Imagine: it’s early Saturday morning; you’ve already exercised quite intensively 3 days in a row during the weekday; you need to go run 32 km. Ouch. The good news is you don’t need to run 32 km! But we do. But that isn’t until mid-September when the Saturday training runs get to its zenith. Marathon training has descended upon us. The first week of training is done, with 4 runs in the bag totalling a distance of 24 km… about that one training run in mid-September. I’ve been reading Influence by Robert Cialdini. It’s great. I can see where Charlie Munger picked up many of his mental models in psychology through Cialdini. I’m going to experiment with the mental models of commitment and consistency bias to ritualize behaviour throughout our marathon training in order to hammer home habit formation through ritualization, which hopefully will make the long Saturday morning runs easier to tackle.
I was reading through the J.P. Morgan (JPM) 2014 Annual Report and Jamie Dimon’s letter to shareholders was rather interesting. I ended up highlighting a bunch of things and wrote a bunch of notes along the columns. JPM has seen solid tangible book value and diluted earnings per share growth over the past 10 years but haven’t seen much movement in the stock price – Dimon thinks he knows why. An interesting fact was how JPM went through the 2008 financial crisis – the answer may shock you. I warn you right now though, this is a long and arduous post – more for my own interest than you, the reader. If you don’t have the slightest interest in reading snippets from the JPM annual report, I suggest you read no further as it will probably just bore you to tears. With that said: here are some random musings from the JPM 2014 Annual Report.
Too often in life, I come across crippling cases of people thinking in very simple terms, going through life auto-piloted to first level thinking. Howard Marks, the legendary junk bond investor, talks about first level thinking and second level thinking in his book The Most Important Thing: Uncommon Sense for the Thoughtful Investor. Too many people seem to lack the mental models necessary to interpret reality. Wait. Let me back up: what are mental models? I tend to get in the habit of reading benders, getting totally intoxicated and consumed with binging on my neverending pile of books, reports, and articles. Coming back from the 2015 Berkshire Hathaway annual meeting, I finally got my hands on Poor Charlie’s Almanack and a few other Munger books (Seeking Wisdom and Damn Right). While not the originator of any of the 100 or so major ideas spanning multiple disciplines, Charlie Munger synthesized the importance of a multi-discipline approach to life by becoming fluent in these major ideas, or mental models, and hanging these mental models in a latticework in his mind in order to avoid the man with a hammer syndrome. What is the man with a hammer syndrome?
You should have listened. I warned you to get this credit card once in 2013, and twice in 2014 (here and here). I warned you all about the dangerously amazing benefits of this card. Oh if you heeded my warnings, you would literally be dancing in a geyser of free cash as of this moment. But alas, your chance (with this card) has passed. Sadly, Capital 1 Canada is no longer offering the same benefits and rewards. The signup bonus was lowered from 35,000 points to 10,000 points. There is also no longer 10,000 bonus anniversary points. We got grandfathered from the older, better card and will still get the 10,000 anniversary bonus, but new card holders are out of luck. I almost had a fit of panic thinking that I would be paying $120 a year for this card without that 10,000 bonus. Here is my final review on this card.
One of the questions asked at the 2015 Berkshire Hathaway Annual Meeting was in regards to what the secret investing formula Warren Buffett and Charlie Munger utilized to achieve such tremendous success over their careers. If you read that giant write up on our road trip to Omaha for the annual meeting, you would know that the answer that was given by Charlie Munger was that there was no specific formula. However, I was recently perusing Poor Charlie’s Almanack and Munger actually provided a specific formula! It’s such a no brainer. I really think Charlie outdid himself with this tremendous formula. Take a look. It will change your life.