The Digest #207
Claim Checks, Herodotus, Berkshire at record highs, Folly of certainty, Advance Auto Parts, Flawed memories, Lost knowledge, Todd Combs, Walter Schloss, Bob Noyce, Nietzsche, Lincoln, and more ...
I recently published the following articles:
Claim Checks, July 16, 2024. Warren Buffett has referred to his wealth as “claim checks” that can be exchanged for all sorts of goods and services. However, he has long had the wisdom to realize that many of the things that his claim checks can purchase will not do much to improve his level of happiness.
Herodotus, July 17, 2024. Herodotus is often described as the father of history for his narrative of the Greco-Persian Wars of the fifth century BC. In this article, I discuss the edition of Herodotus that I recently read and describe one of his many “digressions” — the fascinating cautionary tale of King Croesus of Lydia.
In addition to mentioning all new articles in The Digest, I also provide a RSS Feed containing all articles and links to new articles are posted on my X/Twitter feed.
Berkshire at Record Highs
It seems like Berkshire Hathaway is hitting record highs on a daily basis. Did Warren Buffett introduce a product or service that incorporates “AI”? Just kidding. One of the reasons I no longer offer paid subscriptions is because I have no desire to venture anywhere near making stock recommendations or commenting on stock prices.
That being said, I did write Berkshire Hathaway at $600,000 earlier this year for paid subscribers and the article is now free. My basic thoughts about the company have not changed much since I wrote that article, but obviously shares are now more expensive.
Going back further into the archives, readers might be interested in taking a look at Berkshire Hathaway in 2026 which I wrote in April 2016. I wrote that it was plausible to expect Berkshire’s market capitalization to approach $1 trillion within a decade given the trend of intrinsic value growth and multiples likely to be assigned by the market. We are getting very close to the $1 trillion milestone in mid-2024.
I am no prophet and had no way of knowing Berkshire’s market cap in the mid-2020s. What I could do is look at the underlying business and attempt to judge whether the fundamentals were sound and that value would continue to accrue for the benefit of shareholders. The same exercise could be done today when considering Berkshire’s prospects through the mid 2030s, but I will keep my conclusions private at this point.
Articles
The Folly of Certainty by Howard Marks, July 17, 2024. Podcast. “… There’s no way a macro-forecaster can produce a forecast that correctly incorporates all the many variables that we know will affect the future as well as the random influences about which little or nothing can be known. It’s for this reason, as I’ve written in the past, that investors and others who are subject to the vagaries of the macro-future should avoid using terms such as ‘will,’ ‘won’t,’ ‘has to,’ ‘can’t,’ ‘always,’ and ‘never.’” (Oaktree Capital)
The Risks We Miss by Jonathan Clements, July 13, 2024. No matter how well we plan, we can still be blindsided by events. “Today’s financial lesson: We can manage risk—but terrible stuff can still happen. This thought, of course, was prompted by my recent cancer diagnosis. But the notion is also all too relevant to money management.” (Humble Dollar)
Finding Ideas Before Others by Ian Cassel, July 11, 2024. “The common element in every great stock picker is relentless curiosity and persistence. A stock picker must use all the tools at your disposal to find actionable ideas before others. In the end sometimes it’s serendipity or luck or fate that led you to find something great, but even then it’s the result of a consistently applied search plan.” (MicroCap Club)
Todd Combs on Charlie Munger's Legacy by
, July 16, 2024. This is another well written transcript, with very useful added context in the footnotes. “Shortly before the Berkshire Hathaway annual shareholders meeting in May, investment manager Todd Combs hopped on the Value Investing with Legends podcast to discuss the many lessons and insights that he learned from Charlie Munger.” (Kingswell)Walter Schloss, Nifty Fifty, Market Valuations and Opportunities by
