Huge, sprawling article on Business Insider about Groupon since the early beginnings. It’s telling when an article about the big article is 3 pages long. Normally we would recommend reading the summary for conciseness – and because the day only has 24h – but the big article is a keeper. They got almost all of it right, except for the culture change part. It is more important, and far more disruptive, than they make it seem.
If you haven’t read “Moneyball”, by Michael Lewis, please do so – or watch the movie. The 2003 book was about revolutionary data analysis that changed baseball forever. However, the article we link to here is about the fact that all revolutions have an ending, and not always a happy one. Inefficiencies get taken out, or are at least softened. This article is about what happens after change. It doesn’t mean one shouldn’t pursue change, much to the contrary, nor does it mean that inefficiencies shouldn’t be sought out and explored. The point is that once you’ve found a “method”/framework, use it but don’t marry it, don’t bet the farm on it, and assume its mortality.
“Synergy”, “two powerful minds working in unison”, “complementary skills” and so on: all that we try to achieve has to be checked against reality, especially when theory meets the REAL incentives and cultural aspects of a company. As we constantly repeat to ourselves, “culture eats strategy for breakfast”. An article notes that the two co-heads of Morgan Stanley’s Institutional Securities Group can’t stand each other and, more importantly, that this personal dispute is disrupting business. The Epicurean Dealmaker wrote a very interesting analysis of this particular dispute in light of the bigger picture of the natural conflict of interests inside an investment bank. What he finds there can be applied almost anywhere else where such conflicts are, perhaps, less obvious.
Buysiders.com is about the work done by all of us at IP, but this is a personal note – instead of the normal “we”, this post is about something I’ve watched today: a 1987 “product concept” video that’s simply impressive, not just because the “Knowledge Navigator” is a wonderful vision, but also because we’re not that far away from something like this. Think iPad + the Siri app. Sure enough, the 1987 video was Apple’s. Prof. Sasser’s point: seeing things that others didn’t was nice, but seeing it through and changing the world was Steve Jobs’ genius.
Landmark announcement today: the Berkshire board of directors has approved an “authorization” for a share repurchase program. Berkshire being what it is, it’s a bit different from the usual buyback: there’s no maximum amount, no set period of time and nor is there the obligation to buy any stock at all. There are only two rules: if share purchases do occur, Berkshire will not pay above 110% of book value per share and it must maintain a cash balance superior to US$ 20 billion. As Buffett likes it, there’s no “mandate” other than “intelligent investing”.
We’d usually prefer to post “beefier” updates, but this article grabbed our attention. Alice Schroeder has a very interesting piece that, in the first part, sheds more light on Ted Weschler’s background and achievements. The next part is “noisy” and speculative, but it’s still thought-provoking enough to merit a highlight: Ms. Schroeder then looks at the details of the press release and comes up with interesting questions about Buffett’s succession – mainly that Mr. Weschler appears to have qualities that could make him more than a capital allocator.
Buffett has hired another manager to join Todd Combs: Ted Weschler, hailing from Peninsula Capital Advisors, a US$ 2 bi highly-concentrated equities manager. The point here is not (yet) to try to distill Mr. Weschler’s experience, holdings over the last year and – much more importantly – investment processes. We don’t know much about him yet, although a story by Carol Loomis certainly helps in establishing “motivation”. The point is the interesting dynamic this creates – Mr. Buffett will now have two managers whose performance he will review, and who can learn from him and – we hope – collaborate with one another. That collaboration will be a vital aspect: whether there’s true “team spirit” or unchecked competition – declared or not – may determine whether both, or even of them, stay on and prosper.
We’re at Day Two of the InfoTrends conference in São Paulo about Social Media. It’s been pretty interesting so far. Today we’ll try some live-blogging, and Monday we’ll post the notes from Day One. Just a teaser for the weekend: Julian Assange was the keynote speaker for day one.
Steve Jobs resigned as Apple CEO yesterday, intends to stay on as Chairman. Sad news and nothing much to comment – the praise has been doled out before here. We only wish him the best and highlight a few links with amazing, heartfelt reaction around the web.
Certainly one of the most-discussed articles this weekend, this NYT piece looks at the subset of American retail that is doing pretty well in this recession. Another article highlights the interest by big-name investors (Buffett, Ackman, Leon Black) in the segment. Signal or noise?
