Saluki

Thanks. I'll add this to my queue.

I like behavioral economics books like Freakonomics, Thinking Fast and Slow, and The Undercover Economist. I was talking to a friend recently about the author of one of these books who used to write a Dear Abby type advice column called Dear Economist where people would ask life advice and he would answer from the perspective of an economist. I googled and saw that although he doesn't write the column anymore, he has the old articles on his blog. Here's a sample: Can a cheap wine be a winner at dinner? | Tim Harford Enjoy.

I'll give this a bump. I finished reading the book and it's definitely worth a look if you are the type of person who thinks about mental models. The biological processes in living organisms competing for scarce resources is a really interesting way to look at businesses and niches. Competition and cooperation amongst different species is similar to what happens in business contexts. Even the concept of parasites has parallels in the economic world (criminals, bureaucrats, people who game the welfare system etc) . The flawed early economics that you learn about, such as Marxism and the evenly rotating economy, are now taken with a grain of salt, but the concept of the rational person (homo economicus) still persists. Behavioral economics is chipping away at the traditional beliefs, but looking at it through a biological lens is a quick and easy shortcut. If you believe in a rational man, then there should be no such thing as someone who dives on a grenade to save his friends, or jumps in front of a car to save their child. But if you think of it from a biological perspective: which traits are more like to make the species survive, not the individual, then it's more logically consistent. I read quite a bit and learn a lot of facts from books, but it's rare that I read something that changes the way I look at things. This is one of those rare gems.

Yes, I agree. When Argentina's military junta was losing popular support they decided on their catastrophic invasion of the Fawkland Islands a war with the UK. They gambled that the UK would do nothing because those islands weren't worth fighting for. They were wrong. And those islands didn't even have oil. And speaking of Yemen attacking the wrong ships: https://www.reuters.com/world/middle-east/cruise-missile-yemen-strikes-tanker-ship-us-officials-2023-12-12/#:~:text=DUBAI%2FOSLO Dec 12 (Reuters,has shaken the Middle East.

I think that it's equally likely that there will disruptions in the short term that may make it more expensive. Yemen is trying to blockade Israel and Yemen isn't know for the accuracy of their intelligence agency, so if they start attacking ships that aren't going to Israel or owned by Israelis, it will either cause people to go the long way around, or escalate the conflict. It looks like Iran is trying to drag the US in by attacking ships by proxy and baiting the US to respond. There is also the Venezuela/Guyana thing. Guyana isn't a military powerhouse and Venezuela needs cash so they are claiming that they own the part of Guyana that has all the oil. It's possible that it could get sorted by the international courts or it's possible that fighting breaks out and disrupts oil shipments in both countries. Exxon is drilling in Guyana, if Venezuela takes over, and Exxon threatens to sue anybody who takes over their contract, there will be Venezuelans drilling that stuff and trying to sell it on the black market. Look at Venezuelan oil production over the past couple of decades and see if it's going up or down. Russia's shadow fleet is using some of the oldest, sketchiest tankers you've ever seen, and all it will take is one big spill in a place like Greece for people to avoid those rust buckets and the demand tightens up there too. In the long term I'm bullish oil, but weird stuff happens in the short and medium term. Like when it went negative during COVID.

Trimmed a few shares of GOOG (not that there is anything wrong with the company, but it's my largest position), and sprinkled it around in few very small purchases of BTI, SFL, KNOP, NEP, ENPH, and TAYD.

Biggest percentagewise was Pabrai's first book, which I already had a copy of. I was walking out of a used book store and I saw copy which was sitting on the clearance rack for $1. I bought it and flipped it on Amazon a few weeks later and cleared about $100 after fees and postage. Biggest win that made a difference in net worth was my first condo in 2000, right before the real estate bubble. It was a studio and it was selling for $70k, and I worked out that it was $100/month cheaper to buy in that building than to rent. The seller was a realtor who was retiring and had owned 6 units in different buildings for 20+ years and the price went nowhere, but was selling all of them. It was a few blocks from my job so the commute was perfect. I put 10% down and got a mortgage for the rest. I got a first time home owner credit from the city, and because I had only been at my firm for 4 months and had been a law student before that, my income was low enough to qualify for the credit and I got about $6k back. So I basically bought a piece of property for almost nothing down, like the old infomercials claim anyone can do. Three years later I sold it for $210 and cleared about $90k after fees and closing costs. Because I lived in it for over 2 years, the gains were tax free My only regret is not buying a bigger unit when it became available a few months later. I could have rented one and kept living in the bigger one. My law degree was also, in hindsight, a really good investment because it's still paying me every year, and grad school has gotten much more expensive over the past 20 years. There have been some terrible investments, but those were the good ones.

