Part III: Strategy

Stay the course


I am not a fan of consultants. A red flag should fly when you hear of management hiring consultants. If they know their business then why do they need outside experts? But let’s be open-minded: The_McKinsey_Way

My two favorite books on strategy are: Competition_Demystified__A_Radically_Simplified_Approach_to_Business_Strategy That book is a partial copy so you might pony up the dough for a copy or go to your library. The books isn’t perfect, but it simplifies the difficult, multi-faceted Porter Approach. What are the barriers to entry? Whenever you pay over replacement and earnings power value then you are in the world of franchises and profitable growth so you must understand competitive advantage. Another favorite: Strategic_Logic. The author’s wording is different in places but the book reinforces and supplements Greenwald’s book. Strategy matters.

Next, you can tackle: Harvard-Case-Book and Cases-LBS1998

History and Theory

Great investors read widely. For a greater understanding of why there is a European crisis: An_Economic_History_Europe. You will need a theory to place historical events into context: Mises_-_Epistemological_problems_of_economics_[1933]_+++

Always be practical and use your rational mind (common sense) in the world around you.

Whom would you rather invest with? Don’t get too lost in all your reading.

….you remember Buffett said the only two subjects he would teach a new investor would be:

  1. How to value a business and
  2. How to think about prices.

Part IV: How to Think About Prices…..

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