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The Digest #147
Ben Franklin on Free Speech, Berkshire Hathaway, Brookfield Asset Management, ChatGPT, Auto Insurance, Floor & Decor
Benjamin Franklin on Freedom of Speech
In June 1722, James Franklin, publisher of the New-England Courant criticized the government of Massachusetts for not doing enough to capture a pirate vessel located off the coast. The government was irritated by this criticism and James Franklin was imprisoned. Sixteen year old Benjamin Franklin took over management of the Courant and, using the pen name of Silence Dogood, wrote a letter to the editor that was published on July 9, 1722, from which the following quote is excerpted:
“Without Freedom of Thought, there can be no such Thing as Wisdom; and no such Thing as publick Liberty, without Freedom of Speech; which is the Right of every Man, as far as by it, he does not hurt or controul the Right of another: And this is the only Check it ought to suffer, and the only Bounds it ought to know.”
“This sacred Privilege is so essential to free Governments, that the Security of Property, and the Freedom of Speech always go together; and in those wretched Countries where a Man cannot call his Tongue his own, he can scarce call any Thing else his own. Whoever would overthrow the Liberty of a Nation, must begin by subduing the Freeness of Speech; a Thing terrible to Publick Traytors.”
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Twitter’s Duty to Protect Free Speech by Ro Khanna, December 5, 2022. Ro Khanna is a member of the Democratic Party and represents California’s 17th congressional district which includes part of the Silicon Valley. This is an op-ed defending free speech. “Although Twitter is a private actor not legally bound by the First Amendment, Twitter has come to function as a modern public square. As such, Twitter has a responsibility to the public to allow the free exchange of ideas and open debate.” (WSJ)
Graham and Doddsville, Fall 2022. This is the 46th edition of the student-led investment publication of Columbia Business School. This issue includes interviews of Jacob Rubin, Connor Haley, and Christopher Bloomstran who discusses Berkshire Hathaway among many other interesting topics. (Columbia Business School)
The New Conglomerates by Marc Rubinstein, December 2, 2022. Brookfield Asset Management has been the subject of several articles and podcasts recently, several of which I have included in previous issues of the Weekly Digest. Brookfield will complete the spin-off of its asset management business this week. This article provides interesting historical information about Brookfield and breaks down its complex corporate structure. (Net Interest)
Walter J. Schloss: An Investor for All Seasons by Kingswell, December 6, 2022. Both Warren Buffett and Walter Schloss worked for Benjamin Graham in the 1950s and went on to establish illustrious careers, although employing very different styles. The truth is that there are many ways to win in the field of investing! (Kingswell)
AI Homework by Ben Thompson, December 5, 2022. Twitter has been full of screenshots showing the results of people playing with ChatGPT which allows humans to “chat” with a computer to experience artificial intelligence firsthand. In this article, Ben Thompson provides his views of what this technology is good for and what it still lacks. This is a relatively long read but worth the time. (Stratechery)
Sam Bankman-Fried: The Rigged Wall Street System that “Valued” His Company at $32 Billion by Pam Martens and Russ Martens, December 5, 2022. This is an interesting look at the incentives at work when setting narratives about the value of venture-backed companies. Both the venture capital firms and the Wall Street firms underwriting initial public offerings have strong incentives to talk up valuations. One would hope that the financial media would counter the more fanciful narratives, but this certainly did not happen in the case of FTX. (Wall Street on Parade)
The People Cheering for Humanity’s End by Adam Kirsch, December 1, 2022. The idea that humanity’s end should be welcomed is alarming and extremely dangerous. “From Silicon Valley boardrooms to rural communes to academic philosophy departments, a seemingly inconceivable idea is being seriously discussed: that the end of humanity’s reign on Earth is imminent, and that we should welcome it. The revolt against humanity is still new enough to appear outlandish, but it has already spread beyond the fringes of the intellectual world, and in the coming years and decades it has the potential to transform politics and society in profound ways.” (The Atlantic)
The Single Greatest Habit You Can Build by Sahil Bloom, December 6, 2022. This is an article about the benefits of walking. Americans are too sedentary and any form of exercise is better than nothing. But walking also provides psychological and productivity benefits. In my case, a daily run in the morning serves a similar function and I try to get up from my desk at least every 90 minutes. (The Curiosity Chronicle)
Auto Insurance Competitive Dynamics, April 6, 2022. Over the past decade, GEICO and Progressive have gained market share and it seems like only a matter of time before State Farm loses its market leading position. Progressive has reported stronger performance than GEICO over the past few years. This article provides an overview of the competitive situation early this year. Last month, I examined GEICO’s performance as part of a write-up on Berkshire’s Q3 results. Later this month, I will publish a report on Progressive for premium subscribers. (Rational Reflections)
I continue to work my way through the back catalog of the Founders podcast. If I am looking for something interesting to listen to, I can just randomly scroll through the catalog and find something worthwhile. It’s great source of book recommendations.
