Category: General

There is an old joke that captures well one of the central errors of our time. It goes like this: Two economists are walking through the countryside when they spot a pile of cow manure. One turns to the other and says, “I’ll give you fifty thousand dollars if you eat a spoonful.” The colleague contemplates the utility function, accepts the […]

A business is best thought of as a machine; one that takes various inputs (capital, commodities, people) and converts them into outputs (products/services). If you are interested in a company’s potential for growth, it helps to understand exactly how those inputs are converted to outputs. Furthermore, you need a sense of how demand for those outputs will change over time, […]

At a recent value investing conference, money manager Mohnish Pabrai, a self-described “shameless cloner” of Buffett and Munger, sat down for a fireside chat. In it, he shared wisdom that, while far from original, bears repeating. Indeed, the fact that Pabrai’s wisdom is essentially repackaged lessons from Berkshire’s dynamic duo is precisely one of his key messages. In investing, while […]

Big technological and structural shifts tend to hide in plain sight. When they do finally draw some attention, they tend to look like exaggerated hype. And most of the time that is exactly what they are. Even when a genuine shift is underway, progress feels painfully slow. The promise is always a touch out of reach. Something shinier shows up, […]

I bought my first shares in November 1985, the 40th anniversary is here!!—here’s what I learnt since, sometimes the hard way! Through the various cycles, events and characters, the journey and outcomes have been an intriguing, rewarding and interesting way to spend time. Below, I have attempted to avoid, firstly, pointing out stocks you should have bought, as there are […]

We at Strawman know that bigger isn’t always better. There are plenty of reasons for that, but one of the more enduring comes from William H. Whyte’s classic The Organization Man from 1956. His central point was that large institutions tend to nudge everyone toward the middle. The bigger the machine, the more it wants predictable cogs. Comfort goes up, […]

Ben Hunt, former hedge fund manager and creator of Epsilon Theory, once wrote that a bet is a tax on bullshit. It is a sharp and accurate reminder that opinions are free, narratives are endless and forecasts cost nothing to produce. Talk demands nothing. A bet, however, demands everything. It requires sacrifice. It forces you to risk something you value […]

I recently came across a fascinating, if slightly uncomfortable, piece of research titled Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks (you can read it here). It examines thirty years of market history and reveals an awkward truth: almost all the wealth created by equities comes from a vanishingly small number of companies. Of the 64,000 stocks studied, just 2.4% […]

We often use capital as a synonym for money in markets. We talk of capital raising, capital structure, capital adequacy… but that’s not what capital is. Not really. So, at the risk of getting a little philosophical, I wanted to frame capital in the proper context. Partly because it’s interesting, but more so because a clear conception of capital gives […]

Most technologies can be improved upon significantly after their initial invention. Steam engines, telephones, automobiles, and software all evolve through iterative refinement, with better versions replacing older ones. But every so often, something emerges that is fundamentally final in its category. Not because people stop innovating, but because the nature of the thing itself admits no superior version. Algebra did […]