Nevstar Links 09 May 2025
Welcome back to the Nevstar Links, your guide to some of the best articles on markets and investing available on the internet.
Today is Friday 9th May and it was on this day in 1914 that President Woodrow Wilson made the official announcement proclaiming Mother’s Day to be nationally observed each year. The idea originally grew out of calls for peace and anti-war campaigns following the American Civil War (1861-65). But the idea of a Mother's Day did not gain traction until 1908, when West Virginia woman Anna Marie Jarvis held a church memorial to honour the legacy of her mother, Ann Reeves Jarvis. Anna wanted to continue her mother's work and pushed to have a day set aside to honour all mothers. This culminated in President Wilson’s proclamation that the second Sunday in May would be Mother’s Day, and it remains globally observed to this day.
Onto the links which has articles on margins, missions, and movies.
"The Long Term Trend Is Up"
Saturday was the 2025 edition of the Woodstock of Capitalism with the hosting of the Berkshire Hathaway annual general meeting in Omaha, Nebraska. This years event was notable mainly for the announcement that Warren Buffett (94) would step down as CEO at the end of 2025. Which is a shame. As this link demonstrates, at the shareholder meeting, Uncle Warren proved yet again that he is one of the all-time great teachers of investment literacy.
“Nobody knows what the market is going to do tomorrow, next week, next month. But they spend all their time talking about it, because it's easy to talk about. But it has no value.”
The Value Of A Second Opinion
Excellent piece outlining why it is really difficult to consistently make money as an individual investor picking individual stocks. We seek a second opinion when faced with a deleterious diagnosis from a physician. But the stock market is essentially the sum total of thousands of opinions on the plight of an individual company. Are you really likely to know more than thousands of others – all the time?
“When you buy individual stocks, or when you jump in and out of the market based on stocks collectively looking overvalued or undervalued, you’re deciding that you know more than the collective consensus of a huge number of experts. It’s like a sick patient receiving feedback from thousands of physician specialists and then promptly ignoring that feedback.”
The Story Behind Wall Street’s Favourite Movie
Arguably the best ever movie about Wall Street is JC Chandor’s Margin Call. Filmed shortly after the Global Financial Crisis, its the story of an unnamed Wall Street bank discovering that it owns a pile of ‘toxic sludge’ that will shortly bankrupt the firm if not dealt with quickly. This great blogpost interviews the director and examines why it resonates so acutely with financial professionals.
“Margin Call captures the uncanny sense of a crime without a clear criminal, a system in which each individual follows rules that lead to catastrophe. It’s the more durable sibling to 2015’s The Big Short, a zippy underdog story that unambiguously roots for the small hedge funds on the other side of the bet that threatens Chandor’s fictional bank.”
Why Is Google Abandoning Its Core Mission?
Fascinating blogpost from The Honest Broker wondering why the world’s dominant search engine doesn’t want you to search anymore. Alphabet has the lowest P/E ratio of the Magnificent Seven and this is partly due to threats to its near monopoly search business. The inherent contradiction is that Google needs people to stay on its platform to monetise customers better but this is at odds with the original core search mission.
“The search engine was invented as your gateway to the web. The inventors of this technology tried to index every page on the Internet—so that you could find anything and everything. That was an exciting era. Search engines were like train stations or airports. They took you all over the world. At Google today, the goal is the exact opposite. You never leave the station.”
Why Bitcoin Is Not Worthless
This is a terrific article from a fund manager, and noted Bitcoin sceptic, excoriating the common accusation that Bitcoin is worthless because it doesn’t generate any cash flows. Warren Buffett himself frequently makes this accusation. In this excellent article, Owen Lamont of Acadian outlines why lots of cashflow-less items are still ‘valuable’ largely because they can always be traded for items which we want.
“In modern economies, we don’t get paid in chickens or hogs, we get paid in money, an inherently useless object that is (like bitcoin) only valuable due to the shared social convention that it is valuable.”
Quotes of the Week
“A mother is a person who when seeing there are only four pieces of pie for five people, promptly announces she never did care for pie.”
Tenneva Jordan
“Mothers are like glue. Even when you can’t see them, they’re still holding the family together.”
Susan Gale
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Have a great weekend.
The Nevstar
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