A Primer on Mortgage-Backed Securities

This sums it up:

Warren Buffett & Bill Gates: Looking Forward

While on the topic of Warren Buffett (see previous post), Buffett and his pal Bill Gates were interviewed by Charlie Rose back in January. They discuss current affairs, the recent US Elections and issues facing the world and what they’re doing to tackle them. One key takeaway from the interview was that Buffett said, “We’ve bought $12 billion net of common stocks since the election. (Ted and Todd) have probably bought some too.”  This is coming from a guy that campaigned for Hillary Clinton. He really believes that the economy will do better even with Trump in power.

Below is the video of Charlie Rose’s interview with Warren Buffett:

Becoming Warren Buffett

This is the HBO documentary on Warren Buffett’s life. You don’t need to be a fan of Buffett or investmenting in general to enjoy this. There’s a lot you can learn from this documentary. Below are copies of the documentary on Youtube. I don’t know how long it will be there since it’s most likely an illegal feed. Below the video I have attached some notes from the doc provided by Market Folly.

Link #1:

Link #2:

Market Folly notes:

– He was always fascinated by numbers and it talks about how at an early age he discovered the power of compound interest. He concluded, “It’s a pretty simple concept, but over time it accomplishes extraordinary things.”

– He goes to McDonald’s everyday for breakfast on the way to work and has three options based on how much change his wife has given him for the day. Yup, one of the biggest owners of American Express (AXP) pays for breakfast in cash.

– He framed newspapers from various financial crises and hung them on the wall as a reminder that “anything can happen in this world.”

– As a young student, all his teachers owned AT&T at the time and he shorted the stock and showed the teachers proof to kind of spite them.

– Buffett learned two rules of investing from Benjamin Graham: Rule 1: Never lose money. Rule 2: Never forget rule number one.

– Doesn’t hang his diploma from undergrad or graduate school, but instead the certificate from the Dale Carnegie course of public speaking, which he says changed his life since he was so scared of it.

– Charlie Munger said Buffett made a lot of money early on buying thinly traded securities that were incredibly cheap statistically (“cigar butt” investing).

– Started his first partnership with $105,100 – $100 from himself and the rest from investors.

– Buffett says, “The trick in investing is to just sit there and watch pitch after pitch go by and wait for the one in your sweet spot. There’s a temptation for people to act far too frequently in stocks simply because they’re so liquid. Over the years, you develop a lot of filters. I do know what I call my circle of competence. I stay within that circle. Defining what your game is, where you’re going to have an edge is enormously important.”

– He later adds, “If you’re emotional about investment you’re not going to do well.”

– Charlie Munger had a big impact on him by shifting him to look at wonderful companies at fair prices rather than fair companies at wonderful companies.

– Buffett said he spends 5-6 hours a day reading. He likes to just sit and think. When asked to describe what one word describes his success, he said ‘focus.’

– “The biggest thing in making money is time. You don’t have to be critically smart, you just have to be patient.”

– “Look for the job you’d take if you didn’t need a job.”

My Blackberry Is Not Working!

Video from 2010, still very funny. Includes Apple and Xbox jokes.

Excellent Interview with Jamie Dimon that Buffett Loves

JPMorgan Chase CEO Jamie Dimon gave a memorable interview with Carlyle Group CEO David Rubenstein at the Economic Club of Washington D.C. last September. Dimon addressed a wide array of topics from the need for the Federal Reserve to raise rates, to the benefits of corporate tax reform.

Warren Buffett said this about this interview: “It was off the charts – one of the best I’ve ever heard,”. What’s interesting I just can’t picture Warren say the word “off the charts”.

What I Love Most About America

Below are quotes and videos by President Barrack Obama. These are very interesting conversations with Obama. You can read President Obama’s editorial “Now is the Greatest Time to Be Alive” here.

President Barrack Obama:

“I was a sucker for Star Trek when I was a kid,” he said. “They were always fun to watch. What made the show lasting was it wasn’t actually about technology. It was about values and relationships. Which is why it didn’t matter that the special effects were kind of cheesy and bad, right? They’d land on a planet and there are all these paper-mache boulders (laughs). But it didn’t matter because it was really talking about a notion of a common humanity and a confidence in our ability to solve problems.”

“Star Trek, like any good story, says that we’re all complicated, and we’ve all got a little bit of Spock and a little bit of Kirk [laughs] and a little bit of Scotty, maybe some Klingon in us, right? But that is what I mean about figuring it out. Part of figuring it out is being able to work across barriers and differences. There’s a certain faith in rationality, tempered by some humility. Which is true of the best art and true of the best science. The sense that we possess these incredible minds that we should use, and we’re still just scratching the surface, but we shouldn’t get too cocky. We should remind ourselves that there’s a lot of stuff we don’t know.”

