Tuesday, February 28, 2017

Links

Bill Gates’s latest reddit AMA (LINK)

The Global View With Mohnish Pabrai And Guy Spier (video) [H/T ValueWalk] (LINK)

How Dangerous Is a Stock Market of Mindless Robots? - by Jason Zweig (LINK)

Charlie Munger’s Most Important Concept (Takeaways from the DJCO Meeting) - by John Huber (LINK)

How to Quickly Scan a 10-K Report for Key Updates (LINK)

Jim Grant on CNBC: Rising auto loan delinquencies spell trouble (video) (LINK)

John Rogers of Ariel investments talks with Patrick O’Shaughnessy on the Invest Like the Best podcast (LINK)

Anu Hariharan on Network Effects (video) (LINK)
Related previous link: All about Network Effects (and podcast follow-up)
Tony Robbins on The School of Greatness podcast (LINK)
Related book (released today): Unshakeable: Your Financial Freedom Playbook
Cormac McCarthy Explains Why He Worked Hard at Not Working: How 9-to-5 Jobs Limit Your Creative Potential [H/T @mjmauboussin] (LINK)

The Factious, High-Drama World of Bird Taxonomy [H/T @edyong209] (LINK)

***

There were some good quotes from Reed Hastings in his chat with Marc Andreessen that I thought were worth breaking out here. First, on competition: 
"We spend a very small amount of time thinking about competition. We spend almost all the time trying to improve the service. And that's because there's nothing we can do about the competition."
And then this quote, after talking about the Andy Grove idea of 'only the paranoid survive,' and how it oversimplifies, because the paranoid can see too many things that aren't there. So it's important to focus on eliminating the risks you can and not think that everything can crush you, or you'll get distracted on the wrong threats: 
"To be great at business is like being great at chess. You have to anticipate which series of things 7, 8 moves down are likely to happen, and by the time in chess you go 7 or 8 moves, the tree of possibilities is at the limits of human understanding. And so you have to prune the branches.'That's probably not going to happen, so I'm not going to explore that.' And if you prune wrong, then you get check-mated. And that's the same thing in business."
And then on Amazon and Jeff Bezos, which is especially interesting given that Warren Buffett and Charlie Munger have mentioned on several occasions that he might be the best business person of all-time: 
"In Amazon's case, I would say they've exceeded the amount of investment that I would have thought they'd put in, and they've spent a tremendous amount of money in the area and some of the shows, as you said, are working out. But I would imagine that from a focus standpoint, it's just not at the core of what they do. The core of Amazon retail and AWS are operational excellence and margin efficiency. And entertainment is a very different thing. But I say that and then I look at Jeff Bezos and I think, not only is he running one of the most amazing companies in the world, but then he's also doing Blue Origin, and also doing The Washington Post. And so I feel like we're competing with an unusual person. And so the normal limits of.... Normally you could not combine all the competencies they're trying to do in Amazon and have that work with entertainment. But because Jeff is there, it's kind of scary." 

Monday, February 27, 2017

Links

A few years ago, I put a post together—both for my own reference and also to have something easy to send to any small-company CEOs that we could potentially invest with at my day job—of Warren Buffett's comments on share repurchases over the years. I just updated that post to include his comments from this year's letter, in case it may be of use to anyone else out there as well: Warren Buffett on Share Repurchases

For those already fluent with the Berkshire-gospel, I think the letter largely just served as a reminder of a few particular things things (share repurchases, ignore EBITDA as a metric, etc.). My favorite quote was probably: "First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy."

Warren Buffett on CNBC.... Links to videos (the full transcript is HERE):

Buffett: American dynamism 'overwhelms' everything else

Buffett: Don't make this investment mistake

Buffett: Our market system is why America succeeds

Buffett: There are wonderful assets out there

Buffett: Bought a big chuck of Apple

Buffett: Apple product has incredible 'stickiness'

How Warren Buffett values banks

Buffett: Tweaked airline position

Buffett: This is how we sold Dow Chemical

Buffett: I own about 20 suits

Buffett: Don't mix politics with your investments decision

Warren Buffett: I like airlines because they just 'got a bad century out of the way'

Buffett: Trump's number one job is to keep US safe



Buffett: I'll judge Trump by how safe the country is in four years

Buffett: Low rates and Europe

Buffett: Here's what happened between Kraft Heinz and Unilever

Buffett: No one is any better in product development than 3G

Buffett: Self-driving cars could be negative auto auto insurance companies

Buffett: I wouldn't buy 50-year bonds at these rates in a million years

Buffett: Insurance industry catastrophes remarkably 'benign'

Buffett: Government-sponsored mortgages important, but not necessarily Fannie & Freddie

Buffett: We don't hold stocks forever

Buffett: These two newspapers will likely survive...

