The Tao of Warren Buffett | Mary Buffett

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Published in: 2006

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Mary Buffett was for 12 years the daughter-in-law of Warren Buffett and has since released several books on Buffett’s views on investing. During years of family dinners, she has learned about investments, education, mentors, and life in general. The word “tao” is Chinese and means “way”, “path” or “doctrine”.

TWO RULES OF INVESTINGBuffett has said that “Rule no. 1 is never lose money. Rule No. 2 is to never forget rule No. 1”. You get rich by compounding capital over a long period of time. There can be no zeros in the protocol. In addition, time is the friend of a good investment outcome. The earlier you start the better. Buffett has joked “I made my first investment at eleven. I was wasting my life up until then”.

THINK BEFORE YOU ACT. It is difficult to get out of a signed contract – so do all the thinking before you sign. Think through all the scenarios, especially the negative ones. Thinking long and carefully before signing saves a lot of future thinking time if the decision turns out to be wrong.

”It is easier to stay out of trouble than it is to get out of trouble”

YOUR REPUTATION IS YOUR MOST IMPORTANT ASSET. Buffett is known for thinking about his reputation first. It takes 20 years to build a good reputation but five minutes to ruin it. If you think about it, you do things differently.

”It’s best not to do something that you know is wrong, because if you are caught, the price you pay may be more than you can afford.”

WATCH OUT FOR BAD HABITS EARLY IN LIFE. A well-known quote from Buffett is “The chains of habit are too light to be felt until they are too heavy to be broken.” However, it is not his own words, but the British philosopher Bertrand Russell’s. Early in life we can choose what habits we want. Later in life, we are stuck with the habits we have picked when we were young.

WATCH OUT FOR A CHERRY CONSENSUS. In the stock market, you get paid to go your own way – provided the analysis is correct. If you do as everyone else, you get what everyone else gets and can therefore not expect miracles. If a stock is liked by everyone, it is expensive. Then the upside is small if the business develops as expected, but the downside is large if something goes wrong. Buffett has said “The less prudence which with others conduct their affairs, the greater the prudence with which we should conduct our affairs”. On the same subject, he has also said that we should be fearful when others are greedy, and greedy when others are fearful.

BASIC MATH IS ENOUGH. According to Buffett, a successful investor only needs to be able to add, subtract, multiply and divide. In addition, he needs to be fluent in calculations of percentages and probabilities. When an investment is justified by Greek figures, it is not good – then the uncertainty is too great.

INTEGRITTY, INTELLIGENCE AND ENERGY. When Buffett hires someone, he wants them to have integrity, be intelligent and have a lot of energy. He is famous for saying “And if you don’t have the first, the other two will kill you.” If he has all three, he can leave them to take care of themselves and expect a good job.

DON’T POSTPONE LIFE. There will come a time when you should start doing what you really want. There are many who take job after job because it will look good on their CV. This behavior is only good for a while. Doing it for too long is like saving up sex for later in life.

DON’T LOOK BACK. Buffett has said that he never looks back. We all make mistakes and there is so much to look forward to in the future. Why then suffer from previous bad decisions that we still cannot do anything about. We can only live our lives forward.

ACCEPT MISTAKES. If you never make any mistakes, you never make any decisions. Mistakes are part of the game. Those who can make decisions will lead and those who cannot be led. Part of decision making is making mistakes. If you make twelve decisions in one day, something will be wrong. Buffett, on the other hand, always wants to be able to explain his mistakes, so he makes no decisions if he does not understand the situation.


The Dhando Investor | Mohnish Pabrai

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Published in: 2007

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The value investor Mohnish Pabrai presents in the book what he calls a Dhandho framework for investing – how to get a high return at low risk. Since the launch of Pabrai Investment Funds, a copy of Buffett’s partnerships in the 1950s, Pabrai has outperformed all major indices and 99% of all funds. Dhandho means in Indian “endeavors that create wealth”, and with an annual return of 28% after fees, that is exactly what Pabrai has done.

Einstein has said: “Compounding is the 8th wonder of the world.”… “We, the compounders, agree with Einstein. It is all about the doubles. How long does it take to get a double and how many doubles can I get in a lifetime?” – Pabrai

HEADS I WIN, TAIL I DON’T LOSE MUCH. Pabrai sums up his investment philosophy as a constant pursuit of situations with minimal risk and maximum return: ”Heads I win, Tails I don’t lose much”, as oppose to the maxim ”high risk, high reward”.

