What I've learned since moving to D.C. (some of which should be obvious): 0157

7801.  Buying experiences as gifts for others (i.e., tickets to a baseball game or spa day) versus material things also delivers more happiness for those receiving the gift which is something to consider when buying gifts for loved ones for birthdays and special occasions;

7802.  If somebody has told you they really want a new pair of shoes and you say, “No, I am going to buy you an experience.”  That’s probably a bad call because it turns out people really like getting the things they asked for.  If somebody has told you what they want X just get them that;

7803.  Almost everything about modern society pushes us to consume right away and (often) pay for it much later.  People are better off doing just the opposite.  You’re more likely to get happiness from your spending if you can pay upfront and actually delay consumption.  For example, if you’re planning a trip and you can either pay for it a month in advance or put it on your credit card and pay for it after the trip, by paying in advance, you get the pain of paying out of the way and you get to enjoy the pleasure of anticipation.  It is good to separate payment from the experience itself;

7804.  Having our favorite things a little less often can enhance our ability to enjoy them.  The more we have of something the more we tend to get used to it and lose the same sort of intense pleasure we got when we first experienced it;

7805.  Taking a break from the things you enjoy can renew your capacity for pleasure.  It can also save you some money;

7806.  When people spend money on others, they actually get more happiness than from spending it on themselves;

7807.  Donating to a charity can especially lead to happiness.  People who donate to charity are happier than those who don’t even after taking into account things like their level of wealth;

7808.  “Auto giving,” where you automatically contribute monthly or yearly to a charity, may not lead to increased happiness.  The “set-it-and-forget it” mentality means you are probably not getting much of a burst of happiness when that $100.00 disappears from your bank account every month;

7809.  Warren Buffett notes that book value is seldom meaningful in analyzing the value of a business.  Book value simply records what was put into the business.  The key to calculating value is determining what will come out of the business;

7810.  Warren Buffett believes that buying a business is much like buying a bond with no maturity and with a blank coupon.  You must write in the coupon and the accuracy of that coupon is the essence of intelligent investing.  If you cannot guess the coupon with any accuracy then do not invest in the business;

7811.  A corporation’s return on equity approximates its equity coupon;

7812.  In a 1977 Fortune article, Warren Buffett noted that the average return on equity was then 12%.  Charlie Munger started to chip away at that noting the following: 1.  Post-retirement medical benefits amount to a huge liability for corporate America that has been accruing for 20 years, but is only now beginning to be reported on balance sheet.  Deduct 1/4 to 3/8 of a point; 2.  Stock options and other executive compensation that goes unreported by GAAP accounting.  There is another 1/4 to 3/8; and 3.  Overfunded pensions that have led to faithfully recorded prepaid pension costs, which are not what they would call earnings;

7813.  Signs of emotional dysfunction in families: 1.  Emotions of one member changes the emotions of all members; 2.  Parent shares marital issues with children; 3.  Messages are passed through other family members (i.e., Can you ask mom why she’s made at me?); 4.  Repression of certain unaccepted emotions; 5.  A felt need to be secretive or to hide parts of oneself; 6.  A felt responsibility to change or care for the emotions of parents or siblings; 7.  Parent being “best friends” with the child; 8.  Parent deeply involved in the activities/relationships of the child; 9.  Feeling guilty when spending time outside of the home; and 10.  Afraid or feeling ashamed to say “no” to a request;

7814.  Signs of emotional dysfunction modeled in childhood: 1.  Inability to set boundaries: feelings of fear, shame or being “wrong” in setting them; 2.  The belief that they are responsible for the emotions of others; 3.  The belief that someone can (or should) change for them; 4.  A desire to control situations: a fear of unfamiliarity; 5.  Unhealthy marriages/relationships; and 6.  Viewing children as an extension of oneself;

7815.  Few people understand that they have a right to their own thoughts, feelings and a life that they choose;

7816.  I’ve been asked to be a sperm donor;

7817.  Warren Buffett believes the long-term government bond rate (plus a point or two if interest rates are low) is the appropriate discount rate for most assets;

7818.  True investing is really more like betting against a pari-mutuel system trying to find a 2-to-1 shot that pays 3-to-1.  Value investing is looking for a “mispriced gamble;”

7819.  The danger of relying on historical statistics or formulas (in investing) is that you end up betting on a 14 year-old horse with a great record, but is now ready for the glue factory;

7820.  When investing, to think about what will happen versus when is a far more efficient way to behave;

7821.  It is Wall Street nonsense to say that something that earns a lumpy 20% to 80% is “riskier” than something that earns a predictable 5% year after year;

