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Circle of Competence Issue #27

Quote of the week: "Nothing in life is more liberating than to fight for a cause larger than yourself, something that encompasses you but is not defined by your existence alone." - John McCain (1936-2018)

FOOD FOR THOUGHT

Buffett Watch

As cliché as it seems, Buffett has always and will always be my favorite investor for his prolific investment career and the tremendous wisdom that can be learned by just observing his behavior. So naturally I thought it was very interesting when he gave the OK to Todd Combs, one of his right hand managers, to invest ~$300M into a private Indian payments and mobile commerce company, Paytm. A couple of points:

- this is their first direct investment in India, whose economy is exploding. Look for more investments by the conglomerate in the years to come.

- Todd Combs joined the board of the private company, which was certainly a term of investment. Buffett is almost on no boards any more because his time is better spent investigating new investments, so this is interesting that Combs would immediately join the board.

- Most importantly, Paytm is currently losing money but Buffett & company could be learning a new mental model on how money-losing tech companies can grow quickly (losing money along the way) to scale into BIG profits.

Continuing activism discussion

Last week, I wrote a column exploring whether activism is good for companies and the capitalist economy, or just good for agitating for a sale of a company and making a quick buck for investors. Matt Levine also wrote a nuanced piece on activism where his key point was that sometimes acti