Warren Buffett breaks down his $1 million March Madness challenge

Buffett: Amazon's Jeff Bezos is one terrific businessperson

Buffett: Wells Fargo's huge mistake was its failure to act

Buffett: Pros won't get a better result than index funds

Buffett: You don't have to be special to outperform index funds

Buffett: Stocks are safe in the long run and very unsafe for tomorrow

Buffett: Growth is all about productivity

*****

Full Transcript of Charlie Munger at the 2017 DJCO Meeting [H/T Santangel's Review] (LINK) [And in case you missed the videos, see HERE and HERE.]

The Broyhill Annual Letter (LINK)

Asset Markets as Banks (LINK)

Why has the level of business competition levels been turned up to 11? Or: Why is the lean customer development process important? - by Tren Griffin (LINK)

Shane Parrish talks with Naval Ravikant on The Knowledge Project Podcast (audio and transcript) (LINK)

Twitter, Live, and Luck - by Ben Thompson (LINK)

There’s No Magic in Venture-Backed Home Care [H/T @BrentBeshore] (LINK)

a16z Podcast: Tech and Entertainment in the ‘Era of Mass Customization’ (with Reed Hastings and Marc Andreessen) (LINK)

How I Built This podcast -- Atari & Chuck E. Cheese's: Nolan Bushnell (LINK)
Before he turned 40, Nolan Bushnell founded two brands that permanently shaped the way Americans amuse themselves: the iconic video game system Atari, and the frenetic family restaurant Chuck E. Cheese's.
Now That We Can Alter Our Genetic Code, Should We? - by Siddhartha Mukherjee (LINK)
Related book: The Gene
The first known image of a female green anaconda squeezing her mate to death (LINK)

Friday, February 24, 2017

Links

Warren Buffett's 2016 letter to Berkshire Hathaway shareholders with be posted tomorrow at 8 a.m. EST on the Berkshire website.

Peter Kaufman on The Single Most Important Thing in an Operating Business (LINK)

Surgeons Should Not Look Like Surgeons - by Nassim Taleb (LINK)

The Network Effect of Ideas & Innovation (LINK)

Robert Shiller: With stock valuations high, it’s time to reduce your holdings (video) (LINK)

Update on lack of Chinese Residential Real Estate Buyers (LINK)

a16z Podcast: Brains, Bodies, Minds … and Techno-Religions (LINK)
Related book: Homo Deus
Exponent podcast: Episode 105 — The Most Political (LINK)

Ben Thompson on The Bill Simmons Podcast (audio) [H/T Abnormal Returns] (LINK)

The Rise of the Monk Mode Morning (LINK)
Related book: Deep Work
Extinct Neanderthals still control expression of human genes (LINK)

Sam Zell has a book coming out in May [H/T @chriswmayer]: Am I Being Too Subtle?: Straight Talk From a Business Rebel

Book of the day #1 [H/T Claire Barnes]: The Tropical Oil Crop Revolution: Food, Feed, Fuel, and Forests

Book of the day #2 [H/T @paulg]: The Kings Depart

Thursday, February 23, 2017

Links

Do I contradict myself?
Very well then I contradict myself,
(I am large, I contain multitudes.)
~Walt Whitman

Only a Market Crash Can Stop Warren Buffett From Winning This $1 Million Bet (LINK)

Beyond Buffett: How To Build Wealth Copying 9 Other Value Stock Pickers - by Fei Li & Mohnish Pabrai (LINK)

The Brooklyn Investor: Six Sigma Buffett, Taxes, Fund Returns etc. (LINK) [I missed this article last week, but Buffett's discussion on tax changes from his 1986 letter within the article is especially worth reading given the tax changes currently being discussed.]

Grant's Podcast -- Episode 3: Credit, cars trouble (audio) (LINK)

Leithner Letter 209-212 (LINK)

TV is changing, but not fast enough - by Walt Mossberg (LINK)

A warning from Bill Gates, Elon Musk, and Stephen Hawking [H/T @erikbryn] (LINK)

In Our Time podcast: Seneca the Younger (LINK)
Melvyn Bragg and guests discuss Seneca the Younger, who was one of the first great writers to live his entire life in the world of the new Roman empire, after the fall of the Republic. 
A Probiotic Skin Cream Made With a Person’s Own Microbes - by Ed Yong (LINK)

SEVEN Earth-sized planets found orbiting a nearby star! (LINK)

Yuval Harari with Dan Ariely: Future Think—From Sapiens to Homo Deus (92nd Street Y)


Link to video

.....................

Related books:

Sapiens: A Brief History of Humankind

Homo Deus: A Brief History of Tomorrow

Wednesday, February 22, 2017

Links

For today only, to celebrate their recent corporate reputation score, you can get $8.62 off any order of $50 or more on Amazon by entering the code BIGTHANKS at checkout. And as always, you can support this blog by shopping on Amazon through THIS LINK.