RISK AND UNCERTAINTY. Financial risk can be defined in several ways: (1) risk of losing money permanently, (2) volatility and (3) uncertainty. The best situations arise when uncertainty is high but the risk of losing money is low. Low risk / high uncertainty can be identified in entrepreneurs such as Ray Kroc (McDonalds), Herb Schultz (Starbucks), Richard Branson (Virgin) and also Buffett and Munger. For example, the only capital ever to go into Microsoft was $500k. It can therefore not be said that Microsoft was a high-risk project. But it had high uncertainty. Bill Gates ended up in an extreme place on the “bell curve” but he took no greater risk of ending up there.

LOW RISK, HIGH UNCERTAINTY. Risk and uncertainty are two different concepts. A company’s future may be uncertain. But when you have carefully thought through possible future outcomes and come to the conclusion that the risk of permanent loss of capital is very low, you may have found a lucrative low-risk / high-uncertainty situation. When extreme fear strikes, stock markets can act irrationally. Bad news leads to extreme fear and low valuation as a result. Look for simple businesses that have temporary problems. Look for companies with low valuations and previous profit warnings. Lower expectations may actually mean lower risk of losing your money on the investment.

BUY EXISTING BUSINESSES. Pabrai believes that owning a few listed companies is the best way to build wealth. No major effort is required and in the stock market, a patient investor can occasionally find big discounts. There is also no need for a large amount of capital and there is a gigantic supply of investment opportunities. In addition, the transaction fees are relatively low.

SIMPLE BUSINESSES. “The Dhandho Way” is simple, which is also its power. To fight against your own psychological forces, you must, according to Pabrai, buy businesses that are so painfully easy to understand that in tough times you can remind yourself why you bought the stock. If you need a cumbersome spreadsheet and more than a short paragraph for your thesis, you should look for another investment opportunity.

SUSTAINABLE MOAT. Only businesses with a sustainable moat – ie sustainable competitive advantages – can earn an above average return on invested capital. Over time, the moat tends to shrink. Charlie Munger has said that of the 50 most important companies on the NYSE in 1911, there is only one left today – General Electric. The average life expectancy of a company on the S&P 500 has decreased from just over 60 years in the 1960s to 15-20 years in the last ten years.

FEW BETS, BIG BETS, INFREQUENT BETS. Warren Buffett has said that diversification can be seen as protection against ignorance. Having a portfolio of 100 companies makes it difficult to beat the indices. According to Pabrai, investing as well as gambling is: ”looking out for mispriced betting opportunities and betting heavily when the odds are overwhelmingly in your favor is the ticket to wealth”.

MARGIN OF SAFETY. The larger the discount to the intrinsic value, the lower the risk. And the bigger is also the upside. Stocks are often valued at or above the intrinsic value. Investors should be patient and wait until they find cheap stocks with a large margin of safety, low risk and potentially large upside. In the long run, the cost of permanent losses is high due to the interest-on-interest effect.

COPYCAT RATHER THAN INNOVATORS. According to Pabrai, innovation is a gamble while cloning is safe. Therefore, successful cloning is the best business. Look for businesses run by people who have demonstrated that they can learn and copy from the innovators time and time again.


Investing with Anthony Bolton | Bolton & Davis

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Published in: 2006

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Anthony Bolton is Britain’s counterpart to the United States’ Peter Lynch. They both worked for Fidelity, managed large and well-diversified funds and outperformed their benchmarks. Bolton managed the Fidelity Special Situations fund between 1979 and 2007 and had an annual return of 20.4%, compared to the FTSE All-Share index of 13.8%. During the period, assets under management increased from £2m to £6bn. Between 1985 and 2002, he also managed the Fidelity European Fund, which also beat the market by a good margin.

A WIDE RANGE OF STRATEGIES. Bolton invested in turnarounds, “hidden” growth companies, asset situations, M&A targets and reconstructions. Common to his case was that according to some criteria they were attractively valued and that the companies had what were temporary problems. Turnarounds, however, were his “bread and butter” investments and he was skilled at predicting when the market would change its perception of a company.

AGAINST THE TIDE. His investment philosophy was based on going against the flow. If anything was popular in the financial community, he was not there. During the IT bubble, his funds had no exposure at all to the IT sector but were instead invested in classic industrial companies – which later led to good excess returns when the bubble burst. He felt that an investment should not be comfortable – then it was not good. And if you want a better return than other managers, you must have other holdings than them.

MASTERED THE KEYNESIAN BEAUTY CONTEST. Bolton played the perception game and looked for companies where he judged that the possibility of a perception change was likely – from disapproved to liked. It is when that pendulum turns that you get a good chance for great return in a relatively short time. He liked when analysts dropped a company – then the next pendulum could only go in one direction. Bolton’s holding period averaged 18 months and he sold when he figured his positions had reached fair value.