A recent movie captured the same spirit—The Martian. Not because it had a hugely complicated plot, but because it showed a bunch of different people trying to solve a problem. And employing creativity and grit and hard work, and having confidence that if it’s out there, we can figure it out. That is what I love most about America and why it continues to attract people from all around the world for all of the challenges that we face, that spirit of “Oh, we can figure this out.” And what I value most about science is this notion that we can figure this out. Well, we’re gonna try this—if it doesn’t work, we’re gonna figure out why it didn’t work and then we’re gonna try something else. And we will revel in our mistakes, because that is gonna teach us how to ultimately crack the code on the thing that we’re trying to solve. And if we ever lose that spirit, then we’re gonna lose what is essential about America and what I think is essential about being human.

You can read President Obama’s editorial “Now is the Greatest Time to Be Alive” here. The November issue of Wired focuses on science, technology, innovation and the drive and curiosity of humanity.

 

The Gap Between The “Real World” and School

Jim Collins Interviews Jorge Paulo Lemann and Gisele Bündchen (well sort of)

Jim Collins (Good to Great) got to interview business genius Jorge Paulo Lemann from 3G Capital (Dream Big) and supermodel Gisele Bündchen, which also happens to be Tom Brady’s wife. One is interesting to listen to and the other is interesting to look at. I will let you guess who’s who.  I’m not sure what connects Jorge and Gisele, but they are both Brazilian and they are both have a lot of success globally. After all this was the Brazil Conference at Harvard & MIT. I read a lot about Jorge and his story. It’s incredible what he and his group has accomplished. He’s also really close to Jim Collins. Jorge is usually not big on media stuff, so this interview is a very special one. I don’t know too much about Gisele but I think she is (or was) the highest-paid model in the world. In 2015, Forbes estimated Bündchen’s annual income at $44 million. I think she’s making more money than Tom Brady.

For more on Jorge Paulo Lemann and 3G Capital, be sure to check out my post on Dream Big.

Here’s some inspirational notes from the video:
Jorge Paulo:

“Dreaming big or dreaming small take the same amount of effort so you might as well dream big. So that is easy. The people factor is something that you really have to work hard at. Most people think of business as selling a product or you have a very good product to sell or you have a very special strategy. After I began attracting very good people to work for me, I found that was more powerful than what you were doing or what the product was. Just getting the right people on board then you would find something interesting to do. It is a continuous effort though.”

Jim Collins:

“Most of us come at life as a series of ‘What’ questions. What am I going to do? What career? What company? It’s about what…What? What? What? And I think what Jorge Paulo shifted to early in his life was that the first questions are always ‘Who?’. Who are you going to allow to mentor you? Who do you want to spend your time with? You can be doing a lot of ‘Whats’ with your life, but if you’re not doing it with people you love doing it with, it’s really hard to have a great life.”

Jim Collins:

“Luck favors the consistent. You’re going to have good hands and bad hands in life. And you might get a bad hand early. You might go broke at 26. You might have come from a difficult place. If you see life as coming down from a single hand, then it’s very easy to lose. Because what if that’s a bad hand? But if you look at it as ‘Life is a series of hands’, and the key is to play every hand to the best of your ability; sometimes you get good hands, and sometimes you get bad hands. But you’ve got to stay at the table. You’ve got to stay in the game and keep playing.”

Jim Collins:

If Steve Jobs would have quit after he was fired from Apple, none of use would have iPhones.

Here’s the video. The video audio out of my speaker wasn’t excellent but it works fine with headphones, so I think its the video. Jim is the host and the setup is a conversation between two friends. Gisele is only interviewed for only about 5 minutes. She starts in Portuguese then realizes Jim Collins doesn’t speak Portuguese and switch to English.

Pershing Square / Bill Ackman Video in Hitler’s Bunker

This is a hilarious video on some of the problems Bill Ackman’s Pershing Square is going through right now. If you follow the investment world a bit, things are not really rosy at Pershing Square. I don’t know who the creator is (2/20?) and it’s full of typos. The video is about Ackman’s two major bets going totally wrong on him. Of course I’m talking about Herbalife and Valeant. It’s usually to not a good idea to make fun of somebody when they are down, but I hope Ackman sees the humor in it. Now I wonder if Ackman will move to Boston and opened a mutual fund.

Lessons From the Great Minds of Investing

The great mind of investing
This is another exceptional Google Talks. This time Google hosts William Green, the author of The Lessons From the Great Minds of Investing. I met William Green last year following an investment panel at one of the Berkshire Hathaway events associated with the AGM. He had stacks of books that you could buy before it was released to the public. I had a chance to browse the book and its absolutely beautiful. It’s a big book, coffee table style. The striking feature are the beautiful black and white pictures. The extraordinary photographs credits goes to Michael O’Brien. The book provides insights and wisdom from 33 of the greatest investors of our time. Unfortunately I didn’t end up buying the book. The book is too big to travel on a plane with and it’s expensive. But it’s on the buying list and it would definitely make a great gift.

Back to the talk. This is a good talk. William shares a mix of stories and lessons he learned from spending time with some of these great investors. He’s a good storyteller. That’s what makes the talk entertaining. He has some good stories on John Templeton, Howard Marks, Bill Miller and the late Irving Kahn. If you have an hour to kill or to educate yourself, it’s time well spent.

Twitter: @williamgreen72

None other than Buffett. The Great Minds of Investing
None other than Buffett. The Great Minds of Investing