***

"When an enterprise pursues questionable accounting policies, all its securities must be shunned by the investor, no matter how safe or attractive some of them may appear.... You cannot make a quantitative deduction to allow for an unscrupulous management; the only way to deal with such situations is to avoid them." -Benjamin Graham & David Dodd (Security Analysis)

The $143bn flop: How Warren Buffett and 3G lost Unilever (LINK)

Unilever deal is dead, but Buffett's 'big game' danger lives on - by Lawrence Cunningham [H/T Linc] (LINK)

Jay Wintrob of Oaktree Capital at the LSE Alternative Investments Conference [last month] (video) (LINK)

Grant's Interest Rate Observer now has a podcast (audio) [H/T @svafier] (Episode 1, Episode 2)

[From 2014] The Dentist Office Software Story - by Fred Wilson (LINK)
This story is designed to illustrate the fact that software alone is a commodity. There is nothing stopping anyone from copying the feature set, making it better, cheaper, and faster. And they will do that. This is the reality that Brad and I stared at in 2003 as we were developing our initial investment thesis for USV. We saw the cloud coming but did not want to invest in commodity software delivered in the cloud. So we asked ourselves, “what will provide defensibility” and the answer we came to was networks of users, transactions, or data inside the software. We felt that if an entrepreneur could include something other than features and functions in their software, something that was not a commodity, then their software would be more defensible. 
LSE Literary Festival 2017 | Messy: How to be creative and resilient in a tidy-minded world (audio) (LINK)
Related book: Messy: The Power of Disorder to Transform Our Lives 
The opportunity for telcos in the coming platform revolution (LINK)

a16z Podcast: When Will Genomics Live Up to the Hype? (LINK)

Brain Pickings: Bruce Lee’s Never Before Revealed Letters to Himself About Authenticity, Personal Development, and the Measure of Success (LINK)

Book of the day (released yesterday) [H/T @PeterDiamandis]: Stealing Fire: How Silicon Valley, the Navy SEALs, and Maverick Scientists Are Revolutionizing the Way We Live and Work

Tuesday, February 21, 2017

Links

The videos of Charlie Munger after the Daily Journal Annual Meeting was over [H/T @itzarjun] (LINK)

Nassim Taleb at the 2017 ZEE Jaipur Literature Festival: Of Black Swans and Intellectual Fallacies (video) (LINK)

A Conversation with Elon Musk at the 2017 World Government Summit (video) [H/T Exploring Markets] (LINK)

A collection of links to Q4 2016 investor letters and reports (LINK)

Michael Mauboussin on the Odd Lots podcast (LINK)

Alex Moazed on the Invest Like the Best podcast (LINK) ["Software alone is a commodity. The value is in the ecosystem."]
Related book: Modern Monopolies: What It Takes to Dominate the 21st Century Economy
Ben Thompson explains the great unbundling | Code Media 2017 (video) (LINK)

Manifestos and Monopolies - by Ben Thompson (LINK)

A16z -- How ‘Going Direct’ Changes Everything: for Brands, Retail, Marketing, and Advertising (video) (LINK)

As Obesity Rises, Remote Pacific Islands Plan to Abandon Junk Food (LINK)

‘Meditating mice’ reveal secrets of mindfulness training (LINK)

Monday, February 20, 2017

Links

"There is only one success - to be able to spend your life in your own way." -Christopher Morley

"If you're doing something every day for your lifewhich is hopefully a long time—and you're not enjoying it, then you're wasting your life.... We only get one life...The only thing that makes sense is to try to maximize our satisfaction with our lives. If you get to be 70, 80, 90 years old and you look back and say, 'Damn, I should have X, Y, Z'; it's unfixable. That's what you must think about. How will I feel about my life at the end?" -Howard Marks [via the interview linked to below, where he also mentioned the Morley quote above as being a favorite.]

Charlie Munger's two handouts from the DJCO Annual Meeting [H/T @farnamstreet]: 1) Parody on the Great Recession; 2) A 1984 Draft Piece on the Stock Market

Charlie Munger on Getting Rich, Wisdom, Focus, Fake Knowledge and More (LINK)

Howard Marks on the Masters in Business podcast (LINK)

A Dozen Lessons About Product/Market Fit - by Tren Griffin (LINK)

Aswath Damodaran puts a valuation on Snap ahead of it's IPO (LINK)

How I Built This podcast -- Crate & Barrel: Gordon Segal (LINK)
In 1962, Gordon Segal — with his wife Carole — opened a scrappy Chicago shop called Crate & Barrel. That store turned into a housewares empire that has shaped the way Americans furnish their homes.
Tony Robbins: How to Suffer Less (and Invest Intelligently) (LINK)
Related book (released next week): Unshakeable: Your Financial Freedom Playbook
TED Dialogues -- Yuval Noah Harari: Nationalism vs. globalism: the new political divide (video) (LINK)
Related book (released tomorrow in the U.S.): Homo Deus: A Brief History of Tomorrow
Audible started their yearly First-in-a-Series Sale for members. There were a few titles that stood out to me for those that may also be interested:

The Last Lion: Winston Spencer Churchill, Volume I: Visions of Glory 1874-1932 ($6.95)

