Amazon’s Jeff Bezos on Inventing & Disrupting
“Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.”
It’s not that long run returns will necessarily be negative.
For me, shares of other good businesses offer a more understandable trade off between potential upside if things go well versus downside if things do not.
The company seems very likely to be an important force for a very long time and, eventually, maybe even make a ton of money.
On the Two Ways to Build a Successful Business
“One is to work very, very hard to convince customers to pay high margins. The other is to work very, very hard to be able to afford to offer customers low margins. They both work. We’re firmly in the second camp.”
The Bond Market Rules
“Unrecognized as saviors, the bond vigilantes are demanding the keys to the Eternal City. If the Italian people are very lucky and very wise, they will allow themselves to be ruled by the bond market.” – Thomas Donlan
“…remove insurance contracts from the environment of gambling and the misconduct commonly associated with one having the ability to profit from another’s loss.” – From the Origin Of The Insurable Interest Doctrine.
From Charlie Munger
“I like people admitting they were complete stupid horses’ asses. I know I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.” – Charlie Munger
“I like people admitting they were complete stupid horses’ asses. I know I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.”
“Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse.” – Nassim Taleb in his book: The Black Swan
“…we will have black swans, but we’ll overcome black swans.” – Warren Buffett
“People are habitually guided by the rear-view mirror and, for the most part, by the vistas immediately behind them.” – Warren Buffett in Fortune, December 2001
Everyone needs to get over the fear of the “new normal.”
“Most of you know exactly what I think about every subject, but you still come anyway. It’s a damn cult.”
“We don’t need these kinds of innovation in finance. It’s OK to be boring in finance. What we want is innovation in widgets.”
“Clever derivatives broke dozens of companies. It killed them. Bankrupt. We don’t need these kinds of innovation in finance. It’s OK to be boring in finance. What we want is innovation in widgets.”
Munger on the Financial Sector:
“Why should an investment banker go to Greece to teach them how to pretend their finances are different from what they really are? Why isn’t that a perfectly disgusting bit of human behavior?”
“…why should we want to encourage our brightest minds to do what amounts to code-breaking and electronic trading? No I think the whole system is stark-raving mad. Why should we want 25% of our graduating engineers going into finance?”
“…short term trading is legalized front-running. It’s just done electronically with code-breaking skills. I don’t see any social contribution.”
Price is perhaps the single most important criterion in sound investment decision making. Every security or asset is a “buy” at one price, a “hold” at a higher price, and a “sell” at some still higher price. Yet most investors in all asset classes love simplicity, rosy outlooks and the prospect of smooth sailing. They prefer what is performing well to what has recently lagged, often regardless of price. They prefer full buildings and trophy properties to fixer-uppers that need to be filled, even though empty or unloved buildings may be the far more compelling, and even safer, investments. Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy, even though it virtually guarantees against superior performance.
The price you pay matters.