Independent Thinking
I’m a retired Engineer. I typically deconstruct systems to identify where the consensus narrative often drifts from the underlying reality. For the Japan paper, I focused on Charlie Munger’s latticework of mental models, Graham’s margin of safety, and probabilistic thinking. For the Markel paper, I deconstructed the balance sheet and income statements to unravel the distortions and complexity created by GAAP mark to market accounting. I created an income statement based model to determine Markel’s true cash flow driven value.
Latest Research:
- Japan: ¥1,700 Trillion Vault → — 46% yen undervaluation, antifragile stock selection
- Markel: 30-45% Discount → — Berkshire structure at 30-45% discount to intrinsic value
My Approach
Inversion — My favorite model. What could possibly go wrong? How do I avoid it? Start with failure modes, work backward to robust strategies. Best model—by far—in problem solving.
Probabilistic thinking — Even with good outcomes, it’s impossible to know if the decision that preceded it was correct. Focus on process over outcome, expected value over result.
Second-order thinking — Always question assumptions with “and then what?” Understanding consequences of consequences reveals opportunities others miss.
Incentive analysis — Following Munger’s insight that incentives are the most powerful force shaping behavior. Show me the incentive and I’ll show you the outcome.
Simplify - Make everything as simple as possible, but not simpler. Easier said than done, but very true.
Margin of safety — Downside protection before upside capture. Graham’s principle never goes out of style.
Build it yourself — Do your own thinking. Assume nothing. Where possible, every figure in my research is original, created from primary sources. All data sources are cited so readers can reconstruct the analysis independently and verify the conclusions.
Ignore consensus - Graham says it best, so I will quote verbatim: “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”
Current Focus
Equity selection driven by value investment principles, where mispricing stems from numerous factors.
Influences
Benjamin Graham, Warren Buffett, Charlie Munger, Joel Greenblatt, Nassim Taleb, Robert Cialdini, Daniel Kahneman