The Digest #156

Published on July 20, 2023

Over the past week, I published two new articles.

Progressive is always an interesting company to follow since it is GEICO’s main competitor. Berkshire Hathaway’s Q2 results are likely to be released on August 5.

Coffee Can Investing is a simple concept but can be difficult to implement. I put together some thoughts on how it might be deployed with modifications.

Both articles are for paid subscribers but have introductions for all readers.


Medicine is plagued by untrustworthy clinical trials. How many studies are faked or flawed? by Richard Van Noorden, July 18, 2023. Individual participant data are not usually provided when randomized controlled trials are submitted to medical journals. This has hidden data problems that could have a significant impact on how practitioners make medical decisions for patients. “For more than 150 trials, Carlisle got access to anonymized individual participant data (IPD). By studying the IPD spreadsheets, he judged that 44% of these trials contained at least some flawed data: impossible statistics, incorrect calculations or duplicated numbers or figures, for instance. And 26% of the papers had problems that were so widespread that the trial was impossible to trust, he judged — either because the authors were incompetent, or because they had faked the data.” (Nature)

How Benjamin Franklin Helped Foil Early American Money Counterfeiters By Jo Craven McGinty, July 17, 2023. Everyone knows that Benjamin Franklin was a genius, but I was still surprised by the sophistication of the anti-counterfeiting measures he developed. “Researchers discovered that the black ink used by Franklin and his associates was made of graphite. The blue threads in their bills were dyed with indigo, a plant-based pigment. Their paper was strengthened with muscovite, a variety of mica…” (WSJ)

A Closer Look at Berkshire Hathaway’s Bet on “Old” Energy by Kingswell, July 18, 2023. If you are interested in Berkshire Hathaway, Warren Buffett, and Charlie Munger, you should subscribe to Kingswell’s Substack. “When you combine Occidental Petroleum’s engineering prowess, incredible asset base in the Permian, and the introduction of DAC [Direct Air Capture] in the near future, it’s easy to see why Warren Buffett is so eager to make the company one of the cornerstones of his investment portfolio.” (Kingswell)

How the Internet Went to Threads by Ted Gioia, July 17, 2023. This is an interesting review of Meta’s new Threads platform. The author signed up for Threads despite having serious reservations. My own opinion is that Threads is not ready for prime time. I set up an account, mainly out of curiosity, but the lack of a web browser interface that can be used from a computer is a major limiting factor. Most of the accounts I follow on Twitter have remained on Twitter, although several have started dual posting the same content on Threads. Time will tell … (The Honest Broker)

AI and the automation of work by Benedict Evans, July 2, 2023. “It’s hard to imagine jobs of the future that don’t exist yet, but it’s also hard to imagine some of the jobs of the past that have already been automated away. Gogol’s downtrodden clerks in 1830s St Petersburg spent their entire adult lives copying out documents, one at a time, by hand. They were human Xeroxes. By the 1880s, typewriters produced perfectly legible text at twice the words-per-minute, and carbons gave half a dozen free copies as well.” (Benedict Evans)

“The Evolution Of A Value Investor” by The Science of Hitting, July 13, 2023. “What I’ve slowly learned is that my thoughts about the proper way to play the game were far too rigid. While certain approaches may not align with my idea of what it means to be an investor, there’s clearly more than one way to get to heaven (with someone like Stan Druckenmiller, I still don’t truly understand what game he’s playing). An inability or an unwillingness to accept that speaks more to the views of the individual than to reality. Instead of thinking about whether various approaches are right or wrong, I now tend think about them in terms of trade-offs.” (The Science of Hitting) 

Rich and Anonymous by Morgan Housel, July 19, 2023. Many high profile ultra-rich people seem to revel in their fame. However, a good case can be made that wealth plus anonymity is the ultimate luxury. “I once did some consulting for a family that’s worth $8 billion. If you Googled their name, nothing came up. No Forbes list, no gala photos, no profiles, no Wikipedia pages … nothing. That was intentional.” (Collaborative Fund)

New research puts age of universe at 26.7 billion years, nearly twice as old as previously believed by Bernard Rizk, July 13, 2023. I have always found it fascinating to consider how little we know about the origin of the universe. When the estimate of the age of the universe can double based on new findings, it’s a pretty good bet that we remain ignorant of much else aside from age. I recall that I read this article through another newsletter’s link but I forgot which one … so h/t unknown … ( 

