Richard Feynman was a scientist, professor, musician and raconteur. Bill Gates adds to that description Feynman: “In 1965, Feynman shared a Nobel Prize for work on particle physics. Feynman wasn’t famous just for being a great teacher and a world-class scientist; he was also quite a character. He translated Mayan hieroglyphics. He loved to play the bongos. While helping develop the atomic bomb at Los Alamos, he entertained himself […]
1. “Phase 1: Collect underpants. Phase 2: ? Phase 3: Profit.” Eric Cartman. Underpants Gnomes. http://southpark.wikia.com/wiki/Gnomes/Script The business model problem flagged in the Underpants Gnomes episode of South Park is real since creating a significantly profitable business model is hard. Not only is it hard, it is rare. Many important companies have done it exactly once. And companies that have created a successful business model are often not able to […]
Richard Thaler is not only a famous economist and author, but is also part of a very successful fund said Bloomberg in an article published just today: The 70-year-old University of Chicago professor, whose stock-picking theories drive the Undiscovered Managers Behavioral Value Fund, is getting discovered in more ways than one. The small-cap mutual fund, which beat 99 percent of its Bloomberg peers over the past three and five years, […]
I am working on a new “mental models” series for the blog. The writing is taking a bit longer than I thought, so in the interim here is something light. I have paired each movie quote with an appropriate Charlie Munger quote. “Buy low, sell high. Fear? That’s the other guy’s problem.” Louis Winthorpe III. Trading Places. Charlie Munger: “Look for more value in terms of discounted future cash […]
You can learn a lot in life from anti-models since they teach you the sort of person you do not want to be and things you do not want to do. This applies both to Madoff and his victims. As Charlie Munger likes to say, it is often wise to: “Invert!” It would be fantastic if people like Madoff and his victims did not exist but as long as they […]
I have only encountered Carl Icahn once in a business environment and even then it was indirectly. I have never met him. The indirect interaction took place in the aftermath of the crash of the Internet Bubble and control the company XO Communications was up for grabs (if you had cash, which was relatively rare at the time, you could try to gain control of companies in Chapter 11). […]
1. “Between my horrible poker play and the ’29 stock market crash, it took many years to gain the smarts to keep my investing simple.” Groucho learned some hard lessons in 1929. The author of the book New World Coming: The 1920s and the Making of Modern America points out that prior to the crash, the investing world seemed quite easy to Groucho. He was very involved in selecting […]
Warren Buffett and Charlie Munger have they call a “too hard pile.” Here’s Munger on that point: “If something is too hard we move on to something else. What could be simpler than that?” “We have three baskets: in, out, and too tough. We have to have a special insight, or we’ll put it in the ‘too tough’ basket.” For example, Munger makes quite clear that he does not have […]
I have written about the challenges associated with being short a stock before. It has been my expedience that shorting is something lots of people like to talk about, but few people actually do. Here is Jim Chanos describing what his firm does (“fundamental shorting”) with some of the best quotes coming from an excellent interview with Barry Ritholtz: “We select a portfolio of securities – mostly stocks – that […]
“What these [Wu-Tang clan] guys have done — without taking a single business school course — is to go right to the head of the class in terms of strategy development.” James Cash, Harvard Business School (New York Times, 1996) Rza (Robert Fitzgerald Diggs) grew up in Brooklyn and Staten Island. He learned about business by actually being in business on the street from an early age. As Warren Buffett […]