On Reading More “The solution I devised for myself is a simple one: 25 pages a day. That’s it. Just commit to that, and then do it.” – Farnam Street

Well, that is one way to start the new year.  Set a few goals.  Miss them all.

Certainly behind on the book reading front.  Also, want to maintain an average of writing one article a week.  And behind on that one.

So there is no where to go but up!

Big news is in the works on the career front.  That one is actually going according to plan here in February.  More to come once the fat lady sings.

Here are my most influential reads for the month – in no particular order:

1. After a Timeout, Back to the Meat Grinder! – “Now things get more complicated. While the most extreme froth has been wiped off the market, valuations are still nowhere near their long-term averages.”
2. Why the Federal Reserve Should Raise Rates by Half a Percent – “Financial conditions have loosened significantly in recent months and, by some measures, are around levels that prevailed last March when the Fed initiated this hiking cycle.”
3. Why Competitive Advantages Die – “The only thing harder than gaining a competitive edge is not losing that advantage when you have one.”
4. How to Get New Ideas – “The way to get new ideas is to notice anomalies: what seems strange, or missing, or broken?”
5. On Email and Horses – “The right question is not, is this useful? But instead, how do we want to use it?”
6. The Federal Reserve Is Trimming Its Assets. It’s Not Working – ” The Fed’s QT has had relatively little effect on financial conditions since it got under way last year. And in a surprising twist, the new battle over the nation’s debt limit will largely negate any impact QT might produce”
7. Inflation, Rising Interest Rates Brought End to Cheap Money – “Cheap money—an incredibly popular and influential feature of finance that led to a surge of wealth, speculative trading and booms in ridiculous investments such as   meme stocks and   digital images of cartoon monkeys—died suddenly in 2022. It was 14 years old. Cheap money is survived by its estranged relative, expensive money.”
8. Rental Housing Is Suddenly Headed Toward a Hard Landing – “Why has the rental market turned so weak? As rental housing economist Jay Parsons points out, new lease demand cratered in the second half of the year, and was negative for the full year for the first time since 2009.”
9. 2023 is the Year of _________ – “2023 is a pivotal year for many startups. Churchill once said, “Never let a good crisis go to waste.””  SMS here: SFTE could turn out to be a pivotal year for the family; need a moto.
10. The Critical Question – “They assume you’re price sensitive, and expect you to ask why something doesn’t cost less…but they are not expecting you to ask why something doesn’t costmore.”

Note: This is based on when I read the article, not necessarily when it was first published.  Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.

Top clicks across the site last month:

1. Financial Model vs. Operating Model
2. Excel Tips: Football Field Chart
3. Excel Template: Bridge Waterfall
4. Book Report: The Hard Thing About Hard Things
5. Operating Model Tips

Updated stats:

“We tend to assume that the worst that has happened is the worst that can happen, and then prepare for that. We forget that “the worst” smashed a previous understanding of what was the worst..” – Brain Food: Figuring it Out (https://fs.blog/brain-food/december-11-2022/)

Happy New Year!

First post of 2023.  I’ve set a goal for posting more.  Competing priorities last year, especially the fourth quarter, hampered my ability to read, write, and post.  

However, we successfully sold the business to a new set of investors, delivering a great outcome for our prior shareholders.  So with that behind me, I hope to be spending more time here.

Note on the book reading front – I did knock out the entire Travis McGee series.

Here are my most influential reads for the month – in no particular order:

1.  Take Calculated Risks – “Making an unconventional decision can be a very lonely action. Yet, when the person making it has intimate knowledge of a situation and has calculated the risks involved, it often proves to be precisely the right one.”
2. 3Q 2022 GMO Quarterly Letter – ” Looked at in this way, it seems as if a value strategy in the U.S. should be avoiding the “shallow value” stocks that are mildly cheap relative to the market and focusing solely on the “deep value” quintile. “
3. Summary of My Post-CPI Tweets – “Overall Core ex-housing (which includes core goods) is down to 5.2% y/y. That’s the lowest since…well, September 2021. Going the right direction but unless core services start to decelerate, there’s a limit to how good this picture can be.”
4. The Fed is Dead – “In fact, rather than slowing corporate price increases, the Fed’s rate hikes seem to be having the opposite effect.”
5. Billionaire David Tepper Is Betting Against the Stock Market Because of the Federal Reserve – ” I think the upside/downside [risk here] just doesn’t make sense to me when I have so many central banks telling me what they are going to do”
6. Q&A with Scott Reardon: Great Investor Track Records – “Generally they were looking for companies where free cash flow yield + growth rate equaled 20% or more. In other words, they were looking for returns double the market average, which is exactly what all of them achieved over their long careers.”
7. How private markets became an escape from reality – “Private equity firms reported gains of about 3 per cent this year, when public markets were down 20 per cent or more and tighter money battered all markets similarly.”
8. How to Hedge Inflation and Avoid the Biggest Bond Risk – “Inflation is the biggest long-term risk for bond investors.”
9. BNP Paribas studied 100 years of market crashes – “A typical recession bear market is 1.5 years in length, with a median drawdown of 38% and a median peak in the VIX of 40.5. “
10. TeamDynamix Secures Investment to Deliver Rapid Innovation for IT Automation – ” TeamDynamix, a leading IT automation provider, today announced that it has secured an investment from New York-based Level Equity Management while existing investor, K1 Investment Management, will roll a material portion of its proceeds from its exit into the business.”

