Some call them clients, others guests or customers. Costco (Ticker: COST, revenue $141B) calls them members, a term that makes you feel like you're part of a special club. It's a club that will not sell you junk*. They do not exaggerate. Theirs is not fake-Enron-style-ethics-bragging, and they actually list shareholders' interests last. Focus on the … Continue reading Costco: Lessons from Member Obsession.
Financial valuation uses multiple approaches to estimate the value of a company, whether a shoe factory, a chain of Tex-Mex restaurants, a software company, a bank, or a law firm. The questions are framed around what a firm is worth relative to cash flow, book value, relative to similar assets, recent industry transactions, or others. … Continue reading Medical Bankruptcies in America
Mothers and psychologists remind us that we have a built-in bias to do what's easiest or to follow the path of least resistance. Water and electricity are like this. We are naturally lazy so to stick to an exercise plan, it should be something we like, with shoes left by the bed, perhaps done with … Continue reading Cadillac Consequences
In 2008 Warren Buffett made a bet against active investing, or more specifically the active-active, triple-fee side of investing, the hedge funds of funds. This group charges fees for placing money with hedge funds, who typically charge their own two types of fees. hedge fund's ability to pick funds that would outperform the S&P 500 … Continue reading Why I’m Betting Against Berkshire