Links

"If I go through my career, there's a lot of disappointments; there's a lot of things that didn't go right. But those aren't the things that make you. It's how you bounce back, and where you move on from there—and what you learn from those things. It's kind of 'the river flows'.... You have to make choices on where your life goes, but you never stop flowing. You never stop riding the river.... You kind of keep pushing forward, because you're going to have disappointments, you're going to have problems in your life, you're going to have different things that go wrong, but that's not what's going to define you. What's going to define you is how you recover from those things and how you move on." --David Tepper

David Tepper at Carnegie Mellon (videos) [H/T @LongShortTrader] (Part 1, Part 2, Part 3)

Inertia: The Force That Holds the Universe Together (LINK)

You Are Not Alone: The Berkshire Hathaway Annual Meeting - by Jason Zweig (LINK)

Related book: The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting

Amazon: Glimpses of Shoeless Joe? - by Aswath Damodaran (LINK)

Tokenized Securities and the Future of Ownership (LINK)

Nature's Mechanical Secrets Could Help Build Faster Robots [H/T Linc] (LINK)

Exponent Podcast: Episode 149 — Zillow and Sustaining Aggregation (LINK)

How I Built This Podcast -- Panera Bread/Au Bon Pain: Ron Shaich (LINK)

The Investors Podcast: Mastermind Discussion 2nd Q 2018 w/ Jesse Felder & Tobias Carlisle (LINK)

Farewell, No. 16: scientists left 'miserable' after world's oldest spider dies aged 43 [H/T David] (LINK)

The arachnid is believed to have survived for so long by sticking to one protected burrow its entire life and expending the minimum of energy.

TED Talk: Is the world getting better or worse? A look at the numbers | Steven Pinker (LINK)

Related book: Enlightenment Now

The next epidemic is coming. Here’s how we can make sure we’re ready. - By Bill Gates (LINK)

What Bill Gates Fears Most - by Ed Yong (LINK)

"It is above all things necessary to form a true estimate of oneself, because as a rule we think that we can do more than we are able." --Seneca

Forum on Leadership: A Conversation with Jeff Bezos

Jeff Bezos, Chairman and CEO of Amazon, was the featured speaker at the April 20, 2018 Closing Conversation of the George W. Bush Presidential Center’s Forum on Leadership, in partnership with SMU. [The Bezos chat starts around the 5:30 mark.]

Link to video

Jim Chanos on primary research and peeling the onion...

The below excerpt is from a chat earlier this year between Jim Grant and Jim Chanos that was taped for Real Vision Television. Real Vision has just dropped its price from $597 a year to $180, and is also offering a 14-day free trial. I signed up for the free trial and have so far watched some great interviews with John Hempton, Marc Cohodes, and Kyle Bass, as well as some videos on the auto finance industry. At the new price point, I will probably be keeping my subscription. I get no commission of any sort from them, so my recommending one sign up for the free trial is all because I think there is valuable content on their platform. The Real Vision team was also kind enough to give me permission to post this excerpt, which I thought would be especially of interest to readers of this blog:

Jim Grant: Well, this has been pretty terrific. I think I ought to not wind this up before asking you about dear alma mater and about your not so secret other life as a professor. You teach a course both at Yale and at the University of Wisconsin, kind of a sentimental alma mater. And I'm going to ask you one thing about that. What is the single most important thing that you teach your students?   

Jim Chanos: So the single most important thing I teach my students is primary research. And although it's nominally a history course, it's a course on the history of financial market fraud, we overlay some systematic models on a historical narrative. What I stress to my students and my analysts is the importance of working the opposite way of most investors. And whether it's examining something historically or something currently, the parallels hold.  

So what I try to teach and really, really reinforce to the students is that it's shocking what you can find out when you do primary research. Because most investors, if you think of investing in an idea as sort of an onion, that whereby the kernel of the onion is primary source documents. The second layer is sort of company press releases. The third layer would be conference calls where management expounds on their business. The fourth layer would be sort of Wall Street research reports. And then the fifth layer would be stories, rumors--   

Jim Grant: The good stuff.   

