The Digest #157
Munger on windowless dorms, Damodaran on country risk, Disney's brand, Working without working, The comfort crisis, Fairfax, Markel, Vision Pro's breakthrough, iPhone productivity hacks, and more ...
For more on Mortimer J. Adler:
How to Read a Book by Mortimer J. Adler (1940)
How to Mark a Book by Mortimer J. Adler, July 6, 1941
Review of How to Read a Book, November 13, 2015 (The Rational Walk)
William F. Buckley Jr. Interviews Mortimer J. Adler, March 13, 1970 (Firing Line)
Articles
Charlie Munger Q&A Transcript at the 2020 Redlands Forum by Kingswell, July 25, 2023. This is a transcript of a Charlie Munger interview that took place in January 2020. Part of the discussion involved the dormitory project at U.C. Santa Barbara that became controversial because of the windowless bedroom design. However, the upside was a private sleeping area for each student! “It takes twenty extra square feet of space under the building code that binds the UC system. Twenty extra square feet to give a student his own private sleeping area. Twenty extra square feet. Can you think of anything dumber than building housing that’s going to last 200 years when you force a whole bunch of unrelated people to live together and throw up on one another and God knows what, to save twenty extra square feet? It’s insane. So I gave every student his own room.” (Kingswell)
The Return on Hassle Spectrum by Nick Maggiulli, July 25, 2023. This article is a response to a controversy on Twitter about a couple seeking financial independence through active ownership of rental housing. The essential point is that investment options must be viewed not only in terms of expected return but in terms of the time commitment and hassle factor involved in the activity. In my opinion, actively managing rental housing must be regarded as a full-fledged business. The same is true for actively managing a stock portfolio. I think that this article presents the pros and cons of various types of investments well. (Of Dollars and Data)
Country Risk: A July 2023 Update by Aswath Damodaran, July 26, 2023. “I have looked at country risk, in all its dimensions, towards the middle of each year, for the last decade, for many reasons. One is curiosity, as political and economic crises roll through regions of the world, roiling long-held beliefs about safe and risky countries. The other is pragmatic, since it is almost impossible to value a company or business, without a clear sense of how risk exposure varies across the world, since for many companies, either the inputs to or their production processes are in foreign markets or the output is outside domestic markets.” (Musings on Markets)
The Psychology of Disneyland by Trung Phan, July 22, 2023. A compilation of thoughts and observations on Disneyland after a weekend at the park with a five year old. “We waited in long lines. We got scorched by the sun (I didn’t do us any favours by being hungover). We bought overpriced bottles of water and random swag (hello, Misting Spray Fan for $30). And I legit chuckled every time a Disney employee rang up a bill, as I did the gross margin calculation in my head (the margins are the opposite of low). You know what, though? My memories of Disneyland since then have been incredibly positive and we plan on going back. The ‘Happiest Place on Earth’ got me. It got me!” (SatPost by Trung Phan)
Working Without Working: The Creative Night Shift by Frederik Gieschen, July 22, 2023. Sometimes, work does not “look” like work. “As I navigate the trail, my mind starts wandering. Fragments of memories and ideas trail through my consciousness against a backdrop of weather-beaten trees and endless sky. Suddenly, I stop and pull out my phone to record a voice note. The walk has yielded a first creative spark. Ideas start flowing. I didn’t plan it this way, but I’m not surprised either. Walking without distractions (no music, no podcasts, no audio books, no calls) has become one of my staple practices in surfacing answers and ideas. It’s part of my rhythm of input, processing, and output.” Neckar Substack
The Misuse of ‘Equity’ by Roger Lowenstein, July 25, 2023. If I was Xi Jinping, I would be laughing at the idiocy that seems to plague many public school systems in America. “Prior to the pandemic, Cambridge stopped offering advanced math in grades six through eight. Its explicit aim was to reduce disparities between low-income Blacks and Hispanics (who were under-represented in such classes) and whites and Asians. The policy, according to subsequent state test scores, has done nothing for children of color. But it has done something to students who might have benefitted from algebra.” (Intrinsic Value)
