it’s time to return to it.  Since fewer people were reading my memos in those days, I’m going to start off repeating a bit of its content and go on from there. 

About a year ago, a sovereign wealth fund that’s an Oaktree client asked me to speak to their leadership group on the subject of what makes for a superior investing organization.  I welcomed the opportunity.  The first thing you have to do, I told them, is formulate an explicit investing creed.  What do you believe in?  What principles will underpin your process?  The investing team and the people who review their performance have to be in agreement on questions like these: 

• Is the efficient market hypothesis relevant?  Do efficient markets exist?  Is it possible to “beat the market”?  Which markets?  To what extent?
• Will you emphasize risk control or return maximization as the primary route to success (or do you think it’s possible to achieve both simultaneously)?
• Will you put your faith in macro forecasts and adjust your portfolio based on what they say?
• How do you think about risk?  Is it volatility or the probability of permanent loss?  Can it be predicted and quantified a priori?  What’s the best way to manage it?
• How reliably do you believe a disciplined process will produce the desired results?  That is, how do you view the question of determinism versus randomness?
• Most importantly for the purposes of this memo, how will you define success, and what risks will you take to achieve it?  In short, in trying to be right, are you willing to bear the inescapable risk of being wrong?

Passive investors, benchmark huggers and herd followers have a high probability of achieving average performance and little risk of falling far short.  But in exchange for safety from being much below average, they surrender their chance of being much above average. All investors have to decide whether that’s okay.  And, if not, what they’ll do about it. 

The more I think about it, the more angles I see in the title Dare to Be Great.  Who wouldn’t dare to be great?  No one.  Everyone would love to have outstanding performance.  The real question is whether you dare to do the things that are necessary in order to be great.  Are you willing to be different, and are you willing to be wrong?  In order to have a chance at great results, you have to be open to being both.

AIC 2014 Keynote: The Success Equation - Untangling Skill and Luck (Michael Mauboussin)

Link to Video

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Related book: The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing

[H/T Santangel’s Review]

Opalesque.TV interviews Jack Schwager

Link to interview: Schwager sums up key lessons of Market Wizards series, starts global search for ‘undiscovered traders'

In this Opalesque.TV video interview, we interview bestselling author Jack Schwager on his most recent book, "The Little Book of Market Wizards: Lessons from the Greatest Traders.” In the book, Jack summarizes the key lessons from his four previous Market Wizard books and offers insights from some of the world’s top financial traders, including Paul Tudor Jones, Bruce Kovner and Ray Dalio.

  

[H/T ValueWalk]

Cosmos: A Spacetime Odyssey: Hiding in the Light (Episode 5)

Link to video: Cosmos: A Spacetime Odyssey: Hiding in the Light