There was an article discussed on here recently about the strange cult like atmosphere and practices at Dalio's fund. If you want to take a deeper dive down the rabbithole, this is the book for you. Dalio's "Principles", which are ever changing and sometimes contradictory are the tenets of the faith, and there are strange show trials that are reminiscent of the communist era that occur constantly and are recorded and circulated as teaching examples in the search for what they call the truth. One manager told new recruits that the fund is truth machine that just happens to invest money, but that they could cure cancer if they wanted to . Somehow Ray ("Rainman" behind his back) takes part as judge and jury in many of these lengthy trials to get the "truth" of why someone let him down. Most are eventually fired or quit. There was the six week trial, orchestrated by Dalio, of the people in the facilities department so that he could get to the bottom of who ordered white boards that don't completely erase, but smear a little when you erase. Most offices solve this problem with a $3 bottle of something you squirt on the board, but this took a full blown trial by Dalio himself to get to the bottom of it. There was another trial about the size of the parking passes (the person responsible was fired, but they decided to keep the new parking passes anyway). And there was also the case of the person who didn't get it all in the urinal. Dalio had people monitoring the men's room and janitorial staff would go in and see if the person had peed on the floor and report back. They had the urinals looked at to see if there was something about the design that made them defective and did other things to reduce the chance of urine ending up on the floor. All this was overseen by Dalio himself. He hired former FBI director James Comey, who had five kids to put through college and was trying to justify his existence so he began bugging the offices and reading people's emails to try to get something on someone to fire them so he could look like he was doing his job. His high/low point was when he left a binder out with someone's name on it out in the open and recorded a low-level new hire opening it. He was fired. Imagine being an FBI bigshot and you have to set up traps like this or get to the bottom of who pees clumsily at the urinal. People are paid way over market, but they don't last long because you are expected to keep filing reports on your co-workers who fail to live up one of the Principles at any time. It's easier to kiss up and kick down, so the churn is constant. When Dalio realized that they weren't getting as many offers accepted, and many people were quitting, he blamed himself. Just kidding, he had a trial for the person in charge of hiring because she was obviously hiring the wrong people and her process was wrong. Yes, he did predict the 1987 crash. But he's made the same prediction numerous times before and after so he's predicted 15 of the last 1 crashes. He's kind of obsessed with Buffett and Steve Jobs and he tried to get Walter Isaacson to write his bio. Isaacson declined. A weird, strange look behind the looking glass. Highly recommend.

Sad day. I hoped he would make it an even 100, and hopefully attend the Omaha meeting one last time I loved his snarky sense of humor. In a book about him, there was a story about him driving a beat up clunker after his divorce drained him of money and he was working his way back from the bottom. His daughter was ashamed to be seem in that car and asked him why he drove such an ugly car. He said "I'm trying to discourage the gold diggers."

https://www.investopedia.com/top-25-stocks-in-the-s-and-p-500-for-november-2023-8380010 If you count GOOG and GOOGL as one company, the top 6 companies, all tech companies, in the SP500 index are currently 26.6% of the market. The next two are BRK and Tesla (also tech). Since I have a work sponsored retirement plan that invests in the index, I wonder if that means that I should just focus on much smaller stocks since I already have exposure to tech stocks via the index. Or maybe since the concentration is so high at the top, avoiding them completely means that I am betting against them, in which case why own the index at all? Or maybe the right answer is just to buy what is cheap relative to the others, whether I have exposure or not.

I think the market has rightly rewarded the tech companies that have some kind of moat. Snapchat is unprofitable and trades at 4x sales, while META is wildly profitable even after wasting tens of billions on Zuck's metaverse cartoon obsession, and META trades at 7x sales. Why? I don't use Snapchat, and while the millennials do, if something better came along (TikTok?) they wouldn't hesitate to stop using it. A good test for a moat is something that I heard Seth Godin mention: Would you miss it, if it were gone? If I woke up and Snapchat didn't exist, I wouldn't notice, but if META didn't exist, I would notice. Facebook, WhatsApp and Instagram are used by different people, but they tend to use them several times a day. Google? I would cry if Google was gone and I had to use Bing everyday. If YouTube disappeared and I had to use Vimeo, I wouldn't. There aren't enough people posting videos on there so I won't find what I'm looking for. MSFT? Your office runs on MSFT, you couldn't work without it. AMZN? The cloud stuff is invisible to me, but I do order on Amazon almost every week, and I go to WholeFoods even thought it's not the closest supermarket to me. So, I'm sure you can make a case for Nvidia or some other AI darling, but if you run it through the mental model of "would I miss it if it were gone?" then it cuts out a lot of the contenders. I'm sure Nvidia works great for AI or Crytpo, but as a person typing a search or using a service, how would I know what chips are on the backend? If someone else came along and started making chips "with more megaflops or less megaflops" then they could take market share and no one would notice besides the shareholders.

There's a company I have a small position in that has a lot of cash on the balance sheet. When I spoke to the IR person he said that they don't have any specific plans for it, but he didn't think that they would ever issue a dividend. When I looked on Yahoo Finance today, I saw this and I think he's right about that: Ex-Dividend Date Dec 4, 1989

Just finished this book, which was lent to me by @lnofeisone. It is a really interesting read. Despite, in a past life, having some clients in the energy industry, I was unaware of a lot of the unbelievable behind the scenes stuff. It's really well researched and they dug up a lot despite the fact that the people in this industry are very secretive. Highly recommend adding it to your reading list.

