Work with me: One-on-One Investment Coaching

In Case You Missed It:

My Feature in Financial History Magazine

Your Brain on ChatGPT

Some Behind-the-Scenes of Berkshire’s Taylor Morrison Acquisition

“You get to do exactly what you’ve been doing. Run a responsible, good business, but you get to do it with real patience and a long-term lens. Don’t make any decisions for next quarter. Don’t even make decisions for next year. Do what’s right for the business as far out as you can see,” Palmer recalled Abel telling her.

Clayton Documentary Teaser Video

This Week in Berkshire History

Nothing this week. In fact, it’s a quiet month with just one date mid-month and a couple at the end.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Work with me: One-on-One Investment Coaching

In Case You Missed It:

Huge Demand for Berkshire’s NV Energy

Resolution for the $1 investment that cost Berkshire $535 million

Background: Excerpt from pp. 776-77 of The Complete Financial History of Berkshire Hathaway

Tim Melvin on Value After Hours

I just became a paying subscriber to and recommend it.

This Week in Berkshire History

October 31, 2002: Berkshire acquires CTB International, a manufacturer of equipment and systems for the poultry, hog, egg production, and grain industries.

October 31, 2002: Berkshire acquires The Pampered Chef, LTD, the largest branded kitchenware company and the largest direct seller of housewares in the U.S.

October 31, 2019: Berkshire’s Marmon acquires Colson Medical companies.

Charlie’s Corner: Mental Models

I’m trying something new here. I’ve been thinking about better organizing my mental models for a while, and I recently committed to using Obsidian for the task.

Sidenote: These podcasts featuring Obsidian CEO Steph Ango were fun: Cortex Podcast and the Dialectic Podcast. I also enjoyed his concise essays, which I try to emulate below.

In any event, this is, in my mind, a cozy corner of a library where I share deeper, non-investing thoughts with you, dear reader. It could be a one-time thing, or something more, but here goes…

The X-BOW Ship

Mental Models: Physics/Newton’s 2nd Law, Math/Inversion

Note: The primary mental models are listed above, and I explore those and secondary models below.

This article about the X-BOW hull sparked a fun exploration of mental models and pairs well with the physics book I’m currently reading.

The standard geometry of a ship’s flared hull works great in most cases. The flare adds buoyancy by displacing a nonlinear amount of water as the ship sinks into a wave, returning it quickly to the surface.

But in really rough waters, such as the North Sea, normal ships face a problem. The restoring push overcorrects, causing the recovering ship to slam into the next wave in what’s known as bow flare slamming. The resulting forces can cause damage to the ship and crew.

In the early 2000s, the lead designer of the Ulstein Group noticed that offshore vessels rode more smoothly when driven stern-first (backwards) in rough seas. The company took that idea and designed a ship with an inverted bow hull that slices through waves. Because its submerged volume increases linearly, forces are distributed more evenly, and most bow slamming is eliminated.

There were other, second-order effects too. The X-BOW can operate at higher speeds through rough seas than conventional ships and consumes less fuel.

Primary Models:

• Physics/Newton’s Second Law: The slamming effect of the standard hull is momentum (p=mv) reversed over a short period of time. The X-BOW i. doesn’t allow the same amount of momentum to accumulate and ii. reverses it over a longer period of time, reducing the peak force.

• Math/Inversion: The designer saw ships riding better in reverse and applied the geometry of the stern to the bow.

Secondary Models:

• Math/Calculus: The displaced volume is the hull’s waterline cross-sectional area integrated over depth, which is why the flared hull results in nonlinear growth.

• Engineering/Feedback loops: The slamming effect is caused by overcorrection.

• Biology/Second-order effects: This comes from Garrett Hardin‘s ecology. “We can never do merely one thing.”

