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Thinking About Investments


mbower
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There's so much information to absorb.  10Ks, 13Fs, and countless threads.  Markets are supposed to be efficient but how do you explain AAPL over the last 2 years?  If you're not going to index, how do you generate alpha?

 

Warren Buffet says to read 500 pages every day.  That’s how knowledge works.  It builds up, like compound interest.  And Todd Combs reads a 1,000 pages a day.

 

We have 600 pages on Sears.  Either you believe in Eddie and Bruce and you're buying real estate or it's a declining retailer competing against Amazon.

 

Do you buy or sell?  Sometimes the easiest decision is right in front of you.

 

How would you summarize some of your highest conviction investments, long or short, in a sentence or two?

 

Here's a couple:

 

IBM - capital allocation story, 2% dividend, growing EPS every year, how sticky is their revenue? shorts (Druckenmiller) say they can't grow their revenues or adapt to the cloud

 

MA - network effect, tollbooth on global economy, % of plastic to cash transactions globally is tiny, will only grow.  compounder, paying for growth, PE of high 20s is value given long runway and low cost of capital

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Warren Buffet says to read 500 pages every day.  That’s how knowledge works.  It builds up, like compound interest.  And Todd Combs reads a 1,000 pages a day.

 

 

Haha this is really starting to lead it's own life, beautiful.

 

That means that if he reads 1.5 page per minute, which I personally consider fast (assuming 400 words per page that is an above average speed at 600 words/minute), he has to read 11 hours a day. Non-stop and at that pace, just to read his 1000 pages. No time to reflect on what was read (which is at least as important), bathroom breaks, eating, making annotations, ... If he skips a day/week he has to read two extra hours/day just to make up for it.

 

Eagerly waiting for the day they read 2000 pages per day!

 

 

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Haha this is really starting to lead it's own life, beautiful.

 

Yes it has.........

 

Todd Combs clarified his quote to 500 pages a week, not a day.

 

And for Buffett, he's read the same companies filings for years and some for decades. At this point he must have the ability to skim past the unimportant or repetitive reading. He's been reading K's and Q's for so long he knows how to move around them quickly.

 

I've tried speeding up my reading the last couple of years (in part to this obsession we all have/had with matching wits with people like Buffett/Munger/Combs.........) but it didn't work. No matter what I tried it didn't work and my retention/comprehension was near zero.

It was only recently that I picked up Security Analysis (for the 3rd time) and I forced myself to slow down and I'm getting so much more out of it.

 

And thank you for not listing "Buffett owns it" as a reason to own IBM.  ;D

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