Aside from that, given its historical coverage, it has some good quotes:
Holding an existing investment is the same as making it again. When markets turn sour, you have to forget your losses to date and do a fresh expected-value analysis based on the changed facts.
A commonplace in Washington is that a lot of policy is made through the speechwriting process.So much for that idea of representative democracy. Rubin harped on the fact that a lot of our thinking is very short-term. Philip Fisher said the same thing. I think this is largely due to an age-related perspective shift, the longer you live, the larger your frame of reference, and hence what you are concerned with. But, this is still very much a huge problem for decision-makers everywhere. How do you make short-term unpalatable decisions which are long-term optimal?
For every bad borrower, there's a bad lender.It'd be interesting to see banks' thinking re: how to write good loans when the economy is booming. The problem is that you always have all this money to loan. I suppose this is yet another reason why the small banks are all being killed.
... people react to sheets of figures in two ways. Some people look at them, take them as a given, and go on from there. Others look at numbers and start to question them, looking for inconsistencies, asking what they mean and what stories they tell, wondering about the relationships between them.Which kind of person do you want to be?
Been listening to a lot of freezepop a whole bunch recently. Someday I'll kick my synthpop habit.
Interesting to note that Berkshire Hathaway's fixed income arbitrage partnership, Value Capital (VC), is returning $30M to Berkshire (after making 5% in 2003, which dragged down VC's average). This would indicate that Mark Byrne, the manager, has reached saturation of the market for his investments. That means his market-size is capped at $18B ($600M with 30x leverage). I wonder how long Mark will be interested in running a market that isn't growing (either because he's at his limits or the market's limits)? Especially when VC is a blip compared to Berkshire's earnings from borrowing at Berkshire's AAA rating and loaning (via CORT, or XTRA) at junk rates. Maybe Value Capital is a proving ground. ;)
When we can't find anything exciting in which to invest, our "default" position is U.S. Treasuries, both bills and repos. No matter how low the yields on these instruments go, we never "reach" for a little more income by dropping our credit standards or by extending maturities. Charlie and I detest taking even small risks unless we feel we are being adequately compensated for doing so.
Warren's 2003 recommendations: Bull!, The Smartest Guys in the Room, and In an Uncertain World.