What are your favorite pieces with reflections on investment success and failure or lessons from decades in markets?

A few that come to mind: Mark Sellers: So You Want To Be The Next Warren Buffett? How is Your Writing?

"If your competitors know your secret and yet still can't copy it, that's a structural advantage. That's a moat."

https://twitter.com/NeckarValue/status/1545823421279469573

Very interesting new paper by @mjmauboussin on the corporate lifecycle.

Rather than go by age or size, the framework ties life cycle to cash flows.

Stages: Introduction > Growth > Maturity > Shake-out >Decline.

Roughly: Investing -> returning capital -> liquidating assets.

Unexpected:
"We expected low or negative spreads between ROIC and WACC for companies newly listed, rising spreads as they mature, a decline in senescence.

What we found was nearly the opposite. The spread at the date of the IPO was high and narrowed before stabilizing."

Druckenmiller: "I am so tired of being a bear, and being labeled a bear."

But: Liquidity ⬇️
"Since it's taken so long, the Fed has ended up with a higher terminal rate. Inflation gets stickier the longer its in the system. That increases the probability of a hard landing." "We always short the same way. ... I try and think of a situation 12 to 18 months from now and if I think the security prices are going to be less, I short.

Frankly, I'm not sure I've ever made money in shorts. I like it. It's fun, but you can get your head handed to you."

ROIC and margins for companies with different moats by @mjmauboussin "A company creates value when its ROIC is in excess of cost of capital. Stated differently, it makes a dollar worth of investment worth more than a dollar in market value.

The market broadly appreciates this, especially when growth is considered as an additional variable."

Like other great investors, Sam Zell used content as a form of leverage. His "guide to the risky art of resurrecting dead properties" earned him his nickname, the Grave Dancer. "Some might see buying and creating value from others’ mistakes as a form of exploitation, but I see it as giving neglected or devalued assets new life.

Often in my career I’ve been the only bidder for them—the last chance for a resurrection."

Druckenmiller keynote on debt, entitlements, and the dollar.

"The Fed can’t save us."
"The demographic storm is just getting under way." "In 20 or 30 years there will be fewer young workers, many more seniors that need support… and the starting point is the highest national debt in our history."

"Bloomberg LP is now having to contemplate a world without its sun king."

"No one talks of “Bloomberg killers” any more, unless it is sardonically." "the company has also been building a separate data sales business, which pipes raw data directly to clients that neither need nor want a terminal subscription, called B-PIPE. One former insider estimates this business now probably makes about $2bn a year."

Berkshire Hathaway's annual meetings are a treasure trove of wisdom about investing, business, and life. Over the years, Buffett and Munger have shared tons of laughs, stories, insights, and lessons. I've listened to them all so you don't have to. Here are a few of my favorites: Munger: "I think that a life properly lived is to just learn, learn, learn all the time. Berkshire’s gained enormously from decisions by learning through a long, long period."

Really enjoyed The Davis Dynasty. Three generations of quirky and successful stock pickers. It's as much about markets as it is about family, legacy, and values. "This book is about long term investing. The Davises provide a 50-year case study not only in how to tend a portfolio but how to raise children who break the mold, work hard, and compound the family fortune. Theirs is true long term investing: perpetual."

Capital Returns is a must-read for investors. It's both a rare collection of investor letters (Marathon Asset Management) and a simple yet lindy framework that you re-encounter in markets. The framework is straightforward: high profits attract competition. Competition increases, returns decline.

Return on capital moves in cycles as do share prices and investor expectations. It all over- and undershoots over time.

Buffett: "You’re trying to print the next 10 years of Value Line in your head. Not the price chart, but the chart about business operations. That’s what the game is about." "If you look at each [Value Line] page and look at what happened in terms of return on equity, sales growth.

“Why did this happen? Who let it happen?”
“What’s that chart going to look the next 10 years?”"

The Great Depression Diary remains the best impression I've seen of how a mass bank run unfolds. From town to town, one bank after another.

Benjamin Roth was a lawyer in Youngstown, OH. His diary with notes on the economy and daily was turned into this excellent book. July 30, 1931.
"Newspapers are full of articles telling people to buy stocks, real estate etc. at bargain prices. The trouble is that nobody has any money. On account of numerous bank failures, people are afraid to spend it and are buying government securities."

Munger: "I don’t think you can get to be a really good investor without doing a massive amount of reading."

Buffett: "It’s an investigative process, a journalistic process. Write the story, XYZ Company is worth this amount because..."

A short master class on great questions: Buffett: "Think about five or 10 companies where you feel familiar with their products. Get annual reports, go through the internet. get all magazine articles that have been written on it for five or 10 years."

The world pushes us to find labels for ourselves. We carefully carve these masks, then wear them all day.

And if we’re not careful, we eventually reach to touch our cheek, feel the mask, and believe it to be our face. Sometimes life offers a chance to experiment with a new character, like when you go off to college or move to a different city or country. Or when you switch careers or enter a new community.

You might find it useful to create such empty space in your life.

Buffett on judging people and fraud: "If you’ve got doubts, forget it, basically."

"Charlie and I have bought a lot of businesses, and it’s very important that we assess the individuals that we’re buying from." "We don’t think we can assess everyone accurately. We just have to be right about the ones where we [buy].

They hand us stock and we hand them a lot of money. Then we count on them to run the business with as much enthusiasm as they did before. And so we are assessing people."

Buffett in 2006 on the decline of traditional media, historically one of his favorite moats.
With a Munger zinger at the end.

"People are always going to want to be entertained and informed and some mix thereof. But we only have two eyeballs, and we only have 24 hours a day." "Go back 50 or 60 years. The choices were far fewer. You had the local movie theater, radio, and newspapers. Technology has opened up a huge variety of ways of being informed and entertained many more forms, many that are free."

Buffett: "People get fearful en masse. Confidence comes back one at a time.

It’s just the way the humans are. That’s where Charlie and I have an edge. We don't really get caught up with what other people are doing." "When we see falling prices, we think it’s an opportunity to buy, and it doesn’t bother us.

We don’t own things on margin or get ourselves in a position where somebody else can pull the rug out from under us. That’s enormously important in life."

Buffett: "We will never be dependent on the kindness of strangers. We spent too long building Berkshire to have one moment destroy us."

"Credit is a lot like oxygen. You don’t notice it 99% of the time. But if it’s absent, it’s the only thing you notice." "There will be some time in the next 100 years, and it may be tomorrow and it may be 100 years from now, nobody knows, where we cannot depend on anybody else."

"It’s a terrible mistake to sleepwalk through life. It’s the only one you have."

Buffett on the importance of finding your passion.

"I always tell kids, 'Go to work for an organization or an individual you admire.' That means many of them become self-employed." "I went to work for Ben Graham when I was 24. I only worked for him for less than two years, but I jumped out of bed every day in the morning."

For all the new bank balance sheet analysts..

Buffett: "Accounting is not quite the science that people might want you to [believe]."

"I became interim chairman of Salomon in 1991. They came to me, “We have this item, $180 million. This is a plug number." "We’ve been plugging it ever since Phibro merged with Salomon in ’81.

For ten years, this number moved around every day. And in ten years they never figured out how the hell to get the thing to balance, so they just stuck a number in every day."

10 important ideas from Buffett's speeches at the University of Notre Dame.

Buffett succeeded by being selective and patient: "Almost everybody I know in Wall Street has had as many good ideas as I have, they just had a lot of [bad] ideas too." The punch card: you don't need many great ideas to succeed.

"I always tell students they’d be better off to have a punch card with 20 punches on it. Every time they made an investment decision they used up one of those punches."