• Biology/Evolution: The flared hull became the standard because it worked well in most instances. (Related idea: Lindy Effect)

Note: Buoyancy is a result of gravity, pressure, and Newton’s laws, not a primary model in itself.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Work with me: One-on-One Investment Coaching

In Case You Missed It:

Tesla Partners with BRK to Charge Trucks

BRK Specialty Enters Poland

Tracy Britt Cool - Building a Berkshire for the Middle Market

Las Vegas NetJets Terminal

The Smart Phone Era -

Scenic Route Investing by Wagner Road

TTS Part 2 Continued: The Smart Phone Era

See footnotes for links to parts 1 and 2…

Read more

2 months ago · 7 likes · Andrew Wagner

This Week in Berkshire History

Nothing again this week. Here’s another video from the archives.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Private Investment Coaching

In Case You Missed It:

Coke Takes Share From Pepsi (WSJ)

Berkshire’s PacifiCorp Contracting for Battery Storage

Reinsurance Pricing

New BNSF Bridge Across Missouri River

Copart Completes ACV Acquisition

This Week in Berkshire History

Nothing this week.

Here’s an oldie but goodie. “10% [pre-tax] is the figure we quit on … it’d be sloppy to go below that.”

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Private Investment Coaching

In Case You Missed It:

Buffett’s New YouTube Habit (WSJ)

Berkshire’s Shaw Carpet Has A New (Old) CEO

Berkshire’s Tungaloy and NTK Cutting Tools to Merge

JP Morgan Q4 Guide to the Markets

Rory Sutherland and Ryan Petersen of Flexport (YouTube)

GLP-1s and Beer Consumption

Scenic Route Q3 Recap

Scenic Route Investing by Wagner Road

2026 Third Quarter Recap

This quarter, I posted two more segments of my “Timelapse of the Tech Sector.” I would have done more, but I had to stop posting because I got bit by a dog. It was on my thigh, so I’ll be fine, but the recovery will still take more time (and it really hurts to sit…

Read more

a month ago · Andrew Wagner

New NetJets Terminal in Texas

This Week in Berkshire History

October 10, 2019: Berkshire sells its 81% interest in Applied Underwriters for $920 million to avoid conflicts between its units selling workers’ compensation insurance.

First, the purchase…

Then the sale…

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Private Investment Coaching

In Case You Missed It:

Benjamin Moore Expands into the UK - CEO Interview

New Michael Mauboussin Paper on FCF

Analysis of Copart’s ACV Bid

h/t

The Fat Pitch

CPRT: Copart (14)

ACV Merger Story…

Read more

2 months ago · 14 likes

This Week in Berkshire History

September 30, 2023: Berkshire transfers ownership of BNSF from National Indemnity to Berkshire Hathaway, Inc.

September 30, 2024: Berkshire Hathaway purchases the remaining 8% ownership in Berkshire Hathaway Energy from the estate of Walter Scott, Jr., increasing its ownership to 100%.

October 1, 2018: Berkshire’s National Indemnity Company acquires Medical Liability Mutual Insurance Company, a writer of medical professional liability insurance, for $2.5 billion.

October 3, 2017: Berkshire acquires a 38.6% interest in Pilot Flying J and agrees to acquire an additional 41.4% (bringing the total to 80%) in 2023. It finalized the purchase in January 2024, making Pilot a wholly owned subsidiary.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Private Investment Coaching

In Case You Missed It:

New Howard Marks Memo

Geico Gecko Podcast Appearance?

AAR Weekly Rail Traffic

Bill Gurley Presentation (I just listened to his podcast appearance on TKP)

This Week in Berkshire History

September 26, 2011: Berkshire’s board of directors authorize repurchases of shares at no higher than a 10% premium to book value and so long as cash did not fall below $20 billion. Berkshire would go on to revise this to 1.20x book and then to when Warren Buffett determined it was undervalued.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Private Investment Coaching

In Case You Missed It:

Buffett Steps Down as BRK Chairman

This is one of those surprising-but-not-surprising times. Warren will remain Chairman Emeritus, and his son Howard will take the Chairman spot to guard Berkshire’s culture and values. Berkshire’s transition has been remarkably well done, in my view.

