3 Lessons from Hiking in Japan’s Rainiest Island, Mohnish Prabrai on Turning $1M to $1B+, Big Tech Capex and Earnings Quality
Hi readers,
This week I’d like to share with you these ideas:
3 Lessons from Hiking in Japan’s Rainiest Island
Turning $1M Into $1B+: A Masterclass From The Indian Warren Buffett
Base Hit Investing: Big Tech Capex and Earnings Quality
3 Lessons from Hiking in Japan’s Rainiest Island
Yakushima is known to be the rainiest island in Japan, and there is a famous saying that it rains 35 days a month here.
It’s my first time hiking in 11.5 degrees for 2 hours.
At first the trail was smooth with wooden boardwalks. But deeper into the forest, the terrain became harder to hike and it also started to drizzle.
3 simple lessons the hike taught me:
1 - Pace yourself, and stay in the game
Stepping on wet rocks feels like a game of hopscotch.
But no prizes for being fast because with too much speed on slippery rocks means you could fall down.
2 - Preparation is half the battle won
I only brought a waterproof jacket and an umbrella to help keep dry from the rain.
But having to constantly close the umbrella when hiking through low trees is cumbersome, and I tried to use the umbrella as a hiking stick replacement but it often gets stuck in the mud.
Meanwhile, I saw a hiker with all the proper gear - waterproof rain jacket, a hat, hiking boots, hiking sticks, almost skipping through the terrain.
3 - Slow down and enjoy the process
While the sense of accomplishment after completing the 2-hour trial is rewarding, it’s fleeting just like the drizzle.
What I remember most is the journey of threading through the forest.
Slowing down to look at the ancient cedar trees and insects that I’ve never seen before.
A reminder to focus on the journey, not the destination.
Perhaps more on why I enjoy hiking in another post.
Turning $1M Into $1B+: A Masterclass From The Indian Warren Buffett
In this 2 hour podcast, Mohnish Pabrai shares about his investing philosophies such as “Heads I win, tails I don’t lose much”, how founders can become great investors, and the lessons learned from Buffett and Munger.
Listen: Turning $1M Into $1B+: A Masterclass From The Indian Warren Buffett
Base Hit Investing: Big Tech Capex and Earnings Quality
Software tech companies are known to be “asset” light, requiring a lower amount of capital to grow compared to asset-heavy companies like oil and gas.
While this remains true, with the rise of AI, many big tech companies are heavily investing in infrastructure to be part of the AI arms race.
This means soaring capital expenditure (CAPEX).
Microsoft: While we are not providing guidance for years beyond 2024, we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts.
In his article, John Huber shares his thoughts about the impact of AI investment on the CAPEX and earnings quality of big tech companies such as MSFT, GOOG, META and AMZN.
Read more: Base Hit Investing: Big Tech Capex and Earnings Quality
That’s all I have for you today.
If you enjoy this post, the best compliment you can give me is to share this with one person who would benefit from it.
Stay curious and see you soon.
Cheers,
Tess
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