Saluki

I'll echo what others have said that having read both this and 100 baggers, both are worth a read and this is the better of the two books. Along this line of buying compounders and holding for a very long time, a couple of books with similar strategy that are good reads are The Davis Dynasty (the patriarch was a bureaucrat at the state insurance commission and later got rich investing in insurance companies and holding for decades), and the Phil Fisher books (I believe that he held Motorola for decades and it was a huge part of his portfolio).

Added a little JOE and CPNG. I think there are cheaper things in my portfolio, but none that I'm willing to increase position size right now.

I don't go on Substack, I avoid Twitter like the plague, and I try to avoid articles that give their take on what Buffett said. Like everything in life, it's usually better to go to the primary source. I've got Buffett's chairman's letters in the hardbound book and it's a great learning tool. It seems all media is moving towards shorter, click baity content. Twitter is the worst for the written word, and Tik Tok for video. Maybe you should make a conscious effort to move in the other direction towards long-form content. There are legendary investors who have written books (Peter Lynch, Ben Graham, Phil Fisher, Phil Caret, Joel Greenblatt, Einhorn, Tillinghast, Howard Marks) and I think those are great sources. I read a lot of biographies. Currently I'm reading one on Marvin Bower (responsible for taking McKinsey from two offices to an international powerhouse). In the past I've read books on a particular industry (shipping) and I have one in my queue about graphene now. I don't know if I'll ever use the knowledge, but it's easier to just keep accumulating knowledge and then having it ready if something comes up then to pass up an opportunity because by the time you get up to speed on something the opportunity passed.

My better half works at McKinsey, and she is way more tech literate than I am. She mentioned that she just finished a course on ChatGPT on Udemy which was helpful. It helps to learn how to give better prompts and use prior answers to shape future queries apparently. For instance, she had it generate lists of best cities to live with these 5 criteria and rank them in an excel sheet (I didn't know it could do things besides write bad poetry and give passable, generic history essays for high school students).

I've been to the AGM 2x before the lockdown (It makes more sense, in some ways than the BRK meeting b/c you can meet Prem and upper management, which isn't really possible in Omaha). I would go again if it wasn't so close in time to the BRK AGM. I hate to fly and don't like to do trips too close together. There's definitely more fun things to do in Toronto, and the side events are much smaller and there is much more signal to noise than in some of the retail oriented side events in Omaha which are like a sales pitch for some firms hawking newsletters (not naming names). I got a picture with Prem and one with Mason Hawkins one year. And I got to meet Arnold Van Dem Berg the first year I went. When people say what a nice guy he is, it's not an exaggeration. I'm not a billionaire so his time would've been better spent talking to the deep pockets, but we had a great conversation and he gave me a copy of a book of quotations that he compiled, and wrote a nice inscription in it, then when I was about to leave he told his son to take a picture of us. Class act! I enjoyed watching it online, but it's not the same. I think I'll be back next year

watching it now, thanks for the reminder.

This seems like a strange recommendation, by I'm getting a lot of value out of this book. In addition to being a performance psychologist to most of the top PGA golfers, he's also a coach for Point72, and the parallels between top performers in any discipline are really interesting. This book is about Golf, not investing, but you can easily apply the mindset and habit adjustments to investing (or tennis, or bike racing, or surgery, or battle). Really interesting read, and above is a video where he talks about applying the principles to investing, which is NOT discussed in the book.

Bought some VTS on the dip yesterday, and I added some NETI, taking it to 2% of my portfolio. I think NETI is a full position now, but I would buy some more VTS on a dip in my retirement account, (I didn't want to sell anything in there, so I bought most of it in my taxable account, and recently realized I should've sold some positions in my retirement account and bought them back in my regular account, and bought VTS in the tax free account since the 10% tax free dividend is like a 15% taxable dividend). [edited to add that I sold some BRK this morning in my retirement account to add to VTS on the dip. I plan on replacing the BRK shares in my taxable account as funds come in so I can maintain my original allocation]

VTS, SWBI on the dip. Bought some NETI over the past few days to hold for 30 days and tax loss harvest my older, higher basis, shares and got lucky on the timing.

So my back of the envelope math says that even with today's pop in price, FFH is back to .9 price vs book value

Yes, some of the pictures you take will look photoshopped. Just beautiful. If you like outdoor adventure stuff, Pucon Chile is like Interlaken Switzerland. We went on a day long hike to the top of an active volcano there. Highly recommend Chiloe Island too. It's the farthest north you can go and still see every type of penguin. There are several companies that take you people out on zodiac boats every 20 minutes or so to the see their nests. Lot's of wooden Unesco churches and houses on stilts too.

https://www.cnbc.com/2023/04/12/full-transcript-berkshire-hathaway-chairman-ceo-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box-today-.html Transcript of the interview now online.

