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The Digest #165

Buffett on Inflation, Dollar General, Due Diligence, Personal Libraries, The role of AI in drug discovery, Small-cap opportunities, and interviews of Peter…



Buffett on Inflation

In the mid-1960s, inflation began to accelerate in the United States. There were two brief periods of disinflation, but the overall trend between 1965 and 1982 was a long escalator to higher and higher rates of inflation. It took some serious medicine dispensed by Fed Chairman Paul Volcker to finally bring inflation under control.

Warren Buffett took control of Berkshire Hathaway in 1965 at the start of what is now known as The Great Inflation. He had to deal with the pernicious effects of rising prices when it came to managing Berkshire’s subsidiaries as well as making investments in securities. He also attempted to provide guidance to his partners regarding bond investments when the Buffett Partnership ended in 1970. 

I’ve been reviewing Warren Buffett’s commentary on inflation in the 1970s and early 1980s over the past week and wrote the first in a series of articles focusing on his advice to partners regarding investing in bonds. The article was sent to paid subscribers yesterday and includes a brief free preview. I am working on the second installment of this series and it will be sent out to paid subscribers later this week.


Dollar General: From Bad To Worse by The Science of Hitting, September 4, 2023. Earlier this month, I spent some time reading about Dollar General and posted my thoughts on the company. Being new to Dollar General, I found this detailed write-up interesting, in particular the risks associated with Wal-Mart’s omnichannel initiatives. I previously discounted the risk of competition with Wal-Mart due to the closure of the Wal-Mart Express small format concept in 2016. (The Science of Hitting)

Permanent Equity’s Diligence Process“Permanent Equity is in the business of confidently investing in smaller private businesses using other people’s money, and the aim of diligence … is not to uncover gotchas that would prompt us to renegotiate, but rather to gain an accurate understanding of how a business works and what its opportunity set is so we can do make the investment. Because the more we can confidently invest, the better, so we’re excited to show our work so we can get better too.” (Permanent Equity)

Rate Hikes Make Big Companies Richer by James Mackintosh, September 15, 2023. Just as creditworthy consumers were able to lock in long-term fixed rate mortgages well under 3% in 2021, large creditworthy companies were able to lock in cheap debt. “The winners from higher rates were high-quality borrowers, who locked in low interest rates around the pandemic with bonds maturing further in the future than any time this century. Higher rates have little immediate impact on their borrowing costs—only affecting bonds when they are refinanced—while they earn more on their cash piles straight away.” (WSJ)

An Open Letter to Taylor Swift by Ted Gioia, September 14, 2023. “If it were necessary, I’m confident that you could raise enough money to buy out Spotify or a big record label or a ticketing company. Or all three. Maybe that’s an option, but you don’t need to do that. You can create something better from scratch. You can bring together all of the best things about music into a single operation owned by musicians and run by people who love music—encompassing streaming, physical albums, and live music. You can create a unifying vision. You can build something that’s fair and transparent and gets people excited about music again.” (The Honest Broker)

Creating a Bespoke Lifetime Reading List and Building Your Personal Library by Brady Putzke, September 13, 2023. I was reminded of Nassim Taleb’s concept of an anti-library when I read this article. There’s nothing wrong with accumulating more books than you can read. “End of the day, my salient point in all this is that for readers and writers, this book list and acquisition thing is a way of life. We’re going to do it compulsively anyway. So if it’s not hurting ourselves or anybody else, I figure we lean into it and try to enjoy it all without any guilt.” (The Write Books)

Three Years Of Writing Online by Frederik Gieschen, September 13, 2023. “Everyone needs at least one creative outlet in their lives. We spend most of our days consuming what others have made, whether it’s reading, watching, or listening. I believe it’s crucial that you cultivate at least one place in which you truly express yourself. Forget about sharing and forget about money. Just find one creative activity that you enjoy and that allows you to express and reflect on your unique experience of life. I don’t know what suits you best. For me, it has been mainly writing.” (Neckar’s Alchemy of Money)

AI can help to speed up drug discovery — but only if we give it the right data by Marissa Mock, Suzanne Edavettal, Christopher Langmead, and Alan Russell, September 19, 2023. “Artificial-intelligence tools that enable companies to share data about drug candidates while keeping sensitive information safe can unleash the potential of machine learning and cutting-edge lab techniques, for the common good.” (Nature)

