In one sentence: A second rerun of 332 (also aired as 372): Danielle reads Buffett's 1979–83 letters on inflation and ends on three tests (raise prices without new capital, carry little debt, measure in purchasing power); only the short intro is new.
Key ideas
- Rerun. The body is the same talk as 332, which has the full notes. The new part is a short intro: Danielle says the show is off this week and the next episode will be about expert help. [00:00–01:00]
- Practice with experts. In the intro she suggests talking to friends and family who may be experts on random subjects, a light version of the expert-network work in 476. [00:30]
- Same three tests. (1) Own a business whose earnings rise with price increases without added capital, (2) carry very little debt (her inference, with Buffett's 2010 "credit is like oxygen" quote), (3) measure success by purchasing power, not reported earnings. [09:00–21:00]
- Noah principle. Predicting rain doesn't count, building arks does. [23:00–24:00]
How it maps to RuleOne
Buffett, Munger and Graham links
- Buffett's 1979, 1980, 1981 and 1983 letters (inflation, the "tapeworm", the economic goodwill appendix) and the 2010 letter on debt.
Words to know
- Purchasing power: what a given amount of money can actually buy.
Try this
If you did the exercise in 372, repeat it for a different company on /stocks/ and compare how much operating cash flow each one must plough back just to stand still.
Check yourself
- What is new in this airing compared with 332?
Answer
Only a short intro; the talk itself is the same. - Which of the three tests is Danielle's own inference rather than a direct Buffett statement?
Answer
Having very little debt.
Short quotes
"Predicting rain doesn't count, building arcs does." (Danielle on Buffett, ~23:30, auto-transcribed)