Jim Chanos: --tips, the good stuff. Virtually all investors work from the outside of the onion in. They hear a story, they might read some research, they might listen to a conference call. I tell my students, start with the documents. Start with what the companies have to tell you or are mandated to disclose and work your way out.   

Often the same situation looks radically different when you start that way as opposed to when you start with the chorus and their interpretation of that kernel of truth. And it has put my analysts, I think the firm in good stead in doing that kind of research, whether it's historical or current, and its kind of amazing what you find when you read the Enron 10-K and read the footnotes as opposed to listening to what the sell side was saying. Or you see what Mike Pearson at Valeant was doing with his acquisition accounting, despite what Wall Street was saying. And that's something that we sort of reinforce with historical examples. And I hope that my students, [if they] take anything away from the class, it's that.

Time transforms risk...

From Against the Gods: The Remarkable Story of Risk:

Time is the dominant factor in gambling. Risk and time are opposite sides of the same coin, for if there were no tomorrow there would be no risk. Time transforms risk, and the nature of risk is shaped by the time horizon: the future is the playing field.

Time matters most when decisions are irreversible. And yet many irreversible decisions must be made on the basis of incomplete information. Irreversibility dominates decisions ranging all the way from taking the subway instead of a taxi, to building an automobile factory in Brazil, to changing jobs, to declaring war. 

If we buy a stock today, we can always sell it tomorrow. But what do we do after the croupier at the roulette table cries, “No more bets!” or after a poker bet is doubled? There is no going back. Should we refrain from acting in the hope that the passage of time will make luck or the probabilities turn in our favor? 

Hamlet complained that too much hesitation in the face of uncertain outcomes is bad because “the native hue of resolution is sicklied o’er with the pale cast of thought . . . and enterprises of great pith and moment . . . lose the name of action.” Yet once we act, we forfeit the option of waiting until new information comes along. As a result, not-acting has value. The more uncertain the outcome, the greater may be the value of procrastination. Hamlet had it wrong: he who hesitates is halfway home.

[H/T @williamgreen72]

Links

"We try to think about things that are both important and knowable. There are important things that are not knowable.... And there are things that are knowable, but not important - and we don't want to clutter up our minds with those. We ask ourselves: 'What's important and knowable?'... There are all kinds of important subjects that Charlie and I don't know anything about. And therefore, we don't think about 'em. Our view about what the world will look like over the next 10 years in business or the state of U.S. competitiveness - we're just no good [at that]." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

"We're not predicting the currents that will come just how some things will swim whatever the currents may be." --Charlie Munger (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

What Does Culture Smell Like? (LINK)

Boyar Value Group's Q1 Letter (LINK) [There are also a bunch of other Q1 Letters HERE.]

Open, Closed, and Privacy - by Ben Thompson (LINK)

MUST SEE VIDEO: Snowstorm on a comet! (LINK)

What's Wrong With Growing Blobs of Brain Tissue? - by Ed Yong (LINK)

Fossilized Human Footprint Found Nestled in a Giant Sloth Footprint - by Ed Yong (LINK)

Links

"There's integrity, intelligence, experience and dedication. That's what human enterprises need to run well." --Charlie Munger

Brian Koppelman’s Career Capital (LINK)

An excerpt from John Doerr's new book Measure What Matters (LINK)

2018 Antitrust and Competition conference - Digital Platforms and Concentration (video) (LINK) [Ben Thompson's opening remarks with slides are available HERE.]

Happiness & the Gorilla - By Scott Galloway (LINK)

The Reinvention of America [H/T @StevenLevy] (LINK)

Book of the day [H/T @svafier]: The Go-Giver Influencer

"After crosses and losses men grow humbler and wise." --Ben Franklin [H/T CIO]

Links

"[Charlie and I] really don't worry. We just do the best we can. When we have capital to allocate, sometimes it's very easy to do and sometimes it's almost impossible. However, we’re not going to stay up at night and worry about it - because the world changes. If we were worried about something in the business, we'd correct it....if you're worried about something, the thing to do is to get it corrected and get back to sleep. " --Warren Buffett

Go Fast and Break Things: The Difference Between Reversible and Irreversible Decisions (LINK)

Research Affiliates: Yes. It's a Bubble. So What? (LINK)

With sky-high valuations in the US stock market, and what we believe is a tech bubble that has dangerous implications for other areas of the market, we suggest four actions investors can take now to avoid the inevitable bursting of the bubble, and which will likely benefit their portfolios’ long-term performance potential. 

