The Digest #145
Buffett Donates $759 Million to Foundations, The Fall of Nikita Khrushchev, Jack Welch, Howard Marks, The FTX Saga, Chanos on Fraud
Quote of the Week
“Over many decades I have accumulated an almost incomprehensible sum simply by doing what I love to do. I’ve made no sacrifice nor has my family. Compound interest, a long runway, wonderful associates and our incredible country have simply worked their magic. Society has a use for my money; I don’t.”
Buffett Donates $759 Million to Family Foundations
Warren Buffett donated 2.4 million Berkshire Hathaway Class B shares to four family foundations on November 23. These donations are in addition to the annual gifts Mr. Buffett has given to five foundations every year since 2006.
Unlike the gifts made pursuant to the annual pledges, yesterday’s donation did not include the Bill and Melinda Gates Foundation. Mr. Buffett donated 1.5 million Class B shares to the Susan Thompson Buffett Foundation, named in honor of his first wife, and 300,000 Class B shares to each of the foundations run by his three children.
In June, I wrote an article that documents all of Mr. Buffett’s donations since he started giving away shares in 2006. The article was initially restricted to paid subscribers but I have unlocked that post so everyone can read it. It includes tables summarizing gifts to each foundation as well as a link to an Excel file that contains source information for each donation along with links to relevant SEC filings.
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Articles
What Really Matters? by Howard Marks, November 22, 2022. “In his latest memo, Howard Marks weaves together some of the themes he’s explored in 2022 to explain what he believes really matters in investing and what doesn’t. He discusses the disadvantages of short-term thinking, the difference between volatility and risk, and the one word he believes defines the essence of investment excellence.” (Oaktree Capital)
The New Kids on Berkshire's Block: Q3 2022 by Kingswell, November 21, 2022. This article describes three holdings that appeared in Berkshire’s equity portfolio during the third quarter: TSMC, Louisiana-Pacific, and Jefferies Financial Group. (Kingswell)
Learning to Live by Nick Maggiulli, November 22, 2022. The author reflects on turning 33 years old by sharing what he learned over the past year based on six short stories. I particularly liked “Redundancy Reduces Risk”. (Of Dollars and Data)
The Fall of Nikita Khrushchev, November 22, 2022. This is an excerpt from The Shortest History of the Soviet Union by Sheila Fitzpatrick. Khrushchev gradually lost the support of key players within the Soviet Union over a number of years. The Cuban Missile Crisis was the beginning of the end. Two years later, he was ousted from power and lived the final seven years of his life in retirement. (Delancey Place)
Was Jack Welch the Greatest C.E.O. of His Day—or the Worst? by Malcolm Gladwell, October 31, 2022. During his tenure as CEO of General Electric, Jack Welch walked on water, and the aura of his supposed brilliance did not diminish even after his retirement in 2001. However, the decline of the company over the past two decades took toll on Welch’s reputation which is still debated nearly three years after his death in early 2020. (The New Yorker)
The Hustler: Lessons from a Young Warren Buffett by Frederik Gieschen, November 18, 2022. This is a great article about how Warren Buffett got started saving and investing money as a boy through his early years of managing money professionally. (Neckar's Minds and Markets)
How To Learn Accounting by Adam Mead, November 18, 2022. This article lists resources for people interested in learning accounting. I suspect most of the readers of this newsletter understand accounting, but perhaps this article will provide direction for friends and family interested in the subject. I had a great teacher in high school who taught me the basics of accounting. (Watchlist Investing)
Podcasts
Matt Levine on the Collapse of FTX and Alameda, November 18, 2022. 34 minutes. “It was on an episode of the Odd Lots podcast in April 2022 that Sam Bankman-Fried infamously characterized yield farming as a ‘box,’ in a metaphor that made the practice sound a lot like a ponzi scheme. Of course, in the wake of the collapse of his two main firms — FTX and Alameda Research — that conversation looks more and more like a huge red flag, but also provides insight into the shaky finances of his crypto empire. Bloomberg Opinion columnist Matt Levine was also a guest on that episode and he joins us again this week to discuss where we are in the fallout out of the FTX saga.” (Odd Lots)
Reflecting on the FTX Debacle and the Factors that Made It Possible, November 20, 2022. 52 minutes. “In this episode, co-hosts Phil Ordway, Elliot Turner, and John Mihaljevic discuss the FTX debacle and the factors that made such an epic disaster not only possible but perhaps likely.” (This Week in Intelligent Investing)
Jim Chanos on Crypto, Tech and the Golden Age of Fraud, November 23, 2022. 33 minutes. “Earlier this year we talked to the legendary short seller Jim Chanos, during which he warned of more pain ahead for speculative areas of tech. That call proved to be prescient by a number of measures. So where are things now? We spoke to Chanos again at the recent Berkeley Forum on Corporate Governance in San Francisco. We discussed frauds, crypto, and the pro-cyclical effects of stock-based compensation.” (Odd Lots)
The First Thanksgiving at Plymouth
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Thanks for sharing The Hustler. I got a lot out of that article.