Links - 11/27/2022
“When there is no price for incurring excessive risk, more will be born. When there is no cost for failure, there will be more and more of it.” —Seth Klarman (October 2008)
Warren Buffett explains his $750 million charitable donation on Thanksgiving eve (LINK)
Investor Howard Marks: ‘The short run is by far the least important thing’ ($) (LINK)
“I think it’s a mistake to think you can keep the world from changing,” muses Marks. He minored in Japanese studies at the Wharton School of the University of Pennsylvania, and learnt the concept of mujō, a word originating in Buddhism, meaning impermanence and the inevitability of change. “You have to be cognisant of history, or you’ll repeat it, but you also have to understand that it may not apply,” he goes on.
…“Risk aversion has replaced Fomo [‘fear of missing out’],” says Marks. “Capital is harder to come by. Debt is available at very attractive returns . . . which are likely to go higher.” He sees compelling buying opportunities in high-yield bonds, distressed debt, leveraged loans, mortgage-backed securities and collateralised loan obligations that are Oaktree’s bread and butter. Marks is expecting a pick-up in corporate bankruptcies “but not soon because any company that wasn’t asleep at the switch” refinanced their debt and pushed out their maturities.
…We’ve been talking for over two hours. The restaurant has emptied, Marks’s assistant is calling him back to the office and lunch is drawing to a close. What’s the least important thing, I wonder, as we wait for the bill. “The cult of celebrity, all these people who are just famous for being famous,” he says. And for investors?
“The short run is by far the least important thing,” adds Marks. It’s folly to try to predict what will happen to interest rates or how high inflation will rise. “What matters is the long run. We try to buy the stocks of companies that will become more valuable, and the debt of companies that will pay their debts. It’s very simple. Isn’t that a good idea?”
Goehring & Rozencwajg Q3 2022 Market Commentary: Why Won’t Energy Companies Drill? (LINK)
Oil Prices Face Fresh Volatility With New Russia Sanctions, OPEC Decision (LINK)
The Need to Read - by Paul Graham (LINK)
Richer, Wiser, Happier Podcast: Fidelity Legend Joel Tillinghast (Podcast, Video and Transcript)
Freakonomics Radio Podcast: 523. Did Michael Lewis Just Get Lucky with “Moneyball”? (LINK)
No — but he does have a knack for stumbling into the perfect moment, including the recent FTX debacle. In this installment of the Freakonomics Radio Book Club, we revisit the book that launched the analytics revolution.
Business Breakdowns Podcast: Brookfield Asset Management: Alternative Cash Flows (LINK)
a16z Podcast: Ryan Petersen on Rearchitecting the Supply Chain (LINK)
The Business Brew Podcast: Cullen Roche - Why Macro Matters (LINK)
The Meb Faber Show Podcast: Marc Cohodes on SBF, Fraud, & The FTX Death Spiral | #456 (LINK)
The Acid Capitalist Podcast: Escape Velocity with Lacy Hunt (LINK)
Ukrainian Consequences: The New American War Model - by Peter Zeihan (video) (LINK)
The Tim Ferriss Show Podcast: #637: Stephen Wolfram (LINK)
The Rest Is History Podcast: 265. Saudi Arabia: The Mystery of the Kaaba (LINK)
Happy Birthday, Omicron (LINK)
One year after the variant’s discovery, virologists are still scrambling to keep up with Omicron’s rapid evolution.
“We should not, like sheep, follow the herd of creatures in front of us, making our way where others go, not where we ought to go.” —Seneca