Jim

[Finding Compounders @F_Compounders]

The Convictions of a Long Distance Investor

Great piece on Warren Buffett

[Kevin Carpenter @kejca]

Warren Buffett in 2022: "Elon [Musk] is taking on General Motors and Ford and Toyota and all these people who've got all this stuff — and he's got an idea. And he's winning. That's America." 🇺🇸

[Adam Shuaib @adamshuaib]

You can grind your way to the top 10% of most fields, but the top 0.1% works differently; it's reserved for people who've found their work so absorbing they've stopped noticing the grind at all.

Tesla often forgot to eat. Edisons assistants said he couldn't understand why his employees got tired. He'd hammer at a problem for 30hrs, then look up confused that everyone had gone home and assumed they were sick. Buffett, in his nineties, reads 500 pages of annual reports a day for fun.

People assume these people had super-human willpower, but they actually had a completely different relationship with effort; the effort in itself was the reward. Forcing yourself to work hard is exhausting, but not being able to stop is something totally different. The biggest rewards in life come to the people who don't experience hard work as work at all.

[Spencer Jakab @Spencerjakab]

I think about this guy (and his parents) sometimes. $MSTR

[Jim @Jamesiesta]

@danpompei @grok what do you estimate the economic impact would be if chicago bears moved their franchise to Hammond, IN? Focus on NW Indiana and south suburbs of Chicago

[Jim @Jamesiesta]

@danpompei Plus it will be good for south, sw burbs. They've suffered so much population loss after steel mills shut down in NW Indiana in late '90s and have never recovered. Hopefully this will help revitalize that region

[Spencer Pratt @spencerpratt]

Patience.

[Jim @Jamesiesta]

@rockhillsranch Also, Millionaire Mind (thomas stanley), Thinking in Bets by Annie Duke (former professional poker player)

[Anthony Pompliano 🌪 @APompliano]

I sat down with @MorganLBrennan to discuss:

- the SpaceX IPO
- rise of defense tech
- America's re-industrialization movement
- White House investing like a PE firm
- why spectrum is hottest commodity in AI arms race

YouTube: https://t.co/cawaMZ1bF5
Spotify: https://t.co/JRRz4jLx3V
Apple: https://t.co/hujORxdMqW

TIMESTAMPS:
0:00 - Intro
0:51 - SpaceX IPO breakdown & what investors need to know
7:31 - Government & private enterprise: navigating regulation
10:03 - SpaceX wealth creation & the constellation of startups it spawned
14:04 - Peter Thiel's outsized impact on national defense
16:48 - Re-industrialization & tariffs
22:09 - How America's re-industrial movement is taking root
27:01 - White House asset management & allocating capital
35:18 - JPMorgan, private capital & the pro-America shift
38:41 - Iran, markets & the economic outlook
44:08 - Defense tech: who can build it AND sell it
51:38 - Spectrum: the hottest commodity in the AI arms race
53:34 - Starlink, launch costs & the satellite boom
56:19 - Can public markets absorb the IPO wave?

[Phosphen @phosphenq]

This 90-min talk by Ed Thorp, who beat Las Vegas with Claude Shannon, will teach you more about edge than a career on Wall Street.

He then beat the market for 20 years with no losing year. Bookmark & watch tonight, it'll change how you trade forever.

[Ethan Brooks @alt_w_v_g]

My wife mentioned a nice private school over dinner this week
She said the campus was beautiful
I asked what's the tuition
She said we should look at it as an investment in him not a cost
I made a note
She said don't make a note
I said I always make notes
She said this isn't a deal
I said everything is a deal
She closed her eyes

She said we'd discuss it Saturday
I agreed

Saturday 7:02am
She came downstairs in her Saturday robe
Coffee in hand
I had my cargo shorts on

The dining room had been cleared
The projector was on
The analyst was at the head of the table
Quarter zip on, three iced coffees, a legal pad, and two laptops
He had been there since 6:44am

I texted him at 11:14pm Friday
The text said dining room 6:45am bring the model
He sent a thumbs up

My wife stopped in the doorway
She said what is this
I said you said you wanted to discuss it
She said this is not a discussion
I did not respond
She sat down anyway

The analyst stood
He said good morning ma'am
She did not respond
He sat back down
A printed deck in front of each seat
A fourth copy in case

Slide 1 Tuition Schedule
$38,500 per year
Thirteen years
$500,500 nominal
Before escalators
The school has raised tuition 4.2% per year for a decade
With escalators $648,000
My wife said okay
I said I'm not done

Slide 2 Opportunity Cost
Even before escalators
$38,500 invested annually
10% nominal return
S&P long-run average since 1928
By his eighteenth birthday $944,000
My wife said we can afford it
I said I know that's not the slide

Slide 3 Terminal Value at Age 65
$83 million
She was quiet

The analyst slid the sensitivity tables across the table
8% return $31 million
10% return $83 million
12% return $222 million
She did not look

She said this isn't about money
I said it's always about money
She said no it isn't
I said then what is it about
She did not answer

She said you can't put a dollar value on his teachers his classmates his environment
I said I can the analyst already did slide 6
He flipped to slide 6
She did not look

