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           __________________________

Today's links:

A few simple charts highlighting how some of our prosperity could be an illusion (Link)                   ___________________________ Apple's strategy after iPhone's peak (Link)           ___________________________ Stat of the day:  There are now 3.7 million published indices $(Link)  "Indices measuring markets have ballooned in number by another 438,000 to more  than 3.7 million in the past year, as providers produce a blizzard of bond market, environment,  social and governance benchmarks. Gauges designed by benchmark providers to measure  everything from the performance of small Chinese companies and African debt derivatives  to the music streaming industry or groups that adhere to Catholic values have been spurred  by the rising popularity of passive investing."           ___________________________ How about that multiple compression? S&P 500 Index's Price to Earning Ratio changes year over year.  The P/E ratio is a price multiple which shows how much  investors are willing to pay per dollar of earnings. The S&P 500 Index is a broad-based market-capitalization-weighted index of 500 of the largest and most widely held U.S. stocks.

Get the Edge
Click here to view an archive of:

Investment Education
Book Recommendations
Food for thought
Glimpses into EdgePointers' lives
...and Daily Musings
           __________________________

Today's links:

Daniel Schwartz, who took over Burger King at 32, explains how to find and develop young talent*  (Link)

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Canada is a lot smaller than  you think - maps show Canada and Russia taking up 25% of Earth's surface when in reality they occupy closer to 5% (Link)

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More than a fifth of China's homes are vacant & third-home purchases at record high (Link)

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* EdgePoint Investment Group Inc. owns a stake in Restaurant Brands International and may be buying or selling positions in the security.  

Get the Edge
Click here to view an archive of:

Investment Education
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Food for thought
Glimpses into EdgePointers' lives
...and Daily Musings
           __________________________

Today's links:


Dark-roast coffee may prevent Alzheimer's and Parkinson's (Link)
          ___________________________

Bill Gates on why the world deserves a better toilet (Link)
          ___________________________

Opportunity set increasing in fixed income:

Get the Edge
Click here to view an archive of:

Investment Education
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Food for thought
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...and Daily Musings
           __________________________

Today's links:

Things you see during every market correction (Link)
          ___________________________

Biosimiliars to slash drug costs in rich countries ($) (Link)

"Biosimilars approvals are on the rise, promising cheaper biotech drugs in the long run.  The global market for them could triple to $15 billion by 2020, and could reduce U.S. healthcare spending by $54 billion over the next decade."
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Growth of microbrands threatens consumer-goods giants ($) (Link)

"The growth of direct-to-consumer brands (Casper, Warby Parker, Glossier, etc.) is driving a significant shift in the consumer-goods sector, challenging established giants. The biggest food-and-beverage companies drove only 3% of total industry growth between 2011 and 2015 with a long tail of 20,000 companies below the top 100 producing half of all growth. The growth of "just-in-time" manufacturing means startups no longer need to splurge on inventory, and other service providers can pass on economies of scale once available only to giants. Microbrands can also sell their products through Amazon, and can use online ad platforms to target consumers with great accuracy. The giants are well aware of the threat, and in response are snapping up companies at high premiums."

 

Your weekend Edge:
Click here to view an archive of interesting reads, fundamental investment topics, insights and more
          ___________________________

Too busy during the week? Catch up with last week's readings:


Businesses

An empire built on Nutella (Link)

No cash needed at this café. Students pay the tab with their personal data (Link)

Everything you wear is athleisure (Link)

Software-related posts through the years & the 10th anniversary of Bitcoin whitepaper (Link)

The rise and fall of the popular game app HQ Trivia. Jeopardy disruptor? Not so much (Link)


Investing

Berkshire Hathaway meeting transcripts by year (Link)

A brief attempt at finding the source of Peter Lynch's success on the Magellan Fund (Link)

The "No Jerks" rule of investing (Link)

Big Tech's sell off - Rising rates are only part of the story $ (Link)

Making sense of multiples - interview with Michael Mauboussin (Link)

Mauboussin's research paper on valuation multiples (Link)

George's book recommendation: Expectations Investing: Reading Stock Prices for Better Returns by Mauboussin       

Correlation vs. causation using McDonald's pork-based sandwich: The McRib (Link)

📺 Buffett and Munger on how they never have an opinion about the market - 1994 Berkshire Hathaway Annual Meeting (Link)

Every past decline looks like an opportunity, every future decline looks like risk. (Link)

