We do not bring in compensation consultants and we don’t have a human resources department, legal department, etc. That makes life way too complicated, and people get vested in going to conferences.

If you are dependent on borrowed money, you have to wake up every day worried about what the world thinks of you.

Warren Buffett. The context for this was the Bear Stearns meltdown, but it applies to so much more.

You don’t have to have perfect wisdom to get very rich – just a bit better than average over a long period of time.

Charlie Munger. Applies to more than investing, of course.

I never took a business class, except accounting. When I was a boy, there was a man who came to the club every day at 10:30am. I asked my dad about him – he had such a good life! My Dad said, “He gathers up and renders dead horses.” I learned from that.

We also look for three things: intelligence, energy and integrity. If [they] don’t have the latter, then you should hope they don’t have the first two either. If someone doesn’t have integrity, then you want them to be dumb and lazy.

Buffett FAQ

A treasure trove for Warren Buffett (and Charlie Munger) fans. (via)

Goal – To compile and order the teachings of Mr. Buffett to maximise their benefit and usefulness to others. All material below is from question and answer (Q&A) sessions with Mr. Buffett.

Buffett FAQ

Have You Ever Tried to Sell a Diamond? – Magazine – The Atlantic

Good article. One of the best ever, they say.

[An opinion poll on diamond purchases] noted, for example, “A woman can easily feel that diamonds are ‘vulgar’ and still be highly enthusiastic about receiving diamond jewelry.” The element of surprise, even if it is feigned, plays the same role of accommodating dissonance in accepting a diamond gift as it does in prime sexual seductions: it permits the woman to pretend that she has not actively participated in the decision. She thus retains both her innocence—and the diamond.

Have You Ever Tried to Sell a Diamond? – Magazine – The Atlantic

Spent: Sex, Evolution, and Consumer Behavior (review: 4/5)

Spent: Sex, Evolution, and Consumer Behavior

By now it should be clear that you’ll be most comfortable with my arguments if you fully accept yourself as a fitness-flaunting consumer narcissist who has been deluded, throughout your whole life, into irrational spending habits by advertising euphemisms and peer pressure. In other words, you’ll probably feel uneasy for much of the time you’re reading it.

That line comes about 100 pages into the book. I stumbled on it when I was flipping through and it’s the passage that convinced me to take it from the library. Geoffrey Miller’s book, Spent: Sex, Evolution, and Consumer Behavior turned out to be very good. If I could just block-quote the entire thing right here, I probably would.

You get a sense of the tone from the quote above. It’s fairly conversational. There’s a counter-cultural bent to it that comes across as more detached and bemused, rather than left-wing-ish panic or conservative haughtiness. He picks on both perspectives fairly evenly. Some of it I found genuinely funny, some was awkward funny (“Mobile phones are already becoming too Lilliputian for adult males to use without feeling like a palsy-pawed giant ground sloth.”). Most of it offered plenty of brain-tweaking “I hadn’t thought of it that way” moments. The book got quite a collection of dog-ears by the time I got through with it.

He starts out with a discussion of the “Big Five” personality traits, explaining what they are and how he’ll be using them to guide the discussion. The discussion at hand hinges around the idea of signaling: basically, how we inform others (and exaggerate) our worthy traits and minimize the appearance of less worthy traits. We signal in really primitive ways based on evolutionary learning (e.g. nice, white teeth = healthy) and in really modern ways, such as conspicuous consumption (e.g. nice, white teeth covered with a grill = wealthy).

Anyway, as you make it to page 75, he lists a few reasonable assumptions for the rest of the book:

  • We are social primates who survive and reproduce largely through attracting practical support from kin, friends, and mates.
  • We get that support insofar as others view us as offering desirable traits that fit their needs.
  • Over the past few million years, we have evolved many mental and moral capacities to display those desirable traits.
  • Over the past few thousand years, we have learned that these desirable traits can also be displayed through buying and displaying various goods and services in market economies.

And a few pages later, he brings the connection with consumerism and marketing, and hints and hints at the anti-consumerist arguments that he’ll get into later in the book:

Consumerism depends on forgetting a truth and believing a falsehood. The truth that must be forgotten is that we humans have already spent millions of years evolving awesomely effective ways to display our mental and moral traits to one another through natural social behaviors such as language, art, music, generosity, creativity, and ideology. We can all do so without credentials, careers, credit ratings, or crateloads of product.

