Note to readers: #WeeklyInvestorReader contains a few of the articles I read during the week. Visit my Twitter @HurriCap for any other articles that may not have been included.
A Dozen Thoughts from Charlie Munger from the 2017 Berkshire Annual Meeting – Tren Griffin, June 2, 2017 | Teaching people anything, particularly about investing, is hard.
The big missteps that brought an American retail icon to the edge of collapse – Wahington Post, June 1, 2017 | Walk into a Sears these days, and you’ll see an icon of American retailing collapsing before your eyes.
Uber, But for Meltdowns – NYMag, May 29, 2017 | Sexual harassment, corporate-espionage charges, taking advantage of drivers: The company that practically courts bad PR is in an existential crisis.
Why Is Amazon Building Brick-and-mortar Bookstores?– NYMag, June 1, 2017 | Amazon’s first physical bookstore in New York, located in the high-end shopping center at Columbus Circle, was quietly bustling when I visited on a recent muggy spring day around lunchtime.
Iceland’s first Costco is so popular that one-fifth of the population has joined its Facebook group – Quartz, May 30, 2017 | Costco, the US-based chain of warehouse stores, opened its first branch in Iceland on May 23. This year.
The Security I Like Best Checklist #Buffett #GEICO – Greg Speicher, June 1, 2017 | This simple checklist was produced by inverting Warren Buffett’s classic article on GEICO: what mental or written checklist can we imagine Buffett used to think about GEICO and write the article?
DEAR FELLOW SHAREHOLDERS… Over 30 Years of Value Insights from Martin J. Whitman – Marty J. Whitman, November 10 , 2016 | For over 30 years, Legendary Value Investor, Martin J. Whitman, has written comprehensive shareholder letters that provided readers with thorough lessons in his investment philosophy, security analysis and value investing. The collection of excerpts from letters in this book comprise the “best of” Marty’s writings organized thematically to give readers an opportunity to dive into specific topics of interest.
Why the Construction Industry May Be Robot-Proof – strategy+business, May 24, 2017 | What gives? Well, there is something unique about housing. Typically, home construction activity is custom work — remodeling, renovation, teardowns replaced by a single home, maybe a few homes built on a cul-de-sac. And it is difficult to gain economies of scale — or to automate processes — when every job, or close to every job, is unique. If every T-shirt were made to order — different sizes, styles, cuts, fabric — it would be very hard to get a $3 T-shirt. Think about the sheer, overwhelming amount of choice people have when building a home: gravel or asphalt in the driveway, 500 different shingle styles to choose from, gas or electric heating, landscaping, appliances, bathrooms, and windows. To be sure, there are plenty of planned developments and apartment buildings built in the U.S. But even here there is a great variation from project to project, and within projects.
The Housing Market Is Ripe for Tech Disruption – Bloomberg View, May 31, 2017 | The process of buying and selling a home in the U.S. is needlessly inefficient. That will inevitably change.
Finding Moats: The Best Opportunities Require More Than A Surface Scan – Geoff Gannon, May 31, 2017 | The way to compound your money is to find a wide moat stock at a 12 to 15 P/E, hold it for a long time and then sell it at a 25 to 30 P/E.
Debt pile-up in US car market sparks subprime fear – Financial Times, May 30, 2017 | In an echo of the subprime housing crash, delinquencies of US car loans are rising amid allegations of mis-selling
When High Yield Becomes Low Yield – Pension Partners, May 30, 2017 | In December 2008, as the “world was ending,” European junk bonds hit a record high yield of 25.97%. Forecasts of financial Armageddon were widespread, and few could envision a scenario in which subordinated bondholders would receive anything but pain. But the world did not end in December 2008. And over next five years, European junk bondholders would receive nothing but pleasure, earning a record return of 23% per year. Fast forward to today and we have reached the opposite extreme, with European junk bonds at an all-time low yield of 2.67%.
First impressions of an Amazon bookstore – The Shatzkin Files, May 29, 2017 | The new just-opened Amazon bookstore in Manhattan made my wife think of an airport bookstore or a “gallery, where the books are displayed rather than sold”. Everything is faced out. The selection is limited. An airport bookstore would almost certainly have a different mix of titles: far fewer cookbooks (the Amazon store gives them quite a bit of space) and a much bigger selection of novels, particularly genre novels (of which there seemed to be relatively few at Amazon).
Suppliers Bargaining Power – Dr. Andrew Stotz, May 30, 2017 | Michael Porter’s five forces analysis is a framework for understanding the degree of competition in an industry. Strong forces drive down industry profitability. The five forces model acknowledges that a company operates in a system of suppliers, customers, and existing competitors. In addition, there is always the threat of new entrants and in some cases substitutes.
Airbnb might go public if Spotify has a successful listing – Business Insider, May 30, 2017 | Airbnb is apparently keeping a close eye on Spotify’s rumoured listing.
Apple is stepping up its war to steal Android customers – Business Insider, May 30, 2017 | Apple is trying to steal away Google’s customers.
Proximate vs Root Causes: Why You Should Keep Digging to Find the Answer – Farnam Street, May 29, 2017 | The mental model of proximate vs root causes is a more advanced version of this reasoning, which involves looking beyond what appears to be the cause and finding the real cause. As a higher form of understanding, it is useful for creative and innovative thinking. It can also help us to solve problems, rather than relying on band-aid solutions.
A legendary hedge fund that raised $5 billion in 24 hours expects ‘all hell to break loose’ – Business Insider, May 25, 2017 | A hedge fund led by an investing legend expects “all hell to break loose.”
Iconic hedge fund manager Seth Klarman says investors are missing huge risks – Business Insider, May 26, 2017 | An iconic hedge fund manager says investors are misperceiving risks in the markets – at a time when markets are hitting historic highs.
Route to Air Travel Discomfort Starts on Wall Street 584 – New York Times, May 28, 2017 | “There’s always been pressure from Wall Street,” said Robert L. Dilenschneider, a veteran public relations executive who advises companies and chief executives on strategic communications. “But I’ve been watching this for 30 years, and it’s never been as intense as it is today.”
Amazon Just Invented Borders Books – M.G. Siegler, May 22, 2017 | A quick trip to Amazon Books in NYC…
Ipsos Global Trends– Ipsos, May, 2017 | The Ipsos Global Trends survey is the largest study of its kind, providing a unique snapshot of the world today. It explores the attitudes and behaviours of over 18,000 consumers and citizens in 23 key countries around the world and with over 400 questions, covers everything from tradition to trust, from brands to business, from society to social media and much, much more. Our analysis features both ‘Megatrends’ – the known technology, demographic and environmental changes happening now and in the future – alongside eight global master trends. We also share the full data, which shows trends from our 2014 study along with downloads for additional material.
Transcript: A16z’s Marc Andreessen with Barry Ritholtz on Masters in Business – Zach Ullman, May 26, 2017 | Andreessen Horowitz’s Marc Andreessen was a guest on Masters in Business hosted by Barry Ritholtz. The content is timeless, so I transcribed the interview. That way, we can refer back to it from time to time.
Were Munger, Dalio and Soros CIA Trained? – Investment Masters Class, May 28, 2017 | Mr Fogerty cited “ The Psychology of Intelligence Analysis’ from the CIA’s website by Richards J. Heuer [CIA Book] as guiding his investment principles. Always interested in finding an edge I printed out a copy. I think Mr Fogarty has stumbled across one of the most useful guides an investment analyst could find on improving one’s investment decisions.
Why Brains Are More Reliable Than Machines – Wall Street Journal, May 26, 2017 | The data part may be easy for machines, but the human part isn’t.
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