Tuesday, September 25, 2007

Success Tools: Open Tips' Awesome Website

I Just discovered Open Tips , a huge site with free articles on dozens of topics. Each topic contains dozens of articles. This is one of the most easily accessible and voluminous storehouses of knowledge I have seen. I will be returning to this site often. Here is a current list of topics:

Audio streaming
Auto care
Auto parts
Baby and toddler
Body building
Book marketing
Book review
Breast cancer
Business loan
Business plan
Car buying
Car insurance
Car loan
Car maintenance
Cell phone
College and university
Computer pc tips
Cooking tips
Creative writing
Credit cards
Credit repair
Currency trading
Data recovery
Debt relief
Digital camera
Hair loss
Health insurance
Heart disease
Home business
Home improvement
Home organization
Interior design
Internet tips
Ladies accessories
Lcd plasma
Life insurance
Mailing list
Make money
Network marketing
Online shopping
Paid survey
Pc games
Personal injury
Real estate
Sales letter
Small business
Web design
Web development
Web hosting
Website traffic

Monday, September 24, 2007

Success Audio: Sandy Weill

I reviewed Sandy Weil's book The Real Deal: My Life in Business and Philanthropy here. In this interview, Weil discusses the book, as well as many other topics including his thoughts on mergers, business fundamentals, former protegé Jamie Dimon, and many other topics.



Saturday, September 22, 2007

Success Videos: Mohnish Pabrai

In a recent post, Imitate the Best, I mentioned superinvestor Mohnish Pabrai, author of The Dhandho Investor who, himself imitated the best, by absorbing and adapting the ideas of Warren buffett. Here is a video interview of Pabrai.



Success Podcasts: Building Effective Business Relationships

Here's a fascinating audio presentation on building business relationships from Empowering Women Network Radio. Debra Knupp gives a spot-on, dynamic overview of why, and how, to connect with your target clients. Extremely helpful discussion of personality types, relationship types, and the famous Platinum Rule. If you liked this presentation, I also recommend checking out my review of Keith Ferrazzi's "Never Eat Alone" . By the way, I found this link via the amazing Heidi Miller's Talk It Up Blog.

Click Here to Play Podcast



Success Videos - Joel Greenblatt and Trusting the Data

In my previous post, Part 1 of my review of Tedlow's book on Andy Grove, I discussed my interpretation of a few of Grove's success principles:

1. Get the data.
2. Come to terms with the data as quickly as possible and…
3. Act fearlessly on the data that you find.

This video clip, featuring master investor Joel Greenblatt, actually embodies these principles, and contains a cautionary note about abandoning them. Greenblatt, author of The Little Book that Beats the Market , has one of the best investing records pf the past 20 years. One of his methods, described in his book, and in this video, involves a formula that he tested and verified.

In his talk, he mentions some similar testing work done by another fund manager, who prematurely sold his interest in the fund when the real-world results didn't work out like the testing, only to see the fund post magnificent returns shortly after he sold it.

I believe I know what fund Greenblatt is talking about, since I read the book written by the "mystery fund manager". I also have been an investor in that mutual fund, and have indeed reaped stellar returns. Why? Because I trusted the data...perhaps even more then the researcher himself.

Anyway, this video of Greenblatt is yet another huge benefit of living in the times we do. As little as 10 years ago, material of this kind, a one-hour conversation with a leading genius in his field, would have been unavailable. Only broad-band type videos, aired on network TV , would have been available. And only if you'd happened to be watching. And only if your interests matched those of 100 million average Americans.

We are truly blessed to be able to press a button and get such specialized , and immensely valuable information.



Thursday, September 20, 2007

Success Book Reviews: Andy Grove by Tedlow

This is Part 1 of a review of Richard Tedlow’s book Andy Grove: The Life and Times of an American. Andrew Grove is arguably one of the mot brilliant and influential business minds of the 20th century, having been a major force in the success of chip giant Intel, including serving as CEO and Chairman of the Board. Tedlow has written a spellbinding biography of Grove, which is inclusive and enjoyable. However, the purpose of the Success Books blog is specifically to use the information in a biography such as this to determine the answer to an important question: Just what success characteristics does Grove possess that we can imitate and learn from to achieve success in our own lives?

