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Good Reading -- September 2016

Good Reading -- September 2016

Philip C. Ordway Books

Facts and Figures

"For the two decades through December [2015], the actual annualized return for the average stock mutual fund investor was only 5.19 percent, 4.66 percentage points lower than the 9.85 percent return for the Standard & Poor’s 500-stock index. Bond investors did even worse, trailing the benchmark Barclays Aggregate Bond index by 4.71 percentage points." Source: Dalbar

Links

  • The Quality Brand Mittlestand -- Nadav Mandham at "The Private Investment Brief" runs a great service (full disclosure: I was previously featured) and he has a lot of interesting insights about investing. This essay and study of quality brands is well worth the time.

  • Here's Why the Pundits Are Wrong About Warren Buffett -- Roger Lowenstein with a typically trenchant take. "[E]very feature story fit[s] into one of three archetypes: 'How the Mighty Have Fallen;' 'David v. Goliath;' or..."The Hole in the Donut.' He might have added a fourth: 'Take-downs of Warren Buffett." And having just reread "The Snowball," it stood out to me how many people, over six decades and counting, have made ad hominem attacks that have no basis in reality.

  • Berkshire Hathaway Symposium -- I attended this event at the Museum of American Finance last November, and it was pretty cool. The videos have now been posted on YouTube.

  • Jeff Bezos had to take 60 meetings to raise $1 million... -- This is an excerpt from a recent interview that contains a couple of interesting stories.

  • When Tough Performance Goals Lead to Cheating -- This is a good topic to ponder. As an example, quarterly earnings guidance has always seemed to me as a common practice that might spur bad behavior in multiple ways. The study cited here -- a survey of 106 (?!) workers -- seems flimsy at best, but the topic is valid (as evidenced recently by Volkswagen, Wells Fargo, and others).

  • The rise of the superstars -- Some good numbers and considerations to ponder regarding the emergence of a small group of dominant companies.

  • A Bay State Referendum on Charter Schools -- Roger Lowenstein on the education battle shaping up in his home state.

  • United Airlines' CEO uses the Farmers' Almanac to plan his company's strategy -- I keep looking, hoping to find evidence that this a joke. There is no way that the CEO of one of the world's major airlines is basing his company's logistics planning on astrology, right? Does he have a psychic on retainer for questions about capital allocation? A 1-900 number to call when he's debating the route network? Inquiring minds want to know! And these responses don't make me feel any better:

  • "Oscar spoke anecdotally when he referred to the Farmers' Almanac, and that was in regards to the high likelihood of severe winter weather in the Chicago area this upcoming season," spokesman Charles Hobart said. “We have long range and daily forecasts, but these are from our team of aviation meteorologists that work out of our network operations center in Chicago,” Hobart said. “We do not use the almanac for planning purposes. He was using it as an example of what people are predicting.” Um, what???

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