Robert Hagstrom – 'Investing: The Last Liberal Art'VW Staff
Robert Hagstrom, Legg Mason – ‘Investing: The Last Liberal Art’
Robert is the author of The Warren Buffett Way and Portfolio Manager for Legg Mason, Inc. (NYSE:LM).
- Noted Munger’s 2007 USC commencement speech
- Attempted to diagram the liberal arts of investing
- Isaac Newton
- Wrote Principia Mathematica
- People latched onto physics model for how things work
- Chesterton wrote …”nearly reasonable, but not quite…” (like EMT)
- Markets more like Biology than Physics
- Learns and adapts
- No stable mean
- Non equilibrium system
- Recommended book ‘Origin of Wealth’ Eric Beinhocker
- Need paradigm shift in economic thinking
- Alfred Marshall gave the biology analogy in the 1920’s
- Thomas Kuhn ‘Structure of Scientific Revolution’ (old model resists the new)
- Ludwig Wittgenstein
- Not a straight line & changes constantly
- The meaning of a word is its use in the language
- Description of Amazon
- Barnes & Noble wrong….
- Wal Mart model wrong….
- Dell model closer….
- Amazon is the second largest cloud space provider
- Potential new BIG business
- “Failure to explain is caused by failure to describe” -Mandelbrot
- ‘How to Read a Book’ Mortimer Adler (cannot read everything, pare down)
- Inspectional (taste)
- Systematical (skim)
- Risk tolerance (must get it indirectly because people cannot describe themselves accurately)
- Achievement motivation
- Personal control orientation
- How you view the risk environment
- Fear of Loss
- Inability to persuade
- Math (beware of averages)
- Little thought to variables
- Trend of the system vs. trend in the system
- Data is non stationary
- ‘Rethinking Undergraduate Business Education’ Aspen Institute
- Catching up with Munger
- Paradigm Shift?
- Physics model to Biology model
- Paradigm Shift?
- 70’s/80’s Inflation comparison?
- Businesses had better pricing power then vs. now
- More global now
Value Investor Conference: Omaha, Nebraska –
Dustin Hunter, SunRift Capital Partners (www.sunriftcp.com)
(These notes are to the best of my recollection.)