25iq

My views on the market, tech, and everything else

Charlie Munger on Mistakes

 MUNGER’S METHODS  Chapter 1:   The Difference between a Good Business and a Bad Business Mistakes Charlie Munger learned about business in the best way possible: by making mistakes and being successful actually being in business. Reading about business is vital Charlie has said many times, but there is no substitute for wading in and actually taking the plunge as a business manager or owner.  It is through the process of […]

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Angel Investing and Power Laws

Warren Buffett’s view on risk is the right response to the data contained in the post by Robert Wiltbank on Angel investing returns. In an essay in which he discusses risk, Buffett advises: “… If significant risk exists in a single transaction, overall risk should be reduced by making that purchase one of many mutually-independent commitments.  Thus, you may consciously purchase a risky investment – one that indeed has a […]

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The Matthew Effect and VC Performance

Andy Rachleff wrote recently: “Cambridge Associates, an advisor to institutions that invest in venture capital, says that only about 20 firms – or about 3 percent of the universe of venture capital firms – generate 95 percent of the industry’s returns, and the composition of the top 3 percent doesn’t change very much over time.” Anyone who has looked at Cambridge data over time can see that the distribution of […]

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MUPPETS ASK QUESTIONS AND EXPERTS ANSWER

What is a muppet? Henry Blodgett:  “The definition of “muppet,” say those who live on the other side of the pond (where ‘muppet’ is apparently a common term on trading floors to describe the guy on the other side of the trade) is “idiot.” Can a muppet become an investor? David Swensen:  “Instead of concentrating on the central issue of creating sensible long-term asset-allocation targets, [muppets]  too frequently focus on […]

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