The Rational Cloning: Weekly Ideas #85

Tweets/Ideas That Make You Go… Hmm 🤔

Welcome to the 85th edition of the Rational Cloning Newsletter (Weekly Ideas Series).

Helping you discover the best ideas of others.

Happy cloning.

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Tweets That Make You Go… Hmm 🤔

• One of Jesse Livermore's favorite books was “Speculation As A Fine Art and Thoughts On Life” by Dickson Watts (1880) Dickson Watts was at the height of his powers as President of the New York Cotton Exchange when Jesse Livermore was born.

• Barron's: Oil is "not dead yet"

• "According to our research, both quality and value portfolios exhibit peak CAGRs around 15 to 20 stocks, with returns declining as n [the number of stocks] increases.

• Michael Moritz on what made Sequoia Capital successful: "We've always been afraid of going out of business."

  • "We've worked hard on trying to figure out how we make Sequoia endure. We've assumed that tomorrow isn't like yesterday. We can't afford to rest on our laurels."

• Letter #84: Sam Zell (1976)

  • This past week, Sam Zell passed away. Sam was the founder and chairman of Equity Group Investments, which he founded in 1968, and Equity Office, which he sold to Blackstone for $39bn in what was the largest LBO at the time.

  • Today’s letter is an essay Sam wrote in 1976 titled The Grave Dancer: A guide to the risky art of resurrecting dead properties. In it, he discusses opportunity from adversity, lays out how he analyzes distressed properties, dives into financial restructuring, and shares the motivations of distressed property investors. He also makes the case for why real estate values will grow and walks the read through a concrete example of an office building workout, complete with financials.

• Nick Sleep: "In the near term, our results are likely to be as bad as they may be good — but we are confident that, in the long run, they will prove satisfactory ... Only by looking further out than the short-term crowd can we expect to beat them."

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Check out previous issues of Weekly Ideas👇 

• The Rational Cloning: Weekly Ideas #84

• The Rational Cloning: Weekly Ideas #83

• The Rational Cloning: Weekly Ideas #82

• The Rational Cloning: Weekly Ideas #81

• The Rational Cloning: Weekly Ideas #80

The Rational Cloner’s Library

• The 2023 Game Plan

• Table of Contents

• Fertilizers

• Royalty Companies

• Tobacco

• Black Stone Minerals (BSM)

• Mosaic Musings #1: Tin [Molecule Crisis Series]

• Mosaic Musings #2: Disinflation → Inflation Inflection Point?

• Mosaic Musings #3: Royalty Companies: Inflation, I win; Disinflation, I Don’t Lose Much.

Authored Books

• Nick and Zak's Adventures in Capitalism: Words of Wisdom from the Nomad Partnership Letters

• The Little Book of Investing Ideas: A Curated Collection of Investing Wisdom