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The Digest #75
Playing with FIRE, Larry Culp, Berkshire's legal team, Pabrai Q&A, Case Against Sugar
If You Play With FIRE, Don’t Get Burned by Nick Maggiulli, March 30, 2021. Do you hate your job? If so, you are hardly alone. Millions of people dream of the day when they can say goodbye to paid employment and retire. In recent years, a growing financial community has been built around the concept of retiring at an extremely young age. Achieving financial independence at an early age creates optionality. Those who achieve it can choose to quit their jobs. But is this a wise choice? In this article, Nick Maggiulli explores the subject and links to another blog that offers a cautionary story regarding very early retirement. (Of Dollars and Data)
Beware of the Bubble by Mr. Money Mustache, March 26, 2021. One of the most successful bloggers in the FIRE movement provides his perspective regarding the elements of speculative excess that seem to be building up in financial markets recently. “Human nature never changes, so we are bound to repeat our past mistakes. Unless we are smart enough to see the seeds of these same mistakes in our present – and not repeat them. Read the big books (and podcasts) that cover the longer arc of history. Or at least learn from our elders who are still around to teach us right now.” (Mr. Money Mustache)
Step by step, Larry Culp is rethinking and remaking General Electric by Shirley Leung and Jon Chesto, March 20, 2021. This article is an interesting profile of Larry Culp who is in the process of trying to turn around GE. “He may live and breathe by “kaizen,” but he’s not all work and no play; when he stepped down from his previous job running another manufacturing company, he said he hoped to spend more time fishing. He can be intense, but those around him say he is not the intimidating type. He is known at GE not as an alpha-male boss, but as a leader who knows how to listen.” h/t to the Santangel’s Review Value Links newsletter. (Boston Globe)
Berkshire Lawyering — Buffett’s Way Remains the Munger Tolles Show by Brian Baxter, March 31, 2021. Berkshire Hathaway’s corporate headquarters is famous for frugality. Rather than having an in-house legal department, Berkshire utilizes the services of the law firm Munger, Tolles, and Olson: “The threadbare hierarchy at Berkshire Hathaway Inc. that Warren Buffett has long been proud of extends to his legal department. There isn’t one—not even a general counsel within its headquarters staff in Omaha, Neb., of roughly 30—even as Buffett’s conglomerate has grown to almost a quarter-trillion dollars in revenue. Its decentralized legal and compliance model leans on the Los Angeles-based law firm where Berkshire’s vice chairman, Charles Munger, and board member Ronald Olson are name partners.” (Bloomberg Law)
Why the long-term shareholders Buffett cultivated are a huge part of Berkshire Hathaway’s success by Lawrence A. Cunningham, March 30, 2021. “Having a high density of quality shareholders has contributed to Berkshire’s success over the decades, as it has to the performance of dozens of other major companies. They support management’s long-term view and contribute to the distinctive reputations, cultures, and moats that characterize great companies. Such a long-term culture trickles throughout the company in everything from acquisitions to operations.” (Market Watch)
If life does exist beyond Earth scientists say they may find a trace of it soon by Robert Lee Hotz, March 29, 2021. “If you’re talking about looking for life, even intelligent life, this may be the special time,” says Seth Shostak, senior astronomer at the SETI Institute, a nonprofit in Mountain View, Calif., that searches for intelligent beings. “We have the technological capability to find life on other worlds and that ability is improving.” (WSJ)
What are processed foods and why are they so bad for metabolic health? by Kaitlin Sullivan, March 22, 2021. We often read that avoiding “processed foods” is an important step we can take to enjoy better health. But what exactly is meant by “processed foods”? And what is it about modern food production that has deleterious consequences for human health? This article explores the different types of processing that modern foods undergo before reaching your plate and provides a non-technical overview of the metabolic effects on the human body. (Levels Blog)
This Is the Test to Apply to Everything by Ryan Holiday, March 30, 2021. When we pause to consider whether something that we are about to do is essential, often the answer is no: “Most of what we say and do is not essential,” Marcus Aurelius writes in his Meditations. “If you can eliminate it, you’ll have more time, and more tranquility. Ask yourself at every moment, ‘Is this necessary?’” (RyanHoliday.net)
Mohnish Pabrai’s Q&A at Georgetown University
The Case Against Sugar
When New York City Mayor Michael Bloomberg announced his “soda ban” in 2013, my reaction was to bemoan yet another example of an excessive government intrusion into the lives of citizens. What the mayor actually proposed was not quite a ban. It was actually a portion cap that would prevent restaurants and other venues from selling many sweetened beverages in portions greater than 16 ounces. Still, the optics were terrible and it was undoubtedly an intrusion. It was repealed two years later when the New York court of appeals found that the health department had exceeded its authority.
While my opposition to government control of beverage portions has not changed, I no longer view sugar as a benign indulgence. As I get older, my interest in a healthier diet has increased and I no longer subscribe to the naive “calories in, calories out” mentality that fails to differentiate between the types of calories consumed.
I recently started reading The Case Against Sugar by Gary Taubes, a well written book that contains a fascinating history of sugar along with arguments to limits its consumption. There are all kinds of interesting historical facts in this book that I was not aware of. For example, I did not realize that sugar played an integral part in making cigarettes palatable for smokers to inhale. By treating tobacco leaves with a sugary brine, smokers were encouraged to inhale deeply, ingesting more nicotine and making cigarettes more addicting. If cigarette manufacturers had not added sugar to cigarettes in the early 20th century, it is likely that smoking rates would not have skyrocketed after the First World War.
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