Business, Investing, Learning

Howard Marks | An Evening with Howard Marks, Chairman of Oaktree

Advertisements
Business, Investing, Weekly round-up

Weekly market round-up: 19 October 2015

Beware of little expenses. A small leak will sink a great ship.”
– Ben Franklin

Companies

John Lewis: trouble in store
John Lewis still has enormous advantages. It can draw deeply on the respect and loyalty it has built up over 151 years. And for all the grumbles, the partners, as surveys show, still generally provide top-quality service. The question, in a mobile and screen-crazy world, is whether that will be enough to sustain Spedan Lewis’s remarkable democratic experiment.

How Bad Will It Get for American Express?
Yet they decided not to tell us that 23 percent of their business was actually co-branded, which means it’s using someone else’s brand. I find those two things somewhat inconsistent.”

Square’s deal with Starbucks is a bust, and will end in Q3 next year
In 2012, Square received $9.47 million in revenue from Starbucks, and that amount increased in 2013 to $114.45 million, until finally reaching $123 million in 2014. However, the transaction costs from the Starbucks deal paint a very different picture: In 2012 Square paid $12.54 million in fees associated with the processing it did from Starbucks, $139.8 million in 2013, and $150.96 million in 2014.”

The company behind Tinder and OkCupid just filed to go public
In 2014, Match Group had sales of nearly $900 million and earned $240 million in profit.”

Markets

Americans’ Spending on Dining Out Just Overtook Grocery Sales for the First Time Ever
That younger cohort has been identified as being more willing to spend on “food away from home.”

It Is Expensive to Be Poor
If you can’t afford the first month’s rent and security deposit you need in order to rent an apartment, you may get stuck in an overpriced residential motel.”

Investing

Charlie Munger: Academic Economics — Strengths and Weaknesses, after Considering Interdisciplinary Needs
First, he said Berkshire beat the market in common stock investing through one sigma of luck, because nobody could beat the market except by luck. This hard-form version of efficient market theory was taught in most schools of economics at the time. People were taught that nobody could beat the market. Next the professor went to two sigmas, and three sigmas, and four sigmas, and when he finally got to six sigmas of luck, people were laughing so hard he stopped doing it.”

When Evidence Fails
It’s not enough to look back on history and pick out the strategies that would have worked in the past. Anyone can show you strategies that would have worked brilliantly in the past. That’s the easy part. What matters is looking back at past data and figuring out why something will continue to work in the future (or not work anymore).”

Long reads

The Reasons We Work
The most indirect motive of all is inertia. With inertia, your motive for working is so distant from the work itself that you can no longer say where it comes from—you do what you do simply because you did it yesterday. This leads to the worst performance of all. … As destructive and insidious as it is, inertia is surprisingly common in the workplace.”

Graph of the week

China is playing an expanding role in U.S. exports

cotw-2015-1005-chart

Uncategorized

Weekly market round-up:12 October 2015

Never walk without a document in your hand.”
– David Brent

Companies

Buffett Builds Rail Superhighway to Grab Truck Freight
After this year, BNSF Railway Co. will be more than 99 percent finished with a second, parallel line to its 2,200-mile (3,500-kilometer) Los Angeles-to-Chicago route.

Charlie Munger’s Last Meeting
On Investments: Charlie’s investment philosophy in a nutshell– patience and opportunism.  “When you see a great investment idea.  Be bold.”

Markets

The share buyback mirage
Wealth is transferred from shareholders to executives, helping to explain why executive rewards have far outpaced economic growth or shareholder returns.”

Why Are Corporate Profit Margins So High?
The main driver of falling profits in the last few years is the reduction in the deficit.”

Investing

Keeping Things Simple and Tuning out Folly
More information doesn’t equal more knowledge or better decisions.”

Long reads

Elitism in Britain – breakdown by profession
Just 7% of the UK public attended private school, which compares to 71% of senior judges, 62% of senior armed forces officers, 55% of Whitehall permanent secretaries and 50% of members of the House of Lords.”

Graph of the week

Investor Sentiment and the Business Cycle

Business, Investing, Learning, Weekly round-up

Weekly market round-up: 5 October 2015

“An investment in knowledge always pays the best interest.”
 – Ben Franklin

Companies

Revisiting Icahn’s Apple Call After the Correction
If Apple never came out with another successful product, its current portfolio alone would make it attractive as a value stock. At these valuations, there isn’t exactly a lot of optimism built into the share price.”

Rolls-Royce cutting 400 more jobs from marine division
The firm expects the cuts will generate full year savings of £40m. Investment into research and development will be stepped up.”