The Path to Power: The Years of Lyndon Johnson ($6.95)

The Origins of Political Order: From Prehuman Times to the French Revolution ($6.95)

Our Oriental Heritage: The Story of Civilization, Volume 1 ($8.95)

Sunday, February 19, 2017

Hoover's Handbooks

No source was more valuable than Hoover's Handbooks, produced annually since 1990 for both American and non-American companies. Each handbook includes a ten-year review of the companies' financial statistics and a portfolio of their major product lines, with percentage of sales and income from these lines as well as a brief resume of their history. Hoover's Handbooks certainly remain a reliable basic source for business and economic historians to carry out their central analytical tasks.
It looks like these may be a great way to get a quick overview of a bunch of different businesses, and used copies of the 2015 versions seem fairly inexpensive (as of today anyway):

Hoover's Handbook of American Business 2015

Hoover's Handbook of World Business 2015

Hoover's Handbook of Emerging Companies 2015

Hoover's Handbook of Private Companies 2015

Friday, February 17, 2017

Links

"The idea that life is a series of adversities and that each one is an opportunity to behave well instead of badly is a very, very good idea." -Charlie Munger

For those in the U.S., the first episode of Planet Earth II airs tomorrow (Saturday) on BBC America (LINK)

Elon Musk Is Really Boring (LINK)

What Matters Most - by Ian Cassel (LINK)

Five Good Questions for Erik Kobayashi-Solomon about his book The Intelligent Options Investor (video) (LINK)

A 10-minute video from Nassim Taleb about public (mis)understanding of risk (LINK)

Exponent podcast: Episode 104 — Snap’s Gingerbread Strategy (LINK)

Paul Mason: "PostCapitalism" | Talks at Google (video) (LINK)

James Gleick: "Time Travel: A History" | Talks at Google (video) (LINK)

Take a Break from Your Frantic Day & Let Alan Watts Introduce You to the Calming Ways of Zen (video) (LINK)
Related book: The Way of Zen
Jared Diamond in conversation with Richard Dawkins - The Use of Religion (video) (LINK) [Related books: Diamond, Dawkins]

Yosemite's rare 'firefall' phenomenon attracts tourists and photographers [H/T Linc] (LINK)

Book of the day (given Munger's praise of Maimonides at the Daily Journal meeting): Maimonides: The Life and World of One of Civilization's Greatest Minds

Wednesday, February 15, 2017

Links

Things That Don’t Make Sense (LINK)

To quote Jason Zweig: "An extraordinary & exemplary note from Danny Kahneman" (LINK)

Morgan Creek Capital Management's Q4 Letter (LINK)

A new spike in mortgage delinquencies spells trouble (video and article) [H/T Matt] (LINK)

a16z Podcast: Securing Infrastructure and Enterprise Services (LINK)

Daniel Dennett: "From Bacteria to Bach and Back: The Evolution of Minds" | Talks at Google (video) (LINK)

***

Some early notes from today's Daily Journal Annual Meeting, via the following people on Twitter: @BrentBeshore@TheCharlieton@AlexRubalcava@EricJorgenson.

[Below are some of the quotes that stood out to me. They are from the notes above, and thus possibly not exactly as Charlie Munger said them...]

"Deferred gratification really works if you want to get better and better."

"I've never succeeded in something I wasn't interested in."

"The success of Berkshire came from making two decisions a year over 50 years."

"Diversification is great for people who know nothing...one (investment) will work if you do it right."

"You only need one cinch. When you get the chance, step up to the pie cart with a big pan."

"We're too soon old and too late smart. That's the biggest problem we have."

"I don't think operating over many disciplines is a good idea for most people...get good at something that society rewards."

"Even if you specialize, you should still spend 10-20% of your time learning the big ideas of the major disciplines."

"I do not want a proctologist who knows Schopenhauer. On the other hand, a life devoted solely to proctology isn't much of a life."

"If you think you know what the state of the payments system 10 years out you're in a state of delusion."

"Both Warren and I know you can't trust numbers put out by the banking industry."

"We have a lot of businesses that neither Warren or I could run, but we've gotten good at judging which people can succeed."

"One of the reasons I don't go around talking about how the Fed should work is because I'd mostly be pounding my own ideas into my head."

"Am I comfortable with a non-diversified portfolio? Yes. The Mungers have three stocks: Berkshire, Costco, and Li Lu's fund."

"Arrange your affairs so you can handle a 50% decline with aplomb...if it never happens to you, you're not being aggressive enough."

"The value of my partnership went down 50%...it's a mark of manhood. You better be able to handle it without much fussing."

"I like the Buffett system (0% fee, 6% hurdle, 25% gain-share). I'm looking at at Mohnish Pabrai who still uses it. I wish it would spread."

"In many areas of life the only way to win is to grind away and work hard for a very long time."