The Comfort Crisis by Mr. Money Mustache, July 23, 2023. Too much comfort can backfire. “My work days in that high desert environment in the peak of summer were hot and physically demanding. It was hard to keep my tools, and my food supply in the cooler, and myself protected from the scorching sun … while still getting the job done. There was no indoor plumbing and we had to be very careful with our limited water supply. And then at the end of each day I had to reshuffle everything and set my car back up as a bedroom and crawl in for the night. Alone and far from home. But instead of feeling depressed as I experienced this constant hardship, the opposite thing was happening: I felt more alive and more badass with each passing day. I got better at being a feral forest man.” (Mr. Money Mustache)
Aeropagus Newsletter by The Cultural Tutor. Every Friday, a newsletter arrives in my inbox that requires about a half hour to appreciate, so I typically save it for Saturday afternoon. I rarely regret the time investment. Each issue is divided into seven parts featuring art, classical music, a historical figure, architecture, rhetoric, writing, and anecdotes. This link is to the archive. The newsletter is free. (The Cultural Tutor)
Podcasts
Fairfax is a “Fat Pitch”, July 20, 2023. 1 hour, 23 minutes. Charles Frischer and Asheef Lalani discuss Fairfax Financial with Bill Brewster. Prem Watsa, Chairman and CEO of Fairfax Financial Holdings, has been referred to as “Canada’s Warren Buffett” and his company is often regarded as a “mini Berkshire”. The guests on this podcast are very bullish on the company. I have not followed Fairfax in many years but I did find the discussion on reserving particularly interesting. (The Business Brew)
Tom Gayner, how are you building Markel? A CEO Interview. July 19, 2023. 56 minutes. This is an interesting discussion ranging from describing markets through music, Markel’s business model, and the stock’s valuation. (Good Investing Talks)
The Passionate Pursuit of Lifelong Learning w/Gautam Baid, July 20, 2023. 1 hour, 5 minutes. This is a great story about persistence and determination. Gautam Baid faced a great deal of rejection at the start of his career but never gave up. He applied for over a thousand investing jobs while working the graveyard shift at a hotel. Today he is a successful fund manager specializing in Indian stocks. (The Investors Podcast)
Book Review of The Joys of Compounding by Gautam Baid, June 1, 2020. I highly recommend reading Gautam’s book, The Joys of Compounding, which I discuss in this review. (The Rational Walk)
Chris Paik - Venture Investing Frameworks, July 25, 2023. 1 hour, 30 minutes. The discussion regarding how Apple’s VisionPro represents a fundamental step change in the human/computer interface is very interesting: “With eye-tracking, you basically get to short-circuit that entire lossy physical loop. I feel like that's why you hear from early users, it feels telepathic. It's such a gain of efficiency of human write speed to the computer. I think the hope is that continued advancement of human write speeds to computers lead to these watershed moments of advances in human-computer interfaces.” (Invest Like the Best)
Tweets
Nassim Taleb brings up an excellent point about human nature. Nearly everyone is concerned about how they are perceived by others. While it is a mistake to care about what everyone might think of you, it is equally mistaken to not care what anyone thinks of you. This is the central point of my recent article, The Limits of an Inner Scorecard.
Sahil Bloom suggests a iPhone hack that actually works. Apple strives to make the iPhone more appealing and humans are suckers when it comes to colorful displays. Grayscale makes the display drab and unappealing which results in less use. Click through to Sahil’s tweet for a way to easily toggle between color and grayscale modes.
Lawrence Yeo is the talented artist and writer behind the More to That. He has a way of creating powerful illustrations like the one in this tweet. Happiness is indeed the difference between what you have and what you consider to be “enough”. The problem is that the dashed horizontal line representing “enough” keeps shifting upward for the majority of people due to peer pressure and the hedonic treadmill.
Tony Bennett and Dave Brubeck (1962)
Tony Bennett died on July 26 at the age of 96. I recommend reading A Tribute to Tony Bennett by Ted Gioia as well as his compilation of a dozen jazz collaborations. If you only listen to one of the recommendations, I suggest the following collaboration with the great Dave Brubeck recorded in 1962.
“On August 28, 1962, both Bennett and Dave Brubeck were booked to play the Sylvan Theater on the grounds of the Washington Monument. Each artist performed separately and then they decided to attempt some songs together—without any rehearsal or much planning.”
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These are amazing snippets. Thank you for sharing.