How TTI Built An Empire Inside Berkshire

“Distribution rewards the companies willing to do the unglamorous work of stocking the right part, in the right catalog, before anyone asks for it, and TTI's federation of specialists is one answer to how that work gets organized without losing what made each piece of it good in the first place.”

The Cass Freight Index Turns Positive for the First Time in 3.5 Years

Zeke Ashton on VAH

This Week in Berkshire History

Nothing this week. Warren’s transition to Chairman Emeritus today enters the list for next year.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Copart Buys ACV Auctions for $1.9bn

Big news from Copart.

Chris Bloomstran on William Green’s Podcast

The Lottery and the Leftovers - Small Cap Index Bifurcation

AI Enabled Underwriting at Berkshire’s GenRe

GE Aerospace Pays Up for Castings Supplier

Berkshire paid up for PCC and wrote it down, but the market is validating the purchase. GE is paying 18x EBITDA for a PCC competitor, including projected synergies. Note: Berkshire is NOT selling PCC. One of the current owners of Consolidated Precision Products is Berkshire Partners, which has no affiliation with BRK.

“If you’re standing still, you’re not selling shoes.”

(The kicker: He didn’t even get a commission. It was all internal motivation.)

This Week in Berkshire History

September 11, 2001: Berkshire acquires XTRA for $578 million cash.

Berkshire had the ability to walk away when the stock market closed on 9/11, but didn’t.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Greg Abel in Tokyo on CNBC (Podcast) (Transcript)

Some interesting details on Tungaloy, Alphabet, the Japanese trading houses, Tokio Marine, and how Berkshire is going to integrate Taylor Morrison with Clayton Homes.

Berkshire Robbed! Twice!

Robbers broke into a BNSF train and stole Brooks shoes.

Squishmallows Movie

More Korean Net Nets

Sung Capital

All Korean net nets #2: who’s holding the keys?

As promised in the first batch, the Google Sheet tracking every net net in this series is now live: the price and multiples on the day I wrote each one up, my score from 1 to 5, and the return since, updated live. Premium subscribers will find the link at the end of this post behind the paywall…

Read more

2 months ago · 10 likes · Oliver Sung

The Smart Phone Era 2010s to 2020s

Scenic Route Investing by Wagner Road

TTS Part 2 Continued: The Smart Phone Era

See footnotes for links to parts 1 and 2…

Read more

2 months ago · 5 likes · Andrew Wagner

This Week in Berkshire History

August 30, 1930: Warren Edward Buffett born

August 31, 2005: Recreational vehicle manufacturer Forest River acquired.
August 31, 2020: Berkshire announces it has taken a 5% stake in five of the leading Japanese trading companies (sogo shosha).

September 1, 2023: Berkshire Hathaway Energy pays $3.3 billion for an additional 50% interest in Cove Point LNG, increasing its ownership to 75%.

September 4, 2002: Berkshire acquires Garan, Incorporated, maker of GaranamalsR

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Triumph CEO on The Freight Pod

Pilot Flying J EV Charging Hits 300 Locations

Korean Net Nets

Sung Capital

There are ~180 net nets in Korea, and I'm writing up all of them

I’m confident that Korea is the best pond to fish in right now…

Read more

3 months ago · 19 likes · 2 comments · Oliver Sung

This Week in Berkshire History

August 18, 1991: Warren Buffett elected as interim chairman of Salomon, Inc.

Read more about the saga in this excerpt from my book:

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Fed Report on Household Credit

“Boomer Candy” (WSJ)

Sounds like a free lunch to me. The downside protection has to come from somewhere. Future returns, most likely. Increased counterparty risk, perhaps. I don’t like it…

CRA Overall for Banks Under $10B Assets

The Book That Helped Bill Ackman Grow Howard Hughes Holdings

That book sounds familiar…

Additional Detail on Brooks’ Q2 Results

Buyback Tracker from Manana. I Love These Charts!

