Some good reading today.

Charlie Munger’s 2015 Daily Journal Annual Meeting

“It’s always wise to be prepared for it getting worse. Favorable surprises are easy to handle. It’s the unfavorable surprises that cause the trouble.”

“Concentrating hard on something that’s important, I can’t succeed at all without doing it. I did not succeed in life by intelligence. I succeeded because I have a long attention span.”

“That is the most important governmental leader, the most important nation builder who ever existed in the history of the world. There is no other record equal to Lee Kuan Yew’s unbelievable achievement.”

“I know no wise person who doesn’t read a lot. I suspect that you can read on the computer now and get a lot of benefit out of it, but I doubt that it’ll work as well as reading print worked for me.”

“It shows how hard and dangerous it is to make money in a commoditized business, and how many businesses that you formerly thought were hugely advantaged can be commoditized.”

“But we have a saying at Berkshire that when a man with a reputation for genius takes on a business with a reputation for tough operating conditions, it’s the reputation of the business that’s likely to prevail. Without government help, getting electric cars off the ground is really hard. In China, it works a lot better than it does here, because their air is worse.”

“Through enormous discipline, enormous will, and enormous intelligence, 3G has adopted a zero-based budgeting system which is more extreme than anybody else’s. Yet they’ve been able to do it time after time in a way where the place ends up as strong or stronger after they’ve removed a lot of the cost. Of course, that’s a very interesting example.”



Wang Jianlin, a Billionaire at the Intersection of Business and Power in China


Jeff Bezos in Amazon Annual Letter


investment philosophy from Day 1



We will continue to focus relentlessly on our customers.



We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.



We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.


We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.



When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.



We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.



We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.



We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.



We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.


China in Africa

Investing Rules

Redirect a good link from

Investing/Trading Rules, Aphorisms & Books (Summer 2014)

by Barry Ritholtz – June 17th, 2014


Trading & Investing Rules, Aphorisms & Books

Jeremy Grantham: Investment Lessons Learned Over 47 Years (Mistakes Were Made)

Sir John Templeton 16 Rules For Investment Success

Bernard Baruch: 10 Rules of Investing

10 Lessons from 1987 Market Crash

Livermores Seven Trading Lessons

Bob Farrell’s 10 Rules for Investing

James Montier’s Seven Immutable Laws of Investing

Byron Wien’s 20 Rules of Investing & Life

Richard Rhodes’ 12 Trading Rules

John Murphy’s Ten Laws of Technical Trading

Six Rules of Michael Steinhardt

Warren Buffett Favorite Investing Quotes

Nassim Taleb’s 5 Rules of Volatility

Morgan Housel’s 9 Financial Rules

David Merkel: The Eight Rules of My Investing

Art Huprich’s Market Truisms and Axioms


Rosie’s Rules to Remember

Louis Ehrenkrantz’ 7 Golden Rules for Investing

In Defense of the “Old Always” (Montier)

Lessons from Merrill Lynch

Gerald Loeb’s Market Wisdom

Lessons Learned from 37 Years of Futures Trading

Richard Russell’s The Power of Compounding

Doug Kass: 10 Laws of Stock Market Bubbles

The golden rules of investing (India)

25 Common Sense Money Tips

Dan Bunting’s Laws of Investing

Cassandra’s (Not so) Golden Rules About Investing (& Not Investing)

These are more general rules, not necessarily about investing:

50 Cognitive Distortions

Todd Harrison’s 12 Cognitive Biases That Endanger Investors

Lefsetz’s Business Rules



CNBC on Buffett, Munger, and Gates

Selected quotes:


“Charlie will always emphasize the fact that we ought to state the other guy’s case as well as he can and better than he can if possible. That’s when you get to where you can think through your own case better, and that may be his legal training to some extent. But he starts out stating the opposite case.”-B


Retailing is a tough, tough business, partly because your competitors are always attempting and very frequently successfully attempting to copy anything you do that’s working. And so the world keeps moving. It’s hard to establish a permanent moat that your competitor can’t cross. And you’ve seen the giants of retail, the Sears, the Montgomery Wards, the Woolworth’s, the Grants, the Kresges. I mean, over the years, a lot of giants have been toppled. -B


BECKY: Let me ask all three of you. All three of you are investors that spend a lot of time thinking about things. I wonder, with the stock market hitting new highs, if that concerns any of the three of you, if things are starting to look expensive at these levels. Bill, what do you think?

