The fund - Rob Copeland

•  The theory posited that employees should be tested and ranked by their overall problem-solving ability - known as stratum - and that managers must always be more capable of complex, broad thinking than their subordinates.
• two people inside bridgewater had higher believability scores than dalio himself
• Dalio: Why doesnt believability cascade from me?
• a new rule build into the software: Dalio himself would be the new baseline for believability in virtually all important categories
• A strong Sharpe ration was 2.0. though a ratio of 2.0 or even higher wasn't out of the question for top investors. ... Dalio's approach produced a Sharpe ration of less than 1.0
• Concepts of alpha and beta. Beta was the return that any investor would expect to get simplay from exposure to the markets. ... Alpha, on the other hand, was the extra juice. ... What a talented investment manager could earn on top of the beta return.
• To people that didnt deliver and respond after two reminders:
• "Those who didnt get them in and didnt communicate with you after being nagged twice are fired." ... People who cant do what they are asked or have a quality communication when asked to do something twice are not the sort of people that you want to rely on... Anyway, they are not the sort of people who I want to work here.
• A reporter: "In the time I spent at the firm I saw senior people criticizing subordinates - but not the reverse."
• The one metric highly correlated with how much a country would grow was the number of hours per week its citizens worked.
• "There is no cycle of history. It's a fantasy"
• "I always feel that when someone uses the f-word, they're losing the argument."
• "You've got 375 principles. Those arent principles. Toyota has fourteen principles. Amazon has fourteen principles. The bible has ten. 375 cant possibly be principles. They are an instruction manual.
• Stefanova described herself as having spend "nine years as a seinor executive and managing comitteee adviser reporting directly to the CEO at Bridgewater Associates and serving in critical investment and management leadershipo roles." In truth, she had been far removed from any invetment leadership role, critical or otherwise, but the pitch worked. She raised hundreds of millions of dollars from investors,... [No one is checking facts]
• Though relatively few people present knew anything about how the hedge fund actually invested.
• Those at Bridgewater who had been rated highly... They earned it by being an artificial Ray Dalio. ... Model oneself after the only man who mattered. Bridgewater didnt run on believability. It ran on believers. "Ray, this is a religion", Rubinstein said
• Remarkably few people at briedgewater were involved day-to-day with how the hedge fund made money.
• Only a tiny group at Bridgewater, no more than about ten people, enjoyed a different view. This band of almost allm en were chosen not only on merit, but on loyalty. They almost eiwhtout exception had never woeked anywhere else. ... The lucky few satdown with Dalio and were offered a choise. n excahnge for signing a lifetime contract - and swarting never to work at another trading firm - they would be one of theh andful to see ithe inner secrets of Briedgewater, what Dalio had earlier in his career called the Holy Grail.
• There were two version of how Briedgewater invested hundreds of billions of dollars in the markets. One version Dalio told the public, and clients, over and over. The other version was what happened with the Circle of Trust behind closed doors.
• The transpared discussion.. It was also almost entirely irreleant to what Bridgewater did with its money; as one firmer top investment staffer put it: "It's a facade"
• I could run this firm", Jensen once told a friend over drinks, "on a single spreadsheet".
• The secret... was that there was no secret. Dalio was Bridgewater and Dalio decided Bridgewater's investments.
• There was essentially no grand system, no artificial intelligence of any substance, no Holy Grail. There was just Dalio.
• It also helped explain why Bridgewater seemed not to move the market with its trading.
• Dalio could have skipped the cloudy language and more simply described Pure Alpha as a series of if-then rules. If one thing happened, then another would follow.
• Many of the rules dealt simply with following trends.... Dictated following the momentum in various markets.
• Bridgewater was among the first hedge funds to create its own estimates of economic growth, integrating both public statistics and its own market surveys.
• As the years passed, however, Dalio's advantage softened.
• The study showed that Dalio was wrong as much as he was right. Trading on his ideas lately was often akin to a coin flip.
• Dalio picked up the piece of paper, crumpled it into a ball, and tossed it.
• Didnt mention the leib familys help nor his wifes family wealth [to start his company and fund]
• didnt mentino the funds relatively lackluster performance since 2010
• the published principles werent the principles. They were more like Some Principles
• He could apparently accept giving up the practice (radical transparency, the transparency library), but would never give up the story. (he keeps on telling on TV, in his books etc.)
  
