Thoughts following Berkshire Hathaway meeting

David MoonBlog

Last weekend, more than 40,000 people gathered in an arena in Omaha, Nebraska for the Berkshire Hathaway annual shareholders’ meeting, the most unique such meeting among public companies. The official business portion of the meeting lasted 5 minutes, followed by 5 hours of Berkshire CEO Warren Buffett fielding questions from shareholders from around the world. Buffett addressed questions about some of the company’s investments. He sold 13% of the company’s Apple stock at a massive gain. He sold all of the company’s Paramount shares at a massive loss. At the end of its first quarter, Berkshire had uninvested cash on … Read More

TikTok ban is political theater

David MoonBlog

Listening to politicians justify their support for the new TikTok ban, it is difficult to determine if the true purpose of the “Protecting Americans from Foreign Adversaries Act” is to protect our national security from China or our children from mindless videos. It doesn’t matter, however, because the law won’t accomplish either. For members of the fax machine generation, TikTok is a file hosting platform on which users share short videos, most of which likely reduce a viewer’s IQ a small percentage that increases with each day a person spends on the platform. Imagine a cross between Facebook and The … Read More

Protestors confused on investments demands

David MoonBlog

If any of the protesters occupying the campus at New York’s Columbia University are students in the school’s renowned investing program, they should be expelled – if for no other reason, because they lack the most basic understanding of investing and business. (As homage to fellow protestor Arlo Guthrie and Alice’s Restaurant, they should also be required to pick up the garbage.) In addition to the pro-Palestinian protestors more extreme demands, the campus protestors want Columbia’s endowment to divest of companies that do business in Israel. These offending companies include Microsoft, Google and other big tech firms that have contracts … Read More

President is poor stock market predictor

David MoonBlog

I seldom make predictions, but late last year I made one that was as close to a sure thing as is possible: the closer we get to November 5, the percentage of public economic-political comments that are stupid would approach 100. We still have six months until the election, but my prediction has already proven accurate. Here are a few more predictions, in each of which I have similarly high confidence. At least 50% of Americans and 40% of voters will believe that the winner of the presidential election will prove disastrous for our country. I also predict that the … Read More

Q1 2024 client letter

David MoonUncategorized

April 2024 Dear clients and fellow shareholders: Over a period as short as a few months – or even a year – stock prices can be influenced by almost anything, including factors that are completely unrelated to the actual values of the underlying businesses. The 5-to-10% rise in the U.S. stock market during the first quarter was a pleasant reminder of that fact. (Our stock portfolio increased approximately 13% during the first quarter. Your actual equity portfolio returns in each year likely differed somewhat from our model, due to your specific asset allocation, possible legacy positions in your account and/or … Read More

NAACP calls state lotteries systemically racist

David MoonBlog

Imagine that the private pilots who use Knoxville’s Downtown Island Airport wanted a bunch of infrastructure improvements around their rich man’s playground, including a new terminal, covered automobile parking and 24-hour on-site concierge service. Now further imagine that these pilots convinced City of Knoxville officials to pay for these projects and ongoing services by assessing a tax on KAT bus riders – with a portion of that tax paying for a permanent advertising campaign extolling the virtues of poor people riding the bus. Ridiculous? Of course. Just like state run lotteries, including the one in Tennessee. State lotteries are rigged … Read More

Pistachio shopping offers optimism

David MoonBlog

While grocery shopping this past week, I noticed that my favorite snack food company, Wonderful Pistachios, had added Jalapeno Lime to its lineup. Standing in the aisle at Kroger, I could select from 9 different varieties of nut snacks, all from one company. I imagined what my father might think, knowing that I was about to happily pay $11 for a handful of nuts that had already been taken out of the shell. I’m guessing that my father never ate a pistachio in his life. I am certain he never had the opportunity to stroll comfortably through an air-conditioned grocery … Read More

Housing costs and nasal economics

David MoonBlog

At a press conference announcing a proposed “Green New Deal for Housing,” New York Congressman Jamaal Bowman advocated for a rent to be capped at 20% of income. He described it as “plantation capitalism” for someone to pay 60% of their salary towards rent. According to the U.S. Bureau of Labor Statistics, housing comprises 33.3% of total expenses for the average American household. Despite a massive increase in housing costs since Covid stimulus payments, that share has remained remarkably stable for decades. In 2019, that percentage was 32.8%. Twenty years ago, it was 32.1%. Curiously, in New York City, where … Read More

Do politicians understand economics even a little?

David MoonBlog

I saw a meme floating around The Google last week implying that Representative Alexandria Ocasio-Cortez (D-NY) had already parlayed her brief political career into a $29 million net worth. This claim didn’t pass the smell test, so I reviewed her most recent financial disclosure. Based on the broad categories used in these disclosures, her net worth is somewhere between negative $47,000 and positive $30,000. While I’m glad Rep. Ocasio-Cortez doesn’t seem to be building a political shakedown empire, her balance sheet doesn’t strike me as a glowing reference for someone to serve on our nation’s primary taxing authority. In defense … Read More

What motivates Darwin Award candidates?

David MoonBlog

While driving through the Home Depot parking lot a week ago, I passed a young man making an impressive effort to become a Darwin Award winner. Instituted in 1985, a person is recognized with a Darwin Award when he unwittingly contributes to the advancement of human evolution by removing himself from the gene pool in some extraordinary way. It’s like the Olympics of Stupidity, where contenders compete for the title by meeting their demise while engaging in feats such as climbing into a zoo’s tiger exhibit to take a selfie or trying to jump a dirt bike over a moving … Read More