Kempton’s notes & “insights” on Warren Buffett’s 2009 letter to shareholders & BRK annual report

Saturday, 27 February, 2010

Go ahead, download a copy of Warren Buffett’s letter to shareholders & BRK annual report and read it. I will never advise my readers of what stocks to buy or at what prices, I believe it is the readers’ job. If people want to invest their money and receive the associated gain/lose as a result, it is only fair that they are responsible for their investment actions.

But to me, reading Warren Buffett’s letter is a FREE exercise of the brain one should engage our minds once a year if we can. And I am fully aware that great investor of Warren’s success and one who is so willing to share his insights (in a way with minimum agenda) will likely not come by for a long time (or in my lifetime). So I treasure the pleasure in reading Warren’s letter every year.

The following are my notes and “insights” on Warren Buffett’s 2009 letter to shareholders & BRK annual report. This article will be updated frequently today and the next few days as I get a chance to read more. Come back often to check.

*** Page ref are based on the printed page numbers. Emphasis added. ***

Note: I am reading in a “random” manner” so you will see my comments appearing out of sequence. I will try to read both the letter (pg 1-22) and the MD&A section (pg 61-94).

*** pg 15 – When it’s raining gold ***

“We told you last year that very unusual conditions then existed in the corporate and municipal bond markets and that these securities were ridiculously cheap […] Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.” [Kempton: Of course, the challenge and the wisdom is in recognizing “big_and_solid” opportunities and not just “big_and_wishful_thinking” opportunities. (smile)] [HT Alex]

*** pg 16 – Risk Control ***

Charlie and I believe that a CEO must not delegate risk control. It’s simply too important. […] If Berkshire ever gets in trouble, it will be my fault. It will not be because of misjudgments made by a Risk Committee or Chief Risk Officer.”

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Stanford Class Day Lecture 2009: The Uniqueness of Humans

Monday, 15 February, 2010

What a great talk at Stanford. It is well-worth the 37 minutes to watch this insightful and interesting to watch talk.

On June 13, 2009, Robert Sapolsky, world renowned professor of neurology, neurological sciences, neurosurgery and biological sciences gave the class day lecture in association with commencement weekend 2009. Having been selected to talk by the Stanford University graduating class, Sapolsky spoke about the uniqueness of humans in relation to the rest of the animal world. A few of the topics he spoke on include aggression, theory of mind, the golden rule and pleasure.

[HT Andreas]

My special gift to Ronald Coase for his 99th birthday

Saturday, 5 December, 2009

In some sense, my “gift” to Prof. Ronald Coase for his 99th birthday is “special”. More on this later.

For the last 20+ years of my life, many of my thinking has been shaped and influenced by Coase, and yet I have not met him in person. Of course, how much have I actually learned or understood remains a mystery. (big smile) Allow me to share two stories.

I remember some years ago during the first year of my MBA program, somehow the topic of lighthouse came up. And I, quite off-handedly, mentioned to my classmate (he majored in economics, and I majored in computer science) that lighthouse is usually given as an example of a public good but this categorization is actually wrong.

Well, to my surprise, my classmate insisted that, “No no no. Lighthouse is a public good and you cannot charge any money for the use of it.” After a minute or so of discussion, we got back to our schoolwork. To me, from that moment on, I realized I was lucky to have some special insights. I’ve learned Coase’s ideas, including those in “The Lighthouse in Economics” via Prof. Steven Cheung‘s articles in Chinese when I was attending high school in Hong Kong. I have learned the importance in asking questions. And try not to take things/”established facts” for granted.

In yet another MBA class, this time an ethics class. The professor asked a simple question, something like, “Why do we have ‘company’/’corporation’?” In hope to lead to some discussions about ethics (well, it was an ethics course after all). What my professor didn’t expect was me raising my hand and answered, “To reduce transaction cost.” :)

Now, without further delay, allow me to present my “special” and virtual gift to Prof. Coase. Wishing Prof. Coase a very happy 99th birthday (in advance) and good health for many more years to come.

My “special” “gift”

This gift is “special” because I think the best gift to give to someone like Prof. Coase, who has everything he needs in the world and likely every material thing he wants, is to “pay it forward“. Prof. Coase himself doesn’t really benefit from the gift itself, it is the people who may learn from Prof. Coase that are benefitting. So I am “paying it forward” or “gifting” forward.

As you may know, the wonderfully insightful (and often humorous) 2003 Coase Lecture was delivered by Prof. Coase himself. And the full lecture has been available online via Coase Institute for free download and viewing for some time now. Unfortunately, unless the person has an extremely fast internet connection and have patient to wait for an hour or two or more, downloading the 525MB quicktime video file (this is very big) can still be quite a challenge. And for those that have slower regular internet access, viewing the lecture is practically impossible.

So as a “special” gift to Prof. Coase for his 99th birthday, I have taken the initiative and spent most of the night (well, actually last night and now well into the wee hours) to compress and upload the video onto YouTube.

This “gift” is “special” also because I’ve bent quite a few rules. Since this is a gift for Prof. Coase’s 99th birthday, I hope the “deciders” don’t mind and will let me give this “gift”. :)

Hope you enjoy the 2003 Coase Lecture (in 6 parts).

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2009 Coase Conference – Day 1 brief notes and photos

Saturday, 5 December, 2009

Thanks a lot to my friend Zhaofeng for allowing me to quote and use a brief summary of his personal notes (in Chinese) and photos of day one of the 2009 Coase Conference. I am hoping and looking forward to the Information Economy Project at George Mason University School of Law posting the videos for the 2009 Coase Conference very soon.

Here are some photos.

University of Chicago School of Law2009 Coase Conference registration @ University of Chicago School of Law

Ronald Coase @ 2009 Coase Conference, University of Chicago School of LawThomas Hazlett (L), David Porter and Vernon Smith @ 2009 Coase Conference, University of Chicago School of Law

Doug North @ 2009 Coase Conference, University of Chicago School of Law


Tuesday, 4 August, 2009

I am looking forward to Oscar winning animator Chris Landreth sharing his experience of attending SIGGRAPH 2009 in his blog.

Here is a really cool and specialized SIGGRAPH 2009 Technical Papers Video Preview

And a neat (and technical again) “Deforming Meshes that Split and Merge, SIGGRAPH 2009”

Here is a cheesy SIGGRAPH 2009 Preview Video. No idea why SIGGRAPH made this preview so cheesy to look and sound like a bad ad. :)

Watching all these videos reminded me of the old days in 1991 when my friends were rending teapots and simple objects in the computer lab calculating the shadows and reflections, etc. We’ve come a long way.

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