Sunday Briefing: On investing biases, Buffett’s alpha, Jack Bogle’s rules for investing, and Lou Simpson

Sunday Briefing: On investing biases, Buffett’s alpha, Jack Bogle’s rules for investing, and Lou Simpson

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Welcome to the Sunday Briefing newsletter where I share some of the interesting lessons in life, business, and investing that I’ve come across during the week.

This week, I had a wonderful video conversation with Adam Mead, author of The Complete Financial History of Berkshire Hathawaylikely the biggest single project on the history of the conglomerate yet. If you liked The Snowball by Alice Schroeder, you’re going to want to read Adam’s book too.

Adam also runs a research service by the name of Watchlist Investing in which his philosophy is very similar to mine. He wants to build the biggest watchlist he can of wonderful businesses, then cultivate patience, and only pound when a company from the list reaches a sensible price. His research reads as deep dives from which I’ve learned a lot. You can get to know Adam better through his Twitter.

Latest on Junto

19 Biases That Intervene with Your Investing Success. Being a serious student of the markets is a must for investing success. But the nature of the markets is only part of the intelligent investor’s syllabus. What’s even more important is the lesson of knowing thyself.

What I’ve been reading

Buffett’s Alpha.

[…] it cannot be emphasized enough that explaining Buffett’s performance with the benefit of hindsight does not diminish his outstanding accomplishment. He decided to invest based on these principles half a century ago. He found a way to apply leverage. Finally, he managed to stick to his principles and continue operating at high risk even after experiencing some ups and downs that have caused many other investors to rethink and retreat from their original strategies.

Jack Bogle’s Rules for Investing.

Investing Versus Speculation​

1. Remember Reversion to the Mean
2. Time Is Your Friend, Impulse Is Your Enemy
3. Buy Right and Hold Tight
4. Have Realistic Expectations: The Bagel and the Doughnut
5. Forget the Needle, Buy the Haystack
6. Minimize the Croupier’s Take
7. There’s No Escaping Risk
8. Beware of Fighting the Last War
9. The Hedgehog Bests the Fox
10. Stay the Course

Lessons from Lou Simpson. A guiding force in investing unfortunately passed away on Jan 8 at the age of 85. Lou had a spectacular record, lived a low-key life, and was grounded in his values like no other. His investing for GEICO often paralleled Buffett’s efforts at Berkshire.

“I pondered for eight years what makes Lou knock the cover off the ball,” Byrne said. “Lou is very bright, with an economics background from Princeton. But the woods are filled with bright guys. It has more to do with his personality. He is very, very sure of his own judgments. He ignores everybody else. He gets one or two really strong ideas a year and then likes to swing very hard.”

For other readings on Lou Simpson, read herehere, and here. There’s also nice chapter on him in The Warren Buffett CEO by Robert Miles.

Quote of the week

“Everything that needs to be said has already been said. But, since no one was listening, everything must be said again.”

—André Gide

A thought

Growth happens slowly, then all at once.

Have a great coming week,
Oliver Sung

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