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This new Michael Mauboussin report is a gold mine of data. For example:

"One important feature of venture capital is the persistence of returns. [In contrast] we saw that the persistence of returns for top-performing buyout funds waned in the 2000s versus prior decades."
"The dispersion between the best and worst funds is very high in venture capital relative to other asset classes."
"Venture capital is more cyclical than either public markets or buyouts, and recent annual investment levels have been high." morganstanley.com/im/publication…
"Venture capital has the most investments that lose money but also has more big winners. Buyout funds have more losers than public equity but also have more winners. Only about one-quarter of public stocks lose money during this period."
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Tren Griffin
@trengriffin
1/ If you were watching earnings releases the past two weeks and didn't see that businesses with key intangible assets outperformed expectations, you weren't paying attention. Pricing power created by intangible assets is not captured by "earnings" and even less so by book value.
2/ Businesses that benefit from intangible assets are far more like to operate effectively even with work being done by employees working from home. If the business must create its value from physical capital assets they are more likely to have a hard time continuing to operate.
3/ Accurate accounting and statistical measures of the value creation cababity of modern intangible assets are almost nonexistent.

Investors who understand this can outperform benchmarks by buying substantantly undervalued businesses with key value creating intangible assets.
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Tren Griffin
@trengriffin
1/ If you own a business and are deciding whether to hire software developers to create a new service you are making a capital allocation decision. You must determine whether the present value of the long-term cash flows from the investment exceeds the relevant costs.
2/ Passing the NPV test means that $1 invested in the business is worth more than $1 in the market. Just passing the NPV test isn't enough to be a wise decision since a business owner should seek the most attractive opportunity of all the opportunities that are available.
3/ All capital has an opportunity cost – what you can do as the next best alternative. It is your second best alternative that determines your opportunity cost as the owner of the business. The specific business owner's alternatives are what matter.
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Tren Griffin
@trengriffin
1/ The video starts a little slow with some questions about building apartments, but kicks into "straight up" Charlie Munger. Buckle up.

"Famed investor Charlie Munger shares insights into the ‘basic math of life’ at Redlands Forum" FEBRUARY 7, 2020 redlands.edu/bulldog-blog/2…
Charlie Munger:

"We like businesses that can withstand poor management, but then don't get it."

"I have done any calculous since I left Cal Tech. It is completely gone." He said he uses uses arithmetic and common sense.

Someone creating a transcript would be appreciated.
I sent a link to the video in a retweet, but finally found a direct link:

Charlie Munger: "My grandfather believed it was a sin to be stupider than you have to be. ... We are all born stupid and have a hard time being sensible.... I pick easy problems."
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