Liberty

My point was that the population is growing over time, and the economy is growing too. And thanks to globalization, US businesses now make a lot more money internationally than before. Interest rates are also much lower than before. This is all context. You might interpret this as being a defense of the current fiscal situation or of the level of debt or whatever, but that's not what this is. I don't know enough about the situation to have an opinion on it, because it's not a field I particularly am interested in.

I agree in principal with the proposal that debt needs to be looked at in relation to assets. I also agree debt needs to be looked at "in context." I just wish you would provided a context. No thanks, I don't care enough about this field to do research. Someone else who likes macro can, if they want, it should all be public info in FRED or whatever. I just thought someone should point out that only giving one side of the "assets & liabilities" columns wasn't very productive.

I tend to agree with most of this, but I would caveat the whole "Buffett has not beat the market lately" with the fact that he's a victim of his own success, kind of like the iPhone. Once you've had all the success in the world, it's hard to keep repeating that forever. Very different to invest a few millions than to invest tens and hundreds of billions and to try to move the needle on a company with over half a trillion in market cap. I certainly think Buffett has done well on a risk-adjusted basis, since I think BRK has always been safer than the market (and certainly more counter-cyclical). Anyway, it's just a nitpick, but I think it's worth saying because it's important context.

Found a different version of the same talk from 2014:

The video's 10 years old, so obviously things have advanced since then, but a lot of the principles remain the same and it's still very interesting.

The government's main asset, against which it holds the debt, is the country's economy and population, on which is basically has a royalty through taxation. On top of all the land and mineral wealth and such (cue Rk's rant about how this is theft and shouldn't be like that, etc. Meanwhile, that's how things are). I'm not saying the debt isn't too big, just that it has to be kept in context, otherwise it's just throwing around big numbers that don't mean anything. If Mr. Bob owes 1 million dollars, that doesn't tell you much about whether he's in trouble or not. You have to know his income, how fast that grows, what assets he has, what he's paying in interest, etc.

Yeah, it's Buffett's whole "I'm a better investor because I'm a businessman, and vice versa" concept. It's worth noting that today, everybody's talking about Buffett and value investing and all the info is easy to find on the internet on all you need to know. Back 30 and 40 and 50 years ago, all of this was a lot less well-known and accessible.

The only language that these crooks and thugs understand is money.

Lots of wealthy people try their hand at investing, and they tend to suffer from all the same failings as the rest of us. I don't think this explains it, or at least, only very partially. I think he truly had a long-term orientation, which is rare, and he did a lot of work before buying things, so he had a high level of familiarity and confidence in what he owned, which probably allowed him to hold through all the crashes and corrections and negative headlines over the years.

What's so valuable about this article then? The basic premise is that he's some great investor. It doesn't even go into his background much or his original company. Nobody's forcing you to read it.

"I found a half dozen public companies out of 4000 had done as well or better than CSI with an acquisition strategy during the last decade. All of them were operating on a smaller scale than CSI." What I want to know is what are those..? "We are deploying more capital in the vertical market software sector, but don’t see dramatic growth this year unless competition slackens." This will be interpreted negatively by some, but Mark is the most conservative man in the world, and he said "dramatic" growth. So there could still be growth over last year's excellent year. It also seems to mean that last year wasn't just a fluke but is more of a run-rate increase. To me that's positive.

You made no new points, so see my previous responses.

No problem

I've enjoyed listening to a couple interview with Alex Danco recently, and I've been reading some of his writings. Others might enjoy them too: http://investorfieldguide.com/danco/ http://www.perell.com/podcast/alex-danco His Emergent Layers series: https://medium.com/@alexdanco/emergent-layers-an-introduction-f91c3cbe0175 https://medium.com/swlh/emergent-layers-chapter-1-scarcity-abstraction-abundance-5705666e4f15 https://medium.com/@alexdanco/emergent-layers-chapter-2-overserved-and-underserved-customers-6d5ce546531d#.o0plkmo7z https://medium.com/swlh/emergent-layers-chapter-3-explosive-growth-23cc44688999#.p7cman4ti https://medium.com/@alexdanco/emergent-layers-chapter-4-some-speculation-about-the-future-7964d89dc1c3

That's why I said that you have to differentiate between how the journalist spins things and the important/interesting parts. The guy can't be blamed for clickbait headlines or whatever, and readers here should be able to not be sidetracked this easily.

Where are all the other self-made multi-billionaires who made most of their money from the stock market rather than their companies or from taking fees on OPM? The base rate says that it's very hard and very rare. It's not like there wasn't a cohort of millionaires in the 70s and 80s who invested in the stock market. Yet it seems very rare to hear about some who became billionaires (not from their companies doing really well or from gathering lots of AUM and taking fees) and held on to multi-hundred-baggers. Not saying there aren't others, but to downplay it as something "not hard" is delusional.

Estimates of Amazon ad growth for 2019: https://www.emarketer.com/content/us-digital-ad-spending-will-surpass-traditional-in-2019

Debt is 22 trillion. What are the assets? https://ritholtz.com/2015/10/dont-suffer-from-denominator-blindness/

We still don't know what the CAGR is. The information wasn't known at first, and it's still unknown. Good thing I raised issues with the shallow napkin estimates, though, because otherwise they might have been taken as fact when they clearly aren't. Doesn't mean we can't learn anything from his biographical experience, or find things to admire. Not everything in life is a competition or a tutorial. And it's not as simple as "starting early with large amounts of money". It's starting early with nothing (and an abusive father and dyslexia), earning millions through hard work and smarts, and then finding and holding multi-hundred-baggers for decades, and then pledging to leave probably over a billion (at least) to charity.

I don't think there's a single clear definition of what "great investor" means. I can mean something different to you than it does to me, that's fine.

I didn't say terrible investor either. :-X His wealth came from compounding the $50 million in a bull market. The $50 million in his early 40s in 1981 no less is quite impressive. Under performing a simple index fund (while taking on more risk) does not make one an impressive investor. I'll repeat: You don't know. You don't know how much cash he holds, how many bonds he has, how much in real estate. What his expenses are, what his donations are, how much he's reinvested in his companies or private investments. The article mentions a 100m donation, but I doubt that's the only one. When big withdrawals were made also matters (if you take out 100m back when the whole porfolio was worth 200m, that makes a bigger difference than if you take it out when it's worth 2bn). For all we know, the public equity portion of his portfolio has a 20% CAGR. We don't know. What we know is starting point and outcome, as well as process, and that's a pretty rare combo that is worth some admiration.

I'm not surprised you're surprised.

I was thinking of Heico. But you're right, he's a terrible investor, he probably only has a 7.4% CAGR or worse, that's why every entrepreneur who made a few millions a year is a twice-billionaire in their 70s with multiple hundred-bagger stakes in their portfolios, whatever.

https://www.wired.com/story/mirrorworld-ar-next-big-tech-platform/ I thought it was an interesting look at the field.

Hey thanks! I'll definitely try to be there. Last year was fun. I'm writing out a set of important q's right now: 1) what life advice do you have for me? 2) what questions should I be asking you? 3) what can CSU do to lower the impact on climate change? 4) where do I get some peanut brittle? I see you've been watching this: https://buffett.cnbc.com/annual-meetings/