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WAGE WARS
The sticky issue of inflation is proving to be substantially more challenging to tackle than policymakers’ messaging would have suggested through 2021 and into this year. Wages, broken supply chains, and now a large spike in oil driven recently by the conflict in Ukraine all have the potential to see current trends persist. Wages are one to watch in particular – the price of gas can go back down quickly, but higher wages tend to be persistent.
Berkshire Hathaway’s 2021 Letter
We feature Warren Buffet’s letter each year, with this year’s addition feeling particularly timely given the dispersion in returns between growth and value stocks over the last number of months. It is a good reminder that at the end of the day, cash flows and quality business models do inevitably triumph. The compounding achieved through decades of thoughtful decisions truly is incredible.
Teaching, like writing, has helped me develop and clarify my own thoughts. Charlie calls this phenomenon the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.
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Too Busy to Pay Attention
An excellent piece on finite time through Allan Lightman’s “Einstein’s Dreams”. Lots of quotes to make you think.
You act like mortals in all that you fear, and like immortals in all that you desire.
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Tech Selloff Hints at Deep Cracks in Glamour Stocks
A further exploration of the selloff in growth over the last number of months. It is worth noting that several of these businesses will ultimately have enduring business models that will be rather successful. To that end, the most recent dislocation in markets can offer opportunity. In our view, it’s clear that the market was being too kind to a large number of businesses that will never achieve the economic moat that many of their valuations implied.
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The Lesson To Unlearn
Another one of Paul Graham’s classic pieces. Paul explores issues in how we approach education that leave most readers nodding their heads, and translates the implications of our current approach into business.
Merely talking explicitly about this phenomenon is likely to make things better, because much of its power comes from the fact that we take it for granted. After you've noticed it, it seems the elephant in the room, but it's a pretty well camouflaged elephant. The phenomenon is so old, and so pervasive. And it's simply the result of neglect. No one meant things to be this way. This is just what happens when you combine learning with grades, competition, and the naive assumption of unhackability.
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