Brilliant and well-educated CEOs and managers sometimes become synonymous with their company.
Whether it’s Steve Jobs, Mark Zuckerberg, or Jeff Bezos, it’s hard to separate the man from the operation.
However, investing in a company simply based on its leadership might not be the best strategy.
Rather, as Warren Buffett noted in an interview with the Financial Crisis Inquiry Commission (FCIC) in May 2010, one should instead in invest in a business that any fool can run.
The interview comes from a document dump from the National Archives, which released transcripts, meeting agendas, and confidentiality agreements from the FCIC. The group was set up in the aftermath of the crisis by Congress to look into the causes of the event.
When asked by the FCIC what attracted him to the management of Moody’s – the credit ratings agency that was at the center of the mortgage-backed securities debacle – when he made his initial investment, Buffett responded:
I knew nothing about the management of Moody’s. The – I’ve also said many times in reports and elsewhere that when a management with reputation for brilliance gets hooked up with a business with a reputation for bad economics, it’s the reputation of the business that remains intact.
If you’ve got a good enough business, if you have a monopoly newspaper, if you have a network television station – I’m talking of the past – you know, your idiot nephew could run it. And if you’ve got a really good business, it doesn’t make any difference.
Of course, there are some differences when it comes to management. However, the way Buffett is thinking about it here, as he says in the interview, is if ten years ago someone owned the only newspaper in town, then they’re the person with the pricing power – and that’s a good business.
Buffett stated something more or less the same in the case of Moody’s, noting that very few businesses had the competitive position that rating agencies like Moody’s and Standard and Poor’s had.
He even went as far as calling them a “natural duopoly to some extent,” especially since both basically became the standard for regulators.
So, you see how it’s a “good business” in Buffett’s eyes, regardless whether or not some brilliant person is running the show.
And tellingly, when asked whether he had ever pressed for the election of any board member, Buffett simply responded: “If I thought they needed me, I wouldn’t have bought the stock.”
In short, it might be smart to invest in the businesses that are going to do well regardless of who’s running the show.
Or, as noted investor Peter Lynch once put it, “invest in businesses any idiot could run because someday one will.”
Subscribe to our Official CNBC Make It on Telegram !
This artickel has been realtime updated.
Thanks for visit us, enjoy it
Web : Bot Trading
Trading Result : Arbitrase & Statistic
Consult
Facebook : Messanger
IG : @NinjaForex
Mail : [email protected]
Telegram : @RobotForex
If you are going to take investing advice from anybody, Ray Dalio is a good bet.
Dalio founded investment firm Bridgewater Associates out of his two-bedroom apartment in New York City in 1975. Currently, Bridgewater Associates has $160 billion in assets under management, making it the largest hedge fund in the world.
According to Dalio, “diversifying well is the most important thing you need to do in order to invest well,” he wrote on LinkedIn on Monday.
By diversifying, Dalio means spreading out your money into different kinds of investments, such as stocks, bonds, commodities, real estate, etc.
IC Markets, Vantagefx and other broker under ASIC now to Move Non-Australian Clients to Offshore Subsidiary.
We do not know what the reality really is, why do they change this rule, because offshore regulate for us is not credible, we cannot fully believe it, of course, after ASIC changed rules like this, the question for us is, like
#Technical_Analisy EURUSD 19 Juli 2018, Sesudah
sourse : 
George Soros gained international notoriety when, in September of 1992, he risked $10 billion on a single currency speculation when he shorted the British pound. He turned out to be right, and in a single day the trade generated a profit of $1 billion – ultimately, it was reported that his profit on the transaction almost reached $2 billion. As a result, he is famously known as the “the man who broke the Bank of England.”
Soros went off on his own in 1973, founding the hedge fund company of Soros Fund Management, which eventually evolved into the well-known and respected Quantum Fund. For almost two decades, he ran this aggressive and successful hedge fund, reportedly racking up returns in excess of 30% per year and, on two occasions, posting annual returns of more than 100%.
Here is a famous quote from Mr. Soros:
Livermore, who is the author of “How to Trade in Stocks”(1940), was one of the greatest traders of all time. At his peak in 1929, Jesse Livermore was worth $100 million, which in today’s dollars roughly equates to $1.5-13 billion, depending on the index used. He is most famous, perhaps, for selling short U.S. stocks before they crashed in 1929, swelling his bank account to $100 million.
Here is a famous quote from Jesse Livermore:
Trading as a trend follower, Ed Seykota turned $5,000 into $15,000,000 over a 12-year time period in his model account – an actual client account. In the early 1970s, Seykota was hired as an analyst by a major brokerage firm. He conceived and developed the first commercial computerized trading system for managing clients’ money in the futures markets
Here is quote from Ed Seykota from The Market Wizards by Jack D. Schwager:
Paulson became world-famous in 2007 by shorting the US housing market, as he foresaw the subprime mortgage crisis and bet against mortgage backed securities by investing in credit default swaps. Sometimes referred to as the greatest trade in history, Paulson’s firm made a fortune and he earned over $4 billion personally on this trade alone.
Here is a great quote from John Paulson:
most famous trades ever. Paul Tudor Jones correctly predicted on his documentary in 1986 based on chart patterns that the market was on the path to a crash of epic proportions. He profited handsomely from the Black Monday crash in the fall of 1987, the largest single-day U.S. stock market decline (by percentage) ever. Jones reportedly tripled his money by shorting futures, making as much as $100 million on that trade as the Dow Jones Industrial Average plunged 22 percent. An amazing trade to walk away from with a fortune when so many others were ruined in the aftermath. He played it to perfection. His funds had great consistent returns for decades.
Here is a favorite quote of mine from Paul Tudor Jones featured in the Market Wizards:
Richard J. Dennis, a commodities speculator once known as the “Prince of the Pit,” was born in Chicago, in January, 1949. In the early 1970s, he borrowed $1,600 and reportedly made $200 million in about ten years. Dennis and his friend William Eckhardt, are most famous for starting the Turtle Traders, which was a group of 21 average people to whom they taught their rules to and proved that anyone, given the right training, could trade successfully.
Here is a good quote from Richard Dennis:
Stanley Druckenmiller is an American investor, hedge fund manager and philanthropist.
In 1988, he was hired by George Soros to replace Victor Niederhoffer at Quantum Fund. He and Soros famously “broke the Bank of England” when they shorted British pound sterling in 1992, reputedly making more than $1 billion in profits. They calculated that the Bank of England did not have enough foreign currency reserves with which to buy enough sterling to prop up the currency and that raising interest rates would be politically unsustainable.
James Beeland “Jim” Rogers, Jr. is a Singapore based business magnate of American origin. Regarded by the business world as a brilliant investor, Rogers is also an author and financial commentator. He co-founded the global investment partnership, Quantum Fund, along with George Soros, another equally brilliant businessman.
Here’s one of my all-time favorite trading and investing quotes, courtesy of Mr. Rogers:
Raymond Dalio is an American billionaire investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world’s largest hedge funds. As of January 2018, he is one of the world’s 100 wealthiest people, according to Bloomberg.
Here is a pretty deep quote by Ray Dalio:
Known as the “Oracle of Omaha,” Warren Buffett is one of the most successful investors of all time. He runs Berkshire Hathaway, which owns more than 60 companies, including insurer Geico, battery maker Duracell and restaurant chain Dairy Queen. He has committed to giving more than 99% of his fortune to charity. So far, he has given nearly $32 billion.
Here is perhaps a lesser-known quote from Warren but one that I like nonetheless:
