1/ A friend asked me to summarize Charlie Munger's framework with a few of his quotes from after my book was published. "Extra points for a short explanation."

Four categories form a checklist and create the pneumonic "RISE”:

Rationality
Inversion
Self-Regulation
Emulation Rational:

"There's hardly anything more important than being rational or objective. Think of the people who are just utterly brilliant who do some of the dumbest things. You won't have any trouble thinking of examples. It's hard to be rational."

John Malone: "At the moment, there’s a lot of blood flowing down the gutters, of people who are streaming, and some can afford it and some cannot.” hollywoodreporter.com/business/busin… "With WBD backing out of their RSNs, when combined with the Bally Sports networks, 17 of the league's 30 clubs, or 2/3 of MLB’s total now are on the edge of financial collapse." forbes.com/sites/maurybro…

Of the 300 poss I wrote on 25iQ the one about Steve Jobs was perhaps the trickiest to write. To make sure that everything I said was accurate I had every word checked by someone who was his direct report for 7 years. Steve Jobs would have been 68 this week.25iq.com/2014/12/28/a-d… On the August day in 1981 Bill Gates hosted a summit meeting at the Seattle Tennis Club (pictured) on the shores of Lake Washington. Steve Jobs gave a mesmerizing performance. Macintosh would offer exponentially greater value than anything on the market. siliconvalley.com/2014/08/29/199…

"Operating loss of $392 million."

"Adjusted Operating Income increased 34% to $137 million"

It's all about the adjustments.

amcnetworks.com/press-releases… "I’ve never made an investment in the movie business in any way, shape, manner or form. It may be a very good place to make a living as an actor or a writer or something or a musician. But it’s a hard place to make money if you’re an investor."

Charlie Munger this past week.

1/ What is Roku's customer acquisition cost (CAC)? What is churn? How about ARPU? Gross Margin? Do you understand Roku's unit economics? Can you calculate per customers CLV/CBCV? variety.com/2023/digital/n… 2/ "The YOY compression in platform and player margins resulted in gross profit growth of negative 2% YOY versus the 12% YOY growth in total net revenue. Q3 adjusted EBITDA was negative $34 million and we ended the quarter with >$2 billion of cash." fool.com/earnings/call-…

OCT. 10, 1989

This estimate for Excel was across all platforms. Not just OS/2.
upi.com/Archives/1989/… Steve Ballmer

"IBM was the bear and we were going to ride the back of the bear. You just had to try to stay on the bear's back and the bear would twist and turn and try to buck you and throw you, but darn, we were going to ride the bear."

threadreaderapp.com/thread/1098019…

Investing is a net present value positive activity.

Gambling is a net present value negative activity.

Student: "Do you ever gamble Las Vegas style?"

Charlie Munger: "I won’t bet $100 against house odds between now and the grave. I don’t do that. Why should I?" "What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don’t get a big edge often. Opportunity comes, but it doesn’t come often, so seize it when it does come.... What we want are the favorable odds." CM

1/ What would someone at BRK need to have in a circle of competence to purchase $4.1 billion of TMSC? Does Charlie Munger, who is 99 years old tomorrow, understand whether Digitimes reports are accurate? Does he understand what TSMC's 3nm yields will be? tomshardware.com/news/amd-intel… 2/  “You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You've got to play within your own Circle of Competence.” CM

1/ Moats ≠ operational effectiveness.

Example: Tom Douglas makes the best crab cakes. That's operational effectiveness - methods and practices everyone making crab cakes should be doing. Operational effectiveness can create pricing power, but it's hard to maintain and scale. 2/ The test of whether a moat exists is quantitative, even though factors creating moats are qualitative. If a business hasn't earned returns on capital substantially exceeding opportunity cost of capital for three to five years, it doesn't have a moat. At least yet. It might tho

Predictions for 2022 are more useful than for 2023:

Goldman Sachs: "We expect less impressive returns for risky assets ... Our economists expect inflation to moderate and our rates strategists expect only a modest rise in long-term rates through 2022." bloomberg.com/graphics/2022-… Bank of America

BofA economists and strategists predict: Three Fed rate hikes forecast in 2022 with 10-year Treasuries ending the year at 2%; dollar and oil to remain well-bid (oil peaks around $117 per barrel in the second quarter), gold to appreciate.

Network effects exist when the “value” of a format or system depends on the number of users. They can be positive or negative. Network effects can protect valuable markets, or not much of a market at all in terms of financial value. How valuable are Twitter's network effects? Network effects can also be direct (increases in usage lead to direct increases in value to users, as with the telephone) or indirect (usage increases the production of complementary goods, as with cases for mobile phones. Sometimes they disappear. a16z.com/2016/03/07/net…

1/ Puget Sound Pacific oyster Po-Boy sandwich. Apply your own sauce, lettuce and tomatoes.