Market Resilience or Investors in Denial: The Market at Mid-Year 2023 by Aswath Damodaran, July 18, 2023. “At the start of the year, the consensus of market experts was that this would be a difficult year for markets, given the macro worries about inflation and an impending recession, and adding in the fear of the Fed raising rates to this mix made bullishness a rare commodity on Wall Street. Markets, as is their wont, live to surprise, and the first six months of 2023 has wrong-footed the experts (again).” (Musings on Markets)

Going the Distance by Ian Cassel, July 19, 2023. “Great investment careers can span 10 years, 20 years, 30 years and more. Reputations are normally built by stepping away after a streak of good years, or evolving and adapting your strategy, or simply by making sure you have the duration to grind through the tough years to get to the good ones. When your performance is public record it adds pressure to perform and makes going the distance even more difficult. The ultimate goal for any stock picker is survival.” (Microcap Club)


Toast: The Restaurant Operating System, July 12, 2023. 51 minutes. Toast’s business model involves providing hardware to restaurants at cost, charging a modest SAAS fee, and taking a percentage of revenue processed through the system. “So on a $100 transaction, $2.60, $2.70 is staying with Toast. Of that, there’s interchange, there’s bank fees. So the credit cards and credit card companies, banks, processors or whatnot take the majority of that money, usually about $2 to $2.10-ish of the $2.60 that’s held back on a $100 order. They’re typically keeping about 200 basis points, which leaves Toast with 50 basis points spread on average for all card payments that run through Toast.” (Business Breakdowns)

Why Buffett is Doubling Down on Japan w/Dan Rasmussen, July 15, 2023. 1 hour, 1 minute. “What caused Buffett to go into such a dull, unattractive, terrible market? And I think one thing is this meta-analysis. If everybody believes Japan is a horrible place to invest and everybody’s been burned by investing in Japan, and nobody wants to put money there, it’s almost certain that there are some attractive bargains there. Japan’s valuations have become extremely cheap, to the point where you’re buying things for a third of the cost that you’d pay for equivalent companies in the United States. It’s just silly for equivalent companies, right? It’s truly remarkable how cheap Japan is.” (We Study Billionaires)

Finding Great Growth Companies with David Rolfe, July 20, 2023. 1 hour. “We talk growth investing with Wedgewood Partners Chief Investment Officer David Rolfe. We discuss the characteristics of great growth companies and the details of their process to identify them. We cover the importance of dominant products, the characteristics of strong management teams, the role of valuation in growth investing and a lot more.” (Excess Returns)

Founders #170: My Life in Advertising, March 8, 2021. 1 hour, 19 minutes. This is an interesting podcast about the life of Claude Hopkins, one of the early pioneers of the advertising industry. “There are few pages in ‘My Life in Advertising’ which do not repay careful study—and which do not merit rereading. Before your eyes, a successful advertising life is lived—with all that went to make it successful. The lessons taught are taught exactly as they were learned. They are dished up dripping with life. It is not a book, it is an experience—and experience has always been the great teacher.” (Founders)

How Europe Fought Anarchist Suicide Attacks From 1850 to WW1, July 17, 2023. 44 minutes. “At the end of the 19th century, the world came to know and fear terrorism. Much like today, this was a time of progress and dread, in which breakthroughs in communications and weapons were made, political reforms were implemented, and immigration waves bolstered the populations of ever-expanding cities. This era also simmered with political rage and social inequalities, which drove nationalists, nihilists, anarchists and republicans to dynamite cities and discharge pistols into the bodies of presidents, police chiefs and emperors. The most notorious incidents were Tsar Alexander II’s murder by the People’s Will in 1881, and the dynamiting of the Café Terminus in Paris in 1894” (History Unplugged)


“The Hay Harvest (also known as Haymaking), is an oil on wood painting created by Pieter Bruegel (c. 1525-1569), in 1565. The most important of the Lobkowiczes’ Northern pictures, it was hung in the dining room of the Antwerp merchant Niclaes Jongelink. This picture was originally part of a series of six panels, each presumed to represent two months of the year – in this case June and July.”

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The Digest #156