The Aksarben Bus and Buffett’s Search for value

 

Bus headed to Aksarben

Seeing a bus bound for Aksarben was a very satisfying addition to my trip to Omaha in 2026.

Aksarben is Nebraska spelt backwards. The Ak-Sar-Ben racetrack used to host horse races. It was also one of Buffett’s early hunting grounds. People would bet on these races and receive stubs representing their bets.

After the races, Buffett would visit the track and collect stubs that bettors had lost or discarded as worthless. He would check each one for any remaining value and cash in any winning stubs.

Although the racetrack no longer exists, the story is a useful reminder of what value investors must do: leave no stone unturned.

Berkshire Experience 2025

 Life update: I saw Warren Buffett retire in person, and 6 other things to do in the first week of May in Omaha. :)  
  
1. Attend VALUExBRK: If you attended, you might have met me manning the doors. There were some amazing talks here, you can watch the recording (highly recommended) here. 
2. Make friends while waiting in line at 4 AM for the Berkshire Hathaway AGM: Multiple people, including Guy and Mohnish, talk about this. There's something to waiting in line at 4AM that brings people together.  
3. Meet incredibly successful people, true titans of industry: If you know the right places, you will meet some of the most accomplished people in the business and investing world.  
4. Shopping at the CHI health center: buy great products you hear of and own as part of Berkshire. Chocolate fudge by See's candies was my favorite :)  
5. Go for a run in the Brooks 5K in Omaha: You have to balance off the Chocolate fudge.  
6. The Berkshire Q&A: Watch Buffett answer questions posed by any of the 40,000 attendees with clarity, wit, and insight of someone half his age.  
  
Traveling across the world to see the Berkshire annual meeting was surreal. A dream come true to watch and learn from the best in the world. The Annual meeting is a celebration that will leave you feeling grateful, and inspired to achieve greater things. The biggest takeaways for me:  
1. Lead with your interest and curiosity. This theme was repeated almost daily by different people in Omaha (including Buffett!). All were highly successful in their respective fields, and more importantly, felt joy in talking about their work.  
2. Compounding goes far beyond money. All good things in life - friendships, careers, relationships, hobbies, health - are improved through years of consistent effort and compounding.  
  
To all the friends and idols I met in Omaha and so many more, thank you :) It was meeting all of you that made the Berkshire meeting a celebration over and above an AGM. Special thanks to team Aquamarine Capital and Guy for having made this possible for me!  
  
I urge anyone remotely interested in business and/or investing, to attend this celebration of human capabilities. You will come back far richer, through the friendships you make, the folksy atmosphere of Omaha, and the lessons you learn.  
  
For anyone interested in attending the Berkshire meeting, have a look at Tilman's fantastic guide to attending the Berkshire meeting here.

How a charity turned £2,000 into £1.3 Billion

How can you end up with £1.3 Billion with a £2000 investment? Give it 400 years. That's the story of the Henry Smith Charity.

I stumbled upon the Henry Smith Charity while going through the Wikipedia homepage. Henry Smith came up as a "Did you know..." on 24th November 2024. (Sidenote: The Wikipedia homepage is a great source of information for learning more about the world.) It was a charity started by a 16th/17th century moneylender named Henry Smith. 

As of 31st December 2023, the charity managed assets in excess of £1.3 Billion. However, the charity had more humble beginnings. The charity was bequeathed £2000 in 1628. The initial aim was to support ‘the poore Captives being slaves under the Turkish pirates' and to provide 'relief of the poorest of his kindred who were unable to work for their living'. 

According to the Bank of England's inflation calculator, his initial £2000 (Inflation calculator | Bank of England) is worth £447,061.74 as of 2023. That's a 223.5x multiple increase since the initial donation corresponding to an inflation rate of approximately 1.375% annually. (Perhaps inflation is the wrong measure here given the centuries that have passed in the interim.) 

If the £2000 bequeath simply kept up with inflation, it would only be worth around £450k as of 2023. So how did the donation turn into £1.3 Billion?

The initial donation was invested in acquiring land around London in the parishes of Kensington, Chelsea and St. Margaret's, Westminster. As London grew, the value of the investment kept growing. According to the Charity's investment strategy, they have since diversified and also invest in other assets as well now. 

In effect, they bought an asset, held onto it for almost 400 years, and let compounding do its magic. The Henry Smith Charity was able to compound its assets at 3.429% annually for 396 years. In percent terms, 1.375% and 3.429% do not appear too far apart, but, given centuries of compounding, it can result in mind-bogglingly different numbers. 

I like this story because it reflects the flipside of letting compounding do its magic. Many times, the focus of compounding stories is on percent results, and rightfully so, one only has limited time on our planet. However, if one has the luxury of (relatively speaking) infinite time, even a (relatively) low growth rate can lead to mind boggling results.

