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2022- 1_3 weekly bits and bites

The Better Letter: Forecasting Follies

Our failures in this regard should encourage us to prepare rather than predict and, perhaps, to try to limit our exposure to extreme fluctuations.

(8min _ TheBetterLetter)

Are We Bullish Enough?

Well guess, what? The 20-year period from 2000-2019 had an annualized return of 6.3% (including dividends). So if we were to highlight that range in the plot above (you can see this below), we would expect U.S. stocks to grow between 4x-5.5x over the next 10 years (i.e. from 2020-2029):

(7min _ OfDollarsAndData)

Does Not Compute

To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.

(5min _ CollaborativeFund)

The Code That Controls Your Money

COBOL is not merely fast; it’s also “stable, stable, stable”, as Thomas tells me. One of the processes he developed takes, every month, a file of about 2.4 million government pension and puts the proper amounts in people’s bank accounts. “We verify them and check them in 11 minutes. It hasn’t failed in 20 years.”

“They probably have about seventy-five million lines of COBOL code,” he tells me, “and they found out that it would cost them so much that it would take, maybe, a couple of lifetimes to recover. It was ridiculous. And they have more money than God.”

(6min _ WealthSimpleMag)

Brunello Cucinelli

Dubbed the “king of cashmere” by The New Yorker, Brunello Cucinelli is the founder of the eponymously named fashion house that is well-known for making luxury cashmere sweaters (and more than $450 million a year in revenues). He started his company in 1978, and, now 61, he lives in Solemeo, Italy, with his wife and two children.

(9min _ OM)

Dan Wang 2021 Letter

Ben Thompson rates Dan as “one of the deepest thinkers and most careful observers of the world.” His year-end reflections on China’s development and ambitions prove why.

(75min _ DanWang)

The Stock Market in 2021: Best and Worst Performing Sectors

It was another eventful year—and while it may not quite compare to the pandemonium experienced in 2020, it was still jam-packed with market moving events, such as:

  • The highly-anticipated rollout of COVID-19 vaccines
  • Supply chain disruptions and an ongoing semiconductor shortage
  • Record-setting stimulus spending and debt accumulation by governments around the world
  • The emergence of new variants of concern such as Delta and Omicron
  • Big political upsets and the Capitol riots
  • Rising evidence of (non-transitory) inflation

(5min _ VisualCapitalist)

Arnold Van Den Berg – A Must Listen Life, and Investing, Discussion

Arnold is a testament to what humans can do.  He and his immediate family survived the most hellish conditions on Earth.  Yet, he holds no resentments.  In fact, he discusses his experiences as something he’s almost grateful for because they enabled him to become the person he is now.

“In business, only intuition can protect you against the most dangerous individual of all – the articulate incompetent.” _Robert Bernstein

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