Circle Of Competence Issue #6

April 8, 2018

Department of History

 

What is the Fed: History

- Brief history of the Fed and its creation after the 1907 financial panic. Another great introduction here on the financial panic of 1907.


 

Department of Technology

 

3-D Printed Buildings are a Tech Twist on Ancient Techniques  

- The future of housing is here... almost? I would live here!

 

 

Central Bank Cryptocurrencies

- Excellent introduction into the qualities of different types of money including commodities (gold etc.), cash, commercial deposits, and cryptos etc. as well as how central banks may use them as another form of currency.

 

 

 

Supersonic Flight Prepares for Takeoff (Again) 

- Interesting article mentioning several companies attempting supersonic flight including Spike Aerospace (http://www.spikeaerospace.com/) and Aerion Superson (https://www.aerionsupersonic.com/).

 

 

 

Department of Investing

 

The New 2018-2019 Uber Cannibals 

- One of my favorite investors, Mohnish Pabrai, has written about how spinoffs can outperform markets post-spin and has issued his algorithm's predicted spinoff outperformers for 2018. In fact, his spinoff portfolio returned 30.6% in 2017. 

 

 

Detailed Review of Starboard Value's Portfolio 

- Great article on Jeff Smith's portfolio and Starboard's strategy.

 

 

 

How to Read a 10-K like Warren Buffett 

- Solid tidbits about various managers' favorite sections of a 10-K - I think this is always great to learn what others like to focus on when researching and digging into a company's filings.

 

Elliot Management Reveals over $1B stake in Hyundai

- Interesting article not only on Elliott's stake but also on the South Korean family owned conglomerates called chaebols. 

 

Bill Ackman's Pershing Square Faces a Wave of Investor Redemptions 

- A lesson on the risks of concentration into big bets that go sideways. 

 

Walmart Courts New Risk in Its Hunt for Humana

- Walmart goes elephant hunting for healthcare insurer Humana. 

 

The Last Great Clothing Store  

- Excellent article on what makes Boyd's the last great clothing store in NYC and how it has weathered (somewhat) the retail storm, the evolution from mom-and-pop stores to chains to e-commerce. 

 

 

Department of Letters

 

1990 Fairfax Holdings Letter to Shareholders

1991 Fairfax Holdings Letter to Shareholders

- Excellent set of letters from Prem Watsa at Fairfax Holdings. I am on a mission to finish all of his shareholder letters to learn more about how he replicated Buffett's approach at Berkshire Hathaway - i.e. using insurance float as a (near) cost-less means to boost return on shareholder equity as well as acquire more operating companies. Would highly recommend these letters!

 

 

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