• An annual fixed fee of 3.39%, but receiving only an average return of 3.1 %
• By now, the principles were more of a fantasy, or, perhaps more kindly, a collection of fables. ... Though they had nevery had as much impact on the firm's investing as he claimed publicly, they were rapidly cast aside elsewhere across the firm, too.
• It proved though to be a bully when anyone could put him on mute. [covid time all in VC]
• No major company publicly signed up to adopt The Principles
• found out the hard way that intergenerational wealth can be fleeting. Their three sons frittered away the family fortune in usual ways: divorces, the racetrack, poor investments,...
• Bridgewater laid off most of the remaining staff dedicated to building the Principles software. It was 100 mUSD, at least, down the drain.

Feed forward instead of Feedback

 

The concept of feedback is as old as time. Marshall found a way to turn it around. Why is this?

When you give feedback:

·         You refer to the past.

·         The person receiving it tends to take it personally.

·         You can’t change anything that has already happened

On the other hand, “Feedforward” asks for a suggestion for the future. I want to improve in this area, give me two ideas that I could put into practice in the future. 

And this method can be used at home too:

·         “What can I do to be a better partner at home?

·         “What can I do to be a better parent? (I tried it with my children, and the answers are interesting)

·         “What can I do to be a better son?

I like the metaphor used by Marshall’s partner Frank Wagner.

The rearview mirror is tiny, the windshield is huge.

59 Seconds - Richard Wiseman

•  Increase your chances of giving a great interview in 3 easy steps:
• 1) likeability is more important than academic achievements and work experience, so...
• find something you genuinely like about the organization and let your opinion be known
• feed free to give a genuine compliment to the interviewer
• chat about a non-job-related topic that you and the interviewer find interesting
• be interested in them - ask what type of person they are looking for and how the position fits into the overall organization
• be enthusiastic about the position and the organization
• smile and maintain eye contact with the interviewers
• 2) When you do have weaknesses, don't wait until late in the interview to reveal them. Instead, give your credibility a boost by getting them into the conversation towards the start of the interview. And remember, for positive aspects, modesty is vital, so retain something strong until the very last minute.
• 3) Finally, if you make what seems like a major mistake, don't overreact. The chances are that it is far more niticeable to you than others, and your excessive response or apologizing could just draw more attention to it. Instead, ackowledge it if appropriate and continue as if nothing has happened.
• If you want to increase your changes of making a good impression in a meeting, sit towards the middle of the table. Rule of thumb: Important people sit in the middle. Centre-stage effect.
• To increase the likelihood of someone liking you, get them to do you a favour.
• "We do not love people so much for the good they have done us, as for the good we do them.
• Make it personal. Instead of abstract big statements (African children are hungry), make it personal (show a specific girl). Also in work: Work with a concrete example where the person has suffered instead of opening an abstract big strategic topic
• The bystander effect: The more people who are around when a person is in need of assistance, the lower the likelihood of any one person actually helping.
• If you need someone to help - pick one person and talk to that person.
• Same at work: If you need something dont write to a group of people. Write to a specific person.
• Group brainstorming: were amazed to discover that in the vast majority of the experiments, the participants working on their own produced a higher quantity and quality of ideas then those working in groups.
• When working alone, individuals lifted around 85 Kilos, but managed only 65 kilos when placed in a group.
• When people work alone, their success or failure is entirely due to their own abilities and hard work.
• If you want to get someone to help you out, try the briefest of touches on the upper arm. The same behaviour also increases the likelihood of a woman finding a man attractive. Touching is a strong social signal...
• Those who had been subjected to hearing their own words repeated left 70% larger tips than those in the 'polite and positive' group. 
• If you need something big to be done dont start in first meeting with this big ask. Do a small ask in this direction, then, later, return and ask for the big thing. Likeliness of complicance is much higher.
• And the other way around if you need something. Start with a huge ask (I forgot my money can you pay my meal?) and then go down to ask for a small contribution. Much higher success then only asking from start for small contribution
• "For all of sad words of tongue or pen, the saddest are these: It might have been"
• Never look back. Never wonder what "could have been". It wasn't. full stop. Every thought is wasted. Never regret. You did what you knew at the time and had good reason to decide the way you did. Now maybe you know more, so you can decide now.
• You cannot change the past. Only thing is "Now". 
• Mimik a person in movements - she will like you.
• People are reluctant to lie in emails because they are recorded, and so their words could come back to haunt them.
• Visualize yourself doing, not achieving

The Mythical man-month - Frederick P. Brooks jr.

