Keep Learning – Must Read Links

John Chew asked me to post while he goes through his stem cell transplant.  He says, “I’ll be back.” He thanks the many readers for their kind words of encouragement. 

His hospital roommate. John may opt for a radical new therapy.

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Novagold Annual Report 2015 This annual report’s shareholder letter including the links provides an excellent example of how several investors view the capital cycle for an asset.  History does provides a guide.

http://latticework.com/featured/ Worth a look

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10 THINGS WE’RE READING & WATCHING:

    1.   Overcoming Their Fears 

  2.   Mauboussin On Inefficiencies In Equity Markets 

 3.   3 Critical Things An Investor Needs 

 4.   Superior Investing Insights Through EffectiveThinking 

  5.   Unique Behind The Scenes Look Into Buffett’s Process – Vintage Value (must read)

 6.   Andy Groove And The Iphone SE – Ben Thompson

 7.   How Maritime Insurance Built Ancient Rome 

8.   Should You Buy A Company After A Dividend Cut?

9.   How Buffett And Munger Differ In The Way TheyThink 

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

  10. Podcasts: Conversation with Bethany McLean A fantastic interview for aspiring analysts. Her book on Fannie and Freddie seems like an important read!

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Ackman: PSH-Annual-Report-12.31.151 See the section on Valeant. Yes, hope and confidence have been lost but nothing can help over-valued assets when cheap financing is removed or, in other words, overpaying for rapid asset growth can be financially lethal.

However, love him or hate him, Ackman’s Pershing Square trades at a 12% discount to NAV.  No fees until high water mark met?  Emotional sellers are YOUR friend.

A short summary of the tug of war over Valeant. Setting aside the noise about fraud, greed, and accounting issues, The Valeant Casino, this is a company that financed fast asset growth with cheap debt (at the time) while taking advantage of the flawed quasi-socialized medical system in the US.   Valuation depends on a normalization of true long-term cash flows–VRX_Update_Still Overpriced_2016-03-15 and EV_EBITDA_Misses_the_Point (View video on valuation and ROIC below for more context). The beneficiary of medical care does not DIRECTLY pay ALL of the costs. Who would be willing to accept a $1,000 tube of anti-fungal cream for their itchy feet if a third-party didn’t pay? See Dying with dignity.

Meanwhile……be wise not smart and