Tuesday, February 14, 2017

Links

Bill and Melinda Gates' 2017 Annual Letter: Warren Buffett’s Best Investment (LINK)
Our 2017 annual letter is addressed to our dear friend Warren Buffett, who in 2006 donated the bulk of his fortune to our foundation to fight disease and reduce inequity. A few months ago, Warren asked us to reflect on what impact his gift has had on the world.  
What follows is our answer to him.
Ian Cassel talks with Patrick O’Shaughnessy on the Invest Like the Best podcast (LINK)
Related book: Intelligent Fanatics Project
Over 30 Years of Value Insights from Martin J. Whitman [H/T @chriswmayer] (LINK)

Winter 2017 Issue of Graham & Doddsville (LINK)

Anatomy of a Bull Market [H/T @awealthofcs] (LINK)

John Huber’s 2016 Letter to Investors (LINK)

Sequoia Fund's Q4 2016 letter [H/T @spmullin] (LINK)

How the Flash Crash Trader Lost His $50 Million Fortune [H/T @muddywatersre] (LINK)

The Rise and Fall of a K Street Renegade [H/T @PlanMaestro] (LINK)

Scheduling Your Energy, Not Your Time - By Scott Adams (LINK)
Related book: How to Fail at Almost Everything and Still Win Big
'Extraordinary' levels of pollutants found in 10km deep Mariana trench (LINK)

This Beetle Bites an Ant’s Waist and Pretends to Be Its Butt - by Ed Yong (LINK)

What Mirrors Tell Us About Animal Minds - by Ed Yong (LINK)

Monday, February 13, 2017

Links

"I'll fight tooth and nail to make something succeed. But the moment I realize it's not going to succeed, the next day, I will have forgotten about it. I will just move on to the next venture."-Richard Branson

The Most Powerful Mental Model for Identifying Stocks - by Vishal Khandelwal (LINK)

A Dozen Lessons on Growth - by Tren Griffin  (LINK)

Steve Eisman: “They mistook leverage for genius” (video) [H/T Santangel’s Review] (LINK)

The World According to a Free-Range Short Seller With Nothing to Lose (LINK)
Marc Cohodes, the scourge of Wall Street, is back. And he’s passing along his “dying art” to a new generation of troublemakers.
How J.P. Morgan Won, Then Lost, Indonesia’s Business [H/T Matt] (LINK)
On the Sunday after Donald Trump won the U.S. presidential election, sparking turmoil in emerging markets, J.P. Morgan Chase & Co. downgraded Indonesia’s stock market. The move set off a chain reaction that resulted in the New York bank losing Indonesia as a client. 
... 
Investments banks have long weathered complaints that their research departments, which make calls on stocks, bonds and other assets, aren’t truly independent from their investment-banking operations, which pitch deals to companies and governments. 
But in Indonesia, and other parts of Asia, government officials’ expectations for positive research are unabashed and unapologetic. That means global banks walk a fine line when publishing research their investment-banking clients don’t like. 
In Asia, some bankers say they are routinely quizzed about their research teams’ reports when bidding for government business. In Indonesia, central-bank employees roam trading rooms, urging traders to be patriotic by refraining from selling the rupiah when the currency is under pressure, traders say.
The Next Big Blue-Collar Job Is Coding [H/T @BrentBeshore] (LINK)

Snap's Apple Strategy - by Ben Thompson (LINK)

How I Built This podcast -- Lyft: John Zimmer (LINK)

A16z video: Software Secures the World (LINK)

What We Don’t Do - by Fred Wilson (LINK)

The Key to Good Luck Is an Open Mind (LINK)

Book of the day [H/T @mikedariano]: A Field Guide to Lies

Friday, February 10, 2017

Links

The Man Behind Warren Buffett's Big Insurance Bet (LINK)

Amazon.com Takes Aim at Victoria’s Secret With Its Own $10 Bras (LINK)

Investing in the Pain of Student Debt Is a Tough but Tempting Play (LINK)

Intelligent Fanatics: Lillian Vernon: Unpacking the Lessons From a Mail-Order Queen (LINK)

How I Built This podcast -- Kate Spade: Kate & Andy Spade (LINK)

FT Alphachat (podcast): The Airbnb story (LINK)
Related book (released next week): The Airbnb Story
Jim Rogers: Macro Outlook in the Trump Era (Macro Voices podcast) [Rogers comes on around the 12:40 mark] (LINK)

I Helped Create the Milo Trolling Playbook. You Should Stop Playing Right Into It. - by Ryan Holiday [H/T @paulg] (LINK)

Bias in the ER - by  Michael Lewis [another excerpt from The Undoing Project] (LINK)

Newly Discovered Gecko Escapes Danger Naked and Alive [H/T Linc] (LINK)

Thursday, February 9, 2017

Links

Jason Zweig talks with Vishal Khandelwal (LINK)

Ed Thorp talks with Meb Faber (podcast) (LINK)
Related book: A Man for All Markets
Vacuum up those pennies – and let Warren Buffett invest them for you! - by Mohnish Pabrai (LINK)

The Broyhill Book Club 2016 (LINK)