SEARCHED FOR INEFFICIENCIES. Bolton invested in smaller companies because the market there was less efficient. His sweet spot was market caps of £50-£500m. He was not afraid to invest in illiquid securities as long as he was convinced that the company’s intrinsic value exceeded the market value by a good margin. If the intrinsic value was higher than the current valuation, it was only a matter of time until the revaluation came, provided that the homework was properly completed.

BUY-AND-ROTATE. One of Bolton’s great role models was Warren Buffett, whom he studied carefully during his early years as manager. However, he did not share Buffett’s “buy-and-hold-forever” philosophy, but considered that a rotating portfolio offered a better opportunity for excess returns than a stagnant one. Bolton was totally immersed in the managerial job and has said that a successful manager must live with the market – this too he had in common with Lynch. He believed that the more stones you turn on, the greater the chance of finding the gold nuggets. The working days generally consisted of meeting companies (often 2-6 per day) and discussing portfolio holdings and new ideas with analysts. He had no feelings about stock prices. Had a share he had just bought gone down, but where he had changed his mind, he sold immediately without caring about the quick loss.

VALUE IS WHAT MATTERS. When investing internationally, he often compared the company he was looking at with the sector multiples of similar companies in other markets. If the discrepancy was too great, the opportunity for a good investment was good. The portfolio design was not governed by any macro view but by where there was value. If a particular sector or market was undervalued, Bolton was generally heavily weighted there. However, he rarely invested more than 20% in any single market and individual positions rarely exceeded 3%. On average, he had cash just under 10% of the portfolio and at most (on two occasions) the cash amounted to 15%.

OUTPERFORMED WITH A BROAD PORTFOLIO. Bolton proved that it was possible to beat the market with a well-diversified portfolio. During the first years, the fund usually had 30–40 holdings, but as it grew, it was forced, in order to maintain a small company focus, to add more positions. During the 2000s, he usually had around 200 holdings in the portfolio. Lynch advised Bolton that as the portfolio grew, he should not get caught up in “defensive investment” trap but instead continue to focus on “offensive” investment – the search for new opportunities. Bolton successfully defied “the size curse” and outperformed the market by a good margin even during the latter part of his career.


The Element | Ken Robinson

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Published in: 2009

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Find early in life the job that feels like play to you. That can turn potential underachievers into becoming happy pursuers. This book addresses a few persons who have discovered their element – the place where things you love to do and the things you are good at meet. The element is another way of defining your potential.

“I’m convinced that taking the definition of intelligence for granted is one of the main reasons why so many people underestimate their true intellectual abilities and fail to find their Element. This commonsense view goes something like this: we are all born with a fixed amount of intelligence”

NATURAL STRENGHTS. Most people have a limited idea of their own natural capacity. Finding your element is essential for your well-being and success, and indirectly for the health of your organizations and the efficiency of our education systems. Robinson strongly believes that if we can all find our Element, we have the potential for much higher performance and fulfillment.

LET EVERYONE BLOOM IN THEIR OWN WAY. A “one-size-fits-all” in education marginalizes all those who do not naturally learn in this way. Education should be the system that develops our natural abilities and enables us to take the step into the world. Instead, it often stifles the individual talents and abilities of many students and kills their motivation to learn.

“William James: The greatest discovery of my generation is that human beings can alter their lives by altering their attitude of mind…if you change your mind, you can change your life”

MAKE THE INTEREST A PROFESSION. The only way to prepare for the future is to do the best we can, assuming it will make us as flexible and productive as possible. Go for things that you cannot imagine being without. Many people neglect their passion for doing things they do not care about, for financial security.

THREE TYPES OF INTELLIGENCE. Robinson argues that there are three types of intelligence: analytical intelligence (the ability to solve problems with academic skills and conventional IQ tests), creative intelligence (the ability to handle difficult situations and come up with original solutions) and practical intelligence (the ability to handle problems and challenges in daily life).

CREATIVITY IS THE HIGHEST. The highest form of intelligence is creative thinking. To find your element, it is important to understand the true nature of creativity and to have a clear understanding of how it relates to intelligence. According to Robinson, most people have a limited view of intelligence, by thinking in terms of academic understanding. This makes many people who are smart in different ways start to think that they are not smart at all.

FIND THE RIGHT FREQUENCY. The first critical step is to understand the intimate relationship between creativity and intelligence. People who work creatively usually love the medium they work with. Musicians love the sound they create, writers love words, dancers love movement, mathematicians love numbers, entrepreneurs love doing business and teachers love pedagogy. Therefore, they do not consider it a job – they do what they do because they are then in their element.