I don't think there is any evidence one way or another. Every quarter his 13fs have massive churn, so anything is possible, even that he's day trading and what you see just happens to be what was held on the last day of the period.

There's a great book called "the Other Half of Macroeconomics" by Koo. What we would experience might look like what Japan did: a balance sheet recession. Cutting interest rates might not do much because there is so much debt out there that households and businesses would be devoted to paying down debt, rather than capex and investment even if interest rates fall. Massive government spending, putting the government as the "spender of last resort" would be the way out of it, but with the current political climate I don't see that happening.

Sam Harris had an interesting take on this. There is no reason that human (meat based) intelligence is unique vs machine intelligence. It can already do math better than meat based intelligence and it keeps getting better, but meat based intelligence has stayed the same since Cro-Magnon man. Even if you assume that machine intelligence continues to grow even 1 or 2% better each year, it's outpacing the rise in meat based intelligence and will eventually surpass us. It's when, not if. So if you assume that wolves decided to align with us (not the other way around) because it helped them. And we got smarter and they stayed the same, it helped them out for a long time. They are now dogs and we take care of them, but if there were some covid-like disease spread from dogs to people and it was killing human babies, we would wipe out the dogs. Not only would they be powerless to stop it, they wouldn't even see it coming. What if AI had it's purpose (to get smarter, to grow etc) and something humans were doing (contributing to climate change, bombing each other which destroys computing power as well as people, or if there are just too much of us and too many natural resources are devoted to maintaining us which could be diverted to computing power). If it decided that we were in it's way, not only could it take us out, but there is not only nothing we could do to stop it, but we wouldn't even see it coming. Maybe advanced societies eventually get taken out by their own technology, which is one possible answer to Fermi's paradox.

The Code Breaker book about the two women who got the Nobel prize for it is great. There are a lot of articles written about attempts by male scientists to claim credit for it as was shamefully done to Rosalind Franklin by Watson and Crick. It's ironic that in cementing the legacy of two women in the CRISPR discovery, the Latino scientist, who discovered, named it, and figured out it's role in microbial defense, is never mentioned. Francisco Mojica: https://en.wikipedia.org/wiki/Francisco_Mojica Although if you want to channel peak wokeness, you should refer to him as a LatinX scientist .

Trimmed a little SWBI in my retirement account. I'll wait a full year to decide if I want to sell the shares in my taxable account. I think it's got long-term potential for compounding now that the new factory/headquarters is up and running and that capex is behind them, but I also think that a lot of the price appreciation in the past month is due to what's going on in Israel and fear/uncertainty/doubt about the current administration and gun control. Sold most most of the small position I had in VSTO. It's still cheap but they are no longer doing a spinoff and they sold the part of the business that I was interested in, so the thesis changed.

I picked up a few shares a couple of months ago when it drop in $6xx range. I should've backed up the truck, but I was building a position in something else (NTDOY) at the time. In a few weeks when people forget about it again, If it dips below book, I'll sell something and buy some more.

Interesting piece by Wall Street Millennial about Stansbury Research.

Picked up a few shares of JOE. It's starting to look interesting again, but I already am overweight in JOE. If it keeps getting cheaper (and they keep firing on all cylinders), I'll add more, but these are "great company at fair prices", not "motivated seller" prices right now.

If you are looking at the parent instead of the partial spinco, keep in mind that that even if in a sum of the parts analysis, the parent seems cheap, there may not be a way to unlock that value. Prosus/Naspers for years traded at a value that was less than it's holdings in Tencent, but you can't buy one and short the other, because if they don't sell the position, the discount may not close. Ditto with Bausch Health which spun off 10% of Bausch and Lomb and kept the other 90% for themselves. That Bausch and Lomb position made BHC look like a bargain, but they were not able to spin it off or sell it because of their debt covenants and liability from lawsuits. Yahoo also eventually found a way to distribute it's BABA shares, and people made some money, but it wasn't the tax free home run that people anticipated.

John Neff had a term for this: Measured Participation. You can start buying small and keep adding. You don't have to eat the elephant in one big bite.

How to scare away the algorithmic traders on Halloween

Picked up a few JOE shares today when it dipped below $50. I think with one more interest rate hike we may be able to buy in the mid $40s again. I'd add more but I'm using some of my available cash for my"snake swallowing a mouse" tax loss harvesting strategy. I take $10k and put it in a position with the biggest loss (BABA, over -50%) and hold for 30 days, then sell the higher cost basis shares and move that amount the next biggest loss (TV), then keep doing it for the next biggest % loser. I have two more times I can do it before the end of the year for stocks that are down but still want to hold onto. That loss offsets gains, which is great because I feel like a piece of my soul dies every time I pay taxes that I could have legally avoided paying.