Returns for Great vs. Bad Businesses

Munger and The Cattle Rancher

Munger’s ability to find great businesses is directly related to his ability to consistently discard bad businesses. He is excellent at inverting, and discarding the bad businesses as quickly as possible.

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The Abominable No-Man and Bad Management

Some investors think a business is good, but know that management is bad.  These investors justify the investment based on the idea that the great price of the business is worth the bad management. This is akin to marrying a supermodel who is going to yell at you all day.  Whatever pleasure your eyes may derive from the marriage, your ears will endure a greater amount of pain in the long run. The pocketbooks of those partnering with bad management are likely to see a similar 50%+ decline in their net worth.

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Carmen Segarra and David Sokol…and a Streetlight

Buffett likes to quip that “If past history was all there was to [investing], then the richest people would be librarians.” An addition might be, “If accounting was all there was to investing, accountants would be the richest people.” This American Life had an interesting podcast this past week, “The

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Russian Astronauts, NFL and Munger vs. Graham

This past week, Munger made the following remark: “I don’t love Ben Graham and his ideas the way Warren does. I think Ben Graham wasn’t nearly as good an investor as Warren Buffett is or even as good as I am.  Buying those cheap, cigar-butt stocks [companies with limited potential

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Clippers’ Owner Comments on Recent Tech Announcement…

In honor of a certain announcement out of Cupertino tomorrow, see this great video of Steve Ballmer’s commentary shortly after the introduction of the iPhone.  He mentions the  Motorola Q as being a great phone in the market place and how the Zune has taken 20%-25% of the portable listening market (the

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11th Commandment of Investment Study

“Nobody goes to church expecting to learn about the 11th commandment.” Regardless of one’s religious views, it’s pretty clear that most religious people do not expect to receive the 11th commandment this Sunday (or Friday).  Many religions study the same passages in the same books over and over.  The point

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Investing in a Business not a Stock Symbol

“Investment is most intelligent when it is most business-like.”  Graham “I am a better investor because I am a businessman and a better businessman because I am an investor.” Buffett These phrases and line of thinking are a familiar refrain among value investors.  I hear these used so frequently now

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RG III vs. Buffett or Why I Don’t Study 13Fs

I don’t ever bother reading 13Fs. I think it is a waste of time.  And, I think RGIII is a great example of why you shouldn’t. I grew up with the Redskins. To say my father is a fan is quite an understatement. In fact, one weekend, when he was

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Invert, Always Invert

Charlie Munger frequently talks about inversion, meaning that you need to look at something from an inverted point of view, thus giving yourself a better chance of understanding it from a different perspective.  A good example he uses, is that he wants to know where he is going to die,

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Powder Puff Football and Charlie Munger

Football is big in Ohio.  Lots of traditions revolve around football: tail-gating, homecoming parades, pep rallies, and Powder Puff Football.  For those who did not have the pleasure of enjoying this great classic of american life, Powder Puff Football is an all girl flag-football game, typically between the Senior and

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