Buy the Book: American Business History is a brief but dense introduction to U.S. businesses from the early colonies to the present day and what made the U.S. environment so unique and dynamic compared to the rest of the world.
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Weekend Reads – 5/12/23
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Quote for the Week
The common thread that runs through all equity bull markets is confident expectations of higher earnings ahead. The common thread that ties the onset of all bear markets together is the loss of those confident expectations of higher earnings ahead. History shows that bull markets can go well beyond rational valuation levels as long as the outlook for future earnings is positive. — Peter Bernstein (source)
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Lessons from the 2023 Berkshire Meeting
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Warren and Charlie were back to answering questions last weekend at the Berkshire annual meeting. For over five hours, the duo answered questions from a packed house.
The broader lesson from the meeting revolved around the duality of mistakes. It’s an inevitable aspect of investing that creates setbacks for some but opportunities for others.
Let’s dive in.
New Opportunities
New things coming along don’t take away the opportunities. What gives you opportunities is other people doing dumb things… In the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number of people doing dumb things. And they do big dumb things. — Warren Buffett
The question related to how new tech (AI) might impact industries and markets and how investors might benefit from it. Of course, new tech impacts businesses. It always has. Creative destruction is a byproduct of innovation but it rarely happens instantaneously. It’s also hard to predict which companies might suffer the most. Continue Reading…
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Weekend Reads – 5/5/23
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Quote for the Week
Warren and I have skills that could easily be taught to other people. One skill is knowing the edge of your own competency. It’s not a competency if you don’t know the edge of it. And Warren and I are better at tuning out the standard stupidities. We’ve left a lot of more talented and diligent people in the dust, just by working hard at eliminating standard error. — Charlie Munger (source)
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Repeated Lessons in Buffett’s Partnership Letters
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Warren Buffett’s Partnership Letters hold a number of lessons for everyone. Some stand out more than others because he repeats them throughout the letters. Those lessons are worth repeating again.
It is always startling to see how relatively small differences in rates add up to very significant sums over a period of years.
Exponential growth doesn’t come naturally to everyone. Mostly because it’s hard to imagine the huge amount of growth that happens on the backend based on what we experience on the frontend.
To help his partners understand it, Buffett wrote three versions of alternate history to explain it. He rewrote the history of Christopher Columbus, da Vinci’s Mona Lisa, and the sale of Manhattan. His stories offer a fun way to rewrite historical outcomes and show the power of compounding. Continue Reading…
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Weekend Reads – 4/28/23
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Quote for the Week
Someday I’m going to write a piece called “The Perils of Brilliance.” The times I have been most wrong are the times I thought I was most right. You asked me at the beginning about the things I’ve learned from all of this, and I have to repeat: It’s humility. I think the reason I’ve been able to survive 55 years in this business is because I developed humility, at least after 1958. It’s the only way to survive—not necessarily to be the top quartile—but survival is really the name of the game we’re playing with long-term considerations. — Peter Bernstein (source)