This Week I Learned #94
“Go to bed smarter than when you woke up”
2020-03-16
Paul Graham on why you should start a company during a bad economy. Quite timely for the current climate. http://paulgraham.com/badeconomy.html
"If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it's rounding error compared to the founders."
"Which means that what matters is who you are, not when you do it. If you're the right sort of person, you'll win even in a bad economy. And if you're not, a good economy won't save you. Someone who thinks "I better not start a startup now, because the economy is so bad" is making the same mistake as the people who thought during the Bubble "all I have to do is start a startup, and I'll be rich."
2020-03-17
Meb Faber on expectations in investing.
"An investor who put $10,000 into Berkshire Hathaway in 1965 would now have $200,000,000. That’s Two. Hundred. Million. Dollars.…(Compared to a still respectable $1.75mm for broad stock market.)"
"But most could never have endured the roller coaster to get there. It’s easy to fantasize about the $200,000,000 finish line…but think about suffering through one of Berkshire’s multiple 50% drawdowns…"
2020-03-18
Awesome exercises that gives you an excellent perspective on valuing companies, how hard it is and… well I’ll let you do the exercise and feel all the emotions I felt afterwards.
Turns out.. given my range, it would’ve considered the company in the exercise to be within my FV ranges. Even with my janky FCF yield requirements
http://brontecapital.blogspot.com/2017/01/valuation-and-investment-analysis.html
2020-03-19
“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.” -Charlie Munger
2020-03-20
"As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence… One’s knowledge and experience are definitely limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself entitled to put full confidence." - John Maynard Keynes