If you are going to rip on some ridiculous tax breaks, this is a silly one to pick on, it's a university. It's well funded already, but it's going towards education. That writer is an idiot. If this guy really wanted to rail against something he should look at the art "museum" of the Walton heiress or one the Rales' brothers. It's ostensibly a museum, even though it's not really open to the public. So you have taxpayers subisidizing the costs of acquiring and maintaining your art collection on you property. Your grandma doesn't a tax break for her collection of tea spoons from every place she visited, but billionaires get the taxpayers to subsidize their art collecting hobby?

managed to add a little more VTS at the open following yesterday's dip. It was negative at the open for a few minutes before going up and I got lucky I sold some appreciated BRK in my retirement account and bought the same amount back in my taxable account so I could buy VTS in the retirement account without having to hold it for a year if it shoots up to unreasonable levels. Someone I met from the board told me he has bought low and sold around $20 twice and bought back again. I tend to hoard stocks like an old lady collecting commemorative plates, but I think if it was in my retirement account where I don't have to pay short term capital gain taxes, I might be open to the idea of trading in and out of something like this.

There is also the question of what the mix of immigrants is with regard to skills and education. In the UK, they have historically allowed skilled migrants (Indian doctors) to emigrate easilly, but made it harder for low skilled labor. So if you have a lot of skilled immigrants, it pushes down wages for the upper class, like doctors, and makes professions like plumbers more well off than in the US. In the US we have a lot of unskilled immigrants from Mexico. That makes labor cheap for things like building houses and hurts the wages of construction workers but helps the wages of the constrained supply of highly skilled labor like doctors and lawyers.

Just zooming out and thinking about energy from a econ and game theory perspective: SUPPLY SPR is depleted and must be refilled. OPEC announces production cut Russia supply impaired b/c of sanctions. Oil companies don't seem eager to ramp up supply, preferring to pay down debt and increase buybacks and dividends. New production takes years to bring online Windfall taxes discourage reinvestment in new production DEMAND Despite the push for clean energy, every airplane, ship and almost every car on the road use fossil fuel. So most demand is inelastic. Marginal consumer of inelastic demand determines the marginal (market clearing) price. PRICE SIGNALS Oil Prices climbing and the market clearing price will always be where supply and demand intersect. In order for the price to come down, there will have to be more supply, but see above. The other way oil prices come down is if demand comes down. The green alternatives won't impact that in the short term, so the way oil prices come down is by less demand due to some dramatic increase in fuel efficiency or demand destruction due to a recession. the government is unlikely to willingly cause a recession when there is an election next year, so they will likely loosen up monetary policy if high energy prices increase the odds of a recession. money printing causes inflation which causes commodity prices, including oil, to rise. assets purchased by borrowings and investments in yesterday's dollars are being sold in higher (nominal) dollars which gives you a big boost in ROIC until you must replace depleted assets with new reserves. I'm no mathemagician, but if I had to bet on higher oil prices a year from now or lower oil prices a year from now, I would take the former.

I went to SF last month and it's amazing how much has changed in 10 years since I was there last. At my downtown CVS, some of the high-theft items are behind plexiglass and you have to ask someone with a key to get it for you. in the downtown CVS, most of the store was behind plexiglass, including the cashiers. Crazy. And even though I grew up in NYC and it was kind of gritty in the 80s, I can't imagine raising kids there now. The fact that the guy who killed someone in cold blood over an argument in a vape store was already on bail for shooting at cops is ridiculous. If you stop arresting people for people for shoplifting, why would anyone pay for stuff? And if everyone is stealing, are you surprised that companies won't put stores there? And don't get me started on releasing people with no cash bail. If you arrest someone for a violent crime and let them go the same day, what makes you think they won't do it again and get released the same day again with no bail and do it again? I'll leave NYC for the tourists. When I quit my job I may get one of those JOE beachfront houses and start a Friday happy hour for COBF refugees.

Added some VTS on the dip. (oil is up 2% today, VTS is down 7% on some analyst's downgrade, looks fine to me)

I'm halfway through this book and I'm really enjoying it. It was released a few years ago and didn't get much attention. I was going to skip it because I've got investing books to fill a small library, but when I saw that Seth Klarman and Bill Miller gave it a good blurb and that Peter Lynch wrote the forward, I decided to give it a go. There aren't really any specific formulas or criteria in the book that are helpful. It's like when Buffett says that you should buy good companies at reasonable prices and doesn't give much guidance beyond that. But it is very good at pointing out things to look out and things to avoid. It reminds me a lot of the Howard Marks' book, The Most Important Thing, but with some Charlie Munger "invert, always invert" thrown in. The only thing I can't square is the number of positions Tillinghast has. His fund had over 800 positions. It's easy to outperform (or underperform) the SP500 if you have few positions, and as the number of positions goes up it gets almost impossible to beat (or even match after fees) the SP500, so if he was able to beat it, even a small amount (and apparently with less volatility) with so many positions is impressive. But he, like Buffett and many others, says that you make the real money when you get a no-brainer and concentrate in it. He was Lynch's protege so maybe the army of analysts and all the positions is just how he learned to invest at a fund, but the advice for individuals is different? Still a worthwhile read though.