”This is why Feynman talks about working on the equations of motion “just for the fun of it”. It’s why he talks about “playing” with the ideas in “a relaxed fashion”.

DO WHAT YOU LOVE. When we do something within our element, we feel like our most authentic selves. We think that time goes differently and that we are more alive. Finding and developing our creative strengths is an important part of becoming who we really are. People who are in their element get a deep joy and delight of what they do. People who love what they do often describe themselves as lucky. People who think they are not succeeding in their lives often say that they have been unlucky. Being in your element often means that you are connected to other people who share the same passion and have a common sense of commitment. In practice, this means that you actively seek opportunities to explore your suitability in different areas.


The Charisma Myth | Olivia Fox Cabane

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Published in: 2013

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Olivia Fox Cabane is an American author and career coach. Cabane is the daughter of two psychologists who, while growing up, laid the foundation for her interest in the subject of the book: charisma. With the latest from neuroscience, Cabane dispels the myth that charisma is something a few people with the right genes possess.

CHARISMA IS A SKILLCharisma is not something you are born with; it is a skill that can be trained. Charisma makes others like you, trust you, and want to be led by you. Charisma determines whether you are seen as a follower or a leader. Whether you like it or not, charisma is important – it affects everything that happens to us in our lives.

THREE PARTS. Charisma consists of power, warmth, and presence. A charismatic person gives off a sense of power – he knows where he is going and is sure of his cause. A charismatic person also feels warm and radiates confidence. Finally, a charismatic person is present. If any of the components are missing, the charisma disappears.

CHARISMA COMES FROM WITHIN. Charisma is the result of non-verbal behavior. Body language is more crucial to charisma than verbal skill. What we think and feel is visible in our body language, and we can therefore not be charismatic if we do not also have a charismatic interior. A person with a sharp tongue but a weak body language cannot be charismatic.

THREE WAYS TO INCREASE YOUR CHARISMA. Some simple methods to increase your charisma are to: (1) finish the sentences in a lower pitch, (2) not nod in agreement so often and (3) pause for two seconds before speaking. To increase our “telephone charisma”, a good trick is to close our eyes when we talk on the phone – we then immediately become more present. True charisma, however, must be built from within. It is not possible to fake with any quick tips.

”Striving to acquire external charisma skills without learning how to handle your internal world is like adding pretty balconies to a house with a weak foundation. It’s a nice touch, but at the first earthquake everything falls apart. If your internal state is in turmoil, it’s hard to remember, let alone use, the new skills you’ve just learned.”

PRESENCE IS HARD. A strong impression is only created by being fully present for short periods in situations where others normally aren’t. Some simple tricks to be present are to think about focusing on our breathing or on, for example, our big toe – with this we are put directly into a present mind. If we can increase our ability to be present, we will thereby improve our body language, our ability to listen and our mental focus.

THE IMPOSTOR SYNDROME. Many successful people suffer from what is called “The impostor syndrome” – they feel that they do not know what they are doing and are waiting for someone to expose them as a fraudster. This type of self-criticism is a major obstacle for high-performing people and is often called “the silent killer of business”. Many high-ranking people suffer from this but few dare to talk about it. To reduce our suffering from the syndrome, we can remind ourselves that negativity is something normal everyone feels. We can change our view of the situation by thinking of someone we look up to who has gone through something similar.

APPRECIATE YOUR INCONVENIENCE. Uncomfortable situations will arise in our lives. For that reason, we should not only learn to accept them, but we also need to learn to be more comfortable with them. When they arise, we should not only try to endure them but instead dive into them. We should see ourselves as a scientist trying to investigate how it feels and why. Then we can tackle these situations in the best way come out wiser in the end.

DETAILS MATTERSWhen we dress for a workday or social event, we should do it thoughtfully. We should not wear clothes that make us too hot or too cold, avoid clothes that itch or sit badly or are in some way distracting. Even if we do not notice it ourselves, these physical distractions affect us – they eat away at our mental focus and make us less present.


Only the Paranoid Survive | Andrew S. Grove

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Published in: 1999

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Andrew Grove emigrated to the United States from communist Hungary in 1956, co-founded Intel in 1968, where he became president in 1979 and CEO in 1987. Grove and his co-founders became pioneers in two of the most important building blocks of modern technology: memory chips and microprocessors. When the book was published in 1996, he taught at the Stanford University. Below are some of Grove’s lessons.

