Welcome to the first edition of Sunday Briefing; our weekly newsletter in which we share some of the interesting lessons in life, business, and investing that we’ve come across during the week.
What we’ve been reading
An interview with an anonymous Amazon Web Services cybersecurity engineer. The things you’ll learn about what goes on inside Amazon from this interview is not accessible anywhere else.
Overall, though, it seems like the pandemic compounded all of Amazon’s advantages and significantly reduced the impact of all of Amazon’s weaknesses.
Avoiding bad decisions. How to make better decisions by using the method of inversion.
68 bits of unsolicited advice. A bunch of timeless advice and life lessons by Kevin Kelly. My three favorite points from the list:
– Hatred is a curse that does not affect the hated. It only poisons the hater. Release a grudge as if it was a poison.
– Art is in what you leave out.
– I’m positive that in 100 years much of what I take to be true today will be proved to be wrong, maybe even embarrassingly wrong, and I try really hard to identify what it is that I am wrong about today.
A giant list of Buffett Q&As divided into categories. This site is a real gem of the internet and likely as valuable as any book on your bookshelf.
The beauty of valuing large companies is that it is cumulative. If you started doing it 40 or so years ago, you’ve really got a working knowledge of an awful lot of businesses. There aren’t that many, to start with. What are there, 75 or so important industries? You get to understand how they all operate, and you don’t have to start over again every day, and you don’t have to consult a computer or anything like that. So, it has the advantage of the accumulation of useful information over time.
Business of the week
As an early-2020 spinout from Canadian VMS giant Constellation Software, Topicus.com is an entity renamed from Constellation’s previous operating group Total Specific Solutions.
With a current CAD2.8 billion market cap (under 1/10th of the size of Constellation), a very similar organizational structure to Constellation, high organic growth with sticky offerings, operations in the highly fragmented European VMS market with excellent prospects for acquisitions at fair prices, and a great reputation as perpetual owners of businesses, the spun out entity of Topicus.com could be poised to repeat Constellation story overseas.
The only thing missing is the legend of Mark Leonard steering the ship even though Constellation continues to own a 30% interest and 50.1% of the votes.
By a quick glance, the company looks priced at a free cash flow yield of 8%. It is likely a business that deserves a deep dive.
Quote of the week
The father of economics Adam Smith on science:
Science is the great antidote to the poison of enthusiasm and superstition.
It’s impossible to play the long game if you’re checking the score every day.
Have a great coming week,