A Few Things I’m Pretty Sure About by Morgan Housel, September 14, 2023. I can certainly relate to this: “Some of my best work was easy to write, and the worst stuff I’ve ever written was agonizing to write. I think it’s similar in most fields. If an idea is good, the work flows easily. Writers’ block – or its equivalent in other jobs – usually means the idea is wrong.” (Collaborative Fund)


A conversation with Renaissance Technologies CEO Peter Brown, September 11, 2023. 41 minutes. “In this special episode of Goldman Sachs Exchanges: Great Investors, Peter Brown, CEO of Renaissance Technologies, talks about his career and building the hedge fund company. He also recounts how the firm navigated market crises such as the ‘quant quake’ and the Global Financial Crisis, and describes how computer models and algorithms have long played a role in Renaissance’s growth.” (Goldman Sachs Exchanges) h/t Frederik Gieschen Five lessons from Peter Brown, CEO of Renaissance Technologies

Bill Gross on the End of the Great Bond Bull Market, September 13, 2023. 47 minutes. “Bill Gross became known as the Bond King during his legendary, multi-decade run at Pimco, eventually growing the company to manage trillions of dollars. Of course, that success coincided with a remarkable bond bull market — a bull market that came to a screeching halt over the course of the last two years. So what does Gross think of markets today? And could there ever be a new bond king in this environment?” (Odd Lots)

The Vigilant Investor w/Chris Bloomstran, September 16, 2023. 1 hour, 27 minutes. This episode is part one of a two part series. “Chris explains how to achieve long-term success by seeking a ‘dual margin of safety’ that comes from owning high-quality businesses at attractive prices. He also warns about the perennial dangers of irrational exuberance, which he now sees in hot stocks like Tesla & Nvidia.” (Richer, Wiser, Happier)

Lessons From Buffett & Berkshire w/Chris Bloomstran, September 16, 2023. 1 hour, 18 minutes. This is part two of the series. “Chris discusses what we can learn from studying Berkshire Hathaway & Warren Buffett; weighs the risks of Berkshire’s huge Apple stake; discusses Berkshire’s valuation; & explains why the stock should beat the S&P 500. He also talks about avoiding charlatans and living with integrity.” (Richer, Wiser, Happier)

Small Caps at Multi-Decade Valuation Low vs. Large Caps: Opportunity or Trap?, September 18, 2023. “In this episode, co-hosts Elliot Turner, Phil Ordway, and John Mihaljevic discuss the small-cap versus large-cap dichotomy, as reflected by US small caps recently hitting a 22-year low versus large caps (measured as the ratio of the Russell 2000 to the Russell 1000). We debate whether the time has come to seek outperformance in small caps versus large caps.” (This Week in Intelligent Investing)

Berkshire Hathaway – 1976 Annual Report, September 13, 2023. 26 minutes. Transcript. An analysis of when Berkshire started to invest float in stocks: “1976 is when everything changed. This is where I draw the line of demarcation for its insurance subsidiaries. The level of stocks within the insurance group just narrowly squeaked ahead of its equity capital. The subsidiary had $93 million of stocks, while there was $88 million of equity capital. I interpret this as about $5 million of stocks were funded by insurance liabilities in the form of float. Stocks consistently outpaced equity capital in the insurance group after this point in time, so this was a turning point for the organization.” (10-K Podcast)

Hyde Park, London

This painting by Camille Pissarro depicts an early fall scene in Hyde Park in 1890. It seems like a timely selection as the autumn equinox approaches.

Hyde Park, London (1890) by Camille Pissarro (public domain)

Copyright, Disclosures, and Privacy Information

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Everything Now: eating disorder recovery is treated with sensitivity and nuance in Netflix comedy drama

The series should be praised for recognising that it’s not just white, middle-class girls who experience eating disorders.



Netflix couldn’t have chosen a more resonant title than Everything Now for their new comedy drama series. When I came out of a residential clinic in 2009 for treatment of anorexia, I did a parachute jump, started volunteering and decided to have a baby on my own. Some of these were impulsive – yet heartfelt – attempts to “catch up” on a life that had been passing me by.

Trailer for Everything Now.

This sense of things moving on while you have been trapped in the depths of an eating disorder is probably even more potent in the intensified temporal rhythms of teenage years.

As Mia Polanco (Sophie Wilde), the 16-year-old protagonist of Everything Now, asks as the school bus conversation jostles around her: “Fuck. How can I have missed so much in seven months?”

This article is part of Quarter Life, a series about issues affecting those of us in our twenties and thirties. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.

You may be interested in:

Friends with benefits – what a sex and relationship therapist wants you to know

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Everything Now is a thoughtful, sensitive and entertaining journey through Mia’s experience of teenage life following her discharge from the eating disorder inpatient unit she has been confined to for seven months.

