Eastman Kodak, Instagram, And The Urgency To Invest

Some of you may already be familiar with this statistic that has been making the internet rounds: at its absolute peak, Eastman-Kodak was able to employ more than 140,000 people across the world, mostly in the United States. At the time Facebook saw fit to acquire Instagram at a billion-dollar valuation level, the company only had 13 employees on the rolls.

It’s a real-life illustration of the theme I hit quite a lot on this site: the changes in technology will bring untold riches to the owners of the rapidly growing assets, but it’s not going to bring collateral benefits to people that are conveniently geographically located next to these burgeoning businesses.

The just part of this change is that the people who are creative and willing to add their labor to make their creative visions a reality will be wonderfully rewarded for the value they deliver to their customers. … Read the rest of this article!

Charlie Munger’s Belridge Oil Investment

At the 2019 Berkshire Hathaway shareholder meeting, Charlie Munger described Belridge Oil as the greatest investing mistake of omission of his life. In 1977, he bought 300 shares of the stock for $115 per share. At the time, Munger described it as the most undervalued stock in the world, with his calculation of intrinsic value finding that the stock was worth somewhere in the thousands of dollars.

Later that year, he was offered the opportunity to buy 1500 shares of the stock at the same price. Munger declined, leery of committing to a stock whose CEO was a dysfunctional drunk (though as Munger later recounted, though the CEO had a drinking problem, the Belridge oil wells didn’t).

In 1979, the Belridge CEO put the company on the auction block for sale in a bidding war between Mobil Corporation, Texaco, and Shell. Ultimately, Shell was the high bidder at a price … Read the rest of this article!