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2 | “The internal wealth gap and the resulting conflict over wealth and values are intensifying, which is fear-inducing.”
➡️How NOT to beat the market
1/ The share of equity market capitalisation relative to GDP has risen steadily in the US, although not so in the rest of the world
"Russia was a large market in 1900, accounting for some 6% of world capitalization. Austria-Hungary was also large in 1900 (5% of world capitalization) and, while investors didn’t experience total losses, in real terms, it was the worst-performing equity market and the second worst-performing bond market of our 21 countries with continuous investment histories."
2⃣ $BRK shareholders: “investors who trust Berkshire with their savings without any expectation of resale (resembling in attitude people who save in order to buy a farm or rental property rather than people who prefer using their excess funds to purchase lottery tickets or “hot” stocks).”
2️⃣ “Even if inflation fades further, investors probably will demand something extra to keep absorbing the huge supply of government bonds. That means interest rates, long-term rates in particular, will not fall anywhere near as much as they did in previous disinflation cycles.”
✅ The 3 key drivers include 4% real returns for the broader Japanese market, 4% alpha in small caps and 4% from Yen strengthening vs USD.
➡️ “Multiple employees said plans to separate other businesses had either been axed or were under review. Loss-making wings of the company have been lobbying to stay attached, according to company insiders.”
1 | Pattern recognition works at the intersection of intuition and expertise. Intuition is the immediate sense of understanding something without conscious thought. Expertise is consistently superior performance on a specified set of representative tasks for a domain.
1 | The luxury industry is slowing as shoppers sober up after their pandemic spending spree. In 2022, sales across the sector rose by 15% at constant exchange rates, according to Bain.
2 | "From a Japanese perspective, the real opportunity is investing in the EV enablers: technologies that allow cars to use battery technology more efficiently. These are companies such as Murata, Nidec and ROHM, which all manufacture key components integral to EVs."
1 | Young and small FOBs grow the fastest. FOBs with annual revenues of $150M- $5B, performed better than non-FOBs by being more efficient investors. Large FOBs tend to be more efficient operators.
➡️Investing is an apprenticeship. I think it is undervalued how important it is to learn from somebody. You learn company analysis, but you also learn risk appetite. You just have to learn with somebody who is really good.
❌Plans by Jack Ma to sell 10mn shares (12% of his holdings). His office later said that the current price was too low and the sale was part of a long-term plan. Still, I would like to see insiders buying, not selling.
“There were two or three times as much in assets per-share value as there was in stock-market value per share. Hold it as long as it was underpriced, then sell it when the price got more normal and buy another undervalued asset. And you could do that for about four decades in the aftermath of the 1930s Great Depression. That’s gone, all of that low-hanging fruit. I think that the modern investor, to get ahead, almost has to get in a few stocks that are way above average.”
“I guess there are some firms that make it their business to learn how others make money and try to learn their secrets. That's not our style. We just hire mathematicians, physicists, computer scientists with no background in finance and no connections with Wall Street.”