The image of eating disorders

White, middle-class girls with anorexia have long since dominated the representation in film and TV. But eating disorders cut across ethnic boundaries.

Although there can never be any simple correlation between popular media representations of eating disorders and reality, they play a role in shaping wider understandings of eating problems. This includes who might be affected by them. As a result, this under-representation contributes to a culture in which people from minority ethnic backgrounds are under-diagnosed and less likely to access treatment.

Everything Now should be praised for recognising that it’s not just white, middle-class girls who experience eating disorders.

Also, a significant part of the early plot focuses on Mia’s crush on a female student. Historically, clumsy assumptions have supposed that LGBTQ+ girls and women are somehow more “protected” from eating issues than their heterosexual counterparts. This has long since been challenged. Research has shown that sexual minorities may be more at risk due to the complex relationships between oppression, gender identity and sexuality.

Read more: A male character on Heartstopper has an eating disorder. That's more common than you might think

Nuanced representation

Everything Now is one of the first TV shows about eating disorders that did not make me cringe. It is sensitive, carefully researched and it resonated.

The show does a good job of exploring the complexities of recovery – a long and uncertain process that is rarely depicted, perhaps because it is seen as less arresting than the descent into the illness.

Switching between flashbacks of her time in the clinic and her present life at school and home, Mia’s voiceover communicates her struggles and anxieties. It also shows how difficult it is to navigate other people’s perceptions of recovery. Her grandmother, for example, bakes her a coconut sponge to welcome her home, to which Mia internally exclaims: “You’ve got to be fucking kidding me.”

Her grandma then pinches her cheek and says: “You look so wonderful, so healthy.” The implied link between flesh and healthiness can make such comments a minefield for people in recovery.

Mia aims to throw herself back into adolescence, but the series poignantly explores her new status as an insider and outsider – how she is irrevocably changed by her eating disorder.

As the camera pans over the nibbles and drinks at a party she asks: “How can they just eat and drink? How am I 16 and I can’t just do that?” This captures the way spontaneity with food and drink becomes utterly unimaginable, not only during the throes of an eating disorder but during the pressures, regimens and routines of a recovery meal plan.

Representing recovery

The voiceover is particularly good at showcasing the disjuncture between Mia’s eagerness and how her eating disorder pulls the brake: “Shots, OK. At least I can track what’s in that. Maybe I can skip something tomorrow. I need to show them I’m better. That I can be normal.” She is both present and not present – one of her peers yet so separate.

Everything Now depicts positive moments of recovery too, in ways that are touching and insightful. As Mia walks to school for the first time, she reflects on “All the everyday beauty I forgot how to see – and all the things I get to rediscover now.”

While the eating disorder has made the everyday strange (the snacks and drinks at the party seem impossible) it has also made the everyday more beautiful. The scene reminded me of a quote from a student in sociologist Paula Saukko’s 2008 book The Anorexic Self: “I used to be able to see the sky, but now I only think about food.”

Everything Now is an original, heartwarming and insightful story of learning to see the sky again.

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Su Holmes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Surviving and Thriving in an Ugly Stock Market

Investors Alley
Surviving and Thriving in an Ugly Stock Market
After a wonderful 2021 for stock investors, the last two years have been rough, to say the…



Investors Alley
Surviving and Thriving in an Ugly Stock Market

After a wonderful 2021 for stock investors, the last two years have been rough, to say the least. The next sustained bull market seems to remain in the unknown future.

So let’s look at a couple of market strategies that have worked and will do so no matter how the stock market goes…

It is extremely difficult (for most investors, I’d say it is impossible) to time the market and generate above-average returns from capital gains. I recommend strategies that provide consistent returns.

My Dividend Hunter service focuses on investing in high-yield securities. It has been my best-performing strategy over the last year. Many investors get high-yield investing wrong and stay too focused on share prices. The focus of high-yield investing should be on the cash income stream. Yield means dividends, which are cash returns that don’t go away when share prices go down.

The goal of high-yield investing is to build a stable and growing income stream. I advise my Dividend Hunter subscribers to track their portfolio income quarter after quarter. As long as the income increases, they are fine, and it doesn’t matter what happens to share prices.

Over the long term, a high-yield strategy naturally leads to buying during market downturns. When share prices drop, yields increase, making shares more attractive for income-focused investors. If you make regular monthly contributions, you will buy more shares when the market is down and fewer at market highs. The result will be a lower average share cost and a higher yield on cost.