GATES: Well, relative to interest rates, equities are still a bargain. And, you know, so you’ve really got to have an opinion about interest rates to be an investor of any kind in this market. It’s such a key factor. You know, by historical measures, yes, interest rates were very different in most of those time periods.

BECKY: Have you been surprised that interest rates have stayed so low this year?

GATES: Well, the central banks are making sure that’s the case. They are trying to stimulate these economies as best they can. The fact that it requires the gas pedal being pushed to the floor as much as it does is an amazing and even a little bit scary thing.

BECKY: Charlie, what do you think?

MUNGER: Well, I think under what Bill Gross calls the “new normal,” common stocks may not do quite as well in the future as they did in the last 100 years. But that doesn’t mean that the Mungers are going to sell their common stock in an effort to buy them back later cheaper.

BECKY: Warren, how about you?

BUFFETT: Well, the option is to own equities or own fixed dollars. I think it’s clear you own equities. I do not think they’re in crazy territory. But most of the time stocks have been in a zone of reasonableness over my lifetime. I think they’re in the zone of reasonableness now. And certainly if you said to me it’s either going to have to be long the 30-year bond and short an index fund for 30 years or vice versa, it would be long index fund. I would be long in stocks. ”




Value Investing Congress Las Vegas Notes 2014 – source: Marketfolly

Good read off Value Investing Congress Las Vegas Notes 2014

Thomas Russo’s Presentation

Whitney Tilson’s SodaStream Pitch

Sahm Adrangi: Short Bank of Internet

Carlo Cannell’s 2 Investment Ideas

Tim Eriksen: Long Awilco Drilling

Chris Mayer’s 2 Picks 

Eric Andersen (Western Standard): Pitches on Forrester, OFS Capital & Hartmann 

Eric Sprott (Sprott Asset Mgmt): 2 Ideas

David Neuhauser (Livermore Partners): Energy pitches

Lisa Rapuano (Lane Five Capital:  2 Investment Ideas

Zeke Ashton (Centaur Capital): Long BMW Preferreds

Daniel Miller (Gabelli):  2 Long Ideas

Isaac Schwartz (Robotti & Co): Long Tarkett and Halik Savings Bank

David Hurwitz (SC Fundamental): Opportunities in Korea

Michael Kao (Akanthos Capital): His TAG Oil Pitch

Chan Lee & Albert Yong (Petra Capital): Long Nexen Tire

Richard Lashley (PL Capital):  TARP Warrants and small cap bank plays

Richard Pearson: Short Organovo

– John Lewis (Osmium Partners):

Daniel Ferris (Extreme Value): Long Altius Minerals

Arnaud Ajdler (Engine Capital): Pitch on Hill International



Wells Fargo and John Stumpf

Selected words:

As Stumpf’s bible puts it: “There are only three ways a company can grow. First, earn more business from your current customers. Second, attract customers from your competitors. Or third, buy another company. If you can’t do the first, what makes you think you can earn more business from your competitors’ customers or from customers you buy through acquisition?”

“There’s only three jobs at Wells Fargo: taking care of existing customers, getting new customers and managing the risk of those two things,” adds Loughlin. “Nowhere in there am I talking about profitability or market share.”


CFA Level II

Study Schedule:

prior 3/15: Session 1-7
3/16 – 3/22: Session 8-9
3/23 – 3/29: Session 10-11
3/30 – 4/05: Session 12-14
4/06 – 4/12: Session 15-16
4/13 – 4/19: Session 17-18

4/20 – 4/26: Green book
4/27 – 5/03: Green book

5/04 – 5/10: Practice Exam
5/11 – 5/17: Practice Exam
5/18 – 5/24: Practice Exam

5/25 – 5/31: Reviews
6/01 – 6/07: Reviews