• Efforts
• standalone program *3 to develop program that works on any system
• standalone program *3 to develop program to programming product which works with other programs
• standalone program *9 to develop program that works on all systems together with other programs
• Only this is a truly useful project
• Why is programming fun?
• Sheer joy of making things
• useful to other people
• we want others to use our work and find it helpful
• fascination of fashioning complex puzzle-like objects of interlocking moving parts and watching them work
• Joy of always learning
• The programmer, like the poet, works only slightly removed from pure thought-stuff by exertion of the imagination
• Woes of programming
• One must perform perfectly
• other people set one's objective
• One rarely controls the circumstances of his work or even its goal.
• One's authority is not sufficient for his reponsibility
• (Here agile tries to bring responsibility and authority together)
• Designing grand concepts is fun; finding nitty little bugs is just work
• debugging has a linear convergence, the last difficult bugs taking more time to find than the first
• the technological base on which one builds is always advancing
• as soon as one freezes a design, it becomes obsolete
• implementation of real products demands phasing and quantizing. The obsolescene of an implementatino must be measured against other existing implementations, NOT against unrealized concepts
• (excecution is what counts)
• (better done than perfect)
• Good cooking takes time. If you are made to wait, it is to serve you better, and to please you
• More software projects have gone awry for lack of calendar time than for all other causes combined
• All programmers are optimists
• Perhapts the hundreds of nitty frustrations drive away all but those who habitually focus on the end goal.
• So the first false assumption that underlies the scheduling of systems programming is that ALL WILL GO WELL, i.e. that EACH TASK WILL ONLY TAKE AS LONG AS IT "OUGHT" TO TAKE
• A large programming effort, however, consists of many tasks, some chained end-to-end. The probability that each will go well becomes vanishingly small
• Men and months are interchangeable commodities only when a task can be partitioned among many workers with NO communication among them
• The bearing of a child takes nine months, no matter how many women are assigned
• Many software tasks have this characteristic because of the sequential nature of debugging
• the effort of communication must be added to the amount of work to be done.
• The added burdon of communication is made up of two parts: training and intercommunication
• Each worker must be trained
• Intercommunicatino is worse - efforts increases as n(n-1)/2
• It quickly dominates the decrease in individual task time.
• Adding more people then lengthens, not shortens, the schedule.
• Therefore, testing is usually the most mis-scheduled part of programming
• 1/3 planning + 1/6 coding + 1/4 component test and early system test + 1/4 system test, all components at hand 
• 33% plan, 17% build, 50% test
• no one is aware of schedule trouble until almost the delivery date.
• delay at this point has unusually severy financial, as well as psychological, repercussions
• An omelette, promised in two minutes, may appear to be progressing nicely. But when it has not set in two minutes, the customer has two choices . wait or eat it raw. Software customers have the same choices.
• What does one do when an essential software project is behind schedule? Add manpower naturally
• Or trim the task
• BROOKS LAW: "Adding manpower to a late software project makes it later."
• (therefore decompose tasks, small scopes - agile delivery = usable increments)
• Wide productivity variations between good programmers and poor ones
• 10:1
• The data showed no correlation whatsoever between experience and performance
• small, sharp teams max 10 people (this is exactly scrum team size)
• Most European cathedrals show differences in plan or architectural style between parts build in different generations by different builders. The later builders were tempted to "improve" upon the designs of the earlier ones, to reflect both changes in fashion and differences in individual taste. 
• Against these, the architectural unity of Reims stands in glorious contract. This integrity was achieved by the self-abnegation of eight generations of builders, each of whom sacrificed some of his ideas so that the whole might be of pure design.
• It is better to have a system omit certain anomalous features and improvements, but to reflect one set of design ideas, than to have one that contains many good but independent and uncoordinated ideas.
• (Airport Berlin desaster with steadily changing scope)
• Similarly, I observe that the external provision of an architecture enhances, not cramps, the creative style of an implementing group. They focus at once on the part of the problem no one has addressed, and inventions begin to flow. In an unconstrained implementing group, most thought and debate goes into architectural decisions, and implementation proper gets short shrift.
• "We finally decided to implement the language unchanged and unimproved, for the debates about language would have taken all the effort."
• The fundamental answer is thoroughgoing, careful, and sympathetic communication between architect and builder..
• An architect's first work is apt to be spare and clean. He knows he doesn't know what he's doing.
• An ancient adage warns, "Never go to sea with two chronometers, take one or three."
• He found his programming teams missing schedules by about one-half
• showed that the estimating error could be entirely accounted for by the fact that his teams were only realizing 50 percent of the working week as actual programming and debugging time. Machine downtime, higher-priority unrelated jobs, meetings, paperwork, company business, sickness, personal time etc accounted for the rest 
• In short, the estimates made an unrealistic assumption about the number of technical work hours per man-year.
• "It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something." - Franklin D. Roosevelt
• In most projects, the first system build is barely usable. It may be too slow, too big, awkward to use, or all three.
• The management question, therefore, is not WHETHER to build a pilot system and throw it away. You WILL do that. The only question is wether to plan in advance to build a throwaway, or to promise to deliver the throwaway to customers.
• Hence, plan to throw one away; you will, anyhow
• Managers themselves often think of senior people as "too valuable" to use for actual programming. Next, management jobs carry higher prestige. To overcome this problem some laboratories, such as Bell Labs, abolish all job titles. Each professional employee is a "member of the technical staff"
• Managers need to be sent to technical refresher courses, senior technical people to management training. Project objectives, progress, and management problems must be shared with the whole body of senior people
• Whenever talents permit, senior peope must be kept technically and emotionally ready to manage groups or to delight in building programs with their own hands. 
• It has the effect of making a senior man feel that he does not demean himself when he builds programs, and it attempts to remove the social obstacles that deprive him of that creative joy.
• We rebuild the developing system every night [and run test cases]. The build cycle becomes the heartbeat of the project. Every day one or more of the programmer-tester teams check in modules with new functions. After every build, we have a running system.
• In particular, adding extra manpower early in the schedule is a much safer maneuver than adding it later, since the new people always have an immediate negative effect.
  