60 Minutes' segment on MIT's Media Lab (video) (LINK)

Why Everyone Is Insecure (and Why That's Okay) [H/T @susancain] (LINK)

Uranus smells like rotten eggs (just a little) - by Phil Plait (LINK)

What Was The Ancestor Of Everything? (video) [H/T Linc] (LINK)

Links

"My definition of value is figure out what the business is worth and pay a lot less. It is not low price-to-book, low price-to-sales investing.... As Warren Buffett would say, value and growth are tied at the hip. Growth is part of value.... The reason I’m a value investor, according to our definition, is stocks are actually ownership shares of businesses that you value and try to buy at a discount, they’re not pieces of paper the bounce around that you put Sharpe ratios and Sortina ratios and use computer simulations to balance your portfolios or whatever it is. Basically, they are ownership shares of business that you value and try to buy at a discount. So it’s certainly possible that the market does not reward my valuations even if I’m right over the next two years, but that doesn’t mean we’re going to stop doing what we’re doing. That’s what stocks are: ownership shares of businesses, and that’s very fundamental to the way we look at everything." --Joel Greenblatt

Joel Greenblatt on the Masters in Business podcast (audio and transcript) (LINK)

Buffett's Edge [H/T Abnormal Returns] (LINK)

The Most Valuable Investment Skill - by Sean Iddings (LINK)

How Hedge Funds Hide [H/T Will] (LINK)

Seth Klarman’s Baupost Group buys distressed debt and goes to great lengths to hide it. Here’s why — and how — hedge funds such as his fight to keep secrets. Part 1 of a two-part series.

Mark Leonard's annual letter to Constellation Software shareholders (LINK)

Negative Equity, Veiled Value, and the Erosion of Price-to-Book - by Travis Fairchild (LINK)

Baseball & Waiting for the Fat Pitch - by Frank K. Martin (LINK)

Hugh Hendry’s Life After Hedge Funds [H/T value and opportunity] (LINK)

The Investors Podcast: The Culture Code w/ Daniel Coyle (LINK)

a16z Podcast: Principles and Algorithms for Work and Life (Ray Dalio) (LINK)

Investing and Business Lessons from Aileen Lee (Cowboy Ventures) - by Tren Griffin (LINK)

When the Twitter Mob Came for Me ($) (LINK)

Recently hired by the Atlantic and then promptly fired, the conservative writer Kevin D. Williamson discusses the social-media outrage that made the celebrated magazine retreat

Beyond Black Box Management - by Cal Newport (LINK)

Humans, Gods and Technology - VPRO documentary - 2017

Nobody knows how our world will look like in 25 years. Perhaps our work is taken over by autonomous robots and we become the slaves of the technology we have created ourselves. The big questions about the future of man and his relation to technology are presented to two important thinkers of the moment: Kevin Kelly and Yuval Noah Harari.

Link to video

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

Related books:

Homo Deus - by Yuval Noah Harari

The Inevitable - by Kevin Kelly

Links

Casualties of Your Own Success - by Morgan Housel (LINK)

Kicked in the Ass with a Golden Horseshoe - by Ian Cassel (LINK)

Home Depot was co-founded by Bernie Marcus (visionary), Arthur Blank (operations/finance), and Pat Farrah (energy), and financed by Ken Langone. Home Depot is yet another example of how great ideas are born out of frustration not greed.