, July 12, 2024. “One under appreciated aspect of Schloss's approach: it was simple enough for him to manage virtually by himself (with his son) for 5 decades. Compounding works best when you have a long runway. Some track records are incredible but only last a relatively short period of time because it's hard to keep up the required pace and effort needed for peak performance. Schloss found a way to achieve peak performance that also allowed for longevity, and that is absolutely critical to compounding capital.” (Base Hit Investing)Advance Auto Parts: Will this Turnaround Finally Turn? by
, July 13, 2024. “With a very similar business model, why have Advance’s returns lagged peers [O’Reilly Auto Parts and AutoZone] so drastically?” (Eagle Point Capital)The Right Kind of Stubborn by Paul Graham, July 2024. Being persistent and being obstinate are very different things, but can often be confused. (PaulGraham.com)
Your Memory is Lying to You by
, August 16, 2023. I can relate to the main point of this article: Our minds can often play tricks on us when recalling the past. Journaling can help us remember what we were actually thinking at a point in time and make it impossible to retroactively construct convenient narratives in our mind that do not match reality. (Infinite Loops)The Media Helped Cover Up Biden’s Cognitive Decline by
, July 10, 2024. This is a devastating account of the conspiracy in the mainstream media to deceive the American people about President Biden’s mental condition, complete with screen shots and links to stories prior to the June 27 debate that demonstrate, beyond any doubt, that the media knew about the situation and not only hid it from readers but attacked those who dared to bring up troubling episodes. (Holden Court)The Trust Deficit, July 4, 2024. “There is still an opportunity to correct course and rebuild the trust required for our society to flourish but this will require a political earthquake. The corrupt two party system, which is really two sides of the same coin, assisted by a mainstream media that acts more like publicists for one political party than objective journalists, needs to be entirely upended.” (The Rational Walk)
How Much Knowledge Was Lost to History by
, July 17, 2024. “Only truly civilized cultures dedicate themselves to building up a storehouse of knowledge. That’s why libraries are the trademark of civilization — and their destruction reflects the downfall of culture.” (Culture Critic), July 10, 2024. “I am offering some reading notes and discussion questions … for the first week in the program—which focuses on the final days of Socrates, and also offers a glimpse of Plato’s Republic.” (The Honest Broker)Plato’s Apology and Crito, January 22, 2024. (The Rational Walk)
Plato’s Republic: Books I and II, February 9, 2024 (The Rational Walk)
Podcasts and Videos
Michael Mauboussin — Market Concentration, Buybacks, and Luck vs. Skill, July 11, 2024. 1 hour, 5 minutes. “We cover a wide range of topics, including the ongoing public vs. private equity discussion, luck vs. skill as skill increases, stock market concentration, buybacks, valuation and advice for investment professionals.” (The Investors First Podcast)
How the Sun Rose on Silicon Valley: Bob Noyce, July 12, 2024. 58 minutes. David Senra shares his thoughts about The Tinkerings of Robert Noyce: How the Sun Rose on Silicon Valley, a 1983 article in Esquire written by Tom Wolfe. (Founders Podcast)
Taiwan’s 100-Year Rise from Japanese Colony to Monopoly Producer of Microchips, 43 minutes. This is an overview of the history, politics, and economic development of Taiwan. I was unfamiliar with many of the details. (History Unplugged)
Overcoming Nihilism with Nietzsche, July 12, 2024. 1 hour, 20 minutes.
interviews Robert Pippin about Nietzsche, technology, and nihilism. (Johnathan Bi)Lessons from Lincoln, Then and Now, July 15, 2024. 1 hour, 34 minutes. “What lessons can we take from the speeches of Abraham Lincoln for today's turbulent times? How did those speeches move the nation in Lincoln's day? Listen as political scientist Diana Schaub of Loyola University talks with EconTalk's Russ Roberts about three of Lincoln's most important speeches and what they can tell us about the United States then and now.” (Econ Talk)
Croesus Shows Solon His Treasures
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Individuals associated with The Rational Walk own shares of Berkshire Hathaway.