Here are a few of the success secrets that I am uncovering in this biography.

1. Get the data.
On any pressing issue get as much data as you need to address the issue. Now, I am not a scientist, but I do suspect that this habit of mind relates to the fact that scientific, statistical proof requires a lot of data points to make it valid. Grove seems to have applied this key tenet throughout his life. He is not alone among business luminaries to do this. Charlie Munger tells us that Warren Buffett is always trying to increase his opportunity cost. In other words, to become fully aware of as many options as possible so as to invest time, effort, money, etc in the highest-potential activities.

Examples from Grove’s life:

Before joining Fairchild Semiconductor, Grove investigated twenty-two companies.

Grove drove 8,000 miles around California just to decide if he wanted to live there.

Grove, in his drive to improve his managerial skills, read one management book per week.

2. Come to terms with the data as quickly as possible and…

3. Act fearlessly on the data that you find

What we come across in life is not what we either want or expect. Whether the data is a a relationship that goes bad, a quarterly sales report that does not meet expectations, a new competitor destroying your “fiefdom”, or anything else, it takes a lot of mental toughness to take in this data unsentimentally, and act on it. Some executives (such as Grove) apparently come across as brusque and intense. I have a feeling that part of the problem is not so much an affection for volatility , but that it is nature of the executive’s job to remove “entropy” from the system as quickly as possible. That is, to turn chaos into order. To set a path. To craft and implement responses to changing conditions. Often, such a response is not within he comfort zone of people or organizations. That does not make the solution any less valid. So it is the executive that has to bridge that gap between “comfort zone” and “Reality”, no matter how he is painted.

Examples from Grove’s life

Grove Escaped from Communist Hungary s a teenager, in the dead of night. He navigated unknown terrain. He pushed to the front of lines. He pleaded. He did what was necessary to get to America.

Early in his career he analyzed some data about “surface charge” that was met with anger and derision from other engineers. His answer: “look at the data”.

Later he would use this unflinching focus on What Is as opposed to What We Would Prefer”, to save Intel.

One of Grove’s techniques of cleaning up inefficiency at Intel was to create a “Late List” of those who arrived for work after 8:05. Again, this is not out of a desire to terrorize, but to , in effect, reduce entropy: to keep the inputs to the system consistent, so the outputs would be profitable.

Many have called Grove “lucky”. As A.Z.H. Carr has shown, much of what we call luck is explained by a prepared, engaged mind that quickly seizes on opportunity. As we have seen, Grove was highly focused on getting data (preparing) about issues that were crucial to him. There are other aspects of this preparation: he learned English in Hungary and thus stood out among those who were attempting to make it to America. Later, his programming skills stood out in an era when virtually no one knew how to program. But there is a ”part two” to luck: You actually have to take the shot! Grove’s willingness to leave Hungary quickly, his willingness to work with a hot young group at Fairchild instead of a corporate behemoth like Bell Labs, and his willingness to exit the memory business to focus on microprocessors are examples of taking that shot.

Prepare exhaustively.
Get all the data.
Accept the results unflinchingly.

Then, take your shot.


Tuesday, September 04, 2007

Success Secrets: Margaret Collins on Luck

Margaret Collins Online has a superb post about the role of the individual in creating what we call “luck”, and much of it jubes with one of my favorite books, How to Attract Good Luck. Luck is really our ability to look outward, stay optimistic, and quickly seize opportunities which we encounter. Collins saysit beautifully here

It's really important to be aware of what we expect from life because that part of ourselves that we call our unconscious mind, is working hard to filter all the millions of bits of information we encounter during each and every second of our existence and make sense of them on our behalf.

Read her entire post. It’s great!


Visit the Success Books Store!!!

Monday, September 03, 2007

Success Secrets: Imitate the Best

Numerous motivational books and speakers, notably Anthony Robbins and Brian Tracy, recommend this seemingly simple technique for success: find out what the successful people in your field do, and then go do it. In a sense, that is why I started this blog in the first place.