Horizon Kinetics Q1 2018 Portfolio Update slides [H/T @chriswmayer] (LINK)

Alphabet Soup: Google is Alpha, but where are the Bets? - by Aswath Damodaran (LINK)

Silicon Valley has oversold the near-term potential of the technologies of the future (LINK)

"Adam Smith's View of Man" - by Ronald Coase (1976) (LINK)

In a Few Centuries, Cows Could Be the Largest Land Animals Left - by Ed Yong (LINK)

How Asia's Super Divers Evolved for a Life At Sea - by Ed Yong (LINK)

Freeman Dyson reviews Geoffrey West's book Scale (LINK)

***

"The notion that the desirability of a common stock was entirely independent of its price seems incredibly absurd. Yet the new-era theory [of 1927-1929] led directly to this thesis. If a public-utility stock was selling at 35 times its maximum recorded earnings, instead of 10 times its average earnings, which was the preboom standard, the conclusion to be drawn was not that the stock was now too high but merely that the standard of value had been raised. Instead of judging the market price by established standards of value, the new era based its standards of value upon the market price. Hence all upper limits disappeared, not only upon the price at which a stock could sell but even upon the price at which it would deserve to sell. This fantastic reasoning actually led to the purchase at $100 per share of common stocks earning $2.50 per share. The identical reasoning would support the purchase of these same shares at $200, at $1,000, or at any conceivable price.

An alluring corollary of this principle was that making money in the stock market was now the easiest thing in the world. It was only necessary to buy “good” stocks, regardless of price, and then to let nature take her upward course. The results of such a doctrine could not fail to be tragic."

--Benjamin Graham & David Dodd, Security Analysis

Links

"Well, we do have filters. And sometimes those filters are very irritating to people who check in with us about businesses - because we really can say "no" in 10 seconds or so to 90%+ of all of the things that come along simply because we have these filters. First, we want businesses that we can understand. And that filters out a lot of things. Second, we want 'em to be good businesses. How do our filters deal with fast changing technology? Very simply. If something has a significant technological component or we think future technology could hurt its business as it presently exists, we look at it as something to worry about. And it won't make it through our filters. But we have some filters in regard to people, too. We want businesses that are being run by people who we’re very comfortable with - which means people with ability and integrity. And we can do that very fast. We've heard a lot of stories in our lives." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

"We have to have an idea that is (A) a good idea and (B) a good idea that we can understand. It's that simple. So our filters are filters against consequences from our own lack of talent." --Charlie Munger (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

The Walter Schloss Archive [H/T Linc] (LINK)

Why All My Books Are Now Free (Aka A Lesson In Amazon Money Laundering) - by Meb Faber (LINK)

EconTalk Podcast: Jerry Muller on the Tyranny of Metrics (LINK)

Related book: The Tyranny of Metrics

Freakonomics Radio: Why the Trump Tax Cuts Are Terrible/Awesome (Part 2) (LINK)

What Tennis Can Teach Us About Technology - by Jonah Lehrer (LINK)

How Good Do You Want To Be? - by Ryan Holiday (LINK)

Scientists Genetically Engineered Flies to Ejaculate Under Red Light - by Ed Yong (LINK)

Links

"The financial world is so complex and unpredictable that a fair amount of our analyses will prove to have been flawed.... A dirt-cheap price is an anchor to windward against misperceiving current situations, or being unable to make accurate forecasts." --Marty Whitman

Martin J. Whitman, age 93, Founder of Third Avenue Management, Passes Away (LINK)

Related link: Over 30 Years of Value Insights from Martin J. Whitman

Jeff Bezos' 2017 Letter to Shareholders (LINK)

IMF issues warning on global debt (LINK) [The full report is available HERE.]

WorkLife with Adam Grant Podcast: When Work Takes Over Your Life (LINK)

Edge #512: How To Be a Systems Thinker - A Conversation With Mary Catherine Bateson (LINK)

Drugs from Bugs: Bioprospecting Insects to Fight Superbugs (LINK)

Links

"Markets can do anything. If you look at the history of markets, you see everything under the sun. But we have no time frame [for doing something]. If the money piles up, then it piles up. And when we see something that makes sense, we're willing to act very fast and very big. But we're not going to act on anything if it doesn't check out. You don't get paid for activity. You only get paid for being right."  --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

My Berkshire Hathaway Reflections - by Shane Parrish (LINK)

Zillow, Aggregation, and Integration - by Ben Thompson (LINK)

In the era of Donald Trump, New England’s biggest GOP donor is funding Democrats [Seth Klarman] [H/T Will & Linc] (LINK)

A $76,000 Monthly Pension: Why States and Cities Are Short on Cash (LINK)

Netflix: The Future of Entertainment or House of Cards? - by Aswath Damodaran (LINK)

