John Hendricks, the founder of the Discovery Channel (DISCA/B/K), wrote a book on his life story. Here are my key takeaways from the book.
This book by Jordan Belfort tells the tale of how his firm used its army of brokers to sell stocks at inflated prices to rich retail investors. This is secretly one of the best books on short selling. By understanding the criminal point of view, I started realizing more of the footprints that pump and dump-style frauds leave behind.
The book does have its flaws. The author isn’t exactly a reliable narrator. Jordan Belfort is not a “wolf of Wall Street” at all. The book talks about how he specifically kept his offices and those of his affiliates away from Manhattan. As well, most of the book does not talk about securities fraud. Nevertheless, if you want to develop a gimmicky skillset that is only useful for short selling, I highly recommend this book.
Some key points are:
- Steve Jobs is a real asshole (e.g. he would unnecessarily insult and put down his employees)… it doesn’t seem to have hurt his success too much.
- Jobs is obsessed with great design and making amazing products that are the intersection of great design and technology.
- He worked hard to attract A players and to weed out the “bozos”.
- Jobs would push people to do the unimaginable. Sometimes they would do things that they wouldn’t think were possible. Of course, this doesn’t work all the time.
- He is obsessed with perfection… even for details that consumers wouldn’t see. The robots making Apple/Next computers had to be beautiful… along with the interior of the case and how the circuit boards are laid out.
Walmart is one of the best performing stocks of all time. Sam Walton’s stake in the company made him the world’s richest person. I enjoyed his book as it gives a good historical perspective on the sector and has some useful business insights.
Howard Schultz (Starbucks’ CEO) has written two books: Pour Your Heart Into It and Onward.
From reading/skimming through the books, here’s my take on why Starbucks is successful.
Starbucks’ competitive advantage
It is clear that Schultz is downright obsessive about quality. Schultz has traveled the world and knew that other countries were doing coffee far better than the US when he got into the business.
- The product. Schultz has always insisted on using the highest quality beans and never sacrificing quality by using slightly inferior beans. Starbucks invests a lot of money into figuring out how to deliver the best product. They have in-house employees to source the best beans from around the world, develop the best roasting methods, and to develop the best blends.
- Theatre. Preparing the coffee is like a sacred ritual. The care and craftsmanship in producing each cup of coffee adds to the experience.
- People. Starbucks pays attention to the human interaction between the barista and the customer. Schultz hated espresso machines that were too tall since the barista couldn’t make eye contact with the customer while preparing the drink. He also works towards having baristas that know their customers.
Here are the resources that I found the most helpful for understanding mining…
Key ideas in the book are:
- Sometimes there are inflection points in an industry that changes everything, e.g. containerization of the shipping industry and the rise of the personal computer. The trick is to (A) correctly identify what things are and aren’t inflection points and (B) re-invent the business if you are on the wrong end of an inflection point.
- It is difficult for CEOs to make decisions that may be obvious to outsiders and to a company’s customers.