Starwood Property Trust (STWD) is a long-term Dividend Hunter recommendation. I started my solo 401k in late 2017 and bought my first shares of STWD in January 2018. The first purchase cost $21.18 per share. Over the last six years, I have added STWD shares at prices ranging from $10.96 (at the bottom of the pandemic-triggered crash) to $24.38. My average cost is $17.45 per share, giving me a yield on cost of 11%.

For my Monthly Dividend Multiplier service, I use a dividend growth strategy. You can build wealth by investing in stocks that grow their dividends. You will likely get frustrated with the process before you reach your wealth target.

History shows that the compound annual total returns from a dividend growth stock will end up very close to the average dividend growth rate plus the average dividend yield. For the famous Dividend Aristocrats, this math puts annual returns in the single digits. The realized returns tend to get lost in the short-term market swings, but the math works as you look at five-year and longer time frames.

For the Monthly Dividend Multiplier portfolio, I search out dividend growth stocks where the yield plus dividend growth math gives numbers in the mid-teens. That level of compounding returns will double your money about every five years.

I’ve ensured that the portfolio is diversified across as many sectors as possible that meet my dividend criteria. I track results quarterly and am always surprised by the short-term gains and losses among individual stocks and market sectors. For example, for the third quarter, the Monthly Dividend Multiplier individual returns ranged from gains of over 30% to a loss of more than 30%.

To take advantage of the intermediate swings, I have set weightings for the portfolio stocks, and we rebalance every quarter.

NextEra Energy Partners (NEP) was the big loser for the third quarter. The company reduced its dividend growth guidance from 12% to 15% per year to 5% to 8% through 2026. The NEP share price dropped by 20% in one day and is down double that year to date. But… after the drop, NEP now yields 9%. Add that to 5% dividend growth, and you have potentially mid-teens total annual returns in the future.

Our end-of-Q3 rebalance allowed my subscribers to average down their cost basis on NEP to benefit from future dividend growth.

Tim Plaehn’s controversial new investing strategy

For years, I’ve stressed investing in dividend stocks for income. However, I’ve recently stumbled on a strategy that could generate up to triple digit winners from dividend stocks. This is brand new and you can see the strategy here.


Surviving and Thriving in an Ugly Stock Market
Tim Plaehn

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Ripple’s XRP price jumps 5% fuelled by Singapore licensing acquisition amidst crypto market downturn

Ripple’s XRP emerged as one of the rare gainers during a subdued 24 hours in the cryptocurrency market that saw Bitcoin (BTC) and other top digital assets…



Ripple’s XRP emerged as one of the rare gainers during a subdued 24 hours in the cryptocurrency market that saw Bitcoin (BTC) and other top digital assets lose their value.

Data from CryptoSlate reveals that XRP surged by approximately 5%, reaching $0.53018 as of press time. This uptick follows Ripple’s significant victories during the reporting period as it secured licensing in Singapore and Judge Analisa Torres rejected the U.S. Securities and Exchange Commission’s (SEC) plea for an interlocutory appeal.

Ripple’s Singapore licensing

Earlier today, Ripple said its subsidiary, Ripple Markets APAC Pte Ltd, secured a “full” Major Payments Institution (MPI) license from the Monetary Authority of Singapore (MAS) to provide digital payment token services in the country. The crypto payment country received an in-principle approval from the regulator in June.

The MPI license enables businesses to operate free from daily and monthly transaction limits. To qualify, the business must possess a Singaporean-registered company or branch, maintain a permanent business address for record-keeping, have a minimum capital of $250,000, and appoint at least one director with Singaporean citizenship or residency.

Ripple CEO Brad Garlinghouse described Singapore as a “progressive jurisdiction” that has ” developed into one of the leading fintech and digital asset hubs striking a balance between innovation, consumer protection, and responsible growth.”

Besides that, Judge Torres’s decision provides a closing chapter to the legal tussle between the company and the SEC for this year, with both parties scheduled for trial by April 23, 2024.

Selling pressure on the horizon

Despite this recent surge, XRP still confronts substantial selling pressure due to Ripple recently releasing one billion tokens from its escrow system.

Top 10 Assets by Market Cap. (Source: CryptoSlate)

While the crypto payment firm immediately relocked 800 million XRP, the company still holds 200 million tokens that could add more than $100 million in selling pressure to the market, potentially altering the current upward momentum of the asset.

The post Ripple’s XRP price jumps 5% fuelled by Singapore licensing acquisition amidst crypto market downturn appeared first on CryptoSlate.

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