She said the school is the best in the city
I said best is a feeling
She said it produces the best students
I said the students were already the best before they got there

She said our son deserves it
I said our son deserves $83 million

My son walked in
He is five
Dinosaur pajamas
He looked at the projector
He looked at the open deck on the table
He looked at slide 3
He said are we modeling pre-tax or after-tax
The analyst opened a new tab
My wife looked at the ceiling

He said what's the discount rate
The analyst set down his pen
She closed her eyes

He said is this the same return assumption from the 529 conversation
The analyst stopped typing
He looked at me
I did not say anything

She stood up
Sat back down

He said dad can I help
I said yes
He pulled up a chair
The analyst handed him a printout
He started reading

My wife watched him read
She watched him for a long time

She said his name
He looked up
She said do you like school
He said the work is too easy and the kids don't ask questions

She did not respond
She looked at the ceiling
She walked out of the room

The analyst started packing up
He said should I follow up Monday sir
I said no follow up needed

He'll be fine

Sent from my iPhone

[Ali Cenk Gözen @acgozen]

Çeşitlendirme gerçekten riski azaltır mı?

(Afternoon Session - 1996)

[Kuppy @hkuppy]

I’m sure this will be fascinating👇👇

[Thierry from arvy 🇨🇭 @ThierryBorgeat]

Chris Hohn's TCI: the most profitable hedge fund in the world last year.

Returns since 2003 inception, after fees: +2,924%.

That's a 16% CAGR after 1.5% management fee and 15% performance fee.

SWEET MOTHER MARY AND JOSEPH!

Fifth most profitable fund of all time. About six analysts. One portfolio manager.

The catch:

- 2008: down roughly 43%
- 2022: down roughly 18%
- 2026 YTD: down 4%, worst start since 2022

The chart is a series of wild swings. Up forty in a year. Down forty the next. Then up fifty again.

Concentrated investing is a rough ride. The destination is what justifies it.

[Thierry from arvy 🇨🇭 @ThierryBorgeat]

🚨The 16% CAGR (net of 1.5%/15%) Hohn investing playbook

In five rules:

1. Own monopolies and oligopolies. Pricing power matters more than revenue growth.
2. Concentrate. Fifteen positions, not five hundred.
3. Hold for years, not quarters. Average holding period: nine.
4. Never short. The investor on the other side controls your destiny.
5. Avoid anything AI can disrupt. The list of investable companies is shrinking.

Two examples of the rules in practice:

- Just sold his entire $8 billion Microsoft position when Anthropic's AI productivity tools started threatening Office and Teams.
- Still holds Moody's. Buffett told him: "if the financial crisis didn't kill it, nothing will."

2,924% returns over twenty-three years.

Five rules, six analysts, fifteen stocks.

[Thomas Braziel @Bkclaims]

Chris Hohn is kind of my entire point here. Almost everything TCI owns is effectively must assume or must pay infrastructure. Railroads, Visa, Moody’s, S&P, Microsoft, Google. Assets that are so embedded into the economy that in a restructuring they’re almost impossible to rip out and are 100% repays.

There should almost be an 'assumed contracts' ETF. The signal is the assumption itself. That’s the moat.

[Financial Times @FT]

Is Chris Hohn Britain’s answer to Warren Buffett? https://t.co/HFsMBvnCSH

[Jim @Jamesiesta]

@woodman267 @DGretta_Author @kingkang80 I think it’s due to wmt earnings today plus $casys rsi was crazy overbought when it breached 900.

[Jim Bianco @biancoresearch]

As pointed out below, “stocks are increasingly seen as an inflation hedge,” so fund managers are piling in.

The idea that stocks are a hedge against inflation is not new and has not worked for over a century.

BofA’s Michael Hartnett’s latest “Flow Show” from Friday:

* above 4% on CPI where risk assets get twitchy…
past 100 years once CPI crosses 4% on average SPX -4% next three months, -7% next six months.”

Note that year-over-year CPI inflation was 3.8% through April.

Warren Buffett warned about this almost 50 years ago:

Fortune, May 1, 1977
Buffett: How inflation swindles the equity investor

“For many years, the conventional wisdom insisted that stocks were a hedge against inflation. The proposition was rooted in the fact that stocks are not claims against dollars, as bonds are, but represent ownership of companies with productive facilities. These, investors believed, would retain their value in real terms, let the politicians print money as they might.”

He goes on to describe when this belief peaked: “This heaven-on-earth situation finally was ‘discovered’ in the mid-1960s by many major investing institutions. But just as these financial elephants began trampling on one another in their rush to equities, we entered an era of accelerating inflation and higher interest rates.”

Finally, note that fund managers’ top three tail risks are in the chart on the right:

* Second wave inflation (40%)
* Geopolitical conflict (20%)
* Disorderly rise in bond yields (18%)

These three risks total 78%, and they could be argued to be variations on the same theme – the war will continue to drive crude oil prices higher, creating a second wave of inflation and higher bond yields.
----
“Those who cannot remember the past are condemned to repeat it.”
– George Santayana, from The Life of Reason (1905)

[Spencer Pratt @spencerpratt]

Now this is a story all about how my life got flipped, turned upside down