Chuffed to be referenced in Howard Marks latest memo ...
Great read ..
Brian Arthur [
@sfiscience
], Qualitative vs Quantitative, so-called 'Value' vs Growth, Valuation heuristics etc
"Where I got a lot of my education from was reading history. I'd go back & read about Edison, Ford, Rockefeller, J.P. Morgan. The period between 1870-1920 is really interesting." Marc Andreessen
Rockefeller
Vanderbilt
Patterson
Ford
Firestone
JP Morgan
Edison
Carnegie
👇
The Druck on Shorting.....
"I'm constantly fighting my bearishness about the world. One of the great hedge fund managers of all rime, Bob Wilson, greatest short seller ever, said he made 90% of his money on the long side, the math just works against you. If you're perfect on a
"Where I got a lot of my education from was reading history. I'd go back & read about Edison, Ford, Rockefeller, J.P. Morgan. The period between 1870-1920 is really interesting." Marc Andreessen
Rockefeller
Vanderbilt
Patterson
Ford
Firestone
JP Morgan
Six excellent books..
‘The iron rule of life is everybody struggles .. If you soldier through, you can get through almost anything. And it’s your only option. You can cry alright but you can’t quit.’
- Charlie Munger
$NVDA CEO's advice to students:
"resilience matters in success...I don't know how to teach it to you except for, 'I hope suffering happens to you'..greatness comes from character & character...is formed out of people who suffered..I wish upon you ample doses of pain &
“You want to really devote as much time as possible to study the history of businesses and the history of great businessmen in the past."
- Li Lu
👇
100 Great Business Books...
'I have studied the investment process of many investors, ranging across almost every style of investment. To be a success, I think you need to synthesise a lot of sources."
- Terry Smith. Fundsmith.
80 Great Investment Books...
👇
‘To succeed in economic life, it is not enough to be intelligent. What is necessary is to combine intellectual abilities with solid common sense, a taste for the concrete, and above all a sense of leadership, the ability to lead high-level teams. As one of my professors told me,
‘Just keep accumulating knowledge. That’s one of the beauties of the business that Charlie and I are in, is that everything is cumulative.’
- Warren Buffett
"Wall Street never changes, the pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes."
- Jesse Livermore
"You want the franchise operator to make money and you want him to create a capital asset that’s worth more than he’s put in it. That’s the goal."
- Warren Buffett
Six excellent books...
A must read for any potential buyer of a franchise or franchising business.
“There's two things I always say: Unless you have a position, all you have is an opinion. And the cumulative profits of our opinions are zero.”
- Ken Griffin
"I read voraciously and still do. I read lots of business biography because it informs me about human behavior, how people behave in their business life and how that effect how they will do." Chuck Akre
Some of my favorite business books....
“In order to be successful, an investor has to understand not just finance, accounting and economics, but also psychology.”
- Howard Marks
6 Great Books on Psychology
👇
‘Today I still hold that macroeconomics is of little use unless you also understood behavioural science, and that in business you can’t communicate with people if you don’t understand something of their background.’
- Guy Hands
“I got a big envelope from Berkshire Hathaway. When I opened it, it was a share of BRK stock. The letter from Charlie saying ‘this is by way of thanks, Warren & I have read your books, we’ve made hundreds of millions of dollars. This is our way of saying thanks.’” Robert Cialdini
The first episode of The Curiosity Chronicle just hit inboxes around the world.
This weekly short-form newsletter will include five pieces of content curated to spark your intellectual curiosity.
Stay curious, friends!
"We did not buy Coca-Cola based on any conversation of any kind with the top management before we bought our interest. We simply bought it based on reading the annual report, plus our knowledge of how the business worked."
- Warren Buffett
'Cash combined with courage in a crisis is priceless'
-- Warren Buffett
"Berkshire's best opportunities always came at times of uncertainty, when others lacked the insight, resources and fortitude to make the right judgements and commit."
-- Alice Schroder, 'The Snowball'
“You want to really devote as much time as possible to study the history of businesses and the history of great businessmen in the past.”
- Li Lu
Study the Master CEO's HERE ......
‘I wanted to put on the walls days of extreme panic in Wall Street, just as a reminder that anything can happen in this world. I mean, it's instructive art, you can call it.’
- Warren Buffett
#study_history
‘I’ve read quite a lot about Warren Buffett and Berkshire Hathaway, and imagine that the people heading his various companies all think much more about long-term prosperity.’
- Sir Alex Ferguson
‘Sir Alex understood that one of the keys to an enduring organisation is to build from within, by helping youngsters gain their footing and become successful, rather than recruiting expensive guns for hire…’
- Michael Moritz
#promote_from_within
Fourteen of my favorite quotes which I've tried to internalize from Daniel Kahneman:
"Nothing is as important as we think it is while we are thinking about it."
“Declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not
The best tennis players ever only win just over 50% of points.
Similarly, the stock market's historical odds of being up on any given trading day are around 53%, but that too is enough for massive gains when compounded over a long time frame.
Bill Miller on the value of simplicity:
“For every company, there are a few key investment variables. The rest of the stuff is noise.”
“Are things getting better or worse? If they’re getting better, then I want to understand what’s going on.”
“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”
- Warren Buffett
“There's two things I always say: Unless you have a position, all you have is an opinion. And the cumulative profits of our opinions are zero.”
- Ken Griffin, founder Citadel
Happy Birthday GOAT!
“Warren’s investing skills have markedly increased since he turned 65. Having watched the whole process with Warren, I can report that if he had stopped with what he knew at earlier points, the record would be a pale shadow of what it is.”
- Charlie Munger
Latest from Munger..
'I don't consider this a time when an idiot could get rich by doing practically anything. There is a lot of idiocy going on at the moment & mis-behaviour and it always creates danger for the unwary.'
