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Good Reading -- March 2017

Good Reading -- March 2017

Philip C. Ordway


Facts and Figures

  • In a survey about how poverty has changed since 1990, 70% of respondents said it had increased 25% or more and another 18% of respondents said it had stayed the same. So that's 88% of respondents who thought poverty was as bad or worse than it was 25 years ago. Only 1% of respondents answered correctly that poverty has decreased by half. (Source: Glocalities/Gates Fdn.)

  • In the five years ending 12/31/16, nonfinancial corporations in the U.S. retired a net $2.2 trillion of common stock. (Source: Federal Reserve)

  • And imagine how crazy that would have sounded in 2009, 2010 or even 2011...


  • Grant's Spring 2017 Conference -- There are always some good presentations at this conference, and this year's lineup includes "What the Trump market is giving us" by my friend Mat Klody.

  • This Article Won't Change Your Mind -- You can skip the introductory example, but the rest of this article on "why facts alone can't fight false beliefs" is very good. The recent political environment in the U.S. is the obvious application, but the implications to investing and other fields of decision making are also important.

  • Warren Buffett's Best Investment -- The annual letter from the Gates Foundation is a reply to Warren Buffett's request to provide an accounting of Gates's goals and results. As usual it is full of data and some poignant thoughts.

  • Silicon Valley Tried to Upend Banks. Now It Works With Them. -- Even if you don't like banks as I do, this is a decent case study of networks and moats that foiled a potential "disruption" by new technology.

  • The Death of the All-American Town -- Roger Lowenstein writing about Brian Alexander’s “Glass House: The 1% Economy and the Shattering of the All-American Town," a look at Lancaster, Ohio. I haven't read the book yet but this is an important tale for the times.

  • Domino's Atoned For Its Crimes Against Pizza and Built a $9 Billion Empire -- The recipes, pizza-making and menus have changed a little bit over the years, but the recent strategy and marketing has been enough to create a juggernaut. The stock (DPZ) has returned ~42% compounded over the 5+ years since the beginning of 2012, and since the end of 2008 the stock has increased by 60x. "As much as tech, what buoyed Domino’s was a once-in-an-industry strategy: In 2009 it admitted that its foundational product was … bad. Most chains that encounter trouble cop to some failing: Starbucks Corp. once said it built too many stores. McDonald’s Corp. tried to sell healthier food. Chipotle Mexican Grill Inc. promised patrons they wouldn’t get sick. But Domino’s has outdone them all."

  • Even San Francisco, Flush With Tech Wealth, Has Pension Problems -- And the beat rolls on. SF's pension contributions need to rise by at least a third over the next five years, more than 3x the projected rate of revenue growth. And the annual budget deficit is still likely to swell toward $1 billion (or ~20% of the general fund budget). City says it can "adjust spending" to address shortfalls, but we shall see... (Thanks to Craig for spotting this.)

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