Housing Legislation Analysis

Construction Physics

How Will the 21st Century ROAD to Housing Act Affect Housing Supply? Part II

This is the second installment of my look under the hood of the recently passed 21st Century ROAD to Housing Act, looking at what each provision actually does and trying to suss out its actual impact on housing supply. You can read my previous essay on Title I of the Act…

Read more

3 months ago · 54 likes · 3 comments · Brian Potter

This Week in Berkshire History

Nothing this week.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Salt Batteries (WSJ)

Amazon’s Entry into LTL Shipping

Dan Carlin Alexander the Great - Part IV

h/t I listened to the first three of these in succession and can’t wait to dig into this one!

Why Boring Businesses Win - The fight against entropy.

This Week in Berkshire History

August 7, 2003: Berkshire acquires Clayton Homes for $1.7 billion.
August 7, 1998: Berkshire acquires Executive Jet Aviation (later changed to NetJets). August 8, 2000: U.S. Investment Corporation or USIC, parent of U.S. Liability, acquired.
August 8, 2005: The Public Utility Holding Company Act (PUCHA) repealed.
August 8, 2019: Berkshire invests $10 billion in an 8% preferred stock deal with Occidental Petroleum to assist it in financing the acquisition of Anadarko.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Berkshire Hathaway Completes Acquisition of Taylor Morrison

Home Services 2026 Mid-Year Report (Summary)

Full Report Here

Mid-Year Property/Casualty Report

Prices down 20-25%

Deep Thoughts from Brian Cox

Brian is one of my favorite scientists. This really got me thinking about the preciousness of life.

Construction Physics

Why Is Everyone Trying to Build a Solid-State Battery?

A battery technology that’s getting a lot of attention is solid-state batteries, lithium-ion batteries that replace the liquid electrolyte with a solid material. Chinese battery manufacturer CATL alone had more than 1,000 people devoted to solid-state battery research as of 2024, and battery manufacturers like…

Read more

3 months ago · 150 likes · 6 comments · Brian Potter

This Week in Berkshire History

July 31, 2001: 90% of MiTek acquired for $400 million cash.

August 1, 2000: Justin Industries acquired for $570 million (all cash).

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Jake Taylor’s Essay on AI (Long, But Worthwhile)

100-Ton Wave Energy Buoy

A Detailed View of Precision Castparts

AviationOutlook

Precision Castparts - Company Analysis and Outlook Report 2026 (Updated)

Executive Summary…

Read more

7 months ago · Dipesh Dhital

More Behind NetJets’ First Fatal Crash

Lowering Construction Costs

Construction Physics

Can We Lower Construction Costs with Cheaper Labor or Materials?

Last time in our series on the nature of the construction productivity problem, we looked at economies of scale, finding that capturing economies of scale in homebuilding is difficult. Economies of scale primarily operate on the difference between the costs of the material inputs to some process and the cost of the fi…

Read more

4 months ago · 123 likes · 14 comments · Brian Potter

A Look Into Berkshire’s Investment in Apple

Anomaly Investment Partners

Our Approach to Business Valuation

Most will agree that, to do well in investing, a basic requirement is to invest in businesses at a lower price than what they’re worth, or than their intrinsic value. The idea is simple enough: if something is worth 100 and sells for 60, then we have an investment opportunity. The selling price is always easy to find. The intrinsic value of the business…

Read more

4 months ago · 5 likes · 1 comment · Anomaly Investment Partners

This Week in Berkshire History

Another quiet week in Berkshire’s history.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

I was on two podcasts last week:

Full Warren Buffett CNBC Interview

How America Got Its Banks

Jamie Dimon Interview

A $1.2 million Dam - Built By Beavers

Robert Miles on Talking Billions

Bogumil Baranowski's Substack

Robert P. Miles: What 20 Berkshire CEOs Taught Him About Character, Inside the Temperament, the Moat, and the Culture that Keep Compounding