Glencore shares up on talk of sale of agriculture business
Shares were up 19.6 per cent in late afternoon trading after shooting 72 per cent higher at one point.”

Markets

Lord Adonis to resign Labour whip and chair George Osborne’s infrastructure body
the appointment of Adonis was designed to take the politics out of infrastructure projects as the government seeks to create a permanent and wide-ranging body

A Tax to Curb Excessive Trading Could Be a Boon to Returns
There are all sorts of ways that this tax may cost many investors money in the long run. But considering its potential virtues, it is a useful exercise because it’s akin to a sin tax. Trading too much hurts returns and is extremely hazardous to our wealth, and the less we do of it, the better off most of us will be.

Investing

A Dozen Things I’ve Learned from Charlie Munger about Capital Allocation
There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested — there’s never any cash. It reminds me of the guy who looks at all of his equipment and says, ‘There’s all of my profit.’ We hate that kind of business.”

Unique Insights From Dinner With An $8 Billion Investor
“…the appetite, the dedication, the discipline and the motivation.”

Long reads

Norway’s Doctors Still Use Floppy Disks, And They’re More Secure Than the Alternative

Words used in tweets can offer insight into how much money you make
Lower-income users or those of a lower socioeconomic status use Twitter more as a communication means among themselves,” Preoţiuc-Pietro said in a statement. “High-income people use it more to disseminate news, and they use it more professionally than personally.”

Basically, It’s Over: A Parable About How One Nation Came To Financial Ruin
An excellent parable by Charlie Munger on how one nation came to financial ruin.”

Graph of the week

Population without health insurance coverage by state: 2013 and 2014

Source: US census
Source: US census
Business, Investing, Midweek links

Midweek quick links: 30 September 2015

South Africa May Lose $540 Million a Year From Visa-Rule Changes
The number of air passengers under 18 years of age travelling to and from the country fell 50 percent year on year in June and July due to a requirement to carry an unabridged birth certificate…

William McKnight: The Basic Rule of Management that Propelled 3M
Management that is destructively critical when mistakes are made kills initiative.”

Olympic-Level Troll Hijacks HLN Segment on Edward Snowden to Defend Edward Scissorhands
“…the anchor, who’s either mid-stroke, 100 percent not listening, or doing the most professional job in the world.”

The railroad with better profit margins than Google
The key to UP’s remarkable profitability is a highly disciplined investment approach overseen by a department called network planning.

Business, Investing, Weekly round-up

Weekly market round-up: 28 September 2015

In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
— Benjamin Graham

Companies

Of would-be $1B fees, trips to Omaha and hardball negotiating: Behind the scenes of the Precision-Berkshire deal

Innovation is Alive and Well at Apple
Apple’s breakthrough innovation was financial — its new iPhone Upgrade Program, which is ingenious on many levels… Here’s why: The program turns Apple into an iPaaS (iPhone as a Service) company.”

Exclusive: Wal-Mart presses suppliers to share benefits of cheaper yuan
The company is telling suppliers that they should pass on the savings from the yuan devaluation so Wal-Mart can achieve EDLC, or “everyday low cost,” its term for the tight cost controls needed to keep prices low for consumers

Markets

From Ferraris to Cement, Europe’s Rich Families Turn Dealmakers
Last year, deals by European family offices reached the highest level since before the financial crisis in 2007, according to data compiled by research firm PitchBook. The 13 transactions in 2014 compare to a record 18 in 2007 and 8 so far this year, the data show.”

Investing

Understanding Bond Market Duration & Volatility
You absolutely have to set the right expectations...”

Fundamentals are only half the story
A few months ago people saw down moves as an opportunity to start adding. Now, as soon as they see a down move they sell and sell hard

The Next Tycoon
Alan Leventhal, who is 51, doesn’t even remotely look the part of real estate “tycoon” or “gorilla,” as the Boston Herald and Boston Globe, respectively, have called him.”

Long reads

The Hidden Bolts that Drive Manhattan’s Infrastructure Nerds Nuts
The discovery itself isn’t much to see. It’s merely a bolt — a long, jagged piece of metal that was battered into the ground some 200 years ago.”

A Brief History of the Corporation: 1600 to 2100
In its 400+ year history, the corporation has achieved extraordinary things, cutting around-the-world travel time from years to less than a day, putting a computer on every desk, a toilet in every home (nearly) and a cellphone within reach of every human.  It even put a man on the Moon and kinda-sorta cured AIDS.”

Graph of the week

How Countries Spend Their Money

Source: Eurostat.com
Source: Eurostat.com