Friday, September 12, 2014

Charlie and Warren not prodigies?? I disagree

During the Daily Journal annual meeting, Charlie mentioned that Warren (and he) were puzzling over BRK's success AND that Warren will be devoting a lot of his discussion in the 2014 Annual Report (published in 2015) to the issue. Charlie also said, "BRK's results were prodigious, but they were not produced by prodigies..."

Well, in this case, Charlie is dead wrong. Both he and Warren are prodigies... They just happen not to be child prodigies that's all. Furthermore, they employed and invested in prodigies.

He went on a bit about how probably only BRK and Thomas Reuters managed to survive technological obsolescence in their main line of work, yet went on to greatness. (I would argue that IBM managed that feat as well.)

On other matters, Charlie is not one to pull punches. He would consign the former executives at Countrywide and their ilk to the "lowest reaches of hell"; he likened their behavior to running a child prostitution ring in Indonesia, just "because someone else is making [lots of] money doing it, doesn't mean you have to."

Jason Zweig had an article in yesterday's WSJ (9/11, I hate even typing that date out) and tomorrow's (Saturday) paper, plus a blog post here:
http://blogs.wsj.com/moneybeat/2014/09/12/a-fireside-chat-with-charlie-munger/

Thursday, September 11, 2014

Charlie Munger and the liberal arts.

Although Charlie Munger is probably one of the greatest stoic philosophers of our time, he still disparages liberal arts majors. Yesterday, at this year's Daily Journal meeting, he said he was glad not to have a liberal arts graduate friend of his grandchild at the dinner table, lest orgies ensue, as if the rigors of differential calculus taught morality.

Properly taught, Engineering 101 does teach a certain sound way of thinking, but morality no. Previously, Charlie has argued that sound thinking is a moral imperative. I would argue that in general Charlie's way of thinking is exactly what liberal arts should be, an array of mental models from different disciplines, including the sciences. To be educated in today's world you have to know some science and math.

Charlie Munger at the Daily Journal Annual meeting.

I went to the Daily Journal Meeting, on September 10. Charlie Munger was great, as always. The room was full. Charlie welcomed us with a comment that this was the largest meeting of the Daily Journal ever (they did not even have enough chairs!)

"Welcome to a few shareholders and a lot of groupies"

I will write up my full notes, but here are some choice quotes and paraphrases from the master!

He compared the Journal's old auditors, who held up the annual report by months, to a doctor he had (I assume as a child). The man was a surgeon skilled in fixing hernias, so he kept feeling around Charlies groin, when all Charlie had was a nose bleed.

Speaking of the old auditors, CM said that "We get along with people we admire...[but] I'm old and I can't disguise that there are people I don't like"

"...it was the audit from hell...which was red meat to the commissioned sales force of our competitors..." (The government software business that the Daily Journal has.)

"...the auditors were not malevolent...but it was like elephants [marching] through a barnyard..."

(Variation on Warren's oft repeated comment about 7 foot fences), "We don't try to jump 7 foot fences, we step across puddles to reach for gold.

Answering Jason Zweig of the Wall Street Journal on the difficulties for investors today versus earlier times, [In US markets with a small enough investment base] the shrewd will always [be able to] figure something out, that will never go away.

Thursday, February 14, 2013

Computer Science as a pinnacle of the human thought

CS, as a pinnacle of human thought, well that might seem a bit much, but I would argue that in fact it is. I certainly would not say that is the pinnacle but it certainly is a pinnacle. Think about it. CS is the absolute embodiment of Archimedes's saying: “Give me a place to stand and with a lever I will move the whole world." With computer science as a lever, all you need do is pick a place to stand!

Wednesday, July 4, 2012

Well I just saw a production of Spunk, at Cal Shakes. Fabulous show. She is a brilliant writer and in her time was vilified for her portrayal of various aspects of (African-American)life as either minstrel like or not "uplifting". There is domestic abuse, philandering--wait doesn't Shakespeare have plays like that? Oh well, thank god Alice Walker re-discovered her work.

Friday, May 15, 2009

Apparently, Charlie Munger was in rare form this year at the Berkshire and Wesco annual meetings. Ordinarily I go to one of them, but this year I was unable. It seems from press and blog reports that Charlie, a hero if mine, was as pithy as usual this year.

The Wesco meeting in Pasadena was a bit more crowded than usual at 700, but still way more manageable than the Berkshire meeting. Below is a compilation of notes from Wesco Meeting.

Funny, just reading the notes isn't really good enough.

http://www.beearly.com/pdfFiles/wesco_notes_2009.pdf

From zenway: http://zenway.com/d/node/107?page=17

Motley Fool: http://www.fool.com/investing/value/2009/05/08/charlie-mungers-thoughts-on-just-about-everything.aspx

Motley Fool: http://boards.fool.com/Message.asp?mid=27681782

Guru Focus: http://www.gurufocus.com/forum/read.php?1,55357,55357

Guru Focus: http://www.gurufocus.com/forum/read.php?1,55358,55358

Investopedia: http://community.investopedia.com/news/IA/2009/Wescos-Annual-Shareholder-Meeting-WSC0508.aspx

Thursday, December 11, 2008

Bill Miller and the Existential Crisis of Value Investing

(or what did you in the crash of '08 Daddy?)

The Wall Street Journal Article on Bill Miller highlights a existential problem for value investors. Reading what he said, Miller basically bought stocks into the panic, as he had done before, only this time, by his own admission "The thing I didn't do, from Day One, was properly assess the severity of this liquidity crisis," He had a well worn playbook and it just did not work in this market. Now, if he goes out and beats the market for 8 of the next 10 years then his methods will presumably have proven to be valid. Or are they?

Now, obviously Miller has the institutional imperative that he had to buy and stay in the market. Even as individual and not institutional investors, how can one develop the intellectual and intestinal fortitude to avoid this sort of debacle? Biglari's playbook also looked great before this debacle. (Buy real estate heavy restaurants that can be franchised.)

Now perhaps Mauboussin's article on reproductive strategies in nature points to an answer, but I just don't know. (Some animals have lots of babies--diversification? Some have just a few--focus investing? And some store for the really lean times--Berkshire, Fairfax?)

Is it just temperament, either cultivated or genetically inherited that makes better investors? And those qualities to anticipate the next weird turn are presumably what Buffett is looking for (or found) in his CIO successor.

Anyway, the point remains how the hell do you get to the point that you can at least carry Watsa's shoes(CEO of Fairfax, which made a bundle on the crash)--not to mention Buffett's?