A Sidelined Wall Street Legend Bets on Bitcoin [H/T @williamgreen72] (LINK)

The Rise, Reign, and Fall of W.P.P.’s Martin Sorrell - by Ken Auletta (LINK)

To Everyone Who Asks For ‘Just A Little’ Of Your Time: Here’s What It Costs To Say Yes - by Ryan Holiday (LINK)

The Shellfish Gene - by Ed Yong (LINK)

***

An excerpt from a 2011 article by Nassim Taleb and Mark Blyth ("The Black Swan of Cairo") that may be worth thinking about today:

Political and economic “tail events” are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics into the tractable randomness of blackjack. 

Most explanations being offered for the current turmoil in the Middle East follow the “catalysts as causes” confusion. The riots in Tunisia and Egypt were initially attributed to rising commodity prices, not to stifling and unpopular dictatorships. But Bahrain and Libya are countries with high GDPs that can afford to import grain and other commodities. Again, the focus is wrong even if the logic is comforting. It is the system and its fragility, not events, that must be studied—what physicists call “percolation theory,” in which the properties of the terrain are studied rather than those of a single element of the terrain.  

When dealing with a system that is inherently unpredictable, what should be done? Differentiating between two types of countries is useful. In the first, changes in government do not lead to meaningful differences in political outcomes (since political tensions are out in the open). In the second type, changes in government lead to both drastic and deeply unpredictable changes. 

And a related quote from Taleb in The Black Swan (2007):

Likewise, dictatorships that do not appear volatile, like, say, Syria or Saudi Arabia, face a larger risk of chaos than, say, Italy, as the latter has been in a state of continual political turmoil since the second war. I learned about this problem from the finance industry, in which we see “conservative” bankers sitting on a pile of dynamite but fooling themselves because their operations seem dull and lacking in volatility.

Carl Sagan on science as a way of thinking...

From The Demon-Haunted World: Science as a Candle in the Dark (published in 1995):

Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children’s or grandchildren’s time—when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness.  

The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance. As I write, the number-one videocassette rental in America is the movie Dumb and Dumber. “Beavis and Butthead” remain popular (and influential) with young TV viewers. The plain lesson is that study and learning—not just of science, but of anything—are avoidable, even undesirable.  

We’ve arranged a global civilization in which most crucial elements—transportation, communications, and all other industries; agriculture, medicine, education, entertainment, protecting the environment; and even the key democratic institution of voting—profoundly depend on science and technology. We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.

[H/T @UnionSquareGrp / @wingod]

Links

"I think the most successful investors, if they sell at all, will be selling things that end up going a lot higher - because it means they've been buying into good businesses as they've gone along." --Warren Buffett

Wait But Why: How to Pick a Career (That Actually Fits You) (LINK)

The $105 Billion ‘Ghost Stock' Blunder Rocking Markets in Korea [H/T Matt] (LINK)

A review of the book The Culture Code (LINK)

The World According to Boyar Podcast: Frank Blake, former Chairman and CEO of The Home Depot (LINK)

Adventures in Finance Podcast -- Powering Down: Beginning of the End for Tesla? (LINK) [See also: The bull case for Tesla]

Exponent Podcast: Episode 148 — Facebook Fatigue (LINK)

Sam Altman interviews Anne Wojcicki (video) (LINK)

This Hummingbird's Tail Whistles, and No One's Sure Why - by Ed Yong (LINK)

Links

"Incidentally, the ideal purchase is something you like already when it's selling at a price that makes you want to go out and buy more. And we probably should have done more of that in the past.... That's one of the beauties of marketable securities. When you're in a wonderful business, you do get a chance periodically to double up on it or something of that sort. Were the stock market to sell a lot cheaper than it is now, we'd probably buy more of the businesses we already own. They'd certainly be the first ones we'd think about buying because they're the ones we like best." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Adam Grant on Intentional Parenting - by Shane Parrish (LINK)

[Grant]: I think when it comes to core family values, we care obviously a lot about generosity and kindness. 

One of the things that we discuss at the dinner table every week is… The conversation about “What did you do at school today?” is not that helpful. What’s much more helpful is “what’s something you did for someone else this week?” 

