The Digest #217
The Digest #217
Berkshire Hathaway Acquires BHE Minority Interests, Measuring Competence, Greg Abel Interview, The Fed's Inflationary Bias, Jimmy Carter at 100, Sam Altman, Bruno Leoni, Thermopylae, and more ...
Rational Walk Articles
Berkshire Hathaway Acquires BHE Minority Interests, October 1, 2024. Berkshire is now the sole owner of BHE after a series of transactions with the family of the late Walter Scott Jr. and related entities. BHE’s value has declined precipitously over the past two years amid wildfire litigation and an unfavorable political and regulatory climate. This is reflected in the transaction price. Berkshire also issued Class B shares to fund part of the transaction which has implications for Berkshire’s valuation.
Measuring Competence, September 30, 2024. It is immediately obvious when a dentist, a carpenter, or a musician has mastered their craft. Incompetence is equally apparent. The same is not true in fields such as investing where it is not possible to separate skill from luck over short periods of time. It takes multiple market cycles to determine if an investor has any skill at all. This has important career implications.
Other Articles
Greg Abel credits Alberta roots ahead of honour at Global Business Forum by Chris Varcoe, September 25, 2024. Alternate Link. A profile of Berkshire’s future CEO. “‘From a young age, business intrigued me. I mean, it was as simple as back in the day you could collect pop bottles and people had a tendency to throw them away. And we’d get the nickel. I almost viewed it like a business,’ Abel said in an interview.” (Calgary Herald)
The Two Big Insurers Still Betting on Fossil Fuels by Shane Shifflett and Jean Eaglesham, September 25, 2024. Alternate Link. Berkshire Hathaway and State Farm are not divesting fossil fuel investments, a source of irritation for political virtue signalers who do not seem to comprehend that the world will need fossil fuels for decades to come and someone has to provide capital. It is also revealing that many insurers appear to run their investment operations based partly on political considerations, not a great prospect when it comes to rational capital allocation. (WSJ)
The Fed Wants Your Cost of Living to Go Up by
, September 25, 2024. No one exposes the Fed’s hypocrisy more clearly, both on X and on Substack. Contrary to popular belief and the propaganda relentlessly disseminated in the media, the Fed does not have any authority to destroy 2% of the value of the United States Dollar every year. Furthermore, it is increasingly apparent that 2% inflation is now a floor rather than a target. This state of affairs, particularly after the massive inflation of the past few years, should be a national scandal. (A Havenstein Moment)Jimmy Carter, Champion of Deregulation by Phil Gramm, October 1, 2024. Jimmy Carter turns one hundred years old today, the first American President to reach the milestone. Phil Gramm reflects on the former President’s willingness to confront entrenched constituencies in his own party to pursue deregulation in the late 1970s. Jimmy Carter was a better President than he is usually given credit for. (WSJ)
Metric-Less Success by Lawrence Yeo, September 2024. “Integrity is the ability to navigate the outer world without discounting your inner values. In the context of work, it’s to be able to make a living without sacrificing your interests and ethics. In the context of family, it’s to be able to listen to your loved ones without outsourcing your agency. In the context of community, it’s to be able to form lasting friendships without relying upon flattery. In each case, there is an anchor of authenticity that you’re unwilling to budge, no matter how fervently people want you to.” (More To That)
Status Over Money, Money Over Status by
, September 29, 2024. “The low-ranked workers are giving up status for money. The high-ranked workers are giving up money for status. In other words, there is an implicit tax on the earnings of higher-ranked workers. If the tax isn’t too high, the higher-ranked workers are happy to remain with the firm. Even though they could earn more elsewhere. And the lower-ranked workers find the extra pay sufficient to compensate for the burdens of low rank.” (Rob Henderson’s Newsletter)No, the world doesn't hate America by
, September 25 2024. “… American culture is the cultura franca of the world, and as with English as the linga franca, pointing that out shouldn’t be necessary since it’s obvious to any traveler, at least those not blinded by ideology.” (Chris Arnade Walks the World)How Did Pop Culture Get So Gloomy? by
, September 28, 2024. Even though I do not follow “pop culture” closely, I have noticed the gloomy trend. The disappearance of lighthearted playfulness in the James Bond movies of recent years is a great example. 007 has transformed from the hedonistic playboy of the 1960s and 70s into a ruthless and dark “superhero” type. (The Honest Broker)Podcasts
The Nomad Investment Partnership, September 29, 2024. 59 minutes. “Kyle Grieve discusses the investing philosophy and concepts from the Nomad Investment Partnership, how they created their fund structure to align themselves with partners, why they settled on inactivity, the powerful effects of businesses that share profits with customers rather than shareholder, how they ended up focusing on the scale economies shared business model, how they dealt with commitment bias, and a whole lot more!” (We Study Billionaires)
Pair this discussion of Nomad with David Senra’s recent podcasts: Founders #364 (Nick and Zak’s Excellent Adventure) and Founders #365 (Nick Sleep’s Letters)
Sam Altman — The Man Behind ChatGPT, September 25, 2024. 48 minutes. David Perell interviews Sam Altman about “how Sam uses ChatGPT in his daily life; how LLMs are changing the future of writing; what it means to be a novelist in the age of technology; and Sam’s best-learned writing lessons from Paul Graham.” (How I Write)
The Underrated Bruno Leoni, September 30, 2024. 1 hour, 17 minutes. “Friedrich Hayek credited Bruno Leoni with shaping his ideas on laws and legislation. James Buchanan said that Leoni identified problems that led to his own work on public choice. How is it possible that few of us know of the groundbreaking Italian political philosopher?” (Econ Talk)
Thermopylae, October 1, 2024. 52 minutes. After recently reading about the famous Battle of Thermopylae in 480 BC, as told by Herodotus, I found this episode very interesting. I did not realize how many additional battles were fought at this same highly strategic location over the centuries. (History Unplugged)
Leonidas at Thermopylae
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Individuals associated with The Rational Walk own shares of Berkshire Hathaway.