Links - 7/19/2020
“The stock market is the most obliging, money-making place in the world because you don’t have to do anything. You know, you sit there with thousands of businesses being priced at the same price for the buyer and the seller, and it changes every day. And you’ve got lots of information about most of those businesses, and you don’t have to do anything. Compare that to any other investment alternative you’ve got. I mean, you can’t do that with farms. If you own a farm and the guy has the farm next to you and you’d kind of like to buy him out or something, he’s not going to name a price every day at which he’ll buy your farm or sell you his farm, but you can do that with Berkshire Hathaway or IBM. It’s a marvelous game. The rules are stacked in your favor, if you don’t turn those rules upside down and start behaving like the drunken psychotic instead of the guy that’s there to take advantage of it.” —Warren Buffett (2012)
“What’s interesting about this place is I think we’ve had a lot more fun and we got rich enough so we bought businesses and stocks to hold instead of to resell. It’s an enormously more constructive life. So as fast as you can work yourself into our position, the better off you’ll be.” —Charlie Munger (2012)
Learning from Captain Abrashoff (LINK)
Related book: It's Your Ship: Management Techniques from the Best Damn Ship in the Navy
From 1720 to Tesla, FOMO Never Sleeps - by Jason Zweig ($) (LINK)
The Fed Is Setting the Stage for a Major Policy Change (LINK)
For the Federal Reserve, this time really is different. Having learned a hard lesson in the last recovery — don’t tighten monetary policy too early — the central bank is leaning in the opposite direction. In practice, that means the Fed will not just emphasize actual inflation over forecasted inflation, but will also attempt to push the inflate rate above its 2% target. It’s a whole new ballgame.
Graham Holdings Is a Smaller—and Cheaper—Berkshire Hathaway [Barron’s] (LINK)
Barron’s comes up with a sum-of-the-parts value of more than $700 a share. We value the TV operations at $1.6 billion, about eight times the average adjusted operating profits in 2018 and 2019.
The education business is harder to value because of its depressed earnings. But we give it a value of $900 million, or a fraction of last year’s sales of $1.5 billion. We assign $500 million to manufacturing, which is about 10 times free cash flow over the past 12 months. (We’re not giving any credit for the pension plan, overfunded by $1.3 billion at the end of last year, because it’s not easy to monetize that.)
Matthew McLennan on WealthTrack (video) (LINK)
What Got You There Podcast: #203 Michael Mauboussin (LINK)
Acquired Podcast: Pinduoduo (LINK)
Radiolab Podcast: Dispatches from 1918 (LINK)
John Lewis on Love, Forgiveness, and the Seedbed of Personal Strength (LINK)
“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 life—which 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