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Tren Griffin
@trengriffin
, 3 tweets, 2 min read Read on Twitter
"One of the enduring and puzzling features" of investing is how so many people don't understand the difference between 1) "value" as a statistical factor in an index fund and 2) "value" as an analytical style. They aren't the effing same thing. They just both use the term value.
Which of these Berkshire acquisitions was made with the criteria used by a "value factor" based index fund?

Iscar for $6B?

Lubrizol for $9B?

Duracell for $4.7B?

Precision Castparts for $37B?

"Iscar is not a Ben Graham stock – it is the ultimate non-Ben Graham stock." Munger
Charlie Munger: "We’ve really made the money out of high quality businesses."

Value investing as an analytical style is about investing at a discount to intrinsic value based on *future cash flows*.

google.com/amp/s/25iq.com…

google.com/amp/s/25iq.com…
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Tren Griffin
@trengriffin
25IQ Quiz: Starting with the day this magazine was published in Jan 1975 until today:

Name an innovation milestone that represented a "lollapalooza effect" - multiple factors interacting in ways that feed back on each other to create outcome far bigger than the sum of the parts.
Here are a few milestone events in my view:

1979: VisiCalc

1979: First analog cellular deployment by NTT in Tokyo

1981: IBM PC

1983: Lotus 123

1983: Motorola DynaTAC

1983: AMPS mobile network deployed in North America

1984: MacIntosh

1985: Excel for Mac (before PC)
Was it lucky for me that I started a career that would be driven by technology in the fall of 1980 just two months before Microsoft would sign the agreement to supply MS-DOS to IBM? Is it fun to tell stories about what has happened since then that I saw up close in many cases?
Read 3 tweets
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Tren Griffin
@trengriffin
To say it is hard to buy assets at a bargain to intrinsic value so as to create a margin of safety when world markets have been flooded with cash is a vast understatement. For example:

"The World Now Has $13 Trillion of Debt With Below-Zero Yields" google.com/amp/s/www.bloo…
Any asset that may generate cash flow is being bid up in price as a consequence of "dovish" monetary policy. Why would this not be true? In addition, people desperate for yield are buying assets that will never generate any cash but they believe may increase in speculative value.
More intangible value = book value is much less often useful

Low rates = asset price appreciation

More investor skill/more marketplace data = faster mean reversion

More investor fear = more herd behavior

What's happening now hasn't happened before = uncertainty/ignorance.
Read 3 tweets
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Tren Griffin
@trengriffin
This is horse shit:

"The classic factor investing strategy of picking stocks with cheap book valuation, embraced by the legendary Warren Buffett."

CNBC should know better. cnbc.com/2019/06/21/is-…
Name a stock that Buffett has purchased since he bought See's Candies based on "cheap book value." Iscar? Apple? Precision CastParts? Lubrazoil?
"Book value at most companies differs widely from intrinsic business value – the number that really counts for owners.”

"If we gain a million policyholders at GEICO, that actually adds a billion-and-a-half to intrinsic value, and it doesn’t add a dime to book value."
Read 3 tweets

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5'7'' Black Male
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As long as I'm discussing nuance, complexity and purity...

Does everyone want to PLEASE stop pretending that politicians don't have to make deals and concessions to achieve their goals?

It's the single most annoying thing about political discourse.
The idea that someone comes up with a good idea and that on the merits of that good idea alone a politician should be able to garder unequivocal support of that idea and turn it into pristine policy while yielding no ground is childish and bears no resemblance to reality
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Kristina Olson
@olsonista
One other point on this paper. Something I still struggle with: What happens when the stats that are best for a paper are stats that 95% of the field and esp readers won’t understand? We tried out best to explain them, but if we’re honest, even all of us don’t fully understand.
Getting an editor + reviewers who were savvy was key. But it is unrealistic that everyone will understand increasingly complex analyses & it’s unlikely that non-scientists will. What do we do? Is it ok that so many people do not understand many details of the results section?
Simple stats (t-tests, regressions) told the same story as the fancy Bayesian analyses (though the latter let us support the null). Part of me wondered about putting both the wrong but simple ones and the right but hard ones so more people understood.
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Madhav 🇮🇳
@mahesh10816
One congress leader asked me , you say you are in BJP
He : How many contracts have you managed to get
Me : iam not interested so zero
He : how many times have you gone to Delhi to meet ministers
Me : zero
He : How many transfers have you got
Me : zero
He : How many postings have you got
Me: zero
He: How many CBSE school permits have you got
Me : zero
He : How many questions have you made MPS to raise in Parliament
Me : zero
He : How much donations have you collected
Me: zero
He : any Women ?
Me : No
He : Then why the F*** are you in party & politics ?

Now do you understand the difference between Cong & BJP culture ?
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