Berkshire Hathaway’s Second Quarter Results
Berkshire Hathaway will report second quarter results on Saturday. I plan to review the results over the weekend and will publish an article either on Sunday or Monday.
Like my article on Berkshire’s first quarter results, there will be introductory content available for all readers. Paid subscribers will receive more details as well as the ability to discuss the results in the comments section and ask questions.
For selected articles on Berkshire Hathaway, I have created a resource page on The Rational Walk website. All articles published since January 2020 on The Rational Walk also appear on Substack. For all Berkshire articles since 2009, check out this link.
Mighty Mouse by Daniel Klein, December 19, 2018. “In a grainy film shot at Bell Laboratories in 1952, mathematician and Bell Labs researcher Claude Shannon, SM ’40, PhD ’40, stands beside a machine of his own construction. First built in 1950, it was one of the world’s first examples of machine learning: a robotic maze-solving mouse known as Theseus. The Theseus of ancient Greek mythology navigated a minotaur’s labyrinth and escaped by following a thread he’d used to mark his path. But Shannon’s electromechanical toy was able to ‘remember’ its path with the help of telephone relay switches.” (MIT Technology Review)
- Review of A Mind at Play: How Claude Shannon Invented the Information Age, July 28, 2023. “Shannon created the Theseus mouse at his extensive home laboratory where he engaged in countless experiments just for the fun of gaining knowledge. He freely admitted that much of his time was spent on ‘totally useless things’ of no apparent commercial value. The reality is that the intense intellectual curiosity of a man like Claude Shannon is never directed in a ‘useless’ manner because many discoveries are only recognized as important when looking back at history.” (The Rational Walk)
- Claude Shannon demonstrates “Theseus” Machine Learning, “In this film from the early 1950s, Claude Shannon demonstrates how ‘Theseus,’ a life-sized magnetic mouse controlled by relay circuits, learns its way around a maze.”(Bell Labs)
Ben Graham’s (Not So) Marvelous Father, August 1, 2023. “In contrast with the frequent praise of others, I find it strange that most of my own memories of my father are on the silly or menacing side. One of his favorite expressions was ‘he’s a left-handed imitation of a paralyzed gridiron’ which I …was supposed to find highly amusing, even though I hadn’t the faintest idea what a gridiron was.” (Beyond Ben Graham)
Nick & Zak’s Terminal Portfolio by Kingswell, July 31, 2023. It makes a great deal of sense to select companies to research that you would like to own forever rather than to focus only on companies that are currently cheap. “Too often, investment decisions are rushed by the whims of Wall Street. A particular stock gets pummeled down in price and investors, sensing a fleeting opportunity, frantically research the company in question before this ‘bargain’ slips away. Such a race against the clock is not exactly conducive to rational decision-making. It’s the intelligent investor’s job to be ready. And the careful creation of a terminal portfolio — in advance — will ensure that he or she is.”(Kingswell)
Notes on X by Doomberg, August 2, 2023. The leading finance publication on Substack has decided to stop using X, aka Twitter. In my opinion, Elon Musk misunderstands the value of content creators on his platform. His goal is to keep people doom scrolling forever, so links to external content, especially on Substack, are punished heavily. This is short sighted. People go to Twitter to discover new content. If they consistently discover great new content, even if it takes them temporarily away from Twitter, they will eventually return to Twitter for more. (Doomberg)
Wanna spend $100/month? That’ll be $30,000, please!, August 1, 2023. Nick Maggiulli, the author of the Of Dollars and Data website, recently recommended this article. I like the mindset of contextualizing spending as a portion of a net worth goal. For example, in order to support spending of $100/month, or $1,200/year, you would need to accumulate $30,000 of financial assets assuming that it is sustainable to safely withdraw 4% of the balance every year to spend. (Money With Katie)
