A rare interview with Frank Martin, via the always excellent work of The Manual of Ideas (LINK)
Related link: Frank Martin's 2014 Annual LetterThe Brooklyn Investor comments on the Berkshire Hathaway Annual Report (LINK)
Related previous post: A few comments on the Berkshire Hathaway letter to shareholdersTim Ferriss talks with Mark Hart and Raoul Pal on his podcast: Hedge Funds, Investing, and Optimizing Lifestyle (LINK)
The British Origins of the US Endowment Model (LINK)
Ross Ashcroft talks to George Cooper, author of Money, Blood and Revolution (audio) (LINK)
Five Good Questions for Scott Fearon about his book Dead Companies Walking (LINK)
An interview with Jony Ive: The man behind the Apple Watch (LINK)
StarTalk Live! Podcast: Evolution with Richard Dawkins and Bill Nye (Part 1) (LINK) [Related books, in what I think is a decent order in which to read them, HERE.]
Quote of the day, which has been posted on the blog before HERE, but is worth repeating many times over: “Most geniuses—especially those who lead others—prosper not by deconstructing intricate complexities but by exploiting unrecognized simplicities.” (The article it originally came from was a January 2014 article describing Peyton Manning, HERE.)
That quote also led me back to another excerpt from that same ECAM letter, which described one of the biggest sources of business (and investment) failure:
Overreaching is one of most common causes of death in trees as it creates an air pocket in the trees’ pipes, xylem, which is why trees will often rot from the inside out.
Enduring businesses avoid this fate by employing resolute incremental growth. The stewards of these enduring businesses know that most business failures are the direct result of overreaching. Instead of incremental progress, they overreach in an effort to ‘get theirs now.’ Quite often, that unnecessary “extra” decays the organization from the inside out. If you study business failure, you can point to overreaching as the single biggest cause of dialectical materialism in business. We see it every day in the marketplace, in how management rewards themselves with options, and in how management teams follow inferior mergers and acquisitions strategies. How often do we see mergers and acquisitions work well in biology? It is a biologically flawed objective, so why should it work seamlessly in business? It is a short-cut strategy to produce growth that often creates that same embolism that will eventually rot the decent business as they try to merge contrasting DNAs. There are evolved business systems that can integrate mergers and acquisitions well, but they are outliers.
And both the quote and excerpt above also reminded me of a reply Peter Bevelin gave in one of my interviews with him:
As Munger says: “All I want to know is where I’m going to die so I’ll never go there.” When I hear them at the annual meeting, I am thinking about Einstein’s reply to a student. The student had challenged Einstein’s statement that the laws of physics should be simple by asking: “What if they aren’t simple?” Einstein replied, “Then I would not be interested in them.”
They have a unique ability to distinguish masses of trivia from what is really important – to filter out situations, and find what’s at their core. They tell the simple, blunt truth rather than say things that sound good.