The Digest #191
The dopamine loop, Berkshire Hathaway's annual report recap, Tom Gayner's letter to Markel shareholders, Investing lessons from Earnest Shackleton, Google's Gemini AI goes off the rails, and more ...
The Dopamine Loop
describes the powerful dopamine loop that can lead to addiction. An individual is subjected to a stimulus which results in a mental reward through the release of dopamine, a hormone secreted into the bloodstream. This creates a feeling of pleasure but quickly dissipates leaving the person seeking more. This loop can lead to habit formation and, eventually, full blown addiction.Drugs, including alcohol and nicotine, are ingested substances known to trigger the dopamine loop. But we can be addicted to a variety of stimulants that are not ingested. Social media is a stimulant and has powerful effects on people, especially children and teenagers. Social media companies understand this very well. To speed up the formation of habits, the stimulus must be fleeting which encourages repeated use of the platform. I wrote about this effect last month in The Thirty Second Mind.
Many stimulants can be used without causing addition. Having a few drinks on a Friday night will not result in alcoholism for most people. Some users of social media are capable of logging in for a few minutes, closing their app, and going on with the rest of their day. But whenever you are dealing with a habit forming stimulus, a certain percentage of the population will fall into addiction.
In late January, I decided to take a break from social media for the month of February. I did so in order to test whether I was addicted and to evaluate how abstinence would impact my ability to spend long periods of time reading and writing. The result is that I had a much more pleasant and productive February. I was able to spend more time reading without interruptions and I think that the quality of my articles improved.
Since I was able to abstain from X/Twitter for a full month, I’ve concluded that I’m not an “addict.” But use of social media has been a problem. I find the experience to be unpleasant and distracting. So I have decided not to return to X/Twitter for the foreseeable future, and this could very well become a permanent policy.
For those who wonder whether they are social media addicts, I would recommend abstaining for a period of time. Even if you discover that you are not an “addict” in the strict sense, you might find that life is more pleasant with fewer distractions.
Berkshire Hathaway’s 2023 Annual Report
I’ve published the following articles covering Berkshire’s 2023 annual report:
Warren Buffett’s 2023 Letter to Shareholders, February 24, 2024
Berkshire Hathaway's 2023 Results — Overview, February 26, 2024
Berkshire Hathaway's 2023 Results — MSR, February 28, 2024
I will write additional articles covering the Insurance group, BNSF, and BHE. I plan to send out one article per week over the next three weeks.
Here are some articles by other writers that I’ve read in recent days:
Semper Augustus 2023 Letter to Clients, February 23, 2024. Chris Bloomstran’s letter covers an array of topics including a detailed look at Berkshire Hathaway. It was published a day before Berkshire’s annual report. (Semper Augustus)
Cunningham on Buffett's 2023 Letter by Lawrence A. Cunningham, February 26, 2024. “Warren Buffett has done it again, penned an annual letter to Berkshire Hathaway shareholders with valuable lessons for investors and business leaders, along with subtle signals about his investment intentions.” (Market Watch)
Buffett and Three Hedge Funds by
, February 27, 2024. “Berkshire is different. Despite its 59-year record of success—the fruits of which have been distributed in equal proportion among all investors, including the CEO—the Buffett model remains more the exception than the rule.” (Intrinsic Value)A Closer Look at Warren Buffett's 2023 Annual Letter to Shareholders by
, February 26, 2024. “… Charlie always insisted that Buffett gave him far too much credit for this awakening. Buffett, in turn, refused to stop — never missing a chance to tell the world about Munger’s pivotal role in the Berkshire story.” (Kingswell)
The Greek Gods and Mythology, February 23, 2024. Mythology by Edith Hamilton is an excellent introduction to the Greek Gods. This book is not a “Greek Bible” but it might be the closest thing we have to such a work, at least in a modern book that is meant for contemporary readers. These stories form a very important part of ancient traditions and are referred to constantly in the literature of the period.
Articles
Tom Gayner’s 2023 Letter to Markel Shareholders, February 2024. “The 2023 letter will be longer than usual. As Charles Dickens might say about 2023, ‘It was the best of times, it was the worst of times.’ The letter is long, but we hope it clarifies what’s working at the Markel Group and our awareness of where we can improve.” (Markel Group)
Mike Heaton named Chief Operating Officer of Markel Group, February 26, 2024. Tom Gayner has indicated that he has no plans to retire, but it is still good to see a line of succession developing at the company. (Markel Group)
Albert Einstein College of Medicine Announces Free Tuition in Perpetuity for All Medical School Students, February 26, 2024. Video. “‘Ruth Gottesman’s extraordinary and unprecedented gift gives new meaning to selfless determination and transformational philanthropy. She has always been an inspiration to her fellow board members and the entire Montefiore Einstein community. She will have the lasting gratitude of all who choose to train and learn here,’ said Dan Tishman, Chair of the Board of Trustees of Montefiore Einstein.”