The library of mistakes - Check out this library in Edinburgh where you'll find a collection of books and other materials related to business and finance failures with the goal of learning lessons of the past. (Link)

Boredom begets action - The Madame Bovary Effect (Link)

Have another cup and read a little longer

Doctors hate their computers - where did health care tech go wrong? (Link)
 
On the lighter side

We surveyed our Operations team, who always seems to be jonesing for java, about their daily coffee intake. The longest order? A grande, half-sweet, vanilla latte with soy milk and caramel drizzle (yes, they're those people). On average, their daily dose is two on weekdays and three on weekends. With an average age of 40, investing their caffeine cash* for the next 25 years in the S&P 500 Index at an estimated annualized 9% per year would result in $259,000 at age 65. Coffee anybody?
          ___________________________

Because we can't get enough of George, this is what the back of his business card looks like:

George Droulias, CFA
Masters in Power of Compounding

 

Get the Edge
Click here to view an archive of:

Investment Education
Book Recommendations
Food for thought
Glimpses into EdgePointers' lives
...and Daily Musings
           __________________________

Today's links:

The library of mistakes - Check out this library in Edinburgh where you'll find a collection of books and other materials related to business and finance failures with the goal of learning lessons of the past. (Link)
          ___________________________

The rise and fall of the popular game app HQ Trivia. Jeopardy disruptor? Not so much (Link)
          ___________________________

Boredom begets action - The Madame Bovary Effect (Link)

"More than any other author I know, Flaubert captures and communicates the immense power of boredom over human behaviour.  Why is dullness such a powerful impediment to attention? What makes for greatness as a stock picker is the discipline to act appropriately on whatever the market is giving you, particularly when you’re being dealt one low conviction hand after another. The hardest thing in the world for talented people is to ignore our mental shriek of unused capacities, and to avoid turning a low edge and odds opportunity into an unreasonably high conviction bet simply because we want it so badly and have analyzed the situation so smartly".        

Get the Edge:
Click here to view an archive of:

Investment Education
Book Recommendations
Food for thought
Glimpses into EdgePointers' lives
...and Daily Musings
           __________________________

Today's links:

Fun stat of the day:

We surveyed our Operations team, who always seems to be jonesing for java, about their daily coffee intake. The longest order? A grande, half-sweet, vanilla latte with soy milk and caramel drizzle (yes, they're those people). On average, their daily dose is two on weekdays and three on weekends. With an average age of 40, investing their caffeine cash* for the next 25 years in the S&P 500 Index at an estimated annualized 9% per year would result in $259,000 at age 65. Coffee anybody?
          ___________________________

Correlation vs. causation using McDonald's pork-based sandwich: The McRib (Link)



 "While you might laugh at the McRib Effect as an obvious example of correlation does not equal causation,  I don’t see how it is that different from a lot of the arguments I see being made about financial markets every single day.  Some pundit will claim that event X caused the market to drop or how President A was better than President B for stocks.  All of these arguments boil down to inferring simple causality for a complex, chaotic system involving millions of decision makers.  To think that one individual has an effect that is both large and measurable on aggregate equity performance is absurd."

          ___________________________


📺 Buffett and Munger on how they never have an opinion about the market - 1994 Berkshire Hathaway Annual Meeting (Link)

"The best thing that can happen from Berkshire’s standpoint (we don’t wish this on anybody) is to have markets that go down tremendous amounts.  We are going to be buyers of things over time. If you’re going to be buyers of groceries overtime, you’ll want prices of groceries to go down, if you’re going to be buying cars overtime, you’ll want car prices to go down.  We buy businesses. We buy pieces of businesses and we’ll be much better off if we can buy them at attractive prices."

           ___________________________


Every past decline looks like an opportunity, every future decline looks like risk. (Link)

"The biggest factor affecting market returns over a short period of time are changes in investor moods. And moods don’t care about spreadsheet, reasoning, formulas, or metrics. They make fools out of those who try to predict them."




*Assumptions: Weekday coffee consumption: a grande Starbucks latte: $4.45, A grande Americano: $2.25.  Weekend consumption: one latte and two Americanos. Index return assumption based on the S&P 500 Index's performance over the last 25 years, source: Bloomberg LP.  In C$. The S&P 500 Index is a broad-based market-capitalization-weighted index of 500 of the largest and most widely held U.S. stocks.