...We definitely want our kids to value learning. So one of the principles that we follow is any time they’re interested in learning about something, we’ll find a book on it.

Their challenge then is to learn about it, maybe to teach it to us, which is really fun.

And we get to have a whole discussion about it.

Mark Zuckerberg runs a nation-state, and he’s the king (LINK)

The Saudi Crown Prince Thinks He Can Transform the Middle East. Should We Believe Him? [H/T @kevin2kelly] (LINK)

DIA Director's 2018 Professional Reading List [H/T Phil] (LINK)

Understanding China's Rise Under Xi Jingping - by Kevin Rudd [H/T Phil] (LINK)

When a Bigger Penis Means Swifter Extinction - by Ed Yong (LINK)

For one group of tiny crustaceans, the species whose males invest most heavily in sex disappear ten times faster.

Links

"You don't want to be chasing down every idea. Therefore, you should have a strong presumption. You should be like a basketball coach who runs into a 7-footer on the street. You're interested to start with. Now you've got to find out if you can keep him in school, if he's coordinated and all of that sort of thing. And that's the "scuttlebutt" aspect of it. But it should be the last 20% or 10%. You don't want to get too impressed by that because you want to start with a business where you think the economics are good - where they look like 7-footers. Then you want to go out and use the scuttlebutt approach to test your original hypothesis." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Henry Kravis Discusses Founding KKR and the History of Private Equity (LINK)

The Facebook Current - by Ben Thompson (LINK)

The Knowledge Project Podcast -- Learning How to Learn (LINK)

In order to get where you want to go in work and life you need to learn. But how do we actually learn? How does the brain work? How can we accelerate our learning? To find out, Shane talks with Barbara Oakley (@barbaraoakley), who teaches the most popular massive open online course in the world, Learning How to Learn. 

Nassim Taleb talks with Brett McKay (podcast) (LINK)

Related book: Skin in the Game

WorkLife with Adam Grant Podcast: A World Without Bosses (LINK)

Being your own boss can be liberating, but it can also be paralyzing. Adam talks with author Dan Pink about the challenges of working for ourselves and visits a tomato paste company, Morning Star, that has run successfully for decades without bosses.

Bill Gates shares the story of Cacilda Fumo, an amazing woman living with HIV in Mozambique and what she’s doing to save lives (LINK)

Leonard Mlodinow: "Elastic: Flexible Thinking in a Time of Change" | Talks at Google (LINK)

Four Things Procrastinators Need to Learn (LINK)

People Who Have “Too Many Interests” Are More Likely To Be Successful According To Research [H/T @valueshadow] (LINK)

Today's Audible Daily Deal ($2.95) is a good one, and a former Bill Gates recommendation: Stuff Matters: Exploring the Marvelous Materials That Shape Our Man-Made World - by Mark Miodownik

Skin in the game and simplicity...

From Nassim Taleb via Skin in the Game:

Now skin in the game brings simplicity—the disarming simplicity of things properly done. People who see complicated solutions do not have an incentive to implement simplified ones. As we saw, a bureaucratized system will increase in complication from the interventionism of people who sell complicated solutions because that’s what their position and training invite them to do. 

Things designed by people without skin in the game tend to grow in complication (before their final collapse).  

There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a “scholarly” paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary. Further, there are side effects for problems that grow nonlinearly with such branching-out complications. Worse:  

Non-skin-in-the-game people don’t get simplicity.

Links

"One way to determine which is the good business and which is the bad one is to see which one is throwing management bloopers - pleasant, no-brainer decisions - time after time after time." --Charlie Munger

First Principles: The Building Blocks of True Knowledge (LINK)

An Art Leveraging A Science - by Morgan Housel (LINK)

Come easy, go easy: The Tech Takedown! - by Aswath Damodaran (LINK)

Passive Aggressive Investing and FAANG - by Rick Bookstaber (LINK)

Why the co-dependence between big tech and passive and algorithmic investing could cause far more pain than most anticipate (LINK)

Is College Worth the Cost? - by Ben Carlson (LINK)

Adventures in Finance Podcast -- Crude Awakening: The Yuan, the Dollar, and the Battle for Global Supremacy (LINK)

