The Weekend Bulletin (#36)
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
Hola!!
I hope you enjoyed last weekend's issue, and had a great week. I also hope that of the links from last weekend, you managed to make the time to watch at least Kat Cole’s interview.
I'd like to thank everyone who took the time out to fill the survey, which is now closed, and the final feedback is summarised here.
As promised, 5 most useful survey respondents will each receive a book from me. I will reach out to you'll during this week. The following are the five books (click on the image to read more about the book) that you can choose from (or pick one of your own):
After last week’s heavy issue, we have a relatively lighter issue this week. Although there is a lot to learn this week as well. Lets get on with it now.
Section 1: Investing Wisdom
Chris Begg of East Coast Asset Management is a great thinker and writer. I used to really enjoy reading this investor letters, until they stopped coming after 2015. Therefore I latched onto this interview as soon as I found it. And like his letters, this one was so really worth the time spent (and worth re-reading once in a while). In this interview, Chris outlines his investment philosophy, provides a glimpse into his investment process, along with some checks that he has built to over behavioural biases, and about he tackles reading for himself and his team. He ends the interview with how reading philosophy has made him a better investor - not something you hear often. Lots of nuggets of wisdom in this one.
It's really interesting to take a sneak-peek into the brain of a successful money manager and understand their thought process behind buying something that was hated by other investors - a contra bet. And what better mind to study than the one picked by Warren Buffett to manage part of the investment of Berkshire Hathaway - Ted Weschler. In this note, the author tries to deconstruct the decision taken by Ted (while running his own fund) to invest in McDonald's while it was going through a multi-year crisis that had decimated growth and profitability. The bottomline: Turnarounds seldom turn, but when they do, they make for a pretty impressive story. If you find a business that is loved by its customers but is suffering financially, then don't write it off. Keep an eye out for subtle changes that can turn the metrics around.
If you liked this turnaround story, then here is one from the archives: The turnaround of Domino's Pizza in the US (interestingly, a similar playbook was adopted by Jubilant Foodworks - the Indian Franchise of Dominos - to turn the business around post 2017. If you would like to learn more about the India story, then the current CEO is doing a call next week, details of which can be found here).
Section 2: Mental Models & Behavioral Biases
You know those questions that look pretty straightforward and logical to answer, but in reality are twisted? Here is one such:
“Imagine that I told you that that couple has two children, and that one of them is a girl. What are the odds that their other child is also a girl?”
If you thought that the answer to that question is 50% or 1/2, then you are wrong. Here is a lesson in probabilities, particularly, Bayesian reasoning for you.
Section 3: Lessons From History
Failures are great teachers. The wise learn not just for the mistakes of the self, but also those of the others. Running companies, or investing in them, requires one to minimize mistakes (reduce the downsides, and the upside will take care of itself). As this article shows, mistakes are important from a societal perspective, but learning from them quickly is even more important from a longevity perspective.
Section 4: Personal Development
Following up on last week's posts about getting better each day and finding the time and energy to do so, this article provides the framework that Charlie Munger uses to get a little better each day.
Section 5: Trivia
“You know I saved 50 rupees today,” declares the husband to his wife as he enters the house in the evening. “And how did you do that?” the surprised wife asks. “I missed the bus and ran behind it all the way from office to home.” The air of pride was palpable in the husband’s voice. “Well, then you should have chased a taxi and saved 200 bucks!” the wife said. And her logic was spot on, wasn’t it?
Here is question for you – how much do you think the poor husband saved? Rs 50 or Rs 200?
Leave your answer in the comment below. Next week's issue will carry the article that provides the answer.
* * *
That's it for this weekend folks. I hope you enjoyed this issue; let me know your thoughts/feedbacks by commenting below. Have a wonderful week ahead!!
- Tejas Gutka
[July 25, 2020]
P.S.
If you would like to contribute to a future issue of The Weekend Bulletin, please email a link to the article along with a short summary/note on why you like the article to: share2TWB[at]gmail[dot]com.
The Weekend Bulletin (#36)
I think the man wasted the time.Time is precious than money
I disagree with the answer to the 2 girls probability problem and I had written a blog post about it in 2009 where it was 2 bears and not 2 girls but the same mathematical dilemma - http://salilkhetani.blogspot.com/2009/08/conditional-probability-2-bears.html