Tailwinds Edition #9

September 21, 2019

The name “Tailwinds” has a threefold meaning; 1) If you’re looking to build something special, like a business or permanent capital, you should position yourself where there is a tailwind at your back taking the form of changes in the economy, culture, cities, demographics, or some other factor. 2) Buying an existing company, rather than starting your own, gives you momentum and a head start, a proverbial tailwind. 3) The concept of positioning yourself in front of a tailwind relates to a Charlie Munger quote about fishing where the fish are, rather than a crowded shore or dock. Private company investing is a space with opportunity that most investors and institutions cannot touch, and that leaves the door open for smaller investors to build portfolios.

I’m writing this from San Jose where I am on a short vacation with my fiancé and two friends of ours to watch the Oregon vs Stanford (Go Ducks!) game on Saturday, and the Steelers vs 49ers (Here we go Steelers, here we go!) game on Sunday. Pretty great trip if you ask me! As such I haven’t had the time this week to write out a full discussion of mine but I will be back next week.

Is there something you’d like me to write about or hear my perspective on? Hit reply to this email and let me know!

Capital Notes

Warren Buffett Protege to Leave Berkshire, Start Own Firm

“I want to build a long-term platform and a long-term vehicle to acquire and build businesses,” Ms. Britt Cool said in an interview. “There are companies that I think there’s a lot of value in helping them get to the next level, but they’re too small for Berkshire.”

Chenmark Capital: The Grind

“Upon reflection, despite the plethora of expert “negotiation” and “deal-making” books on our bedside table, the attributes learned during the long hours out on backwood trails was likely the most important factor in getting our first deal to the finish line.”

Alex Danco: Why I Don’t Love Light Rail

“It used to be that anyone could move to a city and increase their earning power; nowadays, the economic advantage of cities is only really available to people on the top half of the income spectrum. Most of the discussion around this phenomenon is around specialization of jobs and skills, but I think there’s another factor increasingly at play here: if you can’t afford to live in the attractive part of cities, you’re going to have to pay a “commute tax” that’s going to be a real drag on your ability to prosper and build a good life. High earners consciously pay a premium to avoid this.”

The Grandmaster Diet

“Robert Sapolsky, who studies stress in primates at Stanford University, says a chess player can burn up to 6,000 calories a day while playing in a tournament, three times what an average person consumes in a day. Based on breathing rates (which triple during competition), blood pressure (which elevates) and muscle contractions before, during and after major tournaments, Sapolsky suggests that grandmasters' stress responses to chess are on par with what elite athletes experience.”

If you found an interesting article, podcast, or interview that I missed, please let me know, I’m always looking for interesting stuff!

Photo courtesy of Brenda Stonehouse