Oaktree's Howard Marks Is Cautious, But Still Investing (video) [H/T ValueWalk] (LINK)

Interview with Jeff Bezos and Steve Boom, VP of Amazon Music, about the music industry, Echo and Alexa's place in it [H/T Techmeme] (LINK)

Alphabet opts to spell out its stock options (LINK)
Google is about to go cold turkey on Silicon Valley’s favourite financial drug. 
Issuing mountains of stock to employees — and then turning a blind eye to the impact on profits — has been a not-so-secret dirty habit of the US tech industry for years. 
But the times are changing. In a little-noticed announcement, the internet company’s parent, Alphabet, let slip on its last earnings call that it is about to alter its treatment of stock-based compensation — a $6.7bn cost last year. From this quarter, it will stop presenting a view of its earnings that ignores stock costs. 
Had that been applied in 2016, the earnings figure that Wall Street used to judge the company would have been nearly 20 per cent lower. Its trailing price/earnings ratio would be 34, not the 27 seen through more rosy spectacles. 
Alphabet’s rethink is a watershed moment in the financial maturity of Google’s parent and the evolution of the Valley. The giant companies that dominate today’s tech landscape are finally feeling the financial self-confidence to deal with mainstream investors on their own terms. What this means for the next generation of up-and-coming tech companies is another matter.
A16z: What Happens When Mobile (Really) Hits the Wallet? (video) (LINK)

A16z Podcast: Cars and Cities, the Autonomy Edition (LINK)

The Production of Money: how to break the power of bankers (audio) (LINK)

Deep Work vs. Messy: How to Balance Productivity and Creativity [H/T @TimHarford] (LINK)

In Bacteria, Persistence Leads to Resistance - by Ed Yong (LINK)

Wednesday, February 8, 2017

Links

"The advantage of living is not measured by length, but by use; some men have lived long, and lived little; attend to it while you are in it. It lies in your will, not in the number of years, for you to have lived enough." -Michel de Montaigne (The Complete Essays)

It’s Buffett vs. Icahn as Lobbying Heats Up Over U.S. Ethanol [H/T Linc] (LINK)

Outwitting the FBI and the SEC (LINK)
Steve Cohen’s fund was once the most successful on Wall Street. Then it pleaded guilty to insider trading. But Cohen was never charged. David McClintick reviews “Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street” by Sheelah Kolhatkar.
IMF Revives Greek Euro-Exit Warning Amid Deadlocked Bailout Talks [H/T @rationalwalk] (LINK)

Sushi Nakazawa: "How 'Jiro Dreams of Sushi' Changed Two Men's Lives" | Talks at Google (video) (LINK)

Remembering Hans Rosling (LINK)

Book of the day: Big Data Baseball

Tuesday, February 7, 2017

Links

A Quiet Giant of Investing Weighs In on Trump (LINK) [I haven't seen Klarman's letter yet, but if anyone happens to have a copy they'd be willing to share, it would be greatly appreciated.]
In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing “perilously high valuations.” 
“Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,” he wrote. 
“President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces,” he continued. “While they might be popular, the reason the U.S. long ago abandoned protectionist trade policies is because they not only don’t work, they actually leave society worse off.” 
In particular, Mr. Klarman appears to believe that investors have become hypnotized by all the talk of pro-growth policies, without considering the full ramifications. He worries, for example, that Mr. Trump’s stimulus efforts “could prove quite inflationary, which would likely shock investors.”
Everything You Need to Know About Required 401(k) and IRA Withdrawals [H/T @jasonzweigwsj] (LINK)

Patrick O'Shaughnessy talks to Morningstar’s Founder, Joe Mansueto (podcast) (LINK)

Investing Mastery Through Deliberate Practice - by Chip Maloney (LINK) [Related books, HERE, especially the first six.]
Related previous post: Seth Klarman quote and some thoughts on deliberate practice in investing
The Platform Business Model - A Keynote Talk by Sangeet Paul Choudary (video) (LINK)
Related book: Platform Revolution
Jonah Lehrer remembers the moment his career was shattered [H/T @morganhousel] (LINK)

When Things Go Missing - by Kathryn Schulz (LINK)

Being friendly puts monkeys at risk in times of revolution (LINK)

Released today: From Bacteria to Bach and Back: The Evolution of Minds - by Daniel C. Dennett

