Old School Value Nugget Fest

Old School Value Nugget Fest (May 1st Edition)

The Berkshire Hathaway weekend is around the corner.

I will unfortunately not be attending, but for those who are making the trek, have a blast, take tons of notes and share the love.

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Q1 hedge fund letters, conference, scoops etc

Old School Value Nugget Fest

To get you in the mood, here are some quotes from this year's letter.

"But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don't need."
A good framework on leverage and not going for excessive risk. It's all about measuring downside and upside. Many people in the market only look up without seeing that the downfall is even bigger.

"Performance comes, performance goes. Fees never falter."
Munger praised a few managers like Pabrai this year for their no-frills fee structure, and it sounds like it will be a theme this year as markets continue on up and funds continue to dig into investors pockets.

"Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. 'Risk' is the possibility that this objective won't be attained."
Too much of the "I want it now" phenomenon in today's culture. If you buy a stock, it better go up in 3 days or else. I plan to use this definition if anyone asks.

I always get a kick out of people's reaction when I happen to quote Buffett in a conversation (even when it's not related to finance). They think I'm a genius until I confess it was Buffett. Try it yourself. You'd be surprised how the majority of people don't know a thing about him.

What We're Reading in the Media

How Wharton Launched Warby Parker--and Dozens of Other Companies Just Like It

With the way retail companies are falling left and right, you would think that ecommerce is the way to go and that retail is going to continue to suffer. I don't believe it. This article shows a different angle about the new ecommerce start ups. Warby Parker is a successful example of how a eyeglasses company did it right, but with the onslaught of new companies popping up, the field of ecommerce is getting noisier. Before you could open an online store, put up some low cost ads on Google or Facebook, do some instagram and "BAM" you start selling. But with the level of competition and everyone trying to do it, the amount spent on ads and marketing is pretty much what you'd pay for traditional rent and overhead of a store.

Warren Buffett on buying bitcoin: 'That is not investing'

I mentioned that management fees will likely be a topic at the shareholder meeting. Another given will be cryptocurrency. Buffett has come out and said that Bitcoin and anything else so far is based on speculation. People who buy it only buy it for one reason. That it will go up in price so they can flip it to the next person. People who buy cryptocurrency are not doing so in order to build up an asset base or to produce something off it.

Other reads

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