These oysters are increasingly grown by private beach owners and commercial operations in bags as protection against predators. It's labor intensive and right now the water is cold. 2/ Taylor is the nation’s largest producer of farmed shellfish. Taylor plants them in bags, some of which hang off the sides of boats. When the oysters are ready, a machine hoists them up, and workers pluck them from eye level, no bending required. crosscut.com/news/2022/10/l…

Launching objects into space isn't easy. Failure is traditionally called "an anomaly."

The goal of the 115-foot-tall Vega C rocket was to launch the satellites Pléiades Neo 5 and Pléiades Neo 6 to sun-synchronous orbit. The total payload weighed 4,359 pounds (1,977 kilograms).

https://twitter.com/arianespace/status/1605392450289250304

Arianespace prices a ride on a Vega C rocket at around $40 million.

If you want floor mats, rust proofing and seat protection, that will cost you more.

Insurance against loss in space, a ~ $60 million market, is an available option. Consult your broker, for details.

1/ When IBM visited Microsoft in July 1980 about licensing software for a PC the goal was get a product to market in less than a year. IBM didn't have big sales forecasts for this PC. In 1980 Microsoft BASIC was used on almost all PCs and was the largest PC language supplier. 2/ The IBM PC was 16 bit and Microsoft kept the right to license the software to other manufacturers for compatible PCs. That the value in the value chain would primarily accrue to the software and the chip suppliers didn't fit the IBM business model.

1/ "To anyone who participated in wrongdoing at FTX or Alameda Research and who has not yet come forward, I would strongly encourage you to come see us before we come see you. We are not done.” Damian Williams, US Attorney, Southern District of New York newyorker.com/news/news-desk… 2/ "They're going to take a meticulous look at each and every one of these people, and, assuming that the allegations are true, a large number are going to want to plead out and coöperate. People who are first in the door get better terms.” Alex Lipman, former SEC branch chief

"Inertial confinement fusion, which involves bombarding a tiny pellet of hydrogen plasma with the world’s biggest laser, achieved net energy gain in a fusion experiment in the past two weeks." ft.com/content/4b6f0f… "The fusion reaction at the US government facility produced about 2.5 megajoules of energy, which was about 120 per cent of the 2.1 megajoules of energy in the lasers"

"In early November, Adrian Butkus, a 43-year-old father of two, put $600,000 — much of his life savings — into an account at BlockFi, a cryptocurrency trading firm. BlockFi had marketed the account as risk free, yielding 6.5% interest."
nytimes.com/2022/12/05/bus… Is it likely US prosecutors are currently (and will be in the future) discussing relationships between BlockFi and another individual and entities controlled by that individual with former associates of that individual in connection with a plea agreement?
bloomberg.com/opinion/articl…

1/ "SpaceX is developing a breakthrough new direct to cell satellite network. We are seeking mechanical engineers to solve a wide range of novel engineering challenges to architect the largest deployable antenna array designed at SpaceX to date." linkedin.com/jobs/view/mech…

AAPL tho 2/ "Closing the link with the phone, given low power levels, is why these satellites plan to have huge antennas."

"More constrained link budget limits you to providing a very low data-rate messaging service, which is what Apple and Globalstar are doing.”
interactive.satellitetoday.com/via/december-2…

On Thanksgiving my story about Alton Brown might be relevant:

“I learned in culinary school that am not a very good cook. I am not Eric Ripert.” “I wasn’t willing to do anything to the food that sacrificed story." Alton Brown
25iq.com/2017/11/04/bus… "We gravitate around the campfire that is food because, as a species, we require connectivity to each other. Food is one of the last universal things that we’ve got to do that. We don’t have it in politics. We don’t have it in religion. We don’t have it in culture.” Alton Brown

"I fundamentally believe storytelling is what fuels Disney." Bob Iger

Storyline: There is a warrior CAC, who is expensive up front, but who can secure an annuity from customers that can create shareholder value if the warlords COGS and churn are friendly. 25iq.com/2016/12/09/why… A business that acquires shareholders intelligently will work to attract supporters who understand how it creates value. That's involves a type of story. The 1997 Amazon letter is a story.

The shareholders who own Disney aren't exactly the same as shareholders who own Netflix.

This happened on a slow news day.

bloomberg.com/news/articles/… Zany is out.

"Masayoshi Son, the billionaire boss of SoftBank Group Corp., has long presided over a quarterly earnings ritual of zany slide presentations. One included a goose laying multibillion-dollar golden eggs." wsj.com/articles/softb…