38: Buffett on ROE; The Jack Welch Paradox; Neil deGrasse Tyson Explains A Day; JWST Delayed Again
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Buffett’s Nuanced Explaination of Returns
Here are my takeaways from the video below. Buffett sure packs a lot into his responses!
Don’t base your actions on the premise that unprecedented high returns are sustainable
Thinking about the system (in this case banking) which “lives” inside GDP; there are natural limits
If companies retain lots of earnings that would increase the level of capital in the industry and likely drive returns down; if they distribute earnings (or buyback stock) or engage in takeovers, high returns can be sustained at the tradeoff of lower growth [think See’s]
If you had 500 Jack Welches, it’s unclear whether returns would be higher or lower. They might be higher due to rationality; or they could be lower because of the neutralizing effect of so many smart people competing
Neil DeGrasse Tyson Explains A Day
Such a fascinating explaination of something we think we know pretty well. Here’s a cool tidbit: even the migration of land mammals can change the rotation of the Earth. Cool!
James Webb Christmas Special
The JWST just got delayed again. It’s scheduled to launch on Christmas Day, no earlier than 7:20am EST.
Stay rational! —Adam
Cover photo by Louis Maniquet on Unsplash
