When starting this book, I was wondering how this possibly ended up on my list. I’m not an active investor, nor do I really want to be, however, I’m always seeking out knowledge. After about a chapter, it was an easy to put it together; I had seen somewhere the required reading list for new interns at Berkshire Hathaway. If you happen to pick up this book, you’ll probably say to yourself, “yea, this sounds like the words are coming from Buffet and Munger themselves”.

One takeaway…

The scuttlebutt method of gaining insights (talking to whomever you can in/around the company) on prospective companies to invest in seemed to me, at its surface, very inefficient. Fisher’s argument that the type of returns possible should clear any questioning of the time spent, which made sense to me, so I obliged to the point. Additionally, given the times (1950’s), the lack of information flow available allowed me to level-set.

Then, I wondered about certain principle of picking a stock; information asymmetry. In today’s world, could the scuttlebutt method be of even higher value? Today, anywhere from 50% to 70% of trades are executed by computers. That means that any information published can be absorbed and is likely used by computers in their algorithmic trading; information asymmetry is gone, for the majority of trades these days.

I don’t know if Philip is on to something here, but the scuttlebutt method of of choosing a great investment seems as though it may only get more valuable over time. Whether or not he knew that will stay a mystery, I suppose.