Welcome to the Sunday Briefing newsletter where we share some of the interesting lessons in life, business, and investing that we’ve come across during the week.
Latest on Junto
I saw the power of Twitter medium this week when my thread about young Michael Burry blew up and was retweeted by Michael Burry himself. Thanks to everyone who chose to like, retweet, and follow my account. I will work hard to make your attention worthwhile.
No notes were published on Junto during the week. I’m currently on a lengthy road trip on the U.S. East Coast which, unfortunately, has taken a small hit on my time to sit down and write (hence this late Sunday Briefing). I try to squeeze in time here and there but it’s tough. Members will see a deep dive of Disney coming soon.
I spent the past week in Savannah, Charleston, and Washington—I was just as amazed by the museums and monuments as the first time I was there. I’m now in Baltimore until Thursday where I’ll go to Philadelphia. If you’re nearby and up for a coffee and a chat, simply hit me up by replying to this email.
What we’ve been reading
If you examine the colony on the colony level, forgetting about the individual ants, it appears to have the characteristics of an organism. It’s robust. It’s adaptive. It has a life cycle. But the individual ant is working with local information and local interaction. It has no sense of the global system. And you can’t understand the system by looking at the behavior of individual ants. That’s the essence of a complex adaptive system—and the thing that’s so vexing. Emergence disguises cause and effect. We don’t really know what’s going on.
Bayes is an extremely useful mental model for investors. Not only does it provide a theoretically sound process for updating beliefs, it helps us better understand signal vs. noise and what kind of evidence to look for. Moreover, any investor can gain from systematically looking for base rates and questioning the worth of the evidence before them. It is significant that the best forecasters and machine learning in the world is fundamentally Bayesian.
Company of the week
Our company of the week is Match Group Inc, the owner of the biggest global portfolio of online dating services including Tinder, Match.com, Meetic, OkCupid, Hinge, PlentyOfFish, Ship, OurTime, and more.
I don’t have any specific comments on the price nor on how to value the company. You can download the Sanity Check model here and make your own assumptions.
Quote of the week
Nick Sleep on price vs. valuation.
“We can all observe that stock prices, set in an auction market, are more volatile than business values. Several studies and casual observation reveal that individual prices oscillate widely around a central price year in year out, and for no apparent reason. Certainly, business values don’t do this. Over time, this offers the prospect that any business, indeed all businesses, will be meaningfully mispriced.”
In investing, the people who’ve been trained to rigidly quantify everything have a big disadvantage.
Have a great coming week,