Foodforthought
Our thoughts go out to the families affected by floods everywhere, but this picture had us thinking about the book “Too Big To Fail”. Unlike other books about the financial crisis that shook the world recently, Mr. Sorkin’s book deals with the real-time, day-to-day background discussions and decision-making in the eye of the storm. And decisions made in times of turmoil can lead to less-than-ideal outcomes and a false sense of security.
David Brooks has a nice teaser article on the current and future economic “protocols”. His tip is to not just read the book he’s reviewing but another that complements what he feels are the first book’s weaknesses. Always a nice way to help readers better form opinions of their own, and it’s what we will always try to do here as well. Also includes links to other columns of his.
Sometimes we’ll publish “older” stuff as part of what we like to call “weekend catch-up reading”. This time it’s a Fortune Magazine interview with Joel I. Klen, New York City’s school chancellor and former CEO of Bertelsmann’s USA operations. He’s best know as the Dept. of Justice’s anti-trust czar that sued Microsoft, so it’s telling [...]
Fred Wilson had an interesting post today on action oriented entrepreneurs/ leaders. While we don’t agree 100%, there are some interesting teasers to think about not only for the companies we study but also for our own. The situation one wants to get to is to have a team composed of people with diverse backgrounds and complementary skills – and personalities – combined with carefully-planned incentives that align individuals and teams with the company’s vision. Easier said than done, but the closer you get to this the better.
Booz Allen is offering words of caution on crowdsourcing. It is a new thing, therefore relatively untested, and it certainly has its optimal applications and its limits – which probably haven’t been found yet. It’s just another tool available and should be subject to the same rigorous analysis before the company starts using it.
They took questions from Columbia grad students and the event was broadcast live by CNBC. It has an eerie feel to it – with the whole “must keep spirits high” approach. That said, both men think in the long term (15+ years) and it’s always interesting to be reminded of some basic concepts.
We’ll hold our judgement on “behavioral finance funds”. The point here is that these funds are ultimately offered to human clients, and as this quote notes, “It would be really kind of ironic if you invested in a fund based on behavioral finance and you sold it after the fund had a big loss or added to it after it was up 50 percent.” (…) “It’s hard not to be human.”
In this second post looking back to memorable moments in IP’s own letters to its shareholders, we continue to discuss our company’s “inner workings”. Again, the idea is to reveal as much as we can about the processes that should, over time, generate favorable outcomes for our investment ideas.
We’re looking back to our recent letters to our shareholders and every now and then we’ll post some quotes we’d like to share with you. Since this is the first installment in this series, we’ll dwell a little bit longer in one specific subject – risk management.
Seth Godin’s thought-provoking presentation about the importance of being different. Obviously a bit of a stretch. On many areas of your life you DON’T want things to change, but in many others you certainly want to experiment. The trick is to figure out where the novelty effect can be successful and balance the effort with [...]