7822.  Peach wine and hard cider are good substitutes for peach schnapps in white sangria;

7823.  Something with a lousy past record and a bright future should be an opportunity you’re going to miss;

7824.  Warren Buffett noted that you do not have to make money back the way you lost it;

7825.  A stock does not know you own it, the price you paid, who recommended it, the prices someone else paid, the stock does not give a damn;

7826.  Charlie Munger said the ideal business has a wide and long-lasting moat around a terrific castle with an honest lord.  The moat represents a barrier to competition and could be low production costs, a trademark or an advantage of scale or technology;

7827.  Warren Buffett noted it is important to differentiate between a business where you have to be smart once versus one where you have to stay smart;

7828.  Warren Buffett said when accounting appears confusing, avoid the company.  The confusion may well be intentional and reveal the character of the management;

7829.  Things to keep in mind when setting boundaries: 1.  An emotionally healthy person will always respect a boundary; 2.  You are not responsible for the emotional response of another person; 3.  We can’t stop others from crossing our boundaries, but we can choose our response; 4.  Silence sends a message; 5.  You have a right to say “no” or change your mind; 6.  A person’s reaction to a boundary has nothing to do with you and everything to do with their internal environment; and 7.  It’s unfair to expect someone who has no boundaries in their own life to understand yours;

7830.  Key business risks: 1.  Capital structure – A company with a ton of debt could be a candidate for foreclosure; 2.  Nature of the business and its capital requirements – For example, commercial airlines require tons of upfront capital and competition is intense; and 3.  Commodity businesses – Unless you’re the low-cost producer, these are poor businesses to own;

7831.  If the business is sound, there remains the risk of paying too much.  The risk is time versus loss of principal.  If you overpay, it will take time for the business value to catch up to the price paid;

7832.  Charlie Munger noted people underrate the importance of a few big ideas.  Filters simplify the decision-making process.  Filters work really well because they are so simple;

7833.  Filters: 1.  Opportunity cost – For any corporate stock, a bond is an alternative.  You must choose the best opportunity you can understand; 2.  Quality people – Warrant Buffett said he looks for a manager who bats .400 and loves it.  Charlie Munger noted there are many wonderful people and many awful people.  Avoid the awful people.  Stick to those who take their promises seriously; and 3.  Good businesses – Go with those that are understandable with a sustainable edge.  The pond you choose is far more important than how well you swim;

7834.  Executive stock options should reflect the business’ intrinsic value and not simply the market price;

7835.  It is essential to learn from both the mistakes of others as well as your own;

7836.  It’s an honor to die for your country.  Make sure the other guys get the honor;

7837.  Even if you’re living overseas, you still have to pay U.S. taxes;

7838.  Dorm(itory) room . . . check;

7839.  You are your greatest asset.  Put your time, effort and money into training, grooming and encouraging your greatest asset;

7840.  Just like attraction is not a choice; catching feelings for someone is also not a choice;

7841.  If you see a girl over a long time, one of 4 things will (eventually) happen: 1.  You both fall in love with each other; 2.  One person falls in love, but the other one doesn’t; 3.  She gets into a relationship with a different guy and you might remain friends with her; and 4.  You part ways for different reasons;

7842.  Apparently, I’m in the 45^th district for the (Virginia) House (of Delegates) and the 30^th (district) for the (Virginia State) Senate;

7843.  Apparently, I’m in the “(0)105: Lee Center” precinct;

7844.  If you’re abundant on the inside then you’re much more likely to experience abundance on the outside;

7845.  Cynics and fools are twins on opposite sides of reality and possibility.  A fool will believe any far-fetched scheme and a cynic will criticize anything outside his/her reality.  A cynic’s reality does not let anything new in and a fool’s reality does not have the ability to keep foolish ideas out.  If you want to be abundant and rich, you need to have an open mind, a flexible reality and the skills to turn new ideas into real and profitable ventures;

7846.  If you want a faster way to get rich, you need to have a mind open to new ideas and have the skills to take on possibilities greater than your current abilities.  You must have a reality that can change, expand and grow quickly.  To try to get rich with a poor person’s reality or a reality that comes from lack and limitation is impossible;

7847.  The hush puppies at Willie’s (WilliesSportsBarDC.com) in D.C. are tasty;

7848.  Investors need only to have a sensible way to keep wealth growing (especially if they are already rich).  If someone else is getting rich so what?  Someone else will always be doing better;

7849.  The notion that an investor or investment manager should be “required” to beat everyone else is nonsense.  The real key is to know what you really want to avoid and give those things a wide berth (such as a bad marriage, an early death and so on).  Do this and life will go much better;

7850.  Dating advice: If they like you, you’ll know it.  If they don’t, you’ll be confused;