George Washington on the National Debt
“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.”
— George Washington, September 19, 1796
Public Debt as Percentage of GDP
Deficit as Percentage of GDP
Articles
The Superinvestors of MicroCap by Ian Cassel, May 29, 2024. In 1984, Warren Buffett published The Superinvestors of Graham and Doddsville, a critique of the efficient market theory. This article summarizes Mr. Buffett’s article and asserts that outperformance is still possible today, particularly in small and micro-cap stocks. (MicroCapClub)
Warren Buffett Q&A Transcript || The David Rubenstein Show (2016) by Kingswell, May 29, 2024. “I was at what was then called the University of Omaha’s library in August and I was leafing through catalogs and I just happened to see that Columbia had Graham and Dodd as teachers. I had read their book, but I had no idea that they were teaching. So I wrote Dean Dodd and I said, ‘Dear Dean Dodd, I thought you guys were dead — but now that I found out you’re alive I’d really like to come to Columbia if you can get me in.’” (Kingswell)
Jack in the Box: Another QSR Casualty by Eagle Point Capital, June 1, 2024. This is a good write-up of a west coast fast food chain. “Jack in the Box reminds me of other times that temporary headwinds have resulted in otherwise high-quality businesses selling for no-growth multiples. The public market tends to occasionally extrapolate recent results into eternity. Sometimes this proves correct, but often times it does not.” (Eagle Point Capital)
BYD Launches Hybrids With 1,300-Mile Driving Range by Jiahui Huang, May 29, 2024. This could be a reason for Elon Musk belief that unrestricted entry of Chinese-made vehicles in the U.S. market will “demolish” the domestic auto industry. “Prices of the models, called the Qin L DM-i and the Seal 06 DM-i, start at 99,800 yuan ($13,775.21) and run up to 139,800 yuan, relatively low prices for the sedan segment in China.” (WSJ)
Occidental and BHE Form Joint Venture, June 4, 2024. This is a press release announcing a joint venture between BHE Renewables and Occidental Petroleum focused on lithium extraction initiatives. My most recent article on Berkshire’s OXY investment was published in October 2023. Warren Buffett has stated that Berkshire has no intention of acquiring Occidental. (Occidental Petroleum)
Pacific Power reaches settlement with 403 plaintiffs, June 3, 2024. “Pacific Power [A unit of Berkshire Hathaway Energy] reached a $178 million settlement with 403 plaintiffs, in which the vast majority of plaintiffs opted out of James class action litigation. The company has settled nearly 1,500 Labor Day 2020 wildfire claims with individuals and businesses in California and Oregon. The company will continue to settle all reasonable claims.” (BHE)
Congress Got More Done When the Greatest Generation Ran It by Gerald F. Seib, May 29, 2024. In 1975, eighty-one members of the Senate were veterans of the Second World War. Shared experiences obviously lead to a more cohesive group that can transcend political differences. That was true in Congress as well as in American society more generally. As we approach the 80th anniversary of D-Day, it is worth reflecting on how far American society has fallen over the past five decades. (WSJ)
John Quincy Adams on Impostor Syndrome and the True Measure of Success by Maria Popova, June 3, 2024. “Honours like these produce in my mind humiliation as well as pride. In this particular instance, I am mortified at being raised to the head of a learned Society, with qualifications so inadequate to the Station … ” (The Marginalian)
Deep Reading Will Save Your Soul by William Deresiewicz, May 29, 2024. American universities are in crisis and no longer seem capable of providing young people with a traditional liberal education centered on the great books. This article provides some examples of recent efforts to correct this problem outside of academia. (Persuasion)
The Long View of Higher Ed’s Decline by Tunku Varadarajan, May 31, 2024. “If you want the long view of what’s gone wrong with American higher education, you could do worse than talk with Harvey Mansfield. Mr. Mansfield is 92, and he taught at Harvard for well over half a century, retiring from the government department only last year.” (WSJ)
Podcasts
Starbucks (With Howard Schultz), June 4, 2023. 3 hours, 15 minutes. Video. My impression is that Howard Schultz values a version of Starbucks as a “third space” that has not existed for a very long time, and that he is fundamentally at odds with management’s strategy. In my opinion, Starbucks is now a mass-market chain where its most important attributes are consistency, speed, and convenience. (Acquired)
Cathie Wood: We’re Investors, we’re not supposed to mimic benchmarks, June 4, 2023. 52 minutes. I purposely listen to investors who I am not likely to agree with. However, I do not understand the basis for Cathie Wood’s $2,000 per share price target for Tesla or the rationale for her other predictions. The interview is full of glowing generalities but very few financial specifics. (Investors’ Chronicle)
Robert Hagstrom on the Warren Buffett Way, May 29, 2024. 1 hour, 2 minutes. It has been thirty years since the publication of The Warren Buffett Way and a new edition was released in April. Robert Hagstrom discussed the book and a number of topics related to Warren Buffett and Berkshire Hathaway. (Value After Hours)
Howie Liu – Building Airtable, May 28, 2024. 1 hour, 9 minutes. Transcript. I enjoyed this interview, particularly the discussion related to making software generic and customizable for non-technical users. This is the type of software I worked on back in the 2000s so I could easily relate to the concepts discussed. (Invest Like the Best)
The Good, the Bad, and the Ugly of the Covid Vaccine, May 27, 2024. 1 hour, 27 minutes. A balanced discussion of the development and rollout of the vaccines in late 2020 and 2021, as well as the evolving knowledge on the efficacy of the shots both for preventing infection and transmission. It is shameful that vaccine mandates remained in effect long after it was well known that the vaccines did not effectively prevent transmission, the only potentially justifiable reason for coercive policies. (EconTalk)
D-Day: June 6, 1944
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