The next bit ranges into a really interesting discussion on the three basic ways we signal: conspicuous waste, conspicuous precision, or conspicuous reputation. Conspicuous waste is fairly self-explanatory: gigantic cars, 30oz steaks, liquid-cooled gaming PCs. Conspicuously precise products rely on refinement, intricacy, low tolerances for error: luxury cars, fine sushi, Apple products. Conspicuous reputation is about envy or facade. Miller mentions BMWs and well-regarded postal codes in this category. Those aren’t perfect examples, and the categories can bleed, but you get the idea.

In one great leveling passage, he writes:

Each signaling principle has its distinctive pros and cons from the viewpoint of the signaler, the audience, and the population and ecology at large. These distinctions are significant but often overlooked. For example, socialist and environmentalist critiques of runaway consumerism apply most forcibly to cruder forms of conspicuous waste, which sequester matter and energy for the rich at the expense of the poor, and which impose the largest ecological footprint (resource and energy requirements). It is much harder to raise socioecological objections to an iPod nano than to an H1 Hummer. Aristocrats differ from the nouveaux riches not in their freedom from consumerism, but in their preference for conspicuous precision and reputation (“the finer things in life”) over conspicuous waste (“the crass and the vulgar”).

Later parts brought to mind the idea of social objects: “As a self-display strategy, it is very inefficient to buy new, branded, mass-produced products from stores at the full manufacturer’s suggested retail price. The product comes into one’s life naked and mute, without any social context, memorable circumstances, or narrative value.” It’s not just what you have, but how you earned it and how it brings you closer to those you love.

And I just love this one bit, about 3/4 through the book. He’s spent a couple sentences talking about buying a Toyota Camry or a comparable Lexus. Both are made by the same mother company to similar quality levels:

If you must have the Lexus, that’s OK, as long as you consciously accept two things: (1) apart from its higher mass, you are paying an extra $40,000 for the Lexus badge, and (2) everyone who sees you driving the Lexus, and who has read this book, will assume that you could think of nothing in the world more creative, kind, or conscientious to do with $40,000.

Zing! Boom! That’s something to think on.

The last 10% or so of the book wasn’t as good the beginning. It got more prescriptive than descriptive, and it just wasn’t as interesting. But man, that first 90% was so worth it.

More elsewhere:

Before College, Costly Advice Just on Getting In – NYTimes.com

Shannon Duff, the independent college counselor… says she ordinarily charges families “in the range of” $15,000 for guidance about the application process.
[…]
While the going national rate for such work is about $185 an hour, a counselor in Vermont and another in New York City are among those who charge some families more than $40,000. Their packages might begin when a child is in eighth grade.

Someone please tell me this isn’t real.
Before College, Costly Advice Just on Getting In – NYTimes.com

An economy that is more entrepreneurial, less managerial, would be less subject to the kind of distortions that occur when corporate managers’ compensation is tied to the short-term profit of distant shareholders. For most entrepreneurs, profit is at once a more capacious and a more concrete thing than this. It is a calculation in which the intrinsic satisfactions of work count.

Matthew B. Crawford, The Case for Working With Your Hands. NYT Magazine, 5.24.09. That last sentence is such a winner. (via)

Online monoculture and the end of the niche. In summary: online recommendation systems tend to offer a more diverse selection, but tends to reward fewer products more greatly than others:

In Internet World the customers see further, but they are all looking out from the same tall hilltop. In Offline World individual customers are standing on different, lower, hilltops. They may not see as far individually, but more of the ground is visible to someone. In Internet World, a lot of the ground cannot be seen by anyone because they are all standing on the same big hilltop.

I wish I followed the math better. Interesting stuff in the comments, too.

The Killers of Eden was a group of orcas off the coast of Australia that helped the local whalers, the Davidson family in particular. The orcas would go out and round up baleen whales. The orcas would even invite the Davidsons out to join them—they’d swim up the bay and splash their tails when they were ready to go on the chase. The orcas worked a lot like dogs round up sheep or corner foxes. After the baleens were killed, whether by teeth or harpoon, the orcas would eat the lips and tongue and the rest would go to the whalers. The relationship continued for decades up until 1930, when Old Tom died.
Old Tom was the most celebrated orca in the pod, the one the Davidsons were probably closest with. He seemed to have a sense of humor about him, and he was also known for grabbing a rope on the boats and taking the whalers for a joyride. If you find this all as mind-blowing as I do, you might like to see the names and photos of some of Eden’s killer whales or read more about Eden’s whaling history.

This bit of trivia and more can be found in the surprisingly excellent book I recently finished, Thousand Mile Song. These animals are smart.