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Walter Isaacson’s biography of Steve Jobs

Some key points are:

  1. 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.
  2. Jobs is obsessed with great design and making amazing products that are the intersection of great design and technology.
  3. He worked hard to attract A players and to weed out the “bozos”.
  4. 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.
  5. 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.

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Portfolio Update Nov. 30 2012

Queenston Mining (QMI.TO) – closed at a profit

Sold Queenston Mining at $5.27ish for a nice profit.  Osisko announced a takeover of Queenston (0.611 Osisko shares for every Queenston share).  I sold because it seemed to me that Queenston was close to fair value.  At this point in time, a competing bid seems unlikely to me.  One reason is that Osisko’s bid has a non-solicitation clause that Queenston management agreed to.  Agnico Eagle Mines, which has a strategic investment in Queenston, will not be bidding on Queenston as it struck a deal with Osisko.

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Books from Starbucks’ CEO

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.

  1. 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.
  2. Theatre.  Preparing the coffee is like a sacred ritual.  The care and craftsmanship in producing each cup of coffee adds to the experience.
  3. 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.

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Oil and Gas 101

Here’s what I know about the sector so far:

  1. The independent oil & gas sector as a whole has a poor track record of profitability.
  2. Reserve estimation is an educated guess.  Small changes in assumptions can have a massive effect on the economics of a reservoir.
  3. One common pattern in the oil & gas sector is for a company to overstate its reserves and to continually raise capital.  See #1.
  4. PUD (proven undeveloped) reserves are especially prone to abuse (overstatement of reserves).
  5. Most of the value creation in the industry comes from exploration.  Exploration is the most open-ended and uncertain aspect of E&P (exploration and production).
  6. Technology is another area of value creation.
  7. Historically, debt has often been dangerous to the companies which use it.
  8. Opportunities are the greatest when overly leveraged companies are forced to sell.

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