“Between the idea and the reality… falls the shadow.” (T.S. Eliot) “Vision without execution is hallucination..” (Thomas Edison) — This concept applies to investing for me. On X and reading threads: I find the conversations center on technique, valuation, which is like driving using a rearview mirror. But not the source that produces the financials….then business logic.That is qualitatively, often enough, but when measured produces numbers. Does that make sense? No matter, different strokes for different folks. Have a nice weekend!

Every man who works ought to have sufficient leisure. Henry Ford

I’m told there are too many applicants for the position at Marlowe. Please be realistic! Below is a video. This is not a normal job—for some this is fairy dust that will change your life, for others, hell on earth. If you don’t hear back, try harder to get our attention. And when in doubt, don’t bother. Happy weekend!

Vibe coding = coding…if not now very soon. As a “vibe” coder, I’m ignorant enough to know I’m missing a lot of details. I’d be grateful if anyone can break it down…limitations et al. Thank you!!

Have you ever been completely stumped at some point in your research? There’s inevitably a time when you’ve factored in every single variable and you still won’t see the answer. But it will be there, somewhere, because the answer is always there. When you can’t see it, in my experience, it’s because some assumption you made—something you took for granted—is actually false.  It’s as if you woke up in a hospital bed  thinking you’re in Canada, but you’re actually in London. It’s dramatic, and yet so invisible that you take it for granted. That might sound like a radical analogy, but in our mental work, it is often these major things that trick us. Remember: the magician doesn’t trick you. The magician creates a circumstance in which you trick yourself.

Trying to figure out where to invest money isn't a very complicated subject. I think this is one of the secrets that nobody wants to really accept and discuss. It's just a known fact. It's not that hard to do, it takes some commonsense sense to do an ok job. And an ok job is often a lot better than what people are trying to sell. It’s almost like looking at a religion (pardon the metaphor!). The core tenets are simple. For lack of a better analog, it’s like the Ten Commandments versus a library devoted to a nuance study of the religion. There is a lot of complexity in that huge library, but those Ten Commandments are pretty darn simple. I think this is a problem for those who are in the business of selling investment services. Why? Because simplicity doesn't sell but it’s key to what makes the most money. Here’s what sells: fear and complexity. When you really think about it, the fear is sort of make believe. Like why are we still talking about the 1987 crash? It scares people (NB: In 1987 in spite of all the action the year ended more or less flat!) There are ups and downs, but the stock market has been an ingenious mechanism to fund businesses and to generate wealth for the investor who funded the business by purchasing the company’s stock. What about complexity? I think complexity is a signal…it’s an asset manager showing how smart they are! It’s so complicated so here I am, Smart! This is problematic in two ways. First, just because it’s complicated doesn’t mean the person is smart. Second: if they are really smart, and they know it, I think there's a chance they'll make a mistake by doing something too clever that violates the Ten Commandments.

