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Monthly Archives: May 2010
The news out of the Gulf Of Mexico is apparently even worse than previously thought. There appears to be another oil leak 5-7 miles away that is releasing an oil plume out the size of “Delaware.”
Watch this video from Matthew Simmons and what may need to be done:
The title of this post comes from what Niall Ferguson wanted to call his Financial Times column, but that title was censored. This video is one of the most important things I have ever posted on this site. I think that the implications are so important and that everyone should start thinking and preparing themselves for the coming surge in interest rates and the rise of inflation.
This is a great blog post by money manager Jeff Matthews on Buffett and Goldman from the Berkshire annual meeting.
I don’t watch Fast Money, but I thought this was an excellent explanation and warning for the future that yesterday will happen again. I don’t trust the computerized trading at all, and I think yesterday was not an error, but a sign for how illiquid the markets are truly are with large volumes. Yesterday was a shot across the bow. Be warned.
A funny set of pictures from attempts in China to use English. My favorite is #8:
I just finished a very interesting book, called Hidden Champions of the Twenty-First Century, by Hermann Simon. This book is a fascinating look at some of the best and most successful unknown or “hidden” companies in the world. The author does a deep dive and tries to figure out what makes them so successful. I think this book is valuable to any investor, even though most of these companies are private.
This book asks a very, very important question: What makes a small or medium sized company a long term success?
Here are some interesting nuggets about Hidden Champions I took from the book:
1)Hidden Champions do not compete on price, but instead on quality and performance, and this is how they increase market share.
2)Hidden Champions spend double the R&D as a percentage of revenue compared to other companies.
3)These companies set really, ambitious growth targets. A favorite quote in the book: “Great successes always start with ambitious goals.”
4)Hidden Champions define their markets extremely narrowly and have market shares as high as 70% to 100%.
5)Two-thirds of hidden champions are located in rural areas. This creates mutual dependence on the company and employees.
6)Self-financing is and remains the most important source of financing.
7)There is a constant focus on reducing costs, no matter how well the company is doing.
8)Hidden Champions implement decentralized, customer focused corporate structure earl on.
9)When these companies diversify it is a soft-diversification, not into wildly disparate industries.
10)Combination of narrow market focus & superior performance is what insulates Hidden Champions from competition.
I recommend this book for any investor or person who wants to better understand companies and what makes them succeed.
What a thrilling race. Ice Box, who I had pegged to finish first, finished second. But he was clearly the horse running the fastest by far down the stretch. In fact, with a little better luck, he would have easily won. From the New York Times:
“The Nick Zito-trained Ice Box was running fastest of all late, but had his chances for victory compromised in the stretch when jockey Jose Lezcano ran up on a herd of horses, got pinched and had to pull up. He then swung Ice Box, the Florida Derby champion, wide to launch a closing kick that collared Paddy O’Prado for second place, but was too late to run down Super Saver.”
Here is the link: Derby Recap
All in all, I forgot how much fun watching the Derby is and how much fun it is to handicap. I think I will make this an annual tradition on my blog.