Robert P. Miles is an author, educator, and the world’s foremost authority on Berkshire Hathaway’s management culture. Robert has written three bestselling books on Warren Buffett, created the only graduate MBA course dedicated to Buffett’s philosophies, and founded the Value Investor Conference in Omaha. His journey from an entrepreneur to a globally r…

Listen now

4 months ago · 1 like · Bogumil Baranowski

This Week in Berkshire History

July 17, 2018: Berkshire’s board of directors authorizes an amendment to the share repurchase program, allowing purchases if Buffett and Munger believe the shares to be undervalued, conservatively estimated.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

New President at Copart

On the heels of the CEO transition announcement, Copart announced the promotion of Jane Pocock to President.

Looking at the AI Infrastructure Players

Scenic Route Investing by Wagner Road

Investing in AI Infrastructure (Part 2: The Contractors)

When we talk about data centers built for the AI boom, there are a few different ways to approach it. In Part 1, I mentioned the 5 hyperscalers that are paying for data centers. But there are also 5 companies involved with building the data centers…

Read more

7 months ago · 15 likes · 2 comments · Andrew Wagner

JPM Q3 Guide to the Markets

Brooks Looking to Beat the World Record Mile

This Week in Berkshire History

July 3, 2000: Ben Bridge Jewelers acquired.

July 5, 2006: Berkshire pays $4 billion for an 80% stake in Israel-based ISCAR Metalworking Companies. Berkshire would go on to buy the remaining 20% in 2013 for $2.05 billion, implying a valuation of $10.25 billion, twice the original valuation.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

Out of Office (But Not Out of Mind)

I’m midway through a week’s vacation as you read this.

Never fear, I’ve assembled a list of recently paywalled posts and some frequently revisited ones for your reading enjoyment.

See you next week, same place, same time!

Last Chance…

Oh, and I still have a few spots available this summer for one-on-one private investment coaching.

If you’re on the fence about joining, click here to hear from others who completed the program.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It:

Fact of the Week:

Greg Abel Becomes A US Citizen

BNSF Just Had It’s Safest Year in History

800 MW Solar Project in Iowa by BHE

First Fatal Crash in NetJets’ History - Since 1986!

Progressive Overtakes State Farm for #1 (GEICO at #3)

Construction Physics

Biological Evolution and Information Acquisition

A few weeks ago we looked at a simulation of technological evolution by economist Brian Arthur, in which he was able to start with simple building blocks (such as a NAND gate) and evolve surprisingly complex circuits (such as a 12-way AND gate or a 4-bit adder) by randomly combining increasingly useful existing components. We analyzed this as a way of s…

Read more

5 months ago · 130 likes · 6 comments · Brian Potter

This Week in Berkshire History

Another quiet stretch in Berkshire’s history. I’ll be on vacation next week, so here’s the following week’s history. Happy 20th BRK-versary IMC!

June 30, 2005: Berkshire acquires Medical Protective Company from a subsidiary of General Electric, paying $825 million in cash.

July 1, 1991: H.H. Brown acquired.

July 1, 2014: Berkshire completes its cash rich split off transaction with Graham Holding Company, acquiring a Miami TV station, cash and Berkshire shares in the process.

July 3, 2000: Ben Bridge Jewelers acquired.

July 5, 2006: Berkshire pays $4 billion for an 80% stake in Israel-based ISCAR Metalworking Companies.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!

In Case You Missed It: The Value Bridge: Zooming In on Copart’s Growth

Fact of the Week: Solar just overtook coal as a supplier of electricity, at 12.8% vs. 12.2%.

BNSF’s BIG Project Approved

BNSF will spend $1.5 billion on a 4,500-acre integrated rail facility.

JP Morgan Report on GLP-1s

New Seth Klarman Video

Squishmallows in Happy Meals

The New Joule Order

China has done a better job with its energy security.

AI Servers Should Get Closer to Wind Farms

This Week in Berkshire History

Another quiet stretch in Berkshire’s history.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

Leave a comment

Stay Rational!

Adam

Order the 2nd Edition Now!