Money and Finance

Links

Nassim Taleb on the success of Munger-Buffett (LINK)

So I figured out something about the success of Munger-Buffett. It is not in the strategies they run, but in their very, very, very strong filtering.

Simply it is generalized flaneuring. Charlie Munger: "We have no system for estimating the correct value of all businesses. We put almost all in the "too hard" pile and sift through a few easy ones". "Warren (Buffett) talks about these discounted cash flows. I've never seen him do one".

Related previous posts to the above: 1) Filters; and 2) Memortation, or One Way to Put What You Learn to Practical Use

And Peter Bevelin also shared some wisdom in this regard in my interviews with him:

I found that I could increase my chance of making better judgments if I could learn what works and not, if I adapt what I do to my personal situation, and if I could establish some values and preferences. If I then could set up some avoid-rules and filters/tests to judge what make sense or is important or not, life could be improved (even if I still do some mistakes; but hopefully I am less of a fool now). Also remember that all decisions aren’t important. Some people spend more time making a judgment on what TV to buy or where to go on vacation than a life-changing decision like marriage.

.....

Generally, keep it simple and use some filters. Some questions I ask myself: Is it important? If yes, is it knowable? If yes, is this within my circle of competence? Which of course assumes that I know what I know and can do, and what I don’t know and can’t do. Otherwise I exclude and throw it in to too hard pile. If within, then, any testable argument should be tested – What is the evidence? Can I disprove it? Compared to what (including negative cases and non-events)? Randomness content? If I believe this, what would follow? What would I have to check out? What ideas can help me?

A Dozen Things Learned from Charlie Munger about Ethics (LINK)

Great investor videos from the team at BeyondProxy [H/T csinvesting] (LINK)

The Best Value Traps (LINK)

Valeant Case Study in Progress (LINK)

Hussman Weekly Market Comment: How Market Cycles Are Completed (LINK)

Even in periods where interest rates have been quite depressed, not a single market cycle in history failed to end with estimated prospective 10-year S&P 500 returns close to 10% annually, if not dramatically higher. Based on the most historically reliable valuation measures, the S&P 500 would have to lose literally half of its value for prospective returns to rise to that level. A 50% market loss isn’t a worst-case scenario. Given current valuations, it’s the standard, run-of-the-mill outcome that investors should expect over the completion of this cycle.

The measures we find most strongly correlated with actual subsequent S&P 500 total returns now project zero total returns for the S&P 500 on a 10-year horizon, and about 1% annual nominal total returns for the index on a 12-year horizon.

Paul Graham: Write Like You Talk (LINK)

Laszlo Bock on Charlie Rose discussing his book, Work Rules! (video) (LINK)

Neil deGrasse Tyson talks to the WSJ [H/T Will] (video) (LINK)

9 Learnings from 9 Years of Brain Pickings (LINK)

- Links
Charlie Munger Isn't Done Bashing Valeant [H/T Will and Linc] (LINK) Ackman said during the presentation that he spoke with Munger about his March remarks. The Berkshire vice chairman’s objections focused on leverage, tax rates and acquisitions,...

- Links
A Dozen Things Learned from Charlie Munger About Benjamin Graham’s Value Investing System (LINK) Related book: Charlie Munger: The Complete InvestorTren Griffin talks with Forbes about his book on Charlie Munger (LINK) James Chanos discusses China...

- Links
Daniel Kahneman: ‘What would I eliminate if I had a magic wand? Overconfidence’ (LINK) Related book: Thinking, Fast and SlowChris Pavese's idea presentation on SeaWorld Entertainment (video) (LINK) Related book: Walt's Revolution!:...

- Links
Q&A with Guy Spier about his book, The Education of a Value Investor (LINK) Buffett’s Private Analysis of Geico in 1976: ‘Extraordinary’ But ‘Mismanaged’ [H/T Lincoln] (LINK) Aswath Damodaran on corporate break-ups, using EBay and PayPal...

- Hussman Weekly Market Comment: We Learn From History That We Do Not Learn From History
Link to: We Learn From History That We Do Not Learn From History “We learn from history that we do not learn from history.” Georg Wilhelm Friedrich Hegel Last week, Investors Intelligence reported that bullish sentiment surged...

Money and Finance