Note: This is based on when I read the article, not necessarily when it was first published.  Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.

Updated stats:

“So much advantage in life comes from being willing to look foolish in the short term. ” – Farnam Street

Happy Labor Day.  After you read this, go outside and ride your bike or something.

Seven books last month!  And I spent some good time reading through aging articles on my list (see How I Read) and culling others to help make my list a bit more manageable.  I am also working on a categorization scheme to guide my reading & research prioritization in the months ahead.  More on that at some future date.

So, I found the John MacDonald Travis McGee series.  So, in the vein of these two thoughts below, I made up some ground on my reading goal.

“I think it’s good to read ambitious books. But if you only get ambitious books (or worse, you force yourself to finish them before reading fun ones) you’ll kill any potential joy for reading you might have. So always have “fun” books—light, easy reads that make you feel good in addition to weightier tomes. That way you can switch between styles depending on whether you want challenge or relaxation and never give up the habit of reading.” – Scott Young

“Yet, many people—even those with a voracious reading habit—make the same mistake: They hardly, if ever, read fiction. They even brag about it! They’re too busy. They don’t have time for “art.” There’s plenty of “real” stuff—the characters in fiction that bear little resemblance to the world we know? I don’t have time for it. But fiction, like all wonderful art, is filled with beautiful bits of insight about the human condition. It can change your life and teach you just as much as any non-fiction book. Actually, no, it can teach you more! It can shine a light on universal truths that non-fiction, bounded by the facts and figures of its specific world, often cannot (to say nothing of the research that connects literature with improved empathy, reduced stress, and hone social skills).” – Ryan Holiday

Here are a few highlights from the series:

• “Savagery, venom and guile are good survival quotients.”
• “There is as much danger in overestimating as in underestimating the quality of the opposition.”
• “These are the slums of the heart. Bless the bunnies. These are the new people, and we are making no place for them. We hold the dream in front of them like a carrot, and finally say sorry you can’t have any. And the schools where we teach them non-survival are gloriously architectured. They will never live in places so fine, unless they contract something incurable.”
• “Somebody has to be tireless, or the fast-buck operators would asphalt the entire coast, fill every bay, and slay every living thing incapable of carrying a wallet.”
• “Being a beach bum takes money. If you want to do it with flair. If the money comes in regularly, then you’re working for it, and you lose your status. I have to come by it in chunks now and then, to protect my way of life.”
• “The old city was being filled with these tall tasteless rectangles, bright boxes which diminished the people who had to live and work in them. People kennels. Disposable cubicles for dispensable people.”
• “Self-evaluation. It is the skin rash of the emotionally insecure.”
• “Temptation does not deliver most of us into evil, because temptation is a constant and evil is a sometime thing with most of us.”
• “The incomparably dull tract houses, glitteringly new, were marching out across the hills, cluttered with identical station wagons, identical children, identical barbecues, identical tastes in flowers and television.”
• “My friend Meyer, the economist, says that cretins are the only humans who can be absolutely certain of their own sanity. All the rest of us go rocketing along rickety rails over spavined bridges and along the edge of bottomless gorges. The man who believes himself free of any taint of madness is a damned liar.”
• “The stars were bright. A dog-thing hollered a hundred miles away. Somebody walked over my grave.”