Other Sources: 

1. The Smith's Charity Estate: Development up to the early nineteenth century | British History Online 

2. The Henry Smith Charity - About us
3. The Henry Smith Charity - Wikipedia

reCAPTCHA's Business Model

I was listened to the “reCAPTCHA and Duolingo: Luis von Ahn” episode of the How I Built This with Guy Raz podcast. reCAPTCHA struck me as a phenomenal business.

reCAPTCHA solved a problem - differentiating human and bot users on sign-up. The authentication service was free of cost or had minimal charges involved. Using their solution, reCAPTCHA charged firms to digitise text not digitalisable by OCR. Since reCAPTCHA offered a similar service for digitising but did not need to pay for the labour, they charged significantly less than their competitors. Finally, it took 2 people a short time to build reCAPTCHA. They were able to fix multiple problems at once and built a business with their solution.

reCAPTCHA is a phenomenal business. Here's why. 

Problem: Part 1

Websites wanted to block bots from creating multiple accounts. However, they found it hard to verify if a user was a human or a bot. 

Solution: Part 1

To solve the above problem, Luis first created CAPTCHA. CAPTCHA classified website users as humans or bots using a puzzle. The puzzle involved identifying and typing in distorted letters presented in an image. For practical purposes, this puzzle was solvable only by a human. If the user solved the puzzle, the user was classified as a human; otherwise, the user was classified as a bot.

Problem: Part 2

In aggregate, people were spending a lot of time solving (slightly annoying) puzzles. Could this time be better spent solving real-world problems? What puzzle could solve real-world problems and simultaneously identify the user as a human? 

Solution: Part 2

Answer: Text recognition not parsed by OCRs. 

Consequently, Luis created reCAPTCHA. reCAPTCHA presented two text strings to a user. reCAPTCHA knew the text of one of the strings with great accuracy. The other string was unknown. Users entering the known string accurately were assumed to write the unknown one accurately too. Once enough people wrote the same text, it was taken as accurately digitised and the system moved on to the next word. 

A phenomenal business

Many websites wanted an effective user verification system at zero cost. At the same time, a few organisations wanted to digitise scanned archives. For example, NYT scanned its archive since the 19th century, but did not have the text available digitally, or Google wanted to digitise all the world's books. A system reliant on human digitisers was very expensive and would take a long time.

reCAPTCHA could digitise a year's worth of text from the NYT archive in approximately a week. They charged USD 42k per year digitised and provided a highly accurate solution. This is opposed to human digitisers, who would take longer, be more expensive, and potentially more error-prone.

To create reCAPTCHA, 2 programmers developed the code. The solution was distributed by websites authenticating sign-ups. Websites were happy to use the system because it was free of charge, and was a relatively simple service to implement. For website operators, user authentication was one less problem to deal with. 

Despite its annoyance, users solved the puzzle because it was short and it acted as a barrier to the user's end goal. It was not the most convenient system, but a border that people needed to cross.  

Customers, like the New York Times, were happy, because their text was digitised at record speed, cost, and accuracy. reCAPTCHA earned revenues by solving multiple problems at once. Once the code was written, distributed, and customers signed on, nothing could stop them. Many other website owners, and customers could use the same system. 

reCAPTCHA is a great example of a business that is small, would most probably remain small, solve problems for multiple parties, and make money in the process. What an amazing business.

Update: I subsequently heard the ACQ2 episode with Luis von Ahn. It was similar to How I Built This episode but with a bit more focus on Duolingo. Would recommend you to listen to this episode too!

Consistency is Key

 or, what learning German taught me.

Any skill I have learned came only after putting in effort through a sustained period. It didn't matter how well each session went. It didn't matter how much I did in a particular session, or if I didn't want to appear for a session. What mattered, was that I showed up to do the work every time. That is where success shows up. Love the work, the results appear. 

An example from my personal life. By December 2024, I had spent over 1.5 years learning German, 2 hours per week. That's all I spent. 2 hours per week. Currently, I am studying in an A2.1 class. My German teacher told me that I could get the B1 certificate if I put 2 months of dedicated effort into learning the language. There were a few things that went into it. 

I almost always showed up to class regardless of the circumstances. It was 2 hours per week. I can always make 2 hours per week to show up for a skill I want to learn. Even if I was on holiday, I would show up for the class. 

I enjoyed the class. I took joy in learning the language. I told myself repeatedly that I enjoyed the class - it was a fact. I did enjoy the class. I enjoyed going through the process of sitting in class - regardless of what was going on outside - I stuck through learning the language. The fact that I enjoyed going to the class meant that I would return to it. 

I had alignment on a few fronts - there was alignment with my personality. There was alignment with how the class was taught. There was alignment in terms of my desire to always be learning. There was alignment in the eventual desired outcome - learning German. I also truly enjoy learning the language - I think it is a beautiful language.
 

What should I take away from all of this?

Enjoy the process, not the result. Work towards your desired result through the process. Show up to do the work. Find a teacher/mentor willing to teach you, and show you the way. That's all you have in your hand. 

If you do not like the process, figure out why. If the result is not worth it - stop. If the result is worth it - change the process. Having alignment on multiple fronts is of the essence. Above all, show up to do the work.

How to learn German?

 Well well well. 

I have shifted to a new country, and I think it's important to learn the local language. The country I have shifted to is Germany and thus, the language I must learn is German. I have spent a good chunk of my teenage years trying to learn French. A lot of which I have since forgotten. 

However, I got to apply my French knowledge when I had my semester abroad in Nancy, France. Even having forgotten a large amount of French, I was still able to speak at the level of a 5 year old (I believe). It was enough to be understood by locals, and it was enough that I could start to understand what I was being told. A lot of the communication was pattern matching with what I already knew and trying to fit the words in a schema I already learnt half a decade ago.

In that light, I have decided to memorize the 1000 most used words in the German language. The 1000 most used words would give me enough scope to be able to understand words in conversations or make enough conversation for simple everyday tasks. At the same time, knowing the 1000 most used words in a language will be a confidence booster enough to take up the rest of the 25,000 words. 

How will I learn the 1000 most used words?

100 words at a time. I will memorize the first 100 words, probably through repetition, and writing. Test myself to get an accuracy of 95% or more, then move to the next 100 words and repeat. 

How long will it take?

I suspect it will take me about 8 weeks if I go about it super diligently. However, I know I have to give myself some allowance for life coming in the way. 12 weeks should be sufficient. That means I have to learn ~85 words/week, which is ~12 words per day, that seems very reasonable. And getting a 100% accuracy on 12 words seems far more attainable than a 95% accuracy on 1000 words. 

Is 1000 words my entire plan to learn the German language?

No, I also attend German class 2hrs/week. The 1000 words is in addition to the 2hrs/week. I still need to understand the Grammar and the pronunciation. (Though from what I understand, the way German is written is the way it is spoken, unlike English.)

So where's the 1000 words list?

Here!

What's next?

Learn.

How to meal prep? part 2

 Here we are. (For context, you will have to read part 1)

I was at the grocery store getting all the stuff I needed to prepare my meals. I got vegetables I was used to seeing in the HelloFresh box (meal kit). At that grocery store, I decided that I would only prepare vegetables this weekend. I would make the rest of the ingredients for the meal prep from the next weekend. So that's exactly what I did. I bought the vegetables, and I bought a bunch of sauce jars. I had enough grain to go through the week, so I didn't need to buy any grain. 

Today, I prepared the vegetables, cooked them in the oven, and stored them in the fridge. Hopefully I have enough vegetables to last me the week. I'll be able to course correct over next weekend. I probably will be able to make a sauce or two this week as well. That gives me time to research and make something I would be happy with, and something that could be mixed between different meals. 

I have a good base to start off with this week. But I need to continue building on it to get to my dream of being able to prepare a healthy meal on weekdays in less than 15 minutes including cleaning time. (This dream is driven by my liking for HelloFresh meals, but dislike for how long it takes to prepare those meals.)

Finally, on the question of proteins, I think I'll be able to squeeze in some lentils and tofu throughout the week. However, I will have to calculate the amount of protein I am consuming. It will ensure that I am not falling far below the recommended amount. At the same time, I'll go through the grocery store looking for high protein snacks and ingredients.

How to meal prep?

That was my Google search. I don't know. I am just starting out. Today will be the first day I try to meal prep. 

What I have figured out based on 2 months of near daily cooking:

1. You need a carb rich base that will fill you. 
2. You need a flavor adding component, usually a sauce.
3. You need vegetables, to make it healthy and satisfying. 

That's the basics of a lot of the Hello Fresh cooking I have done. This was the pattern I recognized. 

Now then, what is the plan? 

1. Get 2 base grains that I can eat throughout the week.
2. Make 2 different sauces that can be consumed throughout the week. 
3. Buy loads of vegetables, cook them in the oven. 

Whenever I need to make a meal, I can swap out between the different options. 

This is the plan for the first week. 

The specifics:

1. Grain: Rice and Quinoa
2. Sauces: ¯\_(ツ)_/¯
3. Vegetables: Onions, Potato, Sweet potato, Avocado, Beans, Cucumber, Bell Pepper, Garlic, Chillies, Carrots, Mushrooms, Zucchini, Tomato, Chickpea, Corn, 

(Yes, I know all of them are not vegetables, but can be placed there as oven going ingredients.)

Finally, I will also need a spice mixture to ensure that there is some taste in the vegetable, will decide the spice mixture at the store I visit though. 

Finally, while I do have the 3 main components available, it will be important to have protein, and some variety. 

Wish me luck. 

The original hockey stick graph

Hockey stick graph

It refers to the sudden exponential growth observed in a graph of a metric across time after an initial linear or close to linear growth. The shape resembles a hockey stick, hence the name. In the startup world, it is used in the context of metrics such as customers or users and usually indicates that the product has found its niche or market-fit.

How recent is it?

In 1908, AT&T, in their annual report, published a rather old instance of hockey stick growth. The graph shows the number of subscribers connected to AT&T's network. 

What's interesting is that telecommunications at AT&T followed a business model in which the benefits of a network accrued to a private party. In any case, a very interesting sighting. Send me more if you come across them.