Tuesday Links - February 8, 2022
Nixon's Final Days, David Tepper, Berkshire Hathaway Energy, Luxury Beliefs, Erosion of Trust, Twitter's Future, Taylor on Inflation
“I brought myself down. I gave them a sword, and they stuck it in, they twisted it with relish. I guess if I’d been in their position, I’d have done the same thing.”
Nixon’s Final Days
I enjoy reading about American history, but usually I tend to gravitate toward the founding generation or the Civil War periods. Recently, I decided to read about Watergate which occurred during my lifetime although I was too young to have any recollection of the events.
Bob Woodward and Carl Bernstein became famous for their Washington Post coverage of Watergate and their book, All The President’s Men, which was published less than two months before Richard Nixon’s resignation on August 9, 1974. That book covered the first part of the scandal. The Final Days, published in 1976, contains the rest of the story including an exhaustive day-by-day account of the final weeks of the Nixon presidency.
The distance of nearly a half century does not alter the gravity of the coverup that took place or the culpability of the President himself. Richard Nixon comes across as a tortured soul consumed by paranoia, insecurity, envy, hatred, and other deeply rooted psychological impulses that eventually destroyed his career and nearly tore the country apart. Nixon’s diplomacy with the Soviet Union and China, which were the accomplishments that he was most proud of, will always be overshadowed by scandal.
Yet, as I read these accounts of the scandal, I was struck by the number of insiders in the Nixon White House and in Congress who ultimately saved the country from further agony by carefully encouraging the President to perceive his resignation as a heroic act rather than forced abdication.
Nixon’s personality was such that the more he was directly pressured to resign, the less likely he would be to make that decision. Nixon’s inner circle, including members of his family, had to convince the President that his cause was not only hopeless but damaging to his legacy and the country. Nixon had to feel like he was in command of the situation and that the decision to resign was his alone.
Richard Nixon lived nearly two decades after his resignation and worked hard to establish his status as an elder statesman. He succeeded in at least partially rehabilitating his image and was eulogized by President Clinton in 1994 who said: “May the day of judging President Nixon on anything less than his entire life and career come to a close.”
David Tepper: The King of Bouncing Back by Neckar, February 5, 2022. This is an interesting biographical profile and set of resources/links for those interested in learning more about David Tepper. “For better or worse we’re a herd leader. We’re at the front of the pack. We're one of the first movers. First movers are interesting; you get to the good grass first, or sometimes the lion eats you." (Neckar’s Insecurity Analysis)
Berkshire Hathaway’s Utility Business Is a Crown Jewel by Andrew Bary, February 7, 2022. A recent presentation regarding Berkshire Hathaway Energy has been linked to from Berkshire Hathaway’s website leading Andrew Bary to believe that Warren Buffett might be interested in highlighting this business ahead of his annual letter to shareholders which is scheduled for release on Saturday, February 26. (Barron’s)
Buffett's $152B Apple bet, explained by Trung Phan, February 5, 2022. An interesting discussion of Warren Buffett’s Apple investment: “Berkshire Hathaway started building its Apple position in 2016 and plowed $36B into the company by the end of 2018. Since then, Apple’s value has 4x’d from ~$700B to $2.8T and Berkshire’s 5.4% stake in the iPhone maker is worth $152B for an unrealized gain of $116B (Berkshire has sold $13B over the years and its current annual dividend from Apple is a truly comical $775m).” (SatPost by Trung Phan)
Thorstein Veblen’s Theory of the Leisure Class by Rob Henderson, November 16, 2019. “In the past, people displayed their membership of the upper class with their material accoutrements. But today, luxury goods are more affordable than before. And people are less likely to receive validation for the material items they display. This is a problem for the affluent, who still want to broadcast their high social position. But they have come up with a clever solution. The affluent have decoupled social status from goods, and re-attached it to beliefs.” (Quillette) h/t Why You’ll Never Win the Status Game via The Profile
Fluke by Morgan Housel, February 1, 2022. Sometimes the path of one’s life can change based on entirely random encounters. This article reminded me of something Nassim Taleb once said about seizing free options in life by exposing oneself to random serendipity. (Collaborative Fund)
The Small Steps of Giant Leaps, February 2022. “Eating a chocolate bar right now won’t make you unhealthy. Just as not eating it won’t make you healthy. Saving money today won’t make you rich, just as not saving it won’t make you poor. Reading a chapter of a great book today won’t solve your problems just as not reading it won’t make them worse. Not doing the obvious thing you know you should do — the thing that positions you for future success — rarely hurts you right away.” (Farnam Street)
Panic Series (Pt. VII) – 1873 by Jamie Catherwood, October 31, 2021. New technology often causes boom and bust cycles. Railroads represented the big new technology bet of the mid nineteenth century. “The Panic of 1873 in American picks up largely where we left off in the Panic of 1857, with railroads at the center of yet another financial crisis. Railroads had already experienced rapid growth before 1861, but the US Civil War (1861-1865) took things to another level. From 1866 to 1873 some 35,000 miles of railway track were laid across America. In terms of their importance to the domestic economy, railroads had also become the largest non-agricultural employer.” (Investor Amnesia)
Covid Is Less Deadly Where There Is Trust by Thomas J. Bollyky, Joseph L. Dieleman and Erin N. Hulland, February 3, 2022. The premise of this article might seem obvious. In late 2019, I wrote an essay called The Paradox of Trust noting that society cannot function without some level of baseline trust between government and citizens, as well as among citizens themselves. The government response to COVID has been flawed from the outset, beginning with misleading guidance on mask policy. The loss of trust in government later spread to vaccine acceptance. The pandemic has now taken nearly a million lives in the United States. The damage to trust in institutions and among citizens will last far longer than the pandemic itself. (WSJ)
Twitter: Towing the Clown Car out of the Goldmine, February 2, 2022. “Twitter, from my perspective, has the tow truck attached to the clown car, and is spending money on real mining equipment, and it's beginning to get the gold mine operational. So for the first time in history, it's not just picking up nuggets on the ground, but actually trying to figure out how to mine in an optimal fashion.” (Business Breakdowns)
John Taylor on Inflation, the Fed, and the Taylor Rule, February 7, 2022. “What's so bad about rising inflation? Why should we aim for a rate of 2 percent? Why is it a problem if interest rates are too low--and what do we mean by inflation, anyway? Stanford University's John Taylor talks with EconTalk host Russ Roberts about these questions, the Taylor Rule, why inflation is rising, and what the Fed should do about it. At the end of the conversation, Taylor discusses whether stimulus stimulates and the dangers of the national debt.” (EconTalk)
The Mistake of Not Selling Soon Enough and The Importance of Journalism, February 6, 2022. “Co-hosts Elliot Turner, Phil Ordway, and John Mihaljevic discuss overstaying one's welcome as an investor, how to think about selling vs. holding, and reading for purpose and the importance of journalism.” (This Week in Intelligent Investing)
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