Gustavo Ballvé on May 28th, 2010

Munger’s classic speech in 1995 at the Harvard Law School is the quintessential example of the multitude of his mental models. In it Mr. Munger describes 24 “standard causes for human misjudgement” in separate, but then reminds us that these can combine to create potentially multiplied consequences. Since it can happen for good or bad, we’re better off informed and much smarter for the effort.

Read more about Classics: Psychology of Human Misjudgement

Gustavo Ballvé on May 24th, 2010

This 2008 article discusses red flags for Board members trying to detect fraud. For our tastes and frameworks, the article doesn’t give nearly enough emphasis to the incentives issue. It’s vital to remember that one shouldn’t rely on checklist approaches to CG, fraud, stock research and pretty much anything else involving “systems” that are far from simple.

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Gustavo Ballvé on May 19th, 2010

In the first of a series of posts, this one highlights the classic article by Robert Cialdini: “The Science of Persuasion”. It’s basically a 6-page summary for his must-read book “Influence: The Psychology of Persuasion”. We can’t stress enough how important the subject is – anyone interested in marketing, retail, personal relationships and, well, wants to reduce the risk of being tricked by a Madoff-like scheme should read this book.

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Gustavo Ballvé on May 17th, 2010

A Harvard researcher says that Brazilian CG of about 100 years ago could teach the current-day US (and others) many lessons. What’s perhaps most interesting and thought-provoking: the provisions came from the companies themselves and surpassed – by far – the legal requirements at the time. We’re reminded of Saraiva, which instituted a tag-along provision long before the law demanded it.

Read more about Brazilian C.G. 100 years ago

Gustavo Ballvé on May 13th, 2010

A few (seemingly) random thoughts and quotes on misdirection, disorientation and how to benefit from it. If that doesn’t convince the reader to click on “read more”, there’s a Charlie Munger quotation inside worth the read.

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Gustavo Ballvé on May 11th, 2010

The brazilian management of AB-InBev is surprising even americans for their fiercely-enforced operational efficiency measures. Their surprise is, well, surprising to us in light of what the same people did in Europe at Interbrew, and highlights the advantages of looking at companies globally.

Read more about Brazilian capitalism in the US

Gustavo Ballvé on May 9th, 2010

A study shows that first-draft picks in the NFL usually underperform and don’t represent value for the money, but still teams fight for that spot thinking they will make the right choice. Overconfidence and inefficient markets happen anywhere – it’s only human.

Read more about Overconfidence and inefficiency – in sports

Gustavo Ballvé on May 4th, 2010

Recent stories about the increased credit lines at BNDES highlight the issue of government spending. There have been many other initiatives that translate into increased spending, and one is reminded that this is an election year. The temptation to focus on the primary fiscal surplus could, for the less skeptic, hide the dangers of this growing spending binge.

Read more about Government spending on the rise in Brazil

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