EXTRAPOLATION IS DIFFICULT. When the microprocessor became fundamental to the industry, the mass production economy kicked in. Manufacturing computers became cost-effective, which made the computer an attractive tool both at home and at work. In the 1980s, the old computer companies were vital and growing. IBM predicted annual sales of $100 billion at the end of the decade. But in the late 1980s, several large vertical computer companies were in the midst of layoffs and restructuring. The calculation basis had not only changed, but the competition base had also changed.

”INFLECTION POINTS” ARE CHANGEABLE. Strategic inflection points are fundamental changes in an industry, whether technical or not. It is when the force balances from the old structure to the new (in physical terms when a curve changes from convex to concave, or vice versa). A leader must plan for this as the fire brigade: it is not possible to predict where the next fire will take place, but it is possible to have an energetic and efficient team that can respond to the unforeseen. It requires objectivity, the willingness to act on beliefs and the passion to mobilize people. Getting through the process requires clarity in the direction, including what to invest in and what not to invest in.

DATA IS ABOUT THE PAST. Grove describes an episode in which he waved away concerns from a subsidiary manager in Asia, in hindsight because he felt much safer in California than the subsidiary manager in “enemy territory.” Data is about the past, and strategic turning points are about the future. When data showed that Japanese memory manufacturers were becoming an important factor, Intel was in the midst of a struggle for survival. You need to know when to question data and when to trust it. To understand which of your competitors can change your business fundamentally: think if you only had one bullet in a figurative gun, which competitor would you save it for?

”10x CHANGE” – MANAGEMENT DETERMINES SURVIVAL. There are competitive forces and there are super competitive forces. A major change in any of Porter’s six forces (strength and competence of existing competitors, suppliers, customers, complementary, potential competitors and the ability to run the business in a different way) is what Grove calls a “10x” change. Eventually, the industry finds a whole new balance. Most market analysis is too static and do not include these events. Have a broad and intense debate instead. The way IBM and Intel responded to the X-ray technology threat showed that one company saw a “signal”, while the other classified it as “noise”. Competent people can have different conclusions with the same set of facts.

“But in capitalist reality, as distinguished from its textbook picture, it is not (price) competition which counts but the competition from the new commodity, the new technology, the source of supply, the new type of organization… competition which.. strikes not at the margins… of the existing firms but at their foundations and their very lives” – Joseph A. Schumpeter, Capitalism, Socialism and Democracy, 1942

IT CAN HAPPEN TO ANYONE, NOT JUST IN TECHNOLOGY. When Wal-Mart establishes itself in a small town, the environment changes for every retailer in the city. A “10X” factor has arrived. However, most changes happen gradually. Typewriters are getting better, cars are getting better, computers are getting better. A change in the customer base can create a subtle change in attitude, but still have a “10x” force. What is a demographic time bomb for consumer companies is good news for the computer industry (young people are growing up with computers). The privatization in the 1990s was in many countries “the mother of all inflection points”.

FIRST-MOVER-ADVANTAGE. Time advantage in the technology industry is the safest way to gain market share (and it’s harder to be best in class in several areas). Intel had almost 100% of the memory chip market segment. In the early 1970s, other companies joined, but Intel defended a large share. But when the Japanese pushed down the price, it became tough. Intel continued to spend a lot on R&D, but at the same time a small team worked with microprocessors, which the company had invented in 1970. Leaving the core business was difficult. But Grove asked himself: if the board brought in a new CEO, what do you think he would do? Why not go out the door, come back and do it yourself. Going through the entire strategic inflection point took Intel a total of three years.

DO WHAT IS HARD, WHEN IT IS EASY. Chaos is inefficient and burdens all participants. But the old order will not make room for the new without a phase of experimentation and chaos in between. Act while the driving force in your existing business is strong, cash flow is good, and the organization is intact. Grove has never made a tough change, either in terms of resource shifting or staff relocation, which he did not wish he had done a year earlier.


Hot Commodities | Jim Rogers

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Published in: 2004

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The book was published in 2004 by financier and world tourist Jim Rogers, who co-founded the Quantum Fund with George Soros. Between 1970 and 1980, the fund had a CAGR of 46% versus S&P 500’s 4%. The fund years resulted in that Rogers could call himself financially independent by a good margin, after which he retired at the age of 38. He has since traveled around the world twice, once by motorcycle and once by car. The car trip has given him a place in the Guinness World Book on the topic “Most countries visited in a continuous journey by car”.