Here are my most influential reads for the month – in no particular order:

1. Recession Is Already Here for Many Small Businesses – “That’s for good reason. Some analysts say that while a mild fall in demand has weighed on energy prices, the drop in gas prices is largely due to the government’s release of strategic petroleum reserves.”
2. Finding persistent invisible systems – “But plastic persists as a commercial solution, because the system is invisible and resilient. Each member of the system does what they do, usually for good reasons.”
3. Brain Food: Appearing Foolish – “To be a good manager, you want things to run smoothly. And insights are not ways of running smoothly. Insights are disorganizing and disruptive. And so, that’s a major reason that organizations, without even intending to, block the insights that come their way.”
4. Brandon Sanderson’s Advice for Doing Hard Things – “I can do hard things. Doing hard things has intrinsic value, and they will make me a better person, even if I end up failing.”
5. Latticework: The New Investing – “Hagstrom makes a case that a successful stock picker must be ready to shift models and look at the markets from different vantage points with the passage of time.”
6. Welfare Queens – “The Inflation Reduction Act (“IRA”) is being hailed/hated as a climate bill, but it’s really just the most recent investment by Eagle Capital”
7. The Climate Bill Is About to Reshape Global Energy – “The age of renewable energy, by comparison, is coming on with lightning speed.”
8. I Beg to Differ – “The basic idea behind second-level thinking is easily summarized: In order to outperform, your thinking has to be different and better.” and “Readily available quantitative information with regard to the present cannot be the source of superior performance.”
9. The Fed Is About to Ramp Up Balance-Sheet Shrinkage. It May Get Dicey. – “Starting next month, those caps will rise to $60 billion and $35 billion, respectively, meaning the pace of balance-sheet runoff is about to double”
10. A Simple Way to Introduce Yourself – “That’s it for the self-introduction framework. Present, past, future. Eloquent and effective”

Note: This is based on when I read the article, not necessarily when it was first published.  Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.

Top clicks across the site last month:

1. Financial Model vs. Operating Model
2. Excel Templates & Other Free Stuff
3. Solamere Trail Loop
4. Operating Model Tips
5. EBITDA Is Not A Good Proxy For Cash Flow

Updated stats:

“I’ve realized a new reason why pessimism sounds smart: optimism often requires believing in unknown, unspecified future breakthroughs—which seems fanciful and naive.’” – Farnam Street

Apologies for the delay here.  We drove from Florida to Utah with some stops in Carlsbad Caverns N.P., Guadalupe Mountains N.P., Santa Fe, NM and Mesa Verde N.P.  That took some time.

Speaking of time, economic / market developments are occurring quite a bit faster than I would have predicted 30 – 60 days ago.

Here are my most influential reads for the month – in no particular order:

1. How Much Further Can We Fall? – “In 2017, the average company traded at 5.4x forward compared to 7.93x as of this morning. There’s precedent for another halving.”
2. Sunk costs at work – “Quitting is underrated.”
3. Was the 1966-1982 Stock Market Really That Bad? – “It’s interesting to note that the 1966-82 period of low stock returns, high inflation, and high wage growth is basically the exact opposite of the current environment of high stock returns, low inflation and stagnating wages.”
4. If You Think Free Speech Is Defined By Your Ability To Be An Asshole Without Consequence, You Don’t Understand Free Speech (But You Remain An Asshole) – “And when you look closely at the actual debate, it always comes down to “I want to be a disrespectful asshole to people I don’t like, and I don’t want to face any consequences for it.””
5. This Time Wasn’t Different – “For instance, over 40% of all stocks had no earnings over the last 12 months.”
6. Sunday Reads …The Glut of Overpriced Companies in The Private Markets – ” but now we have a private market filled with hundreds of Unicorns from Softbank and its clones that will have to work through the system.”
7. Brief Comments on the TerraUSD and Tether Stablecoin Breakdowns – “To be explicit about our dim view of crypto, it’s taken literally hundreds of years to make simple-minded banking not-too-dangerous for the financial health of its customers. There is no reason to think that crypto promoters are going to design a better and certainly not a safer mousetrap any time soon.”
8. 13 Strategies That Will Make You A Better Reader – ““You must linger among a limited number of master-thinkers, and digest their works, if you would derive ideas which shall win firm hold in your mind.””
9. What Should Accompany Stocks: Cash or Bonds? – “Thus, while intermediate-term Treasuries should typically be used to offset the risk of a stock portfolio, there is some logic to holding a shorter portfolio today: say, a mix that consists half of five-year notes and half of Treasury bills.
10. 15 of the Craziest Charts Right Now – “And it’s not just a handful of stocks that are getting killed.”

Note: This is based on when I read the article, not necessarily when it was first published.  Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.

Top clicks across the site last month:

1. Financial Model vs. Operating Model
2. Email: Don’t Get Fired
3. EBITDA Is Not A Good Proxy For Cash Flow
4. Excel Tips: Football Field Chart
5. Operating Model Tips ()

Updated stats: