What We’re Reading (Week Ending 23 November 2025) - 23 Nov 2025
Reading helps us learn about the world and it is a really important aspect of investing. The late Charlie Munger even went so far as to say that “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading.” We (the co-founders of Compounder Fund) read widely across a range of topics, including investing, business, technology, and the world in general. We want to regularly share the best articles we’ve come across recently. Here they are (for the week ending 23 November 2025):
1. Blue Owl private credit fund merger leaves some investors facing 20% hit – Antoine Gara
Earlier this month, Blue Owl told its shareholders that it planned to merge its Blue Owl Capital Corporation II fund, which has $1bn in assets and was one of the first private debt funds targeting wealthy individual investors, with its OBDC fund, which has $17bn in assets.
Blue Owl Capital Corporation II investors are being asked to exchange their shares in the private fund for shares in OBDC at the stated net asset value of both funds. However, OBDC trades on public markets at a discount of about 20 per cent to the stated value of its assets. Blue Owl Capital Corporation II, meanwhile, is not publicly traded and instead offers investors the ability to redeem cash every quarter at the fund’s stated value.
If the mooted deal were to be approved by shareholders and completed at current prices, Blue Owl Capital Corporation II shareholders would see the value of their investments fall by about 20 per cent.
Blue Owl Capital Corporation II investors will be restricted from pulling money from the fund until the merger with OBDC closes in early 2026, at which time they will permanently lose the ability to redeem cash at the fund’s NAV…
…Jonathan Lamm, chief financial officer of OBDC, conceded in an interview with the Financial Times that at current prices, the investors in Blue Owl Capital Corporation II could take a potential haircut on their investments. But he said the merger came with significant benefits, such as the ability to own more liquid shares in OBDC, which trade on the New York Stock Exchange.
2. Blue Owl’s clever private-to-public deal makes investors see red – Sujeet Indap
Blue Owl, a US-based private capital firm, just took a bruising in such a skirmish. On Wednesday it cancelled a planned merger between two affiliates that lend to middle-market companies. One of these “business development companies” is publicly traded; the other is private, so its investors have more limited opportunities to sell their holdings.
While now dead, the merger deserves study. Here is how it worked: investors in the unlisted company would have received shares in the listed one. Measured in terms of fund assets, the swap was a wash: an owner of $1 of what sits in the unlisted bucket would still hold a claim on $1 of stuff in the enlarged, listed counterpart.
The catch was that the listed company’s shares were trading in the market at a 20 per cent discount to their net asset value. So in return for getting access to an investment they could sell whenever they liked, Blue Owl’s clients were taking a pretty sharp haircut if they wanted to sell immediately. Predictably, they cried foul.
While that’s the simplified version of events, the deal actually came with some pretty complex engineering. Had the acquiring publicly traded BDC been trading at a premium to its net assets, the exchange would be calibrated based on its share price, not the — lower — net asset value. In return for their $1 of assets they would get paper they could sell into the market also for $1, but representing a claim on stuff worth less than that.
Confusing? Welcome to private markets.
3. Going All-In on MSTR – Ben Carlson
A reader asks:
Let’s say I have a brother. Let’s say he was on a lucky hot streak this year YOLO’ing into the most speculative plays in the market (quantum, crypto, meme stocks, etc) and was up 100% YTD. Pressing his luck, he thought it was a good idea to put nearly all of his portfolio into MSTR (using margin for more leverage) when it was trading in the 300’s and he is now down 50%. I told him to never touch MSTR with a 10-foot pole and if he was bullish Bitcoin, just buy Bitcoin. I also told him many times to never use margin, especially on high risk stocks. He is at risk of a significant % of his net worth (>50%) going away forever with a home purchase on the horizon as well that’s in jeopardy. Now he suddenly wants my advice on how to get out of this mess. I told him I don’t know and I honestly don’t. It’s a darned if you do, darned if you don’t lesser of two evils situation. How do you deal with clients that consistently ignore your advice and now want your help getting out of a mess?…
..This is the problem with the bull market brain you get from making big gains in the markets. It’s difficult to know if you’ve morphed into a degenerate gambler when you’re making money. Investors who have taken on excessive levels of risk the past few years have been compensated for it.
Once you get a couple of big wins under your belt it’s easy to let things get out of control.
Strategy (formerly Microstrategy) was in the $300s when the brother got into the stock. Now it’s well below $200 and falling fast…
…Here’s the thing — you could try to offer sensible advice. Sell now before it gets worse and you get a huge margin call. Invest in something far more reasonable and diversified.
I’m not sure it will matter.
When I first started my blog I had this dream that I could somehow save people from making illogical financial decisions. After creating financial content for more than a decade now I’ve come to realize this but some people cannot be saved.
They are doomed to make money mistake after money mistake and there’s nothing you can do about it.
Then there are others who need to make a huge mistake before having an ah-ha moment of realization that they need to change their behavior. Some people do change their stripes but it’s not easy.
4. A Century-Old Classic Buffett Would Love – John Garrett
Every so often you stumble across a book so old, so unassuming, that it shouldn’t have any relevance to modern investing… and yet it reads as if it were written yesterday.
That was my experience with R.W. McNeel’s 1927 gem, Beating the Market. Nearly a century old, it feels startlingly contemporary…
…Although it was published three years before Warren Buffett was born, the lessons in this little volume closely mirror his own philosophy: buy below intrinsic value, bet on America, stay unemotional, seek value, avoid new issues, ignore brokers, be patient, resist the crowd, and focus on businesses with quality management — to name just a few.