The full audio of Recode and MSNBC’s interview with Apple CEO Tim Cook (Recode Decode Podcast) (LINK)

Cities are the new Galapagos - by Matt Ridley (LINK)

Academia’s Consilience Crisis [H/T @mjmauboussin] (LINK)

Book of the day: Four Seasons: The Story of a Business Philosophy
[And for those especially interested in business biographies from the hotel industry, also see: 1) Be My Guest (Hilton); 2) Half Luck and Half Brains (Holiday Inn); and 3) Without Reservations (Marriott)]

Peter Kaufman on The Multidisciplinary Approach to Thinking (audio and transcript)

About the most educational 45 minutes of listening (or reading) one can receive...

Link to: Peter Kaufman on The Multidisciplinary Approach to Thinking

.....

An excerpt always worth keeping in mind:

Lou Brock set the Major League record for stolen bases with the St. Louis Cardinals many years ago. And he once said, ‘Show me a man who's afraid of appearing foolish and I’ll show you a man you can beat every time.’ And if you’re getting beat in life, chances are it’s because you’re afraid of appearing foolish. 

Links

"I think the world's best companies are built by fanatics. [That means that you] work day and night. Sort of don't worry about the possibility of failure. Every setback is just something to work a little bit harder at doing. And you really know what you're trying to achieve.... And you're going to change your strategy until you can get that to happen." --Bill Gates

Intelligent Fanatics Think Beyond Their Lifetime (LINK)

Business Lessons from Mark Leonard (Constellation Software) - by Tren Griffin (LINK)

"The Clock Is Ticking": Inside the Worst US Maritime Disaster in Decades [H/T @pcordway] (LINK)

Fintech Could Flop Without Big Banks (LINK)

a16z Video: Eroom’s Law (LINK)

a16z Video: What to Make of Consolidation in Healthcare? (LINK)

Exponent Podcast: There’s Always a Bigger Fish (LINK)

Ben and James discuss Microsoft’s reorganization, how Satya Nadella has managed the decline of Windows, and how it applies to Apple and services.

FT Alphachat Podcast: Benn Steil on The Marshall Plan (LINK)

Related book: The Marshall Plan: Dawn of the Cold War

An Inordinate Fondness for Wasps - by Ed Yong (LINK)

Links

"As long as the odds are in our favor and we're not risking the whole company on one throw of the dice or anything close to it, we don't mind volatility in results. What we want are the favorable odds." --Charlie Munger

"If we have a business about which we're extremely confident as to the business results, we'd prefer that its stock have high volatility. We'll make more money in a business where we know what the end game will be if it bounces around a lot." --Warren Buffett 

Jamie Dimon's 2017 Shareholder Letter (LINK)

The eroding purchasing power of the dollar and its implications for consumption (LINK)

Why the Standard Model of Future Energy Supply Doesn’t Work (LINK)

Elroy Dimson chats with Meb Faber (podcast) (LINK)

Carl Sagan on Mystery, Why Common Sense Blinds Us to the Universe, and How to Live with the Unknown (LINK)

Book of the day [H/T Taleb]: Who We Are and How We Got Here: Ancient DNA and the New Science of the Human Past - by David Reich

Links

Akre Fund Reports from 1997 onward [H/T @colemanrhawkins] (LINK)

Fastenal Co-Founder Bob Kierlin’s Smart Frugality - by Sean Iddings (LINK)

When Keynes Played Art Buyer - by Jason Zweig (LINK)

A bull and a bear debate Tesla on the Quoth the Raven Podcast (LINK)

WorkLife with Adam Grant Podcast: Faking Your Emotions at Work (LINK)

David Remnick Talks to Malcolm Gladwell About Writing, Reporting, and Being Wrong (video) (LINK)

Why Whales Got So Big - by Ed Yong (LINK)

Free book download: System1 - Unlocking Profitable Growth (or you can buy the paperback HERE)

Links

"When we look at the future of businesses, we look at riskiness as being sort of a go/no-go valve. In other words, if we think that we simply don't know what's going to happen in the future, that doesn't mean it's risky for everyone. It means we don't know - that it's risky for us. It may not be risky for someone else who understands the business. However, in that case, we just give up. We don't try to predict those things." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)

