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Kindle Notes & Highlights
by
Guy Spier
Read between
March 18 - April 4, 2024
I hope you will also come to realize that the money is largely irrelevant. And what you will want to do with the bulk of your wealth is give it back to society.
greed may be good after all—not if it merely motivates you to acquire more, but if it drives you toward that inner journey of spiritual growth and enlightenment.
from Ernest Hemingway: “The world breaks everyone and afterward some are strong at the broken places.”
what makes Warren himself so successful is that he’s never stopped seeking to improve himself and that he continues to be a learning machine.
a smart strategy for life: whenever I have the choice of doing something with an uncertain but potentially high upside, I try to do it. The payoffs may be infrequent, but sometimes they’re huge.
For me, the goal isn’t to make money, though I’m guessing Sequoia will continue to outperform. It’s really a question of choosing to have certain people in your life (however tangentially) who embody the values you admire.
It was about choosing a teacher who had already discovered the truths that I still needed to learn.
For the longest time I wanted to hide or, at least, obfuscate this aspect of my journey. I desperately wanted to prove to the world that my achievements were entirely my own, and it seemed like an unfair advantage to get started with my father’s help.
fee structure of his pre-Berkshire investment partnerships. He charged no annual management fee, but took a quarter of the profits above a 6 percent hurdle.
I believed that I could use the force of my intellect to rise above my environment.
As investors, we all have shortcomings; as I came to see it, the key is to accept who we are, understand our differences and limitations, and figure out ways to work around them.
envy is a silent killer: it leads people to behave in ways they wouldn’t if they were more honest with themselves. For example, investors see their friends make a killing off tech stocks that are crazily overvalued, and they plunge in right before the bubble bursts.
As an ancient rabbinical saying puts it: “Who is strong? He who masters his own passions.”
I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.”
By now it was absolutely clear to me that I didn’t understand nearly enough about Farmer Mac to justify owning it. This was an important revelation: so often, we focus our analytical efforts in the wrong direction and miss something vital.
they would pay no annual management fee, and I wasn’t entitled to receive an incentive fee until after they had received a 6 percent annual return on their investment. Above that hurdle, I’d receive a quarter of the profits,
if you encounter someone who has exceptional qualities, it’s worth investing the time and energy to travel so that you can be in their force field.
According to Warren, temperament is more important than IQ when it comes to investing.
Journey to the Ants by Bert Hölldobler and Edward O. Wilson. Much of the book is devoted to describing the different survival strategies used by ant species and to exploring how these different species have coevolved and competed with each other. This one book taught me more about economics than I’d learned in all my years at university.
avoid states of self-organized criticality, which is essentially what occurred in the stock market before the crash of 2008–2009.
I gradually learned that intellectual knowledge and self-awareness are simply not enough. The difficulty is that we can’t use the brain to override the brain. So we remain vulnerable to these mental shortcomings even when we know about them.
how critical it is for investors to structure their environment to counter their mental weaknesses, idiosyncrasies, and irrational tendencies.
The psychologist Roy Baumeister has shown that willpower is a limited resource, so we have to be careful not to deplete it.
People often assume that investors like me are great risk takers, perhaps little more than gamblers. Certainly, there are plenty of reckless investors with scant regard for the risk of loss, but they tend not to survive very long in the investing game. The long-term survivors possess a more sophisticated grasp of risk, including the ability to see when the situation is much less risky than the stock price might suggest.
Blaise Pascal: “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”
I don’t want to see these other prices unnecessarily and to subject myself to this barrage of calls to action.
When a company is going public, it has all of the mind-warping sales power of Wall Street behind it. Of course, some IPOs catch the wind perfectly and soar. But the provenance is toxic, so it’s safer for me to cross all IPOs off my buy list, even if this means missing out on an occasional winner.
So I prefer to read the physical editions of things like the Wall Street Journal, the Financial Times, the Economist, Barron’s, Fortune, Bloomberg Businessweek, and Forbes,
Once we’ve made a public statement, it’s psychologically difficult to back away from what we’ve said—even
The complexity of the business and economic world, combined with our irrationality in the face of money-related issues, guarantees that we’ll make plenty of dumb mistakes.
slow losers suck up an enormous amount of your mental energy over an extended period of time.
“When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
Checklist Item: Is this company providing a win-win for its entire ecosystem?
The point is that I want to invest in companies that control their own destiny, not in companies that have their destiny determined by forces beyond their control.
If I believe this problem is temporary, I can buy the stock at a beaten-down price and then benefit once this issue within the value chain is resolved.
if I pay too much up front, I’d better understand everything there is to know about the company since there is no margin of safety. If I invest when it’s undervalued, I can be wrong about a whole host of issues and still make a good return.
Am I sure that I’m paying for the business as it is today—not for an excessively rosy expectation of where it might be in the future?