I enjoyed this book also. It isn't your usual finance book but it's got some thought provoking reframing of common attitudes. It's not so much a "how-to" book as a "think about why" book. It reminds me of Your Money or Your Life by Joe Dominguez and Vicki Robin, but with less emphasis on F.I.R.E. stuff.

"The key organ in your body in the stock market is your stomach. It’s not the brain. If you can add 8 and 8 and get reasonably close to 16, that’s the only level of math you need to know. " I've always liked this Peter Lynch quote. He's got a lot of pithy quotes.

Added some NETI and started a small position in POWW so that I can keep it on my radar.

There's a couple of cumulative prefereds that I'm looking at. Here's one: https://finance.yahoo.com/quote/SRG-PA?p=SRG-PA&.tsrc=fin-srch it's at $23.17 with a $25 liquidation preference. currently a 7.58% dividend at this price. Seritage is in a kind of run off mode now and selling off the non-core assets to pay down debt and are open to selling off the entire company. I fell like I'm watching someone defuse a bomb while the timer ticks down. Assuming the common survives and stabilizes long enough for someone to buy what's left and they call the preferreds, you get that dividend plus another 8% ($23.17x 1.08 = $25) when they close you out at par. If it happens soon, it's not a bad place to park your money. There are people who are long the common, so maybe this would appeal to them, because if the common survives, then this is money good, but it's a lot of uncertainty. You will get your $25 before the common equity holders get anything, but if there is something that really goes sidways, the debt holders will get paid out first and that $25 is not guaranteed if there is nothing to pay it with. I'm looking at another cumalative preferred too, much smaller and less debt, and yielding 9% but haven't had time to read the 10-k yet so I don't want to mention it yet.

I own some BABA and have been raked over the coals by the Chinese government, so I'm more comfortable now with India (Fairfax India) Korea (Coupang) or Mexico (Televisa) going forward. When Jim Rogers mentioned his bullishness on China, he analogized it to the US in the early 1800s. If you had invested in the US you were buying into the incredible growth. It was lumpy and you had a civil war, the great depression, a genocide of the Indians, several wars with other countries, numerous presidents assassinated, the bankruptcy of the railroads, corrupt politicians and judges, but it was so good that being directionally correct was enough. But I've soured on that outlook because even if he is right, I don't have 200 years to ride out that volatility and if the legal institutions and respect for property rights isn't there, will my ADRs be worth anything to my grandchildren? If you were a British merchant and had invested in NY Gas Light Company in 1824 and left the shares in a safe that was hidden, when your descendants came upon the shares almost 200 years later, they would be entitled to the shares in ConEd and all the uncashed dividends along the way. I don't think anyone believes they wouldn't get every penny of it. As a country with a strong central government that does what it wants, even if it overrides people's rights, it can move quickly and get things done. But what are the odds that Xi's successors will always act in a way that benefits China and not themselves. A powerful central government only needs one autocratic leader who won't step down to turn it into a dictatorship. The Chinese people have never had a democracy, so would they even notice if the power grab was inch by inch instead of all at once? Maybe a war with Taiwan is what they want to rally everyone behind the rulers and jail anyone who opposes them? Who knows? I feel fairly confident that in India you get some of that Asia growth story and some of that Commonwealth legal system respect for property rights that has benefited most of their former colonies (US, Canada, Australia, NZ).

There are probably a lot of places, besides the equities markets, where people who are smart and numerate are making a killing because they aren't the type of places that finance guys go to, like horse races. If you are surrounded by people who are innumerate, then "in the land of the blind, the one eyed man is king." As long as you do it quietly so others don't catch on and crowd your trade, you can keep raking money in. Like Ed Thorpe did in the early days of the Black Scholles option model when he had a better version of the model, but used it to get rich instead of publishing papers and winning a Nobel Prize. And, he knew what the model the other guys were using was (because it was published!) so he knew it's weakest spots (convertible bonds). This discussion reminds me of the guy who made a lot of money in the Lottery due to a quirk in the rules. Again, the Lottery is normally a place that people in finance wouldn't go near. https://highline.huffingtonpost.com/articles/en/lotto-winners/ I've remembered this line for years, which reminds me of the equity markets: "The lottery is like a bank vault with walls made of math instead of steel; cracking it is a heist for squares."