FASB Approves New Requirements for Disclosure of Big Expenses by Segment by Mark Maurer, July 26, 2023. A new FASB disclosure requirement has the potential to increase the information companies are required to release on reporting segments. While at a surface level more information seems useful for investors, we should keep in mind that many companies limit segment disclosures for competitive reasons. Depending on how far this rule is taken in practice, it could have the effect of creating a disadvantage for public companies relative to privately held competitors. (WSJ)
Taking good care of your teeth may be good for your brain, July 5, 2023. I’ve read about poor gum health being associated with cardiovascular disease, but gum health could also be associated with neurodegenerative disease according to a study published in the medical journal of the American Academy of Neurology. However, the study did not demonstrate causality, just association. Still, it is another reminder that dental health is important for more than cosmetic reasons. (Science Daily)
The Cathedral by Thomas J Bevan, July 31, 2023. I enjoyed reading this essay about the perspective the author gained by a visit to the Lichfield Cathedral which traces its origins all the way back to the late twelfth century. (The Commonplace)
The Financial History of General Motors, July 29, 2023. 1 hour, 36 minutes. Geoff Gannon and Andrew Kuhn discuss the early history of General Motors with Jacob McDonough who has been covering early GM annual reports on his 10-K podcast. (Focused Compounding)
National Cash Register – 1906 Annual Report, July 28, 2023. 38 minutes. Jacob McDonough provides his thoughts on an early annual report of National Cash Register. He was inspired to read this report based on comments Charlie Munger made during a speech at USC’s business school in 1994. (10-K Podcast)
- The Paradox of Trust, October 31, 2019. I wrote about the cash register and Charlie Munger’s views on its importance in this article. (The Rational Walk)
Road Tripping with Henry Ford and Thomas Edison, August 1, 2023. 59 minutes. “Some of the most important moments in the lives of Henry Ford and Thomas Edison weren’t their inventions or business successes. It was their road trips through the most remote, rustic parts of America. Between 1916 and 1924, Ford, Edison, Harvey Firestone went on a number of camping trips. Calling themselves the Vagabonds, they set up campsites, took photographs, and fixed cars themselves. They were joined by famous naturalist John Burroughs, an elderly writer with a large white beard who looked like a gold prospector.” (History Unplugged)
- Henry Ford’s Life and Work, May 15, 2023. “In a biography published a century ago, Henry Ford reflected on the early days of the automobile industry. We have much to learn from Ford despite serious flaws in his judgment and character.” (The Rational Walk)
Jony Ive: The Genius Behind Apple’s Greatest Products, May 3, 2021. David Senra discusses Leander Kahney’s biography of Jony Ive, the brilliant designer who worked with Steve Jobs to come up with Apple’s groundbreaking products. (Founders Podcast)
- Review of The Genius Behind Apple’s Greatest Products, May 30, 2020. I read the book several years ago and highly recommend it! (The Rational Walk)
When AI is your personal tutor with Sal Khan of Khan Academy, July 20, 2023. 47 minutes. The founder of Khan Academy discussed the risks and benefits of artificial intelligence in education. Despite the focus on how ChatGPT facilitates cheating, there are opportunities for Khan Academy to leverage AI to further the objective of providing “a free, world-class education for anyone, anywhere.” (How I Built This)
Steve Jobs Responds to an Insult
Just months after Steve Jobs returned to Apple in 1997, he took questions at a conference. Given the state of Apple at the time, it’s not surprising that Jobs had to field tough questions, but he obviously chafed when asked “what you personally have been doing for the last seven years.” Rather than blurt out the first profanity-laced thought that no doubt came to his mind, Jobs briefly paused, told a joke, ignored the personal insult, and spoke about how Apple had to set priorities in tough times.
The Reconstruction of Dresden
The city of Dresden, Germany was extensively bombed during the Second World War. After the reunification of Germany, major efforts were made to reconstruct key architectural landmarks in a historically accurate manner. This is an interesting Twitter (aka “X”) thread about the reconstruction that took place in the recent past.
Taking Seneca’s Advice …
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