Kv0r1n

Most measure how often they were right.
I measure the shape of what remains when they were wrong

[Kv0r1n @Kv0r1n]

A TOWN WHERE NOBODY MOVES IN AND NOBODY LEAVES. HOUSE PRICES STILL GO FROM $100,000 TO $150,000.

Charlie Munger built this town at Berkshire's 2005 meeting, a year before American home prices peaked. Same families, same houses, the same number of people every year. The only thing that changes is the loan.

The houses trade between neighbors, and each round the mortgage gets easier because Fannie Mae or Freddie Mac stands behind it. The lender stops asking whether the buyer put any money down and looks only at the guarantee. Someone in New York or Tokyo buys that guaranteed paper, and the extra $50,000 per house arrives from people who will never walk down the street.

Nobody in town earned more. No house got bigger. The price rose because the next buyer could borrow more than the last one, and it will keep rising exactly as long as that stays true.

"Everybody feels very happy for a long time."

Watch him build an entire bubble out of one town and zero new residents, then look at whatever you are about to overpay for and ask who is lending the next buyer the money.

[Kv0r1n @Kv0r1n]

@0vVane worth checking net share count too, plenty of companies buy back billions and the count barely moves because stock comp is issuing new shares out the back door

[Kv0r1n @Kv0r1n]

the ticker isn't pure distraction though, it's what lets you buy the farm at half price when everyone panics. the trick is treating it as an occasional offer rather than a scoreboard you check hourly

[Kv0r1n @Kv0r1n]

BUFFETT SCANS THOUSANDS OF STOCK PRICES A DAY AND IGNORES 99.9% OF THEM. THE FEW HE KEEPS, HE STOPS CALLING STOCKS.

Nobody who owns farmland checks what it's worth every morning. There is no ticker for the field and no red number on a phone when it rains in the next county. The owner cares about one thing: what the land will grow over the years, against what he paid for it.

At Berkshire's 2008 meeting Buffett is asked where the market goes from here. He says he and Munger haven't the faintest idea, and that it never comes up between them. Then he says what does.

"Forget about the word 'stock.'"

A share is a slice of a business that happens to arrive with a price quote every few seconds. That quote is the only thing that makes it feel different from the farm, and it is exactly where most people spend their attention. Buffett uses it as a place to shop, never as a scoreboard.

Watch him answer a question about the market with a farm, then look at what you own and ask whether it is a business or just a number that moves.

[Kv0r1n @Kv0r1n]

@shukshln The self-checking loop in Nerve is the real tell

[Kv0r1n @Kv0r1n]

@0x_Squirrel that 1% is usually only half of it, the funds inside charge their own expense ratio on top and neither number shows up on your statement

[Kv0r1n @Kv0r1n]

@Ox_Cheetah fade rate is also the hardest input to fake confidence in, a DCF lets you pick terminal growth and the model just accepts it, so most valuations quietly assume the moat holds forever

[Kv0r1n @Kv0r1n]

THE MAN WHO MADE "MOAT" THE MOST IMPORTANT WORD IN INVESTING SAYS MOST OF THEM ARE WORTHLESS.

Berkshire Hathaway, 1995 shareholder meeting. A shareholder asks Warren Buffett what he actually looks for in a business. He answers with a picture: a castle surrounded by a wide moat, with an honest lord inside. The castle is the economics of the business. The moat is whatever keeps competitors from getting in. Low cost, a franchise in the consumer's mind, a technological edge, anything.

Then he says the part nobody quotes.

"Most moats aren't worth a damn in capitalism."

Every advantage is under constant attack. The only question that matters is whether the moat will still be there in five, ten, twenty years, or whether it is already being drained and nobody inside the castle has noticed yet. The moat you can see today is not the investment. The moat you can see two decades from now is.

Watch him explain the one filter that separates the businesses he buys from every business he walks away from.

[Kv0r1n @Kv0r1n]

@0vVane which is also why a moat gets dangerous once management starts believing in it, Kodak knew film was under attack and still couldn't price its own castle honestly

[Kv0r1n @Kv0r1n]

@reidgrows keeping his personal spending flat for 60 years is also why the compounding worked, every dollar he didn't lift his lifestyle with stayed inside Berkshire doing the actual work

[Kv0r1n @Kv0r1n]

@bubosees 38 cents for 14 steps is the number that matters here, at that unit cost you can afford to run this on every PR instead of saving it for the scary ones

[Kv0r1n @Kv0r1n]

@0vVane the months of silence cost more than the fake bids ever did, Treasury was ready to pull the license over the cover-up, not the original trade

[Kv0r1n @Kv0r1n]

@0vVane the free trades are the tell, most apps get paid by market makers for every order you send, so they make money on how often you trade, not on whether you win

[Kv0r1n @Kv0r1n]

@Ox_Cheetah and the fund companies had their best years exactly when investors lost the most, fees are charged on assets, so the money flooding in at the top was pure revenue for them

[Kv0r1n @Kv0r1n]

@0x_Squirrel Yale's edge mostly came from access to top private funds that regular investors can't get into, which is why Swensen himself told individuals not to copy the Yale model

[Kv0r1n @Kv0r1n]

@0vVane congress tried to fix this in 1993 by capping deductible salary at $1M, companies just moved pay into stock options and it exploded anyway

[Kv0r1n @Kv0r1n]

@0x_Squirrel and even a perfectly calm fund manager ends up trading on emotion, redemptions hand him his clients' panic at the worst possible time

[Kv0r1n @Kv0r1n]

THE DAY THE MARKET HIT ROCK BOTTOM IN 2009, HE WENT ON LIVE TV AND CALLED IT GOOD NEWS

March 9, 2009. Nobody in the room knows it yet, but the S&P 500 will close today at its lowest point since the crisis began, down 57 percent from its 2007 peak. Warren Buffett is on CNBC for three hours straight, live, taking questions from viewers.

He does not sound worried. He walks through the plain choices anyone has for their money. A savings account. Government bonds. Real estate. Or a piece of an actual American business.

"In the 20th century, the Dow went from 66 to 11,497."

Two world wars happened in between that number. A Great Depression. A dozen recessions and financial panics. None of it stopped the line from going up over the long run. He is not calling the bottom, he never claims that. He is pointing at a hundred years of evidence that panic is a worse advisor than patience.

What followed became the longest bull market in Wall Street history.

Watch him explain, live, on the single worst day of the crisis, why cheaper is not a warning sign but an invitation.

[Vane @0vVane]

https://t.co/PsxZoh8GJV

[Kv0r1n @Kv0r1n]

@0vVane admitting mistakes gets a lot easier when your capital can't leave, a fund manager saying that risks redemptions while Berkshire holders can only sell to someone else

[Kv0r1n @Kv0r1n]

@xbtnoah cheap failure only works if shareholders let you fail, Bezos warned them back in the 1997 letter that he'd pick long term over short-term profits

[Kv0r1n @Kv0r1n]

@Allx032 Once the debt is large enough that your collapse would hurt the lenders more than it hurts you