This Week I Learned #98
“Go to bed smarter than when you woke up”
2020–04-13
Podcast interview with Chris Cole of Artemis Capital on Acquirers Podcast
Sweet spot is for 45% of the market to be passive… but if it exceeds and hits the level of 50%+ of the market being passive as Bernstein states… then there will be less alpha out there for active managers. But, there is greater volatility. As market becomes dominated by passive, the volatility increases and it will drive market instability. Active managers will not be able to help the market move efficiently because passive will become too big in amount of capital.
2020–04-14
This article looks into the Charlie Munger’s investment that made him $80M.. turns out he was referring to a cheap special situation he invested in:
"I’ve read Barron’s for 50 years. In 50 years I found one investment opportunity in Barron’s, out of which I made about $80 million. For almost no risk. I took the $80 million and gave it to Li Lu, who turned it into $400 million or $500 million. So I have made $400 million or $500 million out of reading Barron’s for 50 years and following one idea…I didn’t have a lot of ideas. I didn’t find them that easily, but I did pounce on one." -Charlie Munger, 2017 Daily Journal Shareholder Meeting.
https://www.brokenleginvesting.com/charlie-munger-cigar-butt/
2020–04-15
Marc Andreessen on how pricing power indicates the existence of a moat: "If you do have a moat, the customers will still buy, because they have to. The definition of a moat is the ability to charge more."
2020–04-16
Learnings from the 2020 Fundsmith AGM with Terry Smith
POV on Google’s poor capital allocation + Apple’s inability to generate wealth in the long term as a fashion company without its visionary founder.
A fascinating approach of looking at your portfolio as a full entity with GM, ROCE, Op Margins and Op Profits. It’s a way of looking at the portfolio as a full holding company.
2020–04-17
Interview with John Malone on the state of media.
The power is no longer with the studios that build the content anymore. If they do not have distribution power, then they are no longer a wealth-creating business.