You’ll find the similarities striking…
…“Before one starts in to speculate, therefore, he should paste this old creed in his hat: ‘I believe in my country – The United States of America. I believe in the American people, their genius, their brains, and their brawn. I believe in their honesty, and their integrity and dependability. I believe that nothing can stand in the way of their commercial advancement and prosperity.’” R.W. McNeel…
…“Charlie and I have always considered a ‘bet’ on ever-rising U.S prosperity to be very close to a sure thing. Indeed, who has ever benefitted during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work it’s magic. America’s best days lie ahead.” Warren Buffett…
…“Hold firm the principles underlying all successful speculation, that earning power makes values, and values make prices in the long run, and, having in mind the value based on earning power of any particular stock.“ R.W. McNeel
“Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.“ Warren Buffett…
…“One chief reason many fail to buy stocks when they are low is because of fear. Periodically prices of stocks representing ownership in the great productive industries of the United States and her great railroad systems fall so far that ownership in them is selling for 25 to 50 cents on the dollar of the value of the bricks and mortar and working capital which the stocks represent. But the majority of people will not buy them then because they are afraid. If they would analyze the cause of their fear they would discover it to be due to doubt as to the very stability of American institutions, for nothing less fearsome would justify certificates of ownership in the great industries of the nation selling at such ridiculous prices.” R.W. McNeel…
…While Buffett ultimately built a far broader and more sophisticated investing framework than McNeel could ever have imagined, the foundations McNeel laid in 1927 remain remarkably solid. Strip away the technology, the speed, the data, and the noise, and you find the same timeless principles: discipline, patience, rationality, independent thought, and a focus on value anchored in real businesses run by real people.
That is why this nearly century-old book still feels so alive. Markets evolve, but human nature does not. The behaviours that drove booms and busts in McNeel’s era are the same forces we wrestle with today — fear, greed, impatience, imitation, overconfidence, and the lure of the crowd.
Or, as Buffett put it most succinctly:
“Humans behave the way humans behave, and they’re going to continue to behave that way in the next 50 years.”
McNeel understood that in 1927.
5. Robotaxis and Suburbia – Ben Thompson
Another classic of the Uber bear genre was this 2014 post by NYU finance professor Aswath Damodaran attempting to determine Uber’s true value; the startup had just raised $1.2 billion at a $17 billion valuation, and according to Damodaran’s calculations, “it is difficult to justify a price greater than $10 billion” (his actual valuation was $5.9 billion). Investor Bill Gurley — before his dramatic powerplay that led to the ouster of founder Travis Kalanick — explained what Damodaran got wrong in How to Miss By a Mile: An Alternative Look at Uber’s Potential Market Size:
The funny thing about “hard numbers” is that they can give a false sense of security. Young math students are warned about the critical difference between precision and accuracy. Financial models, especially valuation models, are interesting in that they can be particularly precise. A discounted cash flow model can lead to a result with two numbers right of the decimal for price-per-share. But what is the true accuracy of most of these financial models? While it may seem like a tough question to answer, I would argue that most practitioners of valuation analysis would state “not very high.” It is simply not an accurate science (the way physics is), and seemingly innocuous assumptions can have a major impact on the output. As a result, most models are used as a rough guide to see if you are “in the ball park,” or to see if a particular stock is either wildly under-valued or over-valued…
Damodaran uses two primary assumptions that drive the core of his analysis. The first is TAM, and the second is Uber’s market share within that market. For the market size, he states, “For my base case valuation, I’m going to assume that the primary market Uber is targeting is the global taxi and car-service market.” He then goes on to calculate a global estimate for the historical taxi and limousine market. The number he uses for this TAM estimate is $100 billion. He then guesses at a market share limit for Uber – basically a maximum in terms of market share the company could potentially achieve. For this he settles on 10%. The rest of his model is rather straightforward and typical. In my view, there is a critical error in both of these two core assumptions.
Gurley argued — correctly in retrospect, given that Uber’s gross bookings over the last 12 months were $93 billion in rides and $86 billion in deliveries — that Damodaran failed to consider how a radically better experience could dramatically expand the addressable market, and completely missed the potential for network effects leading to an outsized share of that expanded market…
…That last sentence was about Uber’s diminished bargaining vis-à-vis a centralized robotaxi operator versus individual drivers, and it’s an important one in terms of Uber’s long-term valuation. However, as robotaxis continue to expand — Waymo is now in five cities (three via their own service, two via Uber), Tesla (with human supervisors in the car) in two, and Amazon’s Zoox in one — I do wonder if I am making a similar mistake to Horan and Damodaran.
First, like Horan, am I too caught up in the current economics of robotaxis? As an apostle of zero marginal costs I am intrinsically allergic to the depreciation inherent in the cars themselves, along with the significant marginal costs in terms of energy and insurance; Uber side-stepped this by offloading those costs to the drivers. Can scale solve this? At some point — Cybercab already points to this future — vehicles will be purpose-built at scale to be robotaxis, and my experience with Full Self-Driving (Supervised) has me convinced that insurance costs will be manageable, not just because of scale, but because there will be fewer accidents.
Second, like Damodaran, am I limiting my thinking by focusing on the current market — even if that market is already massively larger than the taxi & limo market ever was? The experience of a Waymo is certainly magical; it’s also peaceful, and by removing the human from the equation, provides a sense of safety and security that Uber has always struggled with. This last point could address a major suburban point point, which is kids: the lockdown in kids’ freedom corresponded with a dramatic rise in organized activities, the sheer volume of which leaves lots of parents feeling like unpaid Uber drivers themselves. Some may rely on Uber to solve this problem; it seems likely to me far more would be willing to entrust their children to a Waymo.
Disclaimer: None of the information or analysis presented is intended to form the basis for any offer or recommendation. We currently have a vested interest in Alphabet (parent of Waymo), Amazon, and Tesla. Holdings are subject to change at any time.
