Berkshire Meeting Notes – Daily Improvement, Business Evolution, and Investment Strategy

Posted on 10 CommentsPosted in Charlie Munger, Investment Philosophy, Saber Capital Management, Think Differently, Warren Buffett

Last week I headed to Omaha to attend Berkshire Hathaway’s annual meeting. Nowadays, there is less of a reason to attend the meeting in person because it is available to watch online, but I love attending the event for all of the peripheral meetings that occur. It was a great weekend, and I got to connect with a few Saber Capital clients, as well as some good friends that I don’t see very often. No matter how long you’ve been […]

Charlie Munger’s Most Important Concept (Takeaways from the DJCO Meeting)

Posted on 14 CommentsPosted in Charlie Munger, Investment Philosophy, Think Differently

A couple weeks ago, I flew to Los Angeles to listen to Charlie Munger at the Daily Journal annual meeting. These days, you can read the transcript of these events or even watch it on YouTube, so there is less of a practical reason to attend the actual event. But the main reason I enjoy these events is to meet with people. I have as much fun at the peripheral gatherings as I do at the main event. It’s nice […]

Analyst Ratings and the Institutional Imperative

Posted on 12 CommentsPosted in General Thoughts, Investment Quotes, Think Differently, Warren Buffett

Buffett talks a lot about the concept he calls the “institutional imperative”. In his 1989 shareholder letter, when he was describing his mistakes of the first 25 years managing Berkshire, he outlines what he means by this (emphasis mine): “My most surprising discovery: the overwhelming importance in business of an unseen force that we might call “the institutional imperative.” In business school, I was given no hint of the imperative’s existence and I did not intuitively understand it when I […]

Base Hits vs. Swinging for the Fences

Posted on 18 CommentsPosted in Case Studies, Shareholder Letters & Reports, Think Differently

I just got done reading Jeff Bezos’ annual letter to shareholders, which is outstanding as it always it. As I finished it, I spent a few minutes thinking about it. He references Amazon’s style of “portfolio management”. He doesn’t call it that of course, but this passage got me thinking about it. Since I wrote a post earlier in the week about portfolio management, I thought using Bezos’ letter would allow me to expand on a few other random thoughts. […]

Long-term Thinking and Back to Basics

Posted on 12 CommentsPosted in General Thoughts, Get Better by Reading, Think Differently, Warren Buffett

When markets are tumbling, it’s time to get excited about stocks. This is often talked about, but rarely practiced. J. Paul Getty once said the key to getting rich is simple: “Buy when everyone else is selling and hold when everyone else is buying”. For the value investing community, Buffett’s famous “Be greedy when others are fearful” basically is the same gist. Commonly referenced and preached, but far less often practiced. I am lucky to have a great client base at […]

Drivers of ROE in the Context of Portfolio Management

Posted on 18 CommentsPosted in Portfolio Management, Think Differently, Warren Buffett

Someone on the Corner of Berkshire and Fairfax board recently posted this comment referencing Buffett’s well-known piece on inflation from 1977. In the article, Buffett describes the variables that drive a company’s return on equity. There are only five ways that a company can improve returns: Increase turnover Cheaper leverage (reduce interest charges) More leverage (increase the amount of assets relative to a given level of equity) Lower income taxes Wider margins Notice three of the five drivers of ROE have […]

Michael Burry: Focus on Bargains and not Stock Market Valuations

Posted on 32 CommentsPosted in Case Studies, Investment Quotes, Overall Stock Market, Think Differently

Michael Burry’s story is captivating. And in fact so good of a story that excellent financial storytellers like Michael Lewis and Greg Zuckerman turned it into main portions of best-selling books on the financial crisis. The story goes something like this: Burry was just a guy writing a blog (before people knew what a blog was). He was discussing his ideas in early internet chat rooms. He picked stocks. He was a value stock picker at a time when value […]

Portfolio Turnover–A Vastly Misunderstood Concept

Posted on 52 CommentsPosted in Case Studies, Superinvestors, Think Differently

A while back I wrote a post about how the gap between 52 week high and low prices presents an opportunity for investors in public markets. I mentioned that this simple observation (the huge gap between yearly highs and lows) is all the evidence you need to debunk the theory that markets are efficiently priced all the time. I think the market generally does a good job at valuing companies within a range of reasonableness, but there is absolutely no […]

Walking, Thinking, and Investing

Posted on 8 CommentsPosted in General Thoughts, Investment Philosophy, Think Differently, Warren Buffett

I just came across an article I just read that I thought was interesting, and thought certain readers might enjoy. Although the article has nothing directly to do with investing, I think there are some takeaways for those of us in the investment world. Certainly the article has relevance to anyone whose chosen endeavor requires the occasional deep thinking. The article is called “Why Walking Helps Us Think”. The article—as you probably guessed from the self-explanatory title—describes the benefit of […]

10 Years of Google and the Importance of Long Term Thinking

Posted on 16 CommentsPosted in Case Studies, Investment Ideas & Company Research, Investment Philosophy, Investment Quotes, Shareholder Letters & Reports, Think Differently

“Google has a huge new moat. In fact, I’ve probably never seen such a wide moat.” – Charlie Munger, 2009 Google celebrated the 10 year anniversary of its IPO last week. Google is a company that I’ve never owned (unfortunately), but really admire. There are a few businesses I almost root for, like a fan of a football team. Costco, Fastenal, and Walmart among others are on the list. These are really high quality businesses that have made their shareholders wealthy […]