Happy Friday! Here are eight great things I read this week. 


Bill Gates talks about one of his biggest regrets in life

"I feel pretty stupid that I don't know any foreign languages," Gates said Wednesday in an online Reddit chat.

"I took Latin and Greek in high school and got A's and I guess it helps my vocabulary but I wish I knew French or Arabic or Chinese," he said. "I keep hoping to get time to study one of these -- probably French because it is the easiest. I did Duolingo for a while but didn't keep it up. Mark Zuckerberg amazingly learned Mandarin and did a Q&A with Chinese students -- incredible."

Smart money

"Professional investor" is a loose term:

A hedge fund manager told clients he is "truly sorry" for losing virtually all their money.

Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital -- down from the roughly $100 million it ran as of late March.

"I take responsibility for this terrible outcome," Li wrote in a letter to investors, which was obtained by CNBC.com.

"My only hope is that you understand that I acted in an attempt -- however misguided -- to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse," he added.

Time frame

This is a great way to depict the average American life:


Those with more than $1 million in assets are 0.7% of the world's adult population but own 44% of its wealth: 


This is a great point about investing strategy:

The reason we always hear intelligent investors talk about a consistent process is because results are inconsistent. A successful investor leaves no room for hindsight bias; they are steadfast in their implementation. If you can look back on losing periods and say "I would have done the same thing if the situation was presented again," your results will take care of themselves.

Reversion to the mean

Ten years ago an investor highlighted ten "perfect" value investors. One of their funds doesn't exist anymore. How'd the other nine do

Just two of the nine "perfect" value investors produced alpha [outperformance] during the period. The average alpha for the eight surviving funds was -1.05, or 1.01 percentage points below the -0.04 alpha of the [index] fund. Even passively managed funds have expenses, including the expense ratio and trading costs, so a small negative alpha should be expected even from a pure index fund. DFUVX has an expense ratio of 0.27%, which is greater than its negative alpha. 


Most Warren Buffett quotes are well known. Jason Ke Wang found some new ones, including:

 - "Only way to stop a panic in today's times is to have someone say with absolute authority, "I will do whatever it takes to make this right."

- "The next panic will most likely come from a cyber/nuclear/biological or chemical attack on the US. The ability of psychotics, religious fanatics etc. to impact people has tremendously increased since 1945 (atomic bombing of Hiroshima and Nagasaki)"

- "The US will always bounce back. Our system really works, if you have cash during a time of panic, BUY"

- The auto industry has been the one of the most important industries during Buffett's investing career. He has extensive knowledge of auto. Despite that he doesn't feel comfortable buying auto stocks. Instead he chose to buy an auto dealer with 78,000 dealerships across the US. Simply because five years from now, he doesn't know which model will sell but he does know that the auto dealer will sell it. This is the same story in tech, Buffett does not know who the leader will be.


Bill and Melinda Gates make a big bet on the world getting better. Watch: 

Have a good weekend. 

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