The Digest #28

Published on July 1, 2020

The Changing Landscape of News

When President Johnson decided not to run for re-election in early 1968, he reportedly said “If I’ve lost Cronkite, I’ve lost middle America.” Such was the power of Walter Cronkite, a man trusted implicitly by millions of Americans, who habitually ended each of his CBS News broadcasts by saying “And that’s the way it is.” This was the era when television was displacing radio while co-existing in prosperity with the great American institution of the print newspaper.

From the end of the Second World War until the end of the twentieth century, almost all Americans consumed information by turning to television, radio, or the local newspaper. Events of the day were curated by professional journalists and news was disseminated by large and mostly well regarded organizations.

Then the internet changed everything.

Suddenly, during the final years of the century, anyone with a computer and an internet connection had an unlimited supply of news provided by countless publishers. Not only did we have access to newspapers from around the world but we gained access to less formal sources of information written by ordinary people. And most of this new content was completely free. The comfortable culture of journalism was viciously upended, never to be the same again.

Murray B. Light started working for The Buffalo News in 1949 as an entry level copyeditor and stayed at the paper for a half century before he retired and wrote From Butler to Buffett, a book that provides both a history of the Buffalo News and a personal memoir of a newspaperman during the final glory days of print. Light, who passed away in 2011, was in a perfect position to also provide an account of how Warren Buffett took control of the paper in 1977 and navigated major difficulties before his investment paid off.

One of the most interesting aspects of the history of The Buffalo News, which was founded in 1873, is the fact that the news of the late nineteenth century was almost as noisy and chaotic as the internet age, although the competition was at a local level rather than global. We get to know Edward Butler, a young man of unlimited confidence, as he founds his paper with as much aggressiveness as any of today’s millennial tech founders. Entrepreneurial spirit was just as alive and well in 1870s Buffalo as it is in 2020s Silicon Valley.

Today, newspapers are well into their second decade of decline as a vicious cycle of declining readership, loss of advertising revenue, and newsroom cutbacks take their toll on formerly solid business models. However, Light’s book was published in 2004 when the industry was still mostly healthy so he wasn’t forced to grapple with the full magnitude of the internet’s impact. He also recounts many stories of “characters” and internal politics and promotions at paper. But, overall, I still found the book to be a worthwhile read.

I published a book review of From Butler to Buffett this week on The Rational Walk which goes into more detail regarding the history of the newspaper and Berkshire’s involvement. The article also contains some data showing the financial outcome of Buffett’s investment in The Buffalo News and also touches on Berkshire’s foray into local papers in the 2010s which recently concluded with the sale of the Berkshire Media Group to Lee Enterprises.

Click here to read the full article on The Rational Walk

Jim Simons: Life Lessons from the “World’s Smartest Billionaire”

Jim Simons is known to be publicity-shy and it is also well known that he did not want a book to be written about him. However, that didn’t stop Gregory Zuckerman from writing The Man Who Solved the Market which was published in 2019. I reviewed the book on The Rational Walk at the end of 2019 and mentioned it in the first issue of Rational Reflections on New Year’s Day. Simons is a fascinating character — a mathematician, an investor, and a philanthropist.  

In the recent interview appearing below, Simons is interviewed by Brian Keating who is the son of James Ax.  Along with Lenny Baum and James Ax, Simons developed models for various commodity, bond, and currency markets during the early years of Renaissance Technologies. Perhaps because Simons has known Keating since he was a child, the interview seemed to be quite authentic and perhaps approaches what Simons is like in real life. It’s always fascinating to read about an investing genius but it can sometimes be more insightful to listen to his actual words on a variety of topics.

Interesting Links

Powell Has Become the Fed’s Dr. Feelgood by James Grant, June 28, 2020. The longtime editor of Grant’s Interest Rate Observer comments on his serious concerns regarding the course of recent Fed policy. Grant’s flagship publication is pricy, but there is a free daily newsletter that’s usually worth reading. (WSJ)

Don’t Kill Time by David Perell, June 29, 2020. “Time is scarce, life is short, and as the grains of sand slip through the hourglass, so does the precious gift of time. Once gone, it disappears forever. We all know these things. And yet, at work and at home, we’re so lost in a trance of distraction that killing time has become a chronic disease.” Mr. Perell is wise beyond his 25 years. (

How Money Forever Changed Us by Lawrence Yeo, June 24, 2020. A brilliant essay, enriched with original artwork and drawings, on the history of money from its origin as a medium of exchange and store of intrinsic value up to today’s conception of money as a socially approved abstraction. (More To That)

You Must Live an Interesting Life by Ryan Holiday, June 23, 2020. Modern-day stoic Ryan Holiday reflects on the importance of a life well-lived, which must include personally experiencing life. Otherwise, we risk never obtaining the “raw material” needed to create something useful. (

Wirecard Scandal Puts Spotlight on Auditor Ernst & Young by Patricia Kowsmann, Paul J. Davies and Juliet Chung, June 27, 2020. The Wirecard fraud demonstrates, yet again, that a clean bill of health from a major auditing firm provides no certain assurance of safety to investors. (WSJ)

Why Birds Can Fly Over Mount Everest by Walter Murch, June 24, 2020. Fascinating account of how birds, due to their evolutionary descent from the dinosaurs, have adapted to survive on limited levels of oxygen that would spell certain doom for mammals, including humans. (Nautilus)

‘She Is Going to Make It, Damn It’: One Doctor’s Quest to Save Her Patient From Covid-19 by Jennifer Levitz, June 26, 2020. Story of how a doctor stubbornly refused to give up on her 31 year-old severely ill COVID patient who also happened to be over seven months pregnant. (WSJ)

The first $100,000 is the hardest by Dividend Growth Investor, June 24, 2020. Charlie Munger, in the early 1960s, believed that accumulating the first $100,000 was very difficult but simply had to be done to start the “snowball” of compounding. In 2020 dollars, perhaps the updated figure should be $1 million.

Quote of the Week

“How often have you arrived one, three, or six hours late on a transatlantic flight as opposed to one, three, or six hours early? This explains why deficits tend to be larger, rarely smaller, than planned.”

— Nassim Nicholas Taleb, The Bed of Procrustes

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The Digest #28