Corporategovernance
There’s lots of interesting content in Amazon.com’s launch page for “No One Would Listen”, a book by the main whistleblower in the Bernie Madoff saga. The timeline in particular is very impressive: it shows that it took ten years to uncover the mess – nine since the first contact with the SEC – by which time the problem was irreversible. And that’s far from the only case, which begs a question… How do we justify still having institutions supposed to keep watch so unready and unwilling to investigate red flags?
God has spoken, go out and read it. The core is dedicated to welcoming and explaining BRK to its new shareholders acquired through BNSF, so no big news. Buffett complains more about the media and investments analysts, on how they distort things, causing losses to the less diligent and recommends that everybody form their own knowledge base and opinion. Hope he lives to see that happening, but we sincerely doubt it.
In the 1st Buysiders article inspired by a reader’s suggestion, we’d like to propose “anti-portfolios”. It’s a vital lesson in humility: our activity involves a certain degree of failure, of missed or simply wrong ideas. Recognizing that we are going to make mistakes over time is extremely important in order to mitigate risk as we define it (the permanent loss of capital). The objective here is to insist, once again, that price is the ultimate measure. (…) After you’ve done all the homework, you still have to demand a price that implies a large margin of safety – and keep analyzing the position everyday with the same skepticism you had before you bought it.
They took questions from Columbia grad students and the event was broadcast live by CNBC. It has an eerie feel to it – with the whole “must keep spirits high” approach. That said, both men think in the long term (15+ years) and it’s always interesting to be reminded of some basic concepts.
Continue reading about Buffett and Gates at Columbia University
Part 2 of the excerpts from our Q4 2008 report. In Part 1, we introduced and exemplified the theme of the structural fragility of incentive systems via two texts, “Own Goal” and “Dolus Bonus”. In this text, we present the core of our reflection on the subject in order to highlight the importance of raising our moral critical standards.
Continue reading about IP report excerpts, vol. 4: Moral diligence (part 2)
Post 1 of 2 posts with excerpts from one of our most-commented reports. We look back at a highly unusual year – a period of seemingly definitive change which proved, definitively, that some things never change. 2008 was one of those years that tested our mettle and reaffirmed old principles, the most cherished of which is our moral diligence. We kick off with two introductory texts, “Own Goal” and “Dolus Bonus”.
Continue reading about IP report excerpts, vol. 4: Moral diligence (part 1)
The Wall Street Journal has a nice piece today on Google’s option repricing bonanza now that the stock is back to the US$ 500’s. Not a second too soon, not a bit exaggerated.
“The CEO of a public-owned company is no more its owner than the CEO’s chauffeur is the owner of the executive limousine”.
George P. Schwartz