The Digest #110

Published on March 30, 2022

“I wish our example spread more because I think if you’re wealthy and own a share of a company and you get to decide what it does and whether it liquidates or whether it keeps going, that’s a nice position to be in and maybe you shouldn’t try to grab all the money in addition. And that’s my theory on executive compensation.”

— Charlie Munger


Daily Journal Corporation Announces New Chairman and CEO, March 28, 2022. Charlie Munger has resigned as Chairman of Daily Journal Corporation, but he will continue serving as a director with a particular focus on oversight of the company’s investment portfolio. Gerald Salzman, the company’s longtime CEO, has retired at the age of 83. Steven Myhill-Jones, a Canadian software entrepreneur, has been named Chairman and Interim CEO. Mr. Munger also announced that he would give $1 million of his personal holdings of Daily Journal stock to the company as the basis for a new equity compensation plan to benefit employees. (Daily Journal Corporation)

Carl Icahn’s Letter to the CEO of Kroger, March 29, 2022. “Our concerns regarding Kroger’s governance go beyond animal suffering and other terrible practices taking place at industrialized factory farms – that are supported by Kroger’s patronage. Kroger’s inaction towards creating meaningful animal welfare policies and verification methods is totally out of step with consumer desire and current legislation. The Board of Kroger is also completely tone-deaf to other growing ESG concerns, specifically that of providing a living wage to your employees. You’ve helmed a company that certainly has the gravitas to steer change, yet instead have condoned cruelty towards those who are the most defenseless.” (

ESG’s Russia Test: Trial by Fire or Crash and Burn? by Aswath Damodaran, March 28, 2022. “My views on ESG are not a secret. I believe that ESG is, at its core, a feel-good scam that is enriching consultants, measurement services and fund managers, while doing close to nothing for the businesses and investors it claims to help, and even less for society. That judgment may be harsh, but as the Russian hostilities in Ukraine shake up markets, the weakest links in the ESG chain are being exposed, and as the same old rationalizations and excuses get rolled out, I believe that a moment of reckoning is arriving for the concept.” (Musings on Markets)

Rule #1: Do No Harm, March 28, 2022. This is a good article explaining why it is a mistake to make dramatic changes immediately after acquiring a business: “What we have going for us in pursuing a philosophy of Do No Harm is that it helps us build shared trust (we’re not out to strip your company for parts) and align ambition (continuous improvement and sturdy growth). Trust allows for transparency and authenticity. It affords us the privilege to be wrong and admit it and strive for better.” (Permanent Equity)

The Trouble with Optionality by Mihir A. Desai, May 25, 2017. “The shortest distance between two points is reliably a straight line. If your dreams are apparent to you, pursue them. Creating optionality and buying lottery tickets are not way stations on the road to pursuing your dreamy outcomes. They are dangerous diversions that will change you.” (The Harvard Crimson) h/t David Perell’s Monday Musings has commentary regarding this article.

Maslow’s Hierarchy of Needs by David Perell, March 28, 2022. I have long been influenced by Maslow’s concept of a hierarchy of needs and found this commentary very interesting: “Everybody knows this triangle and people talk about it like it’s some sort of god-given truth about human nature. When they do, they imply that you can’t ascend to higher levels of meaning and spirituality until you have all your lower ones met. The issue is that Maslow refuted his own theory…” (Monday Musings Newsletter)

What Teenagers Really Learn From Stock-Market Games by Jason Zweig, March 25, 2022. Anyone who participated in stock picking contests in school will relate to this article. Almost by definition, such games must be short-term and teach poor lessons. “My drivers’ ed teacher taught me to put safety first, and yours probably did, too. That’s what children learning how to invest should be rewarded for. They shouldn’t be proclaimed “winners” for taking huge risks that could encourage a lifetime of bad behavior.” (WSJ)

Vanguard Stumbles In Pivot From Cult of Jack Bogle by Annie Massa, March 27, 2022. “Vanguard’s still gobbling up market share and drew about $300 billion in net flows last year. But some of its greatest strengths — its outsider status, cautious approach and focus on costs — come with drawbacks in a changing industry. Some index-fund enthusiasts known as Bogleheads fret the company has veered off the straight and narrow.” (Bloomberg) 

Enough: True Measures of Money, Business, and Life, January 25, 2019. “John C. Bogle, who died on January 16, 2019 at the age of 89, was hardly universally well liked within the investment community. Visionary leaders who disrupt comfortable industries rarely escape the ire of those who have been displaced. On the other hand, Mr. Bogle was a hero to millions of investors at The Vanguard Group as well as to the broader community of cost-conscious individual investors known as Bogleheads. Through Mr. Bogle’s tireless efforts to lower the cost of investing, investors have saved billions of dollars that would have otherwise gone to various “helpers” in the investment community.” (The Rational Walk)

The First Conglomerates by Adam Mead, March 29, 2022. This is an interesting description of early conglomerates including AHP, Textron, Litton Industries, LTV, Gulf + Western, ITT, and Teledyne. “Lessons: Decentralized operations with centralized capital allocation is a powerful tool and comes with the added benefit of motivating managers with autonomy. Furthermore, it’s highly scalable. Good capital allocation also includes repurchasing undervalued shares.” (Watchlist Investing)


How to Win The Investing Game w/Joel Greenblatt, March 28, 2022. “William Green speaks with Joel Greenblatt, one of the greatest hedge fund managers of all time. Greenblatt famously averaged 40% a year over 20 years. At that rate, $1 million grows into $836 million. He’s also the author of best-selling classics like “The Little Book that Beats the Market” and was a key character in William’s book, “Richer, Wiser, Happier.” (Richer, Wiser, Happier)

Broken Income, March 25, 2022. This is an interview of Mary Childs, the author of The Bond King, a recent book about Bill Gross. Book description from Amazon: “The Bond King is the story of how that whiz kid made American finance his casino. Over the course of decades, Bill Gross turned the sleepy bond market into a destabilized game of high risk, high reward; founded Pimco, one of today’s most powerful, secretive, and cutthroat investment firms; helped to reshape our financial system in the aftermath of the Great Recession―to his own advantage; and gained legions of admirers, and enemies, along the way. Like every American antihero, his ambition would also be his undoing.” (Full Disclosure)

Max Frumes on The Caesars Palace CoupMarch 27, 2022. This is an interview of the co-author of The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street. Book description from Amazon: “In the tradition of Barbarians at the Gate and The Big Short comes the riveting, multi-dimensional poker game between private equity firms and distressed debt hedge funds that played out from the Vegas Strip to Manhattan boardrooms to Chicago courthouses and even, for a moment, the halls of the United States Congress. On one side: relentless financial engineers Marc Rowan, David Sambur, and David Bonderman with their teams at Apollo Global Management and TPG Capital. On the other: superstar distressed debt investors Dave Miller and Ryan Mollett with their cohorts at the likes of Elliott Management, Oaktree Capital, and Appaloosa Management.” (This Week in Intelligent Investing)

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The Digest #110