Investing quote of the day, from Howard Marks on this week's Oaktree Capital Group call:
I would just add that as everybody knows, we are vociferous in asserting that we don't know what's going to happen. And the peak year for defaults was 2009, and 2018 will be 9 years later. We think the reason we raised a lot of money for Xb was that we thought by '17 or '18, maybe we'd be seeing some increase in defaults. Every year that goes by logically increases the probability, but there are times, like today, when people say, we're in a virtuous circle. We have an accommodative Fed, we have expanding -- well, the Fed's accommodative but not too much and the economy is expanding but not too much that it has to be reined in and corporations are doing well and piling up cash and debt has been refinanced and paid down. And they will give you 100 reasons why there's not going to be another down cycle again. But invariably, there is. And the question is, does it come after 12 years, like the gap between '91 and '02? Or does it come after 6 years, like the gap between '02 and '08? Or these subjects are not subject to science and statistics. My favorite new quote is from the physicist, Richard Feynman, who said that physics would be much easier if electrons didn't have feelings. The point is that investors and companies have feelings, and that's what causes markets to be radically unpredictable, and this one is too. But we think that on balance, having an $8-ish billion fund with substantial fees, where we can turn on the fund and turn on the fees whenever we think it's prudent, we think, gives us a great advantage. And it always has in past cycles and we think it will again. And -- but we -- I'll end by repeating what I said. We don't know what's going to happen. And what we state is our best guess, and there's always great uncertainty. So who knows, maybe there won't any defaults in '18 because things will be going so swimmingly. It's just that logic suggests that's not the case.

Monday, February 6, 2017

Links

Some videos of the HBO documentary "Becoming Warren Buffett" have started to pop up online. You can find a couple of them on YouTube HERE or HERE.

A16z video: A Whirlwind Tour Through Trends in China (LINK)

Mutual Fund Observer, February 2017 (LINK)

Bill Gross' February 2017 Investment Outlook (LINK)

Politics and science are a toxic combination - by Matt Ridley (LINK)

EconTalk: Gary Taubes on the Case Against Sugar (podcast) (LINK)
Related book: The Case Against Sugar
The Tragic Tale of a Pangolin, the World’s Most Trafficked Animal (video) (LINK)

Sunday, February 5, 2017

Links

Gross Margin for Fun and Profit - by Tren Griffin (LINK)

Inching Your Way Toward Wealth with Your Phone - by Jason Zweig (LINK)

Greek debt crisis: an existentialist drama with no good end in sight (LINK)

Snap IPO Will Mint Fortunes for Founders, Two Big Investors (LINK)

How I Built This podcast -- Virgin: Richard Branson (LINK)
Related book: Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way
50 Things That Made the Modern Economy podcast: Insurance (LINK) [Related books on insurance, HERE.]

Sebastian Mallaby talks to Barry Ritholtz on the Masters in Business podcast (LINK)
Related books: 1) More Money Than God; 2) The Man Who Knew: The Life and Times of Alan Greenspan
I've mentioned this site before [H/T Andrew], but as I've enjoyed it, I thought I'd mention it again in case it may be of interest to a few documentary lovers that haven't seen it yet: CuriosityStream (referral link with 2-month free trial). 

Saturday, February 4, 2017

History and chaotic systems

As I go back through Yuval Noah Harari's book Sapiens in anticipation of the U.S. release of his follow-up book Homo Deus (which has been released elsewhere, but will be released in the U.S. on February 21st), the following excerpt stood out as worth sharing this time around: 
History cannot be explained deterministically and it cannot be predicted because it is chaotic. So many forces are at work and their interactions are so complex that extremely small variations in the strength of the forces and the way they interact produce huge differences in outcomes. Not only that, but history is what is called a ‘level two’ chaotic system. Chaotic systems come in two shapes. Level one chaos is chaos that does not react to predictions about it. The weather, for example, is a level one chaotic system. Though it is influenced by myriad factors, we can build computer models that take more and more of them into consideration, and produce better and better weather forecasts. 
Level two chaos is chaos that reacts to predictions about it, and therefore can never be predicted accurately. Markets, for example, are a level two chaotic system. What will happen if we develop a computer program that forecasts with 100 per cent accuracy the price of oil tomorrow? The price of oil will immediately react to the forecast, which would consequently fail to materialise. If the current price of oil is $90 a barrel, and the infallible computer program predicts that tomorrow it will be $100, traders will rush to buy oil so that they can profit from the predicted price rise. As a result, the price will shoot up to $100 a barrel today rather than tomorrow. Then what will happen tomorrow? Nobody knows. 
Politics, too, is a second-order chaotic system. Many people criticise Sovietologists for failing to predict the 1989 revolutions and castigate Middle East experts for not anticipating the Arab Spring revolutions of 2011. This is unfair. Revolutions are, by definition, unpredictable. A predictable revolution never erupts.  
Why not? Imagine that it’s 2010 and some genius political scientists in cahoots with a computer wizard have developed an infallible algorithm that, incorporated into an attractive interface, can be marketed as a revolution predictor. They offer their services to President Hosni Mubarak of Egypt and, in return for a generous down payment, tell Mubarak that according to their forecasts a revolution would certainly break out in Egypt during the course of the following year. How would Mubarak react? Most likely, he would immediately lower taxes, distribute billions of dollars in handouts to the citizenry – and also beef up his secret police force, just in case. The pre-emptive measures work. The year comes and goes and, surprise, there is no revolution. Mubarak demands his money back. ‘Your algorithm is worthless!’ he shouts at the scientists. ‘In the end I could have built another palace instead of giving all that money away!’ ‘But the reason the revolution didn’t happen is because we predicted it,’ the scientists say in their defence. ‘Prophets who predict things that don’t happen?’ Mubarak remarks as he motions his guards to grab them. ‘I could have picked up a dozen of those for next to nothing in the Cairo marketplace.’
So why study history? Unlike physics or economics, history is not a means for making accurate predictions. We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable, and that we consequently have many more possibilities before us than we imagine.