“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” John Kenneth Galbraith = We are fallible = Stay humble = Caveat emptor Tulip Mania — Peak 1637, decline ~–90% “The tulip is worth its weight in gold.” — Dutch trader, 1636 “Rare tulips are not subject to the laws of supply and demand.” — Leiden speculator, 1637 Mississippi Bubble — Peak 1720, decline ~–85% “The shares will keep rising as long as confidence holds.” — John Law, 1719 “The Mississippi Company’s value cannot fall, for the wealth of Louisiana is boundless.” — Paris financier, 1719 “The value of Mississippi stock must increase as France expands.” — French pamphlet, 1719 “Confidence will maintain the system.” — John Law, 1720 South Sea Bubble — Peak 1720, decline ~–85% “I can calculate the motions of the heavenly bodies, but not the madness of people.” — Isaac Newton, 1720 “The only way to secure great fortunes with certainty is through South Sea stock.” — London Gazette, 1720 “Shares in South Sea are safer than any other investment.” — London pamphleteer, 1720 “South Sea stock will rise forever.” — London crowd phrase, 1720 Canal Mania — Peak 1793, decline ~–70% “The canals will return a fortune without risk. Nothing can prevent their prosperity.” — Investor testimony, 1793 “No safer investment than canal shares.” — British prospectus, 1793 Railway Mania — Peak 1845, decline ~–70% “Railways are destined to pay high dividends forever.” — Parliamentary witness, 1836 “Railway shares will double every few years.” — British investor, 1837 “There is no investment safer than railway shares.” — George Hudson, 1845 “There is no reason whatever to fear a crash.” — Railway Times, 1845 “Fortunes will be made in railways without risk.” — British MP, 1845 Panic of 1873 — Peak 1873, decline ~–60% “They are as safe as a government bond.” — Jay Cooke, 1873 “No cause for uneasiness in the financial situation.” — New York Tribune, 1873 Panic of 1907 — Peak 1907, decline ~–50% “There is no danger of a panic.” — Wall Street Journal, 1907 “Prosperity is permanent.” — Banker, 1906 “The country is sound.” — New York Clearing House, 1907 Roaring Twenties / Great Depression — Peak 1929, decline ~–89% “We in America today are nearer to the final triumph over poverty.” — Herbert Hoover, 1928 “Everybody ought to be rich.” — John Raskob, 1929 “Stock prices have reached what looks like a permanently high plateau.” — Irving Fisher, 1929 “We are in a new era of permanently rising values.” — Charles Mitchell, 1929 “Business conditions are sound.” — Bernard Baruch, 1928 “The outlook is favorable for sustained prosperity.” — Harvard Economic Society, 1929 “Only the lunatic fringe has been shaken out.” — Irving Fisher, Oct 1929 “The fundamentals are sound.” — Herbert Hoover, 1930 “Recovery is just around the corner.” — Herbert Hoover, 1930 Nifty Fifty — Peak 1972, decline ~–70% “Buy the Nifty Fifty and hold forever.” — Institutional brokers, 1972 “Those who buy these stocks are guaranteed to make money.” — Forbes, 1971 “Growth companies are the only investment worth holding indefinitely.” — Morgan Guaranty Trust, 1972 Black Monday — Peak 1987, decline –22% in one day “The market will keep rising because investors can’t think of any reason it should stop.” — David Shulman, Salomon Brothers, 1987 Japan Asset Bubble — Peak 1989, decline ~–80% (Nikkei, real estate) “Japan is number one. Our prosperity will not end.” — Noboru Takeshita, 1989 “Land prices in Tokyo will never go down.” — Tokyo real estate broker, 1989 “The Nikkei will reach 100,000.” — Japanese strategist, 1989 “Japan will dominate the 21st century.” — MITI official, 1989 Dot-Com Bubble — Peak 2000, decline ~–78% (Nasdaq) “Stocks are still undervalued. The Dow will hit 36,000 within five years.” — Glassman & Hassett, 1999 “Amazon to $400.” — Henry Blodget, 1999 “The American financial system is as strong and resilient as it has ever been.” — Larry Summers, 1999

“Circumstances? What are circumstances? I make circumstances” -Napoleon Bonaparte Investing Like Napoleon: Circumstances compensate for a large amount of uncertainty. The next idea is fundamentally the case where we’re looking at a situation where we want to pick a game we’re going to win. Now a lot of the time there’s an obsession with the intelligence associated with winning a game. We look at it differently. I would say that competency is a relative concept. And so, for us, what we need to think about is, will we win this game versus our competitors? It’s not whether we’re the smartest person in the world, it’s are we the smartest person playing that game? But that doesn’t necessarily require us to be particularly intelligent. It could just mean that everyone else that we’re playing against is very stupid. There are a lot of stupid people out there, and they’re not necessarily stupid by their nature, although some of them are. A lot of stupidity in terms of the behavior is created by institutional structures that force behavior that could appear stupid to an outsider. And so whatever the reason is, as long as we understand why they’re behaving that way, and as long as the stupid behavior is there and our behavior is superior, we can win the game. That does not necessarily say anything about our intelligence. We I prefer winning via circumstance and systems. I don’t care if I’m smart. Results are what matter. David Steinberg Marlowe

“What you decide not to read is more important than what you read.” David Steinberg

“If you can’t describe what you’re doing as a process, you don’t know what you’re doing.” W. Edwards Deming Deming? Who is Deming? ….Danaher, Toyota’s production model—celebrated as distinctly Japanese—have the same source, the American statistician, W. Edwards Deming, who went to post war Japan to share his insights. Charles Koch called him the only management thinker who truly understood systems. He’s an invisible hero, whose name isn’t mentioned in the efficiency gospel attributed to Japanese techniques and continuous improvement. He is the source. And what a great read! He gets to the point! Deming = the America “export” that transformed business around the world. Respect 🫡