WSJ: “The donation comes from Ruth Gottesman, who after joining the faculty at the Bronx, N.Y.-based Einstein in 1968 developed widely used tools to screen children for learning problems and launched an adult literacy program. Gottesman, 93 years old, and her husband, the late billionaire-investor David “Sandy” Gottesman, were longtime donors to the medical school, and Ruth Gottesman serves as chair of its board of trustees. Sandy Gottesman, who died in 2022 at age 96, was an early Berkshire Hathaway shareholder and friend of Warren Buffett. Ruth Gottesman said the funds for the billion-dollar donation came from her husband.”
Sandy Gottesman Interview, May 18, 2016. Sandy Gottesman was interviewed by Peter Kunhardt for a documentary on Warren Buffett eight years ago. (YouTube)
Warren Buffett Case Study: Studebaker 1965 by
, February 20, 2024. “Warren Buffett and David “Sandy” Gottesman met in 1962. They were in the same line of work and had an affinity for similar securities - mispriced, boring, old-line businesses. One such company presented itself in 1965. Studebaker, the famed automobile manufacturer, was exiting the car business. Its heyday was long gone, and the auto division had recorded losses for five consecutive years leading up to 1963.” (Dirt Cheap Stocks)What Lies Beneath by Jonathan Clements, February 24, 2024. “‘You’ve saved all that money. When are you going to spend it?’ I’ve long thought ‘never’ was a perfectly fine answer. Money may represent the financial freedom to purchase all manner of goods and services. But instead of buying things, we can use money to buy freedom from worry. In a world where many—and perhaps most—folks fret constantly about their finances, I think the freedom not to worry about money is one of the top reasons to amass some savings.” 🎯 (Humble Dollar)
Investing Lessons from Shackleton’s Expeditions, February 23, 2024. “Shackleton is lauded for his leadership skills for good reason. The lessons stand out throughout his story. He raised his crew’s spirits, staved off doubt, and kept them focused throughout setbacks and adversity in the toughest of conditions. But Shackleton’s harrowing story offers some lessons for investing as well.” (Novel Investor)
Endurance: The amazing story of Ernest Shackleton's legendary voyage, January 27, 2024. A book review of Endurance by Alfred Lansing. (The Rational Walk)
Ernest Shackleton, September 13, 2020. 55 minutes. (Founders Podcast)
Gemini and Google’s Culture by Ben Thompson, February 26, 2024. Google’s Gemini appears to have gone off the rails. AI is only as good as its “training data” and appears to have drawn some … interesting conclusions. “Gemini won’t help promote meat, write a brief about fossil fuels, or even help sell a goldfish. It says that effective accelerationism is a violent ideology, that libertarians are morally equivalent to Stalin, and insists that it’s hard to say what caused more harm: repealing net neutrality or Hitler.” (Stratechery)
Why Waiting Until Age 50 To Address Risk Factors For Heart Disease Is Too Late by
, February 28, 2024. Maybe this rhymes with the power of compound interest. It pays to start early, but few doctors tell this to young patients. “I hope it is crystal clear to you by this point that waiting until this age is WAY too late. It’s not that you can’t make a difference. You can. But if you had started 30 years previously, the difference you could have made would have been much greater.” (Dr. Paddy Barrett)Podcasts
Morgan Housel — Selfish Writing, Fiction vs. Nonfiction, Methods for Connecting Ideas, February 21, 2024. 1 hour, 15 minutes. Video. “Morgan Housel talks to Guy Spier about the concept of writing for oneself, the slow way to approach reading and how to help the process of connecting ideas. Other topics discussed include skiing, beauties of the United States and the importance of sample size.” (The Education of a Value Investor)
Les Schwab Price in Performance: Keep It Going, February 22, 2024. 30 minutes. Video. Geoff Gannon and Andrew Kuhn discuss Les Schwab’s book which has been recommended by Warren Buffett and Charlie Munger. This is an out-of-print book published in 1986 that often sells for hundreds of dollars. (Focused Compounding)
Hermès, February 20, 2024. 4 hours, 11 minutes. Transcript. I’ve listened to the first hour of this marathon-length podcast. I don’t understand the ultra high-end luxury market. Even if I was worth billions of dollars, I would have no interest in a thousand dollar belt, and that’s one of the cheapest accessory that can be purchased from Hermès! But there is certainly a market for very expensive tastes. (Acquired)
HEICO — Parts for Planes, February 21, 2024. 1 hour, 2 minutes. Transcript. HEICO operates in the lucrative aircraft maintenance market. “We cover the market for aircraft parts and maintenance, how the Mendelson family have built HEICO into what it is today, and how its operating model compares with that of TransDigm.” (Business Breakdowns)
The Rise and Fall of the Global Age of Piracy, February 27, 2024. 44 minutes. “Piracy didn’t spring into existence in the 18th century Caribbean. It has existed as long as there has been commercial shipping and people to steal the goods. There were medieval pirates. Vikings loved robbing ships in the Baltic and North Seas. The Romans dealt with pirates in the Mediterranean, and the Greeks and Carthaginians before them. Pirates are as much part of history as armies, taxes, and temples. Why do we associate pirates with one specific time and place in the 18th century Caribbean with eye patches and peg legs?” (History Unplugged)
Pirates Isle
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Thanks for including my article about Buffett's letter! Incredibly honored to be listed alongside such Berkshire heavyweights like Bloomstran, Lowenstein, and Cunningham!