‘Buffett plunked down a billion dollars for a 6.3% stake in Coca-Cola in 1989-an unusual move for the midwestern investor noted for picking undervalued stocks. With its P/E ratio hovering around thirty, Coke was not cheap, but Buffett shrewdly spotted its limitless potential.’
2022 reading ....
My Top 5
1) McDonalds - Behind the Arches
2) John H. Patterson [National Cash Register]
3) Exceeding Customer Expectations - Enterprise
4) Loyalty Rules - Fred Reichheld
5) Rags to Riches - Cintas
Other favourites in bold....
“A&P was the largest food retailer in the US. They were a big promoter of private labels. … It was a great American success story for a while and then a great American failure.”
— Warren Buffett
'Pershing Square Holdings investors have grown equity investment at a 16.5% pa over the last 20 years, compared with a 10.0% return had they invested in the S&P 500 during the same period.'
Latest from Ackman's Pershing Square Holdings
Good Read...
👇
“A rule of psychology: if you always tell people why, they'll understand it better, they'll consider it more important, and they'll be more likely to comply. Even if they don't understand your reason, they'll be more likely to comply.”
- Charlie Munger
'Buffett posted all the AGMs online on from 1994 till now, which I never thought they'd do. I just finished about a month ago. I learned a lot. The biggest learnings I had in the last I would say 15, 18 months is those videos. Those were great' M Pabrai
"I took Economics just so I could read the paper intelligently. I went to get a PhD in Economics and I went there and I said: “These people are crazy. They’re trying to shove the economy into a math formula. It doesn’t make any sense.” Stanley Druckenmiller
Hayden Capital Q2 .. YTD +101%, 25%pa since Nov 14
'Like a bouncer at a popular nightclub, I promise I will continue curating& ensuring that any new partners who join alongside you in our Hayden “family” will be emotionally qualified & like-minded.' F Liu
"If you read Phil Fisher's book Common Stocks and Uncommon Profits, I think he has a 25 point checklist on how to analyse a company and interestingly of the 25, probably 15 are qualitative elements. Which is just the reverse of what most people on Wall Street do."
- Paul Black
Great interview with Philippe Laffont of Coatue Capital (a Tiger Cub)
- runs c$50b, started with $50m of capital
- went to MIT and got rejected 5 times for a job at Apple
- then worked for free at small mutual fund to learn enough of ‘the lingo’ before meeting Julian Robertson
-
My takeaways from Philippe Laffont's (Coatue Management) interview with David Rubinstein (Carlyle Group)
AI Overhyped?
If everyone is talking about it, it must be priced in, right? No. Laffont has always emphasized focusing on tech stocks with high valuations as a starting point
Akre Q4
‘Compounding does not, & cannot, happen over the course of a year or two or even five. Compounding requires decades.’
‘Rough markets and share price declines do not have to be enjoyed. But to compound, they must be endured.’
"Warren & I have read your books, we’ve made hundreds of millions of dollars.”
Charlie Munger's letter to Robert Cialdini ... where he sent Mr Cialdini a BRK share to say thanks [and reciprocate!]
"You couldn’t start with a better book than Cialdini’s Influence” Charlie Munger
“We never look at any analyst reports. If I read one it was because the funny papers weren’t available. I don’t understand why people do it.”
- Warren Buffett
This video hit me hard...
In this 2017 interview, Warren Buffett commented on the importance of his open schedule:
"I can buy anything I want, but I can't buy time."
The power of this realization is hard to capture in words...
My attempt:
Time is your most precious asset.
“As a youthful analyst I used to have a notice on my desk that read, ‘share prices are more volatile than corporate cash flow, which is more volatile than asset replacement cost.’ It was a reminder to concentrate on non-transitory items..." Nick Sleep
“I took Economics just so I could read the paper intelligently. I went to get a PhD in Economics and I went there and I said: “These people are crazy. They’re trying to shove the economy into a math formula. It doesn’t make any sense.”
- Stanley Druckenmiller
“The banking business is no favorite of ours. When assets are twenty times equity - a common ratio in this industry - mistakes that involve only a small portion of assets can destroy a major portion of equity.”
- Warren Buffett
“In the seventy five years I’ve been investing if I’d reacted to events I’d be out of the market. I never really want to be out of the market. It’s not a question of being out of the market, it’s a question of owning businesses.
If I wanted to own farms, I wouldn’t keep buying
"The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot, and if people are yelling, 'Swing, you bum!' ignore them."
- Warren Buffett
"Businesses do not meet expectations quarter after quarter & year after year. It just isn’t in the nature of running businesses. And, in our view, people that predict precisely what the future will be are either kidding investors, kidding themselves, or both." Warren Buffett
"I am no longer interested in 50-cent dollar bills. I am intensely focused on 10-100 baggers that we can own for decades. Set it and forget it." M Pabrai Q1
‘Learning the skill of not investing is harder and more important than learning how to invest.’
- Pulak Prasad
Enjoying this…
(Nb. Both Chuck Akre and Peter Keefe recommended the book to me in Omaha)
Maybe the greatest stock pitch/case study of all time..
Munger on Coca-Cola
No mention of beta, risk-free rates, the Fed, interest rates, discount rates, DCF or price targets?????
‘Our office doesn't have a TV screen playing CNBC or any other news; our lone TV screen is used only for video conferencing. The only Bloomberg terminal we have is in the corner of our office pantry; it remains unused and unwatched probably 99 percent of the time….’
If you ask my kids the one quote I’ve tried to instil in them over the years, it’s this one from Daniel Kahneman. My thirteen year old daughter surprised me when she told me she did a speech on it recently at her school (completely unprompted by me.)
‘Nothing in life is as