A Thread on Diversification

My friend Shyam, wrote an excellent column on diversification. I agree with everything he has written and have some additional thoughts. Thread... A Thread on Diversification Diversified conglomerates get a bad rap for very good reasons. One big one, as Shyam points out, is capital misallocation.Companies in diverse industries have, for the most part, destroyed… Continue reading A Thread on Diversification

I Don’t Want to be a Toll Bridge, I Want to be Its Meaning

The Economics of a Toll Bridge Buffett tells us that the fundamental economics of a toll bridge are excellent. However, this post is not about a toll bridge. Rather, it's about the "functional equivalents" of a toll bridge. Now, apart from the reasons Buffett talked about, what are the other reasons that make a toll bridge… Continue reading I Don’t Want to be a Toll Bridge, I Want to be Its Meaning

Playing Socratic Solitaire on a Gal Called NIMBY

I got a mail from a student. Nikhil wrote: Your approach to multidisciplinary thinking is highly pragmatic but it is an approach never taken in the entirety of our education. Throughout we are taught subjects individually and each of the problems that we are given is confined to the context of that particular subject only,… Continue reading Playing Socratic Solitaire on a Gal Called NIMBY

How to Boil a Frog

Hello there. My name is Umbridge. I am a slimy, green frog. No, not the one who you heard croaking in a movie you watched last month. Nor the one you saw hopping about in your balcony this monsoon. (You shouldn't have screamed at poor Groffy! He jumped over and broke a leg.) I am the… Continue reading How to Boil a Frog

Flirting with Floats: Part III

In Part I of this series on floats, I wrote about how Berkshire Hathaway has been able to create less-than-free float from its insurance operations — a key reason for the company’s stupendous success. I also listed a few “general principles” on floats and showed how high-quality floats can become “unencumbered sources of value.” In… Continue reading Flirting with Floats: Part III