Elon Musk: Tesla, SpaceX, & the Quest for a Fantastic Future, September 19, 2016. 58 minutes. This is the first episode of the Founders podcast and one of many covering Elon Musk. No matter what you think of Musk, he is fascinating to study and this is a book I enjoyed reading many years ago. In addition to listening to the podcast, I recommend my own review of the book written in 2016.
The Autobiography of Walter Chrysler, June 9, 2020. 1 hour, 8 minutes. I never get tired of learning about the early history of automobiles. Walter Chrysler started out in the railroad industry as a machinist before launching his career in the automobile industry, eventually founding the firm that bears his name.
Milton S. Hershey's Extraordinary Life of Wealth, Empire, and Utopian Dreams, September 27, 2020. Chocolate connoisseurs can scoff all they want, but my favorite candy bar dating back to childhood has been Hershey’s Milk Chocolate with Almonds. There’s a reason a brand like Hershey’s has a formidable moat. This is the story of a great businessman and philanthropist.
How to Invest When You Like the Business But Not Management, December 4, 2022. 48 minutes. It is not uncommon to encounter an interesting business only to be taken aback by some of the decisions made by management. Excluding such companies may mean passing on an otherwise good opportunity, especially if you are in a position to discuss concerns with management. This is a good conversation on how to approach this common issue. (This Week in Intelligent Investing)
Behind the Memo: What Really Matters, December 6, 2022. 23 minutes. Howard Marks briefly describes the thought process that went into his latest memo which was published on November 22. (Oaktree Capital)
Floor & Decor: Raising the Floor, December 7, 2022. 50 minutes. In 2020 and 2021, I visited a Floor & Decor warehouse several times to select flooring for a renovation. The company’s business model apparently sparked some interest in Omaha. Berkshire Hathaway opened a position in the company in Q3 2021 and added significantly in Q1 2022 at lower prices. Given the size of the position, it is almost certainly a position of either Todd Combs or Ted Weschler rather than Warren Buffett. This podcast provides a good briefing on the company. (Business Breakdowns)
How Sleep Affects Metabolic Health, December 2, 2022. 40 minutes. This podcast is a good motivation to try harder to get eight hours of sleep more often: “Sleep deprivation can be detrimental to metabolic health—even a short night of sleep, poor quality sleep, or low sleep efficiency can have significant impacts. Not getting a full, high-quality night’s sleep may be why you’re so hungry, but can also set you up for decreased insulin sensitivity, which when compounded, can have worse long-term effects.” (A Whole New Level)
Warren Buffett on the history of automobile insurance:
Interesting story about the reintroduction of wolves in Yellowstone National Park:
Autumn Landscape with Four Trees
“The autumn landscape from Otterlo provides striking evidence, when compared to Vincent's earlier work, of his increased skill in composition. This was not a new theme for him; in the spring of 1884 the artist had made a very detailed pen sketch in brown, entitled 'Behind the Hedges', which features, in a more modest role, the four trees behind the parsonage which form the subject of the canvas - the topographic similarity with the painting is striking. However, Van Gogh showed with this simple but powerful composition how much progress he had made in the intervening year and a half.”
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