One person who has succeeded spectacularly well using this technique, is Mohnish Pabrai, author of The Dhandho Investor: The Low - Risk Value Method to High Returns, and a fabulously successful money manager himself. He credits much of his success to modeling the techniques of superinvestors Warren Buffett and Charlie Munger.

In a unique display of generosity, Mr. Pabrai has also graciously revealed some of his investing secrets, so that the rest of us can model some of his techniques. The links are here and here.
As I have repeatedly stated here in the past, we are in a unique age in which the truly successful, such as Charlie Munger and Mohnish Pabrai, are able to rapidly spread their brilliant techniques to all of us, at lightspeed, and on a global scale.

By the way, the site in which Pabrish was speaking, http://www.gurufocus.com/, is, in itself, an excellent source for modeling successful investor techniques.


Sunday, September 02, 2007

Success Tools: Guide to The Logical Fallacies

This post is related to my ongoing fascination with the thought of Billionaire Charlie Munger.

One of the general categories of Charlie Munger’s thought appears to be the area of “human misjudgment”. Day after day we make choices for all the wrong reasons. Our minds, which are supreme gifts, are also fallible: easily misdirected, in much the same way that a magician misdirects us. In our too-fast and media-soaked world, we are bombarded by quick sound-bites that attempt to move us to believe things, buy things or do things.

This can also happen to us with our friends, family, at work, or anywhere someone is trying to convince us of something. And, of course, we can also generate misdirect ourselves in order rationalize our own behavior.

Luckily, our minds are, amenable to help. Over the centuries, rhetoricians and logicians have catalogued the logical fallacies…tangled arguments that lead us away from careful thought…that take advamntage of our weaknesses and eagerness to believe the easy or alluring answer.

Stephen Downes, expert in online learning, content syndication, and new media, has put together a terrific Guide to the Logical Fallacies .

Here is Downes’ description of his collection:

Each fallacy is described in the following format:
Name: this is the generally accepted name of the fallacy
Definition: the fallacy is defined
Examples: examples of the fallacy are given
Proof: the steps needed to prove that the fallacy is committed

The fallacies are themselves
grouped into categories of four to six fallacies each. This grouping is somewhat
arbitrary and is for the sake of convenience only.

I intend to use this guide as a checklist (another Munger recommendation), and to refer to it frequently whenever I feel that some thought or argument just doesn’t “ring true”.


Incentive Cause Bias: Munger Writ Large

I have been “riffing” lately on the ideas of Charlie Munger (please check the Charlie Munger category on the blog) and a recent speech by Ben Bernanke, chairman of the Federal Reserve, caused me to sit up and take notice. One of Munger’s categories of “human misjudgement” is the “incentive-cause bias” or, the tendency of, as Munger explains, salt salesman to tell you how much salt you need, or hammer-owners to see every problem in nail-like terms. Here is Bernanke, describing one of the key causes of the mortgage meltdown (italics mine):

The traditional model of mortgage markets, based on portfolio lending, solved
these problems in a straightforward way: Because banks and thrifts kept the
loans they made on their own books, they had strong incentives to underwrite
carefully and to invest in gathering information about borrowers and
communities. In contrast, when most loans are securitized and originators have
little financial or reputational capital at risk, the danger exists that
the originators of loans will be less diligent. In securitization markets,
therefore, monitoring the originators and ensuring that they have incentives to
make good loans is critical. I have argued elsewhere that, in some cases, the
failure of investors to provide adequate oversight of originators and to ensure
that originators' incentives were properly aligned was a major cause of the
problems that we see today in the subprime mortgage market
(Bernanke, 2007). In recent months we have seen a reassessment of the problems of maintaining
adequate monitoring and incentives in the lending process, with investors
insisting on tighter underwriting standards and some large lenders pulling back
from the use of brokers and other agents.

In other words, there was no incentive for the underwiters to scrutinize the credit risks of the borrowers, and plenty of incentive to turn those mortgages around and get them out the door.

The incentive-cause bias is alive and well and has come close to toppling the banking system. Score another one for Charlie Munger.