Independentthinking

Gustavo Ballvé on February 2nd, 2017

There is a certain beauty and corresponding reverence to the scientific method. The “problem” is that humans are using it: we are subject to biases and, most importantly, incentive systems. I highlight a Wired article about a young billionaire who has declared “a war on bad science”. His foundation’s work seeks to shed light on the instances of bad use of the scientific method, when data was perhaps ignored and corners perhaps cut. Analysts know what I am talking about: brushing away data points that seem “incoherent” with a theme, weighting independent factors disproportionately… We have all been there, no matter how hard we fight to be 100% rational and intellectually honest.

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Gustavo Ballvé on September 21st, 2016

From the comic strip in the beginning and the poem in the end, and right through the writing and the amazing Cognitive Bias Codex, the post I link to is a can’t-miss story on biases. Congrats to Better Humans’ Buster Benson for the writing and thanks to fellow PLDer Boris Tsimerinov for the heads-up on LinkedIn.

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Gustavo Ballvé on August 3rd, 2016

It is impossible not to be criticized when you are in the spotlight. Case in point: Warren Buffett. In the space of two weeks he has been criticized for supporting Hillary Clinton in the US presidential race, for a Corporate Governance “manifesto” co-signed by several CEOs (I’ll adress that in a separate post), and now for being increasingly “relentless” in his search for efficiency.

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Gustavo Ballvé on May 18th, 2016

Sometimes the obvious must be repeated, and such are the times in Brazil. We highlight a text by Seth Godin on that ageless dilemma: the short run and the long run.

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Quoting Buffett, Munger and Klarman – and others of different areas – is sure to get our attention. When that letter is written by an NBA head coach as a send-off from his job, that is simply impressive.

Read more about Unusual letter to “investors” by former 76ers coach Sam Hinkie

Gustavo Ballvé on October 31st, 2015

My notes on Guy Spier’s book, The Education of a Value Investor. The book is much better for beginners, but there are very interesting tidbits for experienced investors. Some of what he shared about productivity and about finding a group of people you both admire and trust so you can debate ideas with them resonated a lot with things I had been thinking about, or doing, without necessarily having an idea of where it could lead to.

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Gustavo Ballvé on October 16th, 2015

David Brooks ponders the merits of two apparently antagonistic Educational approaches and tries to establish what it take to form a “wise” person.

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Gustavo Ballvé on July 29th, 2015

How NOT to understand Buffett after so many years: just read this Financial Times LEX piece on how GM is an “opportunity” for Buffett right now. Yes, GM.

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Gustavo Ballvé on January 13th, 2015

Back in March 2014 we published our 4Q13 management report containing a special section discussing Proxy Advisory Firms. It was motivated by further research following a June 2013 post on Buysiders.com called “Proxy Advisory firms: use with caution”. In the original post I highlighted “the dangers of “outsourcing research” – be it in Corporate Governance, people, financials, business models, competition, whatever – and the temptation of trying to systematize/quantify an investigation that is, by nature, subjective and case by case.” In the excerpt inside I addressed this part in detail but also mentioned “the fundamental choices we should make in terms of capital allocation (be it financial or human).” We can choose how we do our research, and we should choose wisely. For us the choice is clear.

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Gustavo Ballvé on January 5th, 2015

A Financial Times story today highlights what is certainly a top-3 item on value investors’ wishlists: raising permanent capital. The compliance, corporate governance and incentives challenges are immense, but every investor thinks at some point that they could make it work for them and their clients – as the potential benefits of a truly long-term investment horizon could outweigh the risks/ unintended consequences incurred.

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