Wall Street Heavies Fear a Beloved Gravy Train Is Nearing the End (LINK)

Don't Blame Jeff Immelt for GE's Stock Woes (LINK)

Bill Gates reviews “Factfulness” by Hans Rosling and Anna Rosling Ronnlund (LINK)

How Melinda Gates Is Tackling Tech's Gender Problem (Bloomberg's Decrypted Podcast) (LINK)

Invest Like the Best Podcast: Deep Basin – Earning Alpha in Energy (LINK)

After On Podcast: George Church | Bioengineering (LINK)

Related book: Regenesis: How Synthetic Biology Will Reinvent Nature and Ourselves  

Related link: Edge #464: The Augmented Human Being - A Conversation with George Church 

Can Doctors Choose Between Saving Lives and Saving a Fortune? - by Siddhartha Mukherjee (LINK)

Warren Buffett on painting his own painting...

From his 2003 talk at the University of Nebraska at Lincoln:

I can do anything in the world I want to do but what I want to do is run Berkshire Hathaway. Now why do I want to run it that way? There's a couple of things: 

A) I get to paint my own painting. I go down there every day and I feel like Michelangelo working on the Sistine Chapel or something. Nobody else may think it's a great painting, but I get to paint my own painting. I do not have people second-guessing me. I do not have people saying 'Why don't you use a little more red paint, or blue paint. Why don't you paint a seascape instead of a landscape.' I get to do my own thing. It's a form of creativity. It's exactly like somebody feels that's a professional golfer, or like somebody feels that's a painter. They're not doing it for the money, primarily. They're doing it because they like doing something well and that happens to be down the route of their talents.  

And the second thing I like, frankly, is I like applause. I like appreciation. So I like having shareholders who feel good about what I've done.... Everybody in our family has got all of their money in Berkshire, and so those people are counting on me. And that's kind of fun to have something where you can actually deliver for other people and change their lives in positive ways. 

Links

"Hang on to your hat. Hang on to your hope. And wind the clock, for tomorrow is another day." --E. B. White [Source]

The End of Windows - by Ben Thompson (LINK)

How do wars affect stock prices? (LINK)

Mutual Fund Observer, April 2018 (LINK)

Charley Grant, columnist for the Wall Street Journal, on the Hidden Forces podcast discussing Tesla (LINK)

How to Serve a Deranged Tyrant, Stoically - by Ryan Holiday (LINK)

Books of the day:

Letters of Note: Volume 1

Letters of Note: Volume 2

Warren Buffett's 2003 talk at the University of Nebraska at Lincoln

Link to video


[H/T George]

Links

“People create their worlds with the tools they have directly at hand. Faulty tools produce faulty results. Repeated use of the same faulty tools produces the same faulty results. It is in this manner that those who fail to learn from the past doom themselves to repeat it. It’s partly fate. It’s partly inability. It’s partly… unwillingness to learn? Refusal to learn? Motivated refusal to learn?” -Jordan Peterson, 12 Rules for Life [H/T Taubes]

This circulated several years ago, but in case any readers have never seen it [H/T @FocusedCompound].... Notes from Joel Greenblatt’s Special Situation Class at Columbia Business School from 2002 through 2006

The New 2018–2019 Uber Cannibals - by Mohnish Pabrai (LINK)

How to Talk to People About Money - by Morgan Housel (LINK)

Domino’s Pizza Founder Tom Monaghan’s Five Priorities for Success - by Ian Cassel (LINK)

Friar Tuck Financial Services: A Classic Unbundle/Re-bundle Strategy - by Tren Griffin (LINK)

Facebook and the Awakening of Our Private Selves - by Rick Bookstaber (LINK)

Scott Galloway, Prof. NYU Stern School of Business – Keynote | OMR18 (video) (LINK)

The History of Singapore: The Miracle of Asia (Full Documentary) [H/T Tim Ferriss] (LINK)

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 - 1965-2000

Einstein’s Theory of Special Relativity (MetaLearn Podcast) (LINK)

Book of the day [H/T Josh Wolfe]: Immortality: The Quest to Live Forever and How It Drives Civilization – by Stephen Cave