Friday, February 3, 2017

Links

Adam Robinson on Tim Ferriss' podcast: Lessons from Warren Buffett, Bobby Fischer, and Other Outliers (LINK)
Related previous posts: 1) Things that don't make sense...; 2) Having time to think... [They start the podcast above off with the Buffett calendar story.]
How to Review a Proxy Statement (LINK)

Trump Moves to Undo Dodd-Frank Law (LINK)

Discount broker shares tumble on price war fears (LINK)

Amazon now has more than 341K employees after adding 110K people in 2016 alone (LINK)

The investor’s dilemma: Why investing in lower cost innovations is difficult in healthcare (LINK)

Lunch with the FT: Ed Thorp: the man who beat the casinos, then the markets (LINK)
Related book: A Man for All Markets
Exponent Podcast: Episode 103 — Dull Knives Don’t Cut (LINK)
Ben and James discuss what kind of politicians and products cut through in the Internet age, and why they are profoundly different than what worked before.
Jack Schwager on the Macro Voices podcast (audio) (LINK)
Related book: A Complete Guide to the Futures Market
FT Alphachat podcast: How the world was shaped by goofing off (LINK)
Related book: Wonderland: How Play Made the Modern World
Dan Dennett talks about his new book, and other things (video) (LINK)
Related book (released next week): From Bacteria to Bach and Back: The Evolution of Minds - by Daniel C. Dennett 
World’s most endangered marine mammal has 30 individuals left (LINK)

Thursday, February 2, 2017

Links

"It is not enough to be a hardworking person. Think: what do you work at?" -Henry David Thoreau

"There's no use running if you're on the wrong road." -Warren Buffett

Oaktree Capital video: Risk Management with Raj Makam (LINK)

The Absolute Return Letter - February 2017: Who Really Knows? - An Open Letter to Howard Marks (LINK)

Third Point's Fourth Quarter 2016 Investor Letter (LINK)

TED Talk - Eduardo Briceño: How to get better at the things you care about [A bit repetitive for those that have already read the literature on deliberate/deep practice.] (LINK)

Book of the day [H/T Brian Koppelman and Patrick O'Shaughnessy]: The Artist's Way - By Julia Cameron

Wednesday, February 1, 2017

Links

"Nothing is so good a protection against such misery as inward wealth, the wealth of the mind, because the greater it grows, the less room it leaves for boredom. The inexhaustible activity of thought!" -Arthur Schopenhauer (The Wisdom of Life)

“Becoming Warren Buffett,” the Man, Not the Investor - by James Surowiecki [H/T Linc] (LINK)

Fairholme Funds' 2016 Annual Report (LINK)

The Short Seller Who Crushed Valeant Has Picked His Next Target [H/T Matt] (LINK)

This is Why You Need a Process - by Ben Carlson (LINK)

Amazon is building a $1.5 billion hub for its own cargo airline (LINK)

Mobile 2.0 - by Benedict Evans (LINK)

Birds and Frogs - by Freeman Dyson (LINK)
Some mathematicians are birds, others are frogs. Birds fly high in the air and survey broad vistas of mathematics out to the far horizon. They delight in concepts that unify our thinking and bring together diverse problems from different parts of the landscape. Frogs live in the mud below and see only the flowers that grow nearby. They delight in the details of particular objects, and they solve problems one at a time. I happen to be a frog, but many of my best friends are birds. The main theme of my talk tonight is this. Mathematics needs both birds and frogs. Mathematics is rich and beautiful because birds give it broad visions and frogs give it intricate details. Mathematics is both great art and important science, because it combines generality of concepts with depth of structures. It is stupid to claim that birds are better than frogs because they see farther, or that frogs are better than birds because they see deeper. The world of mathematics is both broad and deep, and we need birds and frogs working together to explore it.
Why Frog Tongues Are So Sticky - by Ed Yong (LINK)

Plant keeps moths captive inside its fruits for almost a year (LINK)

Freeman Dyson on Living Through Four Revolutions (2011 lecture)

"I don't particularly care [if the things I'm doing] are important or not. I'm not driven by a passion to dig out the deep secrets of nature. I'm much more interested just in exercising my skills as best I can and enjoying life." -Freeman Dyson


Link to video

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Related previous posts:






Related link: Freeman Dyson reviews Danny Kahneman's Thinking, Fast and Slow

Related books by Freeman Dyson: 

Dreams of Earth and Sky

Origins of Life






In the video, Dyson also mentioned a couple of other books: 

The Information: A History, A Theory, A Flood

The Human Use Of Human Beings