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Magic Sauce
I probably shouldn't have read Warren Buffett's annual letter. It only reminded me of the futility inherent in what we do every day.
As longtime readers can attest, I don't actually put any figurative or literal stock in near-, medium- or really even long-term market prognostication. In that sense, I wholeheartedly agree with Buffett's unabashedly acerbic characterization of any and all such soothsaying.
If your question is whether that means I view most of the analysis I highlight in these pa
H-
I still have “no clue” as to who you used to be, prior to the time you became “H”. Now, I still don’t know who you are!
Maybe you should start an after school investing club for high school students (who are actually interested in investing) or do something like this. The socialization might be good for you, too.
Cut and paste from Reddit, summarizing an article that was In Bloomberg news in 2022.
Ex-Wall Street trader quit to become a teacher at a public HS in central Florida. Now the school’s math team is one of the best in the country. Colleagues and students say it’s because he’s infused a competitive culture into the team.
This is wild. Imagine quitting your job on Wall Street to become a public school teacher.
This guy left his job as a bond trader, bought a Ferrari, and began teaching at a public high school school in Gainesville, Florida.
The result? Buchholz High School now counts more qualifiers in national math team events than almost every other high school in America.
https://www.bloomberg.com/news/articles/2022-06-03/ex-trader-turns-high-school-math-team-into-wall-street-pipeline
I know what I did the first 60% of my life, but trying to figure out what to do with the next 40%. Something “meaningful” – just trying to figure out what that is. An extremely fortunate situation that I am in; don’t want to waste it!
So THAT’s why Buchholz High’s math program is so good. I thought it was because the university was down the street.
I started my graduate work in Finance and other things in 1966, right when academics were just figuring out what Finance actually was. I watched modern finance being born and squeezing its way into the old school. The stock market in those days was cold, flat dead. The DJIA hit 1000 for the first time in Feb 1966. That didn’t happen again, ever, until Oct 1982. While modern finance was being created in that backwater environment, the first conglomerates were being born like new galaxies in an expanding baby universe. Two of those were new business forms were remarkable, and different. My favorite was Gulf & Western, a bumper stamping company taken over by Charles Bluhdorn in the mid 1950s. He was my first idol at the time. Under him this company came to be the leader in movies, publishing, recorded music, sugar refining and production, shoe making, and many other uncorrelated industries. At Bluhdorn’s untimely death in 1983, the company was broken up. and sold off. Pieces of it ended up as Paramount, Simon & Schuster, Viacom, Madison Square Garden and many others. At about the same time, somewhat less publicly, Warren Buffet was turning a tired carpet mill into what now comprise 6% of all the assets in all the companies in the S&P 500., in short, the biggest company in America. It doesn’t have the biggest market cap. From a company perspective market cap is immaterial and not real. Mostly, cap is a public relations phantom. Buffet and Bluhdorn both worked their magic in the old school. Buffett’s idol was Benjamin Graham, the grandfather of the “old school” of value investing. Buffett is now the leader of that old school and his latest letter shows me he “knows the score.” He told us that in his opinion there is really nothing of value left to buy that will materially improve the performance of Berkshire-Hathaway. Nothing can. What he has accomplished came about from his following the teachings of his idol and his and his partner’s astute observations. Graham was one of my mentors from afar, and the mentor of my main grad school guru, a co-founder of the CFA program. It was these old school folks whose teachings I passed on to my students (and also followed with my wife’s and my meager professor’s earnings). Let’s say, I am not unhappy with what happened from so doing. Old school still makes sense to Buffett and could teach much to those who choose to believe in the miracle of the infinite “melt up.” In the words of the song, “… it just isn’t real …” Buffett may be called a hedge fund manager by some but I say he is by far the most successful creator of the ideal conglomerate, and probably the very last of his kind.
Thanks for the perspective, Dr. Lucky.
My early hero was Robert Vesco.