Please go read this article in the New Yorker by Malcolm Gladwell. It is about how underdogs can win. It is simply fantastic and has many lessons that anyone, especially investors can use.
7 thoughts on “How David Beats Goliath”
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Is the article with the example of the girls basketball team using the full court press? The blogosophere is full of posts shooting holes in this one, which isn’t surprising. Gladwell makes a lot of money writing feel-good stuff about how everyone who works hard can be successful, but his essays can rarely withstand any rigorous scrutiny. What the New York Times book reviewer Michiko Kakutani wrote of Gladwell’s last book seems to apply to most of his other work: it’s “glib, poorly reasoned and thoroughly unconvincing.”
I hate to be critical here, especially on the heels of your last post, but as I wrote elsewhere last December, when you respond credulously to this sort of happy talk by Gladwell it raises questions about whether you are similarly credulous when you listen to CEOs tell you about their company’s future prospects. You seem to be an optimistic, philanthropic type of person, which is admirable, but sometimes we need to be more cynical and dubious.
I’m pretty sure now that Dave doesn’t believe in Santa.
Dave, do you believe that Charlie Munger actually is actively recommending Gladwell’s last book, calling it an excellent book.
I don’t think Gladwell has all of the answers or is 100% correct, why I think it is excellent is that he makes you think and question.
For example, what made me think in this latest article is whether I was playing a “Goliath” game or the “David” game I’m better at. I think that in the past year I have not been as nimble or fast as I have been in past. So, I took a very interesting take from this article.
I still stand by my comments, it was a great article.
I am surprised to hear that Munger is recommending the book, but I believe it if you say it.
Perhaps you can elaborate on what you mean about playing a “Goliath” game versus a “David” game. Sounds like it would make for an interesting post.
http://valueinvestingresource.blogspot.com/2009/05/outliers-by-malcolm-gladwell.html
He said it at the Berkshire Hathaway meeting.
I think that would make an interesting post. I’m going to think about it and try to put up a more detailed post.
An obvious example is not to invest like Berkshire when you have a much smaller portfolio. A smaller portfolio enables you to stick and move, stick and move, dancing around the market wherever you think you can make a profit. Berkshire and other institutions have to be slow moving position traders, Goliaths, because of their size. They wont be engaging in penny-stock arbitrage, for instance. Nor will they be able to enter or exit postions easily using technical analysis, which is probably at least one reason why Buffet discredits it. But Homma Munehisa and others beg to differ.
I thought it was a great article. It was the story of winning. It was uplifting, yes, but give Aaron a break. He didn’t write it. He merely shared it.
There aren’t many people out there that are more cynical than I am, but I think there’s at least one in New Jersey.