Happy Friday and welcome to our new subscribers! |
We had great engagement on last week’s poll — thank you, everyone! |
Also, we got our first comment on the website since the site was revamped — thank you, Susan! |
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On My Mind |
Earlier this week, someone asked me a question about a rather complex topic. I know very little about this topic. Despite that, my mouth quickly opened and words started to flow out. The words we not mine, however. |
I had read a little on the subject at some point in the last five years. They key word there is “little.” Thus, it was somewhat disturbing, as I watched myself in almost third person, that I was confidently speaking while merely parroting a single source without any indication the words weren’t mine. |
At the end of the short conversation, I was fairly unhappy with myself. I realized that I had barely skirted through the discussion — any follow-up question as to the specifics of what I said would have unveiled the house of cards. Worse, however, was the feeling that I knew better than to do what I just did. |
I was reminded of a quote — which I can’t find an attribution for online at the moment — that goes something like “The man who has only read a single book is worse off than the man who has read none.” |
The idea, as I think about it, is that knowing a little bit about a topic but not realizing how much you have yet to understand leads to ignorance-based false confidence. |
It would have been much better if I had merely told my colleague, “Oh, I haven’t really thought about that. What do you know about it?” and moved on with my day after their answer. I might have learned something, and there would have been little risk of looking a fool for having stolen words I didn’t understand. |
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Disclaimer — I get paid a small commission per click on the below, which helps offset the cost of Beehiiv. |
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Quote of the Week |
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One of the biggest challenges I have been dealing with lately is focus. The number of things that need to be done seems to dwarf the hours in a day — or at least that is what it feels like when I am rushing at the end of the day. |
But then I remember a coworker I had ~6 years ago. He spoke little at work — but when he did, it was pleasant. He wasn’t one to loiter around others’ desks — instead, you could almost always find him with headphones on chunking through work. |
He spent less time in the office than almost anyone else. He got just as much done. I think he just never picked up the habit of being distracted. |
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Poll of the Week |
What book do you most often recommend to friends?After clicking, you can share the specific title |
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Things to Read |
Power of Incentives | From Poor Charlie’s Almanack by Charlie Munger, 1994 (re-shared by @kejca) |
From all businesses, my favorite case on incentives is Federal Express. The heart and soul of its system, which creates the integrity of the product, is having all its airplanes come to one place in the middle of the night and shift all the packages from plane to plane. If there are delays, the whole operation can't deliver a product full of integrity to Federal Express customers. And it was always screwed up. They could never get it done on time. They tried everything moral suasion, threats, you name it. And nothing worked. Finally, somebody got the idea to pay all these people not so much an hour but so much a shift, and when it's all done, they can all go home. Well, their problems cleared up overnight. So getting the incentives right is a very, very important lesson. It was not obvious to Federal Express what the solution was. But maybe now, it will hereafter more often be obvious to you. |
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I recently ordered the new print edition of Poor Charlie’s Almanack put out by Stripe Press, which has a free online version here as well. About six years ago, I read the entire book cover to cover in a few days and consequently don’t remember as much of it I should. With Munger recently passing, I thought it made sense to re-read it while taking a slower, more thoughtful approach than the sprint my younger self did. |
The book is full of Munger’s useful takeaways and examples such as the above FedEx story on how getting the incentives right matters more than almost anything else. |
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There you have it. Buffett and Gottesman more than doubled their money on the original stake they purchased. Then through a combination of keeping an ear to the ground and acting quickly, they were able to make a cool 26%+ (at least) on the stock they grabbed up to $35… Gottesman and Buffett remained lifelong friends. Gottesman served on the Berkshire Hathaway board from 2004 until his death in 2022. His stake in Berkshire was reported to be worth $2.6 billion at his time of passing. |
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Warren Buffett and David Gottesman invested in a company called Studebaker in 1965. The company was struggling financially at the time, but Buffett and Gottesman dug into the details others seemed to miss and saw potential in an ongoing turnaround effort and undervalued assets. They eventually made a significant profit on the trade. |
Dirtcheapstock does a nice job of pulling data from 1965 and quotes from Gottesman to explain how the pair pulled it off. In short, they were willing to take a bet when others were not because they took the time to understand the situation better than almost anyone else. |
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Then, in the middle of the morning, the old men begin shuffling in. Kelly calls them “the steadies.” The majority are retired laborers and small businessmen. They prefer McSorley’s to their homes… In summer they sit in the back room, which is as cool as a cellar. In winter they grab the chairs nearest the stove and sit in them, as motionless as barnacles, until around six, when they yawn, stretch, and start for home, insulated with ale against the dreadful loneliness of the old. |
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Sometimes something is so well written that you get value from the experience of reading it and don’t have to worry about what exactly you learned. Joseph Mitchell’s short history on “McSorley’s, the oldest Irish saloon in the city”, published in 1940 in the New Yorker, is one of such reads. |
It is a wonderful little story about a Lower Manhattan saloon, first opened in 1854 by “Old John,” and how it changes hands without changing its traditions over time. Mitchell somehow so artifully weaves the bar patrons’ daily lives into the story through the sights, smells, emotions, jokes, stale air, and so on that at the end of it, I felt like I was sitting in McSorely’s myself. |
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Youssef Nader, Luke Farritor, and Julian Schilliger used neural networks to win the $700,000 grand prize in the Vesuvius Challenge, a competition to translate charred papyrus scrolls found in the ruins of a villa at the Roman town of Herculaneum in southern Italy. [A] volcanic eruption covered Herculaneum in ash [in 79 AD]. It also transformed into carbon the papyrus scrolls, which originally would have unrolled to lengths as long as 30 feet. |
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The Batch is a weekly update that shares news and perspectives on trends in AI. It had an interesting bit about the rise of cloud-hosted AI software and what that means for the data you might share with a third party. If, like me, you are worried about how AI & LLMs might open up new vulnerabilities for cybersecurity professionals to deal with, there are some interesting things to think about in their latest issue. |
Outside of that, The Batch also covered recent efforts in using AI vision for archeology. The goal? Imagine accessing a library containing thousands of scrolls, untouched for centuries, that were turned into unreadable, unscrollable carbon by an eruption of Mount Vesuvius in 79 A.D. |
How? AI magic, as discussed in the link above! |
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Visuals |
High prices cure high prices: lithium edition (@LibertyRPF) |
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Excess retirements exploded following COVID (@stlouisfed) |
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Top 15 hedge fund earners last year (@business) |
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There will always be market crashes (@perfinclub) |
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Have a great weekend, |
EJ |
historyinvestor.com |
Twitter / X: @HistoryEJ |
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Disclosure: Nothing in this article constitutes investment advice. More detailed disclosure here. |
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