Tatort Kanban

• Stop starting, start finishing
• Fokus auf das Beenden von Aufgaben
• Wert für den Kunden im Zentrum
• Manage work, not people
• parallele Tätigkeiten limitieren
• Abhängigkeiten reduzieren
• Kanban kommt aus dem japanischen und heißt so was wie Signalkarte
• Agilität: Schnelligkeit, Anpassung, Dynamik, Selbstorganisation
• Kybernetik: Selbstorganisation ist der normale Weg. Deswegen muss Selbstorganisation als die Regel und nicht die Ausnahme systemischen Verhaltens betrachtet werden.
• work in progress limit in kanban
• In diesem Arbeitsschritt wird an maximal zehn Dingen parallel gearbeitet
• Dadurch, dass ab der Spalte Next jede Aktivitätenspalte limitiert ist, verhindern wir, dass wir mit Arbeit überschwemmt werden - was bekanntilch nicht Fluss, sondern Stau fördert.
• dass wir damit die an uns gestellten Anforderungen und unser aktuelles Leistungsvermögen möglichst gut im Gleichgewicht halten.
• Was passiert auf einer Autobahn, wenn dort zu viele Autos fahren.
• langsamer
• Genau, der Verkehrsfluss hat ein natürliches Limit.
• Es wir immer zähflüssiger, wenn noch mehr Autos auf die Autobahn strömen.
• Es geht immer langsamer bis alles steht
• Dann kommt die Polizei und löst es:
• Der Zufluss wird so geregelt wie es die Ampeln an den Auffahrten zur Autobahn tun. Gleichzeitig wir die Durchschntissgeschwindigkeit gesenkt (dynamische Anzeigen auf der Autobahn die bei starkem Verkehr auf 120/100/80 runterregeln), damit der Verkehr nicht zum Erliegen kommt
• Auch in der Produktion wird seit vielen Jahren auf bewusste Limitierung gesetzt. Nur in der Wissensarbeit werden diese einfachen Flussprinzipien immer noch weitgehend ignoriert.
• Kassasturz
• gemeinsam innezuhalten und nicht einfach so weiterzumachen, bis man nur noch kopflos agierte. 
• Zeit und Raum, um ihre Erfahrungen zu sortieren.
• erst einmal nachzudenken und Einsichten zu gewinnen
• Welchen Sinn hatte es, immer mehr Informationen zu sammeln, wenn einem der Überblick fehlte
• 
   

If you don’t do the business the business will do you (From Elvis movie)

Ben Stancil - Making the decision is more important than the decision you make

The Sorceres apprentice - Lisa Abend - A season in the kitchen at Ferran Adrias Elbulli

 

The Sorcerers apprentices

„I dont want to hear any screaming in this resturant. No one insults anyone else, no one belittles anyone else. If you have a criticism, you raise it calmly, in a meeting. We're team. And if I hear of anyone insulting anyone else, they're out.“ - „When I started“, Ferran continues, „insults, shouting, outbursts were normal. But by now we've created an environment of respect so that when others come here they admire us.“

Learning required the utmost dedication and focus, and he would not tolerate a moments lapse in himself or, for that matter, in anyone else. (…) But Luke remained centered on the task at hand. „The only thing I think in my