NEGATIVE CORRELACTION WITH STOCKS. During the 20th century, there were three bull markets in commodities; 1906–1923, 1933–1953 and 1968–1982. Over the past 130 years, equities and commodities have alternated in regular cycles lasting an average of 18 years. During the 1970s, commodities performed the stock market, but the following decade the outcome was the opposite. Between 1959 and 2004, commodities had a higher return, and slightly lower volatility, than the stock market. Rogers explains the negative correlation with the fact that when raw materials are cheap, companies can generally enjoy high margins. When commodities become more expensive, it hits the companies’ margins, which leads to depressed share prices.

ROGERS INTERNATIONAL COMMODITY INDEXIn 1998, Rogers began to worry about the valuation of the stock market and talked about investing in commodities and how the fast-growing Chinese market would act as a locomotive for commodity prices. Commodity prices were then, also adjusted for inflation, lower than at any time since the depression of the 1930s. He then created his own commodity index in which he also invested his capital ahead of the upcoming round-the-world trip. Rogers was right, between 1998 and 2008 commodity prices rose sharply. Since then, according to Rogers’ index, commodities have had a negative development until today [2021].

A FORGOTTEN ASSET CLASS. In 2004, the turnover on the world’s commodity exchanges was many times greater than on the stock markets. Oil had the highest turnover. Coffee has on most occasions qualified as the second most traded commodity, despite the fact that only 20% of the world’s population are coffee consumers. According to Rogers, commodities should not be ignored and he thought that he became a better equity investor with knowledge from the commodities sector. By understanding the mechanisms in the raw materials sector, an investor can better understand how they in the next stage affect everything from food producers to real estate companies.

BACK TO BASICS. When Rogers analyzes commodities, he goes back to business 101 – supply and demand. He uses the CRB Commodity Yearbook and studies supply, demand, how large the reserves are and whether there are producers in areas where there is unrest. He also examines which industry is in demand for the raw material and what substitutes there are if prices rise too sharply. In general, commodities perform well during times of high inflation.

TRADING COMMODITIES = TRADING FUTURES. There are three players in the commodities market: producers, buyers and speculators. The producers are the mining companies, the forest companies, and the oil companies. The buyers are the ones in the next step in the value chain who use the raw material. The speculators are the investors who bet on the commodity price, but who have no interest in using the commodity. The speculators therefore never trade in the futures during the last trading month, as they do not want to be forced to take deliver on a batch of commodities.

COMMODITIES > COMMODITY-RELATED COMPANIES. When financial advisers talk about commodity exposure, it is usually through commodity-related companies. However, Rogers believes that the raw material companies are significantly more risky than the raw materials themselves. This is also strengthened by a study from Yale which showed that commodities over time performed better than the commodity-related companies. One difference between commodity-related companies and commodities is that the former can go to zero, which is not possible for the latter. The former also depends on the quality of management and the company’s indebtedness.

A COMMODITY-BOOM CAN BE A BOOM FOR A COUNTRY. When strong periods in commodities begin, it has a positive effect on the commodity-strong economies in many respects. A profit-generating raw material industry seeps through the entire business community, which leads to generally good times and strengthened currencies. As prices for copper, lead and other metals rise, the consequence is that the economies of countries such as Canada, Australia, Chile and Peru are to expect good times.


To Sell is Human | Daniel Pink

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Published in: 2013

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Physicians sell patients on a remedy. Lawyers sell juries on a verdict. Teachers sell students on the value of paying attention in class. Entrepreneurs woo funders, writers sweet-talk producers, coaches cajole players. Whatever our profession, we deliver presentations to fellow employees and make pitches to new clients. We try to convince the boss to loosen up a few dollars from the budget or the human resources department to add more vacation days. In 16 OECD countries – including France, Mexico, and Sweden – more than 90% of businesses now have fewer than ten employees. And a world of entrepreneurs is a world of salespeople.

THE AMBIVERT ADVANTAGE. Adam Grant collected data from a software company that operates call centers to sell its products and tracked the sales representatives’ revenues over the next three months. Not surprisingly, introverted sales reps didn’t perform as well as the extroverted ones. But neither did nearly as well as a third group: the ambiverts. These are people who are neither overly extraverted nor wildly introverted. On a scale on the 1-to-7 scale he found that revenue peaked between 4 and 4.5.

LEARNED HELPLESSNESS. Martin Seligman pioneered the concept of “learned helplessness”. First with studies on dogs, and later with research on humans, Seligman demonstrated that after extended experiences in which they were stripped of any control over their environment, some individuals just gave up. Even when conditions returned to normal, and they possessed the ability to seek gain or avoid pain, they did not act. They had learned to be helpless.

MONITOR YOUR POSITIVITY RATIO. The secret numerical code of the satisfied: 3 to 1. Seligman’s work demonstrated that how we explain negative events has an enormous effect on our buoyancy and performance. When something bad occurs, ask yourself: is this permanent? Is this pervasive? Is this personal? The more you explain bad events as temporary, specific, and external, the more likely you are to persist even in the face of adversity.  

FRAMING MATTERS. Clarity depends on contrast, which Robert Cialdini calls “the contrast principle”. We often understand something better when we see it in comparison with something else. The less Frame, i.e., less is more, is especially important in a world saturated with options and alternatives. Framing people’s options in a way that restricts their choices can help them see those choices more clearly instead of overwhelming them. Other frames mentioned in the book is the experience frame, the label frame, the blemished frame, the potential frame.

PRACTICE YOUR SIX PITCHES. The purpose of a pitch is not necessarily to move others to immediately adopt your idea. The purpose is to offer something so compelling that it begins a conversation, brings the other person in as a participant, and eventually arrives at an outcome that appeals to both of you. The pitch is often the first word, but its rarely the last word.  Ask people to describe your invisible pitch in three words. What is my company about? What is my product or service about? What am I about?

THE ONE-WORD PITCH. Write a fifty-word pitch. Reduce it to twenty-five words. Then to six words. One of those remaining words is almost certainly your one-word pitch.

THE QUESTION PITCH. The classic Reagan question “are you better off now than you were four years ago”. Use this if your arguments are strong. If they are weak, make a statement. Or better, find a new argument.

THE RHYMING PITCH. We remember from the O.J. Simpson trial “if it doesn’t fit, you must acquit”. Pitches that rhyme are more sublime. Go online and find a rhyming dictionary (for example

THE SUBJECT LINE PITCH. Review the subject lines of the last twenty e-mail messages you sent. Note how many of them appeal to either utility or curiosity. If that number is less than ten, rewrite each one that fails the test. Utility and curiosity are about equally potent, but they seem to operate independently of each other.

THE TWITTER PITCH. The best pitches are short, sweet, and easy to retweet.

THE PIXAR PITCH. Once upon a time ___. Every day, ___. One day___. Because of that___. Because of that___. Until finally___.    

IMPROVISE. Beneath the apparent chaos of improvisation is a light structure that allows it to work. Understanding that structure can help you move others, especially when your astute perspective-taking, infectious positivity, and brilliant framing don’t deliver the results you seek. In those circumstances, you’ll do better if you follow three essential rules of improvisational theater: (1) Hear offers, (2) Say “Yes and”, and (3) Make your partner look good.


Pebbles of Perception | Laurence Endersen

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Published in: 2014

Amazon | Goodreads

The book is about the choices we make in life and how we make them. Your life is a product of your choices – good choices equals good life equals bad choices, bad life. The book is inspired by Poor Charlie’s Almanac and Lawrence Enderson’s goal is to help young people to not have to grow old in order to become wise.  

LEARN TO KNOW YOURSELF. To take time for reflection and self-awareness is well-invested time. By understanding ourselves, we can understand others and with greater confidence go after our goals. By that, it gets easier not to live someone else’s life.

CURIOSITY AND LIFELONG LEARNING. The best way to learn is to approach a subject with a child’s curiosity and a questioning mindset. Curiosity leads to better questions, which in turn leads to better answers. By asking open-ended questions, we improve our chances of increasing our understanding and the answers can lead to new questions.

“Choosing lifelong learning is one of the few good choices that can make a big difference in our lives, giving us an enormous advantage when practiced over a long period of time”

THE FEYNMAN TECHNIQUE. When we have a subject or a concept we are trying to learn, we can use the Feynman technique. We produce a blank piece of paper and write the name of the subject at the top. Then we assume that we will teach someone else about the subject and fill the paper with information. If we can do this in a clear and pedagogical way, we will master the subject in question.

NOTHING HAPPENS IN A VACUUM. We should always keep in mind that everything is about what perspectives we have. If you go too far west, you end up east and vice versa. Nothing happens in isolation. Everything is affected by its context. Perspectives and contexts are different for everyone and change over time. See things from all angles and adapt to the current situation.

LOSS ASSOCIATED FEAR. Loss is something natural and to be expected. But the consequences of a loss will not be as bad as we imagine, especially if we live a varied life. We never lose our ability to learn, our ability to love and above all our ability to choose. Fear is mostly a thought-based construction. It disappears when we stop comparing ourselves to others and accept the situation as it is right now.

“Another helpful analogy is that of a ship. We are each the captain of our own ship. Fear of the future is the anchor that holds us in the harbor. Fear-ruled ships stay in safe harbours. But what use is a ship that won’t set sail?”

ADVERSITY IS NATURAL. Assuming that we will not suffer adversity is naive. An adversity is often more frightening in advance than when it comes. According to Endersen, there are three things that can make us overcome adversity and even come out better from them: (1) a reflection of the nature of adversity with a view to understanding, (2) a recognition of adversity in order to accept the situation and (3) to be able to mentally re-write our life history, now with adversity and its lessons. A common reaction to adversity is to deny it. Our goal should be to face adversity when it comes. To ask: what does life expect of me now?

FOCUS. If you ask someone successful about the secret behind their success, many will answer with just one word: focus. It’s hard to get good at something without giving it a disproportionate amount of time. The focus is on controlled applied energy. When we have something important to do, we should eliminate all other distractions and just do it. Before that thing is done, everything else is distractions.

LEAVE YOUR COMFORT ZONE. By leaving your comfort zone, you accept that you will fail. By welcoming failure, you will be able to grow. The most comfortable place for an animal is in the middle of a herd – where it is warm and safe. But the view from the middle of the herd is not very exciting.

”How will you ever be polished, if you are irritated by every rub?”


The 5 love languages | Gary Chapman

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Published in: 1992

Amazon Goodreads

According to Chapman, there are five different “love languages”; (1) Words of affirmation, (2) Quality time, (3) Receiving gifts, (4) Acts of service and (5) Physical touch. Not knowing a close one’s language, can cause situations similar to if one person speaks Chinese and another English. Like all human theory, however, it is not quite that simple – there are a variety of dialects and combinations. One way to identify your partner’s love language – in addition to asking – is to pay attention to what it is complained about. If you speak different languages, you may still have a good relationship if you actively speak each other’s.

“We can receive love through all five, but if we don’t receive our primary love language, we will not feel loved even though the person is speaking the other four. However, if they speak our primary love language sufficiently, then the other four provide icing on the cake”

THE LOVE TANK. According to Chapman, people – much like a car have a fuel tank – have a love tank that feels best when it is full. If we do not regularly re-fill, a feeling of emptiness arises. Chapman discusses how children who do not receive closeness, love and appreciation often grow up and become confused and unhappy as adults.

“Psychologists, psychiatrists, sociologists, anthropologists and educators have suggested in countless studies and numerous research papers that love is a “learned response, a learned emotion”.. most of us continue to behave as though love is not learned but lies dormant in each human being and simply awaits some mystical age of awareness to emerge in full bloom. We seem to refuse to face the obvious fact that most of us spend our lives trying to find love, trying to live in it and dying without ever truly discovering it”

THE TWO-YEAR RULE. Studies have shown that the period when a couple is newly in love rarely lasts longer than two years. During this period, one cannot see shortcomings, and have irrational thoughts that nothing else in life matters. The tank is well stocked without effort. The next step may be passionate, but it must be fed and nurtured. If you do not speak each other’s love language, the relationship does not reach its full potential. You must be aware that you have slipped into a new phase and adjust accordingly.

“The choice to live is the choice to take initiative. It is the choice to do or say something for the other person’s benefit, something that would help make them a better person, something that would enrich their lives or make life more meaningful for them. We can’t make other people to change, but we can influence people to make changes”

WORDS OF AFFIRMATION. This language is for those who need hear praise and confirmation. Lack of verbal affirmation is interpreted as lack of love. To these you can call and say something encouraging and that you appreciate everything they have done over the years – the answer does not matter much.

GIFTS. Anthropologists have not found a culture where gifts (without reservation) are not a sign of love. If there is an ulterior motive, it is not a gift but a deal. It should be a genuine expression of love. Listen to what they are interested in and come up with great gifts to give.

ACTS OF SERVICE. Someone who appreciate classic services such as helping at home or something similar. If someone says “no, I’d rather do it myself” it is not a rejection. This means that you do not want to speak that language at the moment.

QUALITY TIME. Quality time with each other is not the same as just being in the same room. “We do not serve each other by avoiding one another’s weaknesses. Often, we help them simply by listening as they share their struggles. Empathetic listening is an awesome medication for the hurting heart”.

PHYSICAL TOUCH. If a person’s primary love language is physical closeness, then closeness will speak louder than words. A hug or a pat on the shoulder can mean more than words.

PARENTAL RELATIONSHIP. Improving the relationship with parents can have a positive effect on a person’s emotional well-being. Chapman writes: “When there is mutual love and honor between parents and adult children, both experience a positive state of emotional health, which in turn positively affects their physical health, which results in longer, more fulfilling lives. Love breaks down barriers, leaps over walls and seeks the well-being of another”.