Open Strategist

Friday, August 1, 2014

Thursday, July 31, 2014

Charlie Munger surfer investing

“Then there’s another model from microeconomics which I find very interesting. When

technology moves as fast as it does in a civilization like ours, you get a phenomenon

which I call competitive destruction. You know, you have the finest buggy whip factory

and all of a sudden in comes this little horseless carriage. And before too many years

go by, your buggy whip business is dead. You either get into a different business or

you’re dead—you’re destroyed. It happens again and again and again.

And when these new businesses come in, there are huge advantages for the early birds.

And when you're an early bird, there's a model that I call "surfing" – when a surfer gets

up and catches the wave and just stays there, he can go a long, long time. But if he gets

off the wave, he becomes mired in shallows...

But people get long runs when they're right on the edge of the wave whether it's

Microsoft or Intel or all kinds of people, including National Cash Register in the early

days.

The cash register was one of the great contributions to civilization. It's a wonderful

story. Patterson was a small retail merchant who didn't make any money. One day,

somebody sold him a crude cash register that he put into his retail operation. And it

instantly changed from losing money to earning a profit because it made it so much

harder for the employees to steal... But Patterson, having the kind of mind that he did,

didn't think, "Oh, good for my retail business." He thought, "I'm going into the cash

And he "surfed." He got the best distribution system, the biggest collection of patents and

the best of everything. He was a fanatic about everything important as the technology

developed. I have in my files an early National Cash Register Company report in which

Patterson described his methods and objectives. And a well-educated orangutan could

see that buying into partnership with Patterson in those early days, given his notions

about the cash register business, was a total 100% cinch.

And, of course, that's exactly what an investor should be looking for. In a long life,

you can expect to profit heavily from at least a few of those opportunities if you develop

the wisdom and will to seize them.”

Via: Charlie Munger reference

Wednesday, July 30, 2014

Sunday, July 27, 2014

"When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens." "If you address a market that really wants your product, if the dogs are eating the dog food, you can screw up everything in the company and you will succeed. Conversely, if you're really good at execution but the dogs don't want to eat the dog food, you have no chance of winning." A great product in a great market can make an executive look great, regardless of skill. Similarly, when a talented executive tries to achieve success with an offering that is lousy or the market is lousy, the result is inevitably lousy. Warren Buffet has expressed a similar thought: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." Andy wants great management and a great market when he invests. One big difference between Andy Rachleff and Warren Buffett is that as a venture capitalist and entrepreneur, Andy builds new moats. Warren Buffett and Charlie Munger make it clear that they only buy existing moats. Building new moats and buying existing moats are very different objectives, involving very different skills and talents.

via: 25iq

Saturday, July 26, 2014

Weekend Links

The High-Heel Hottie Effect: The Evolutionary Psychology of Women’s Shoes http://blogs.scientificamerican.com/bering-in-mind/2014/07/23/the-high-heel-hottie-effect-the-evolutionary-psychology-of-womens-shoes/ …
How the Other Half Works: an Adventure in the Low Status of Software Engineers http://michaelochurch.wordpress.com/2014/07/13/how-the-other-half-works-an-adventure-in-the-low-status-of-software-engineers/?src=longreads …
Why Poor Schools Can’t Win at Standardized Testing http://www.theatlantic.com/features/archive/2014/07/why-poor-schools-cant-win-at-standardized-testing/374287/?src=longreads …
Lunch with the FT: Vikram Pandit http://www.ft.com/intl/cms/s/2/e4f1c550-0762-11e4-81c6-00144feab7de.html#axzz38Rm94SHP …
“Burger King Is Run by Children” — http://ift.tt/1pfzHzq (Businessweek)
I'm Ira Glass, Host of This American Life, and This Is How I Work http://lifehacker.com/im-ira-glass-host-of-this-american-life-and-this-is-h-1609562031 …
Does This Make Me Sound Insecure? http://www.slate.com/articles/health_and_science/science/2014/07/insecurity_in_language_psychology_of_how_words_reveal_self_doubt.single.html …
Don't Send Your Kid to the Ivy League http://www.newrepublic.com/article/118747/ivy-league-schools-are-overrated-send-your-kids-elsewhere …
Ask the Sexpert: The 90-year-old sex guru http://www.bbc.com/news/magazine-28353027 …
Off my table, you damn Carnivore! http://www.openthemagazine.com/article/living/off-my-table-you-damn-
The twenty stories in 60 minutes podcast : http://feeds.thisamericanlife.org/talpodcast

Tuesday, July 22, 2014

Ron Johnson: Stanford GSB Talk [video]

via: VIW

Sunday, July 20, 2014

On old age

"Fruits are most welcome when almost over; youth is most charming at its close; the last drink delights the toper, the glass which souses him and puts the finishing touch on his drunkenness. Each pleasure reserves to the end the greatest delights which it contains.

Life is most delightful when it is on the downward slope, but has not yet reached the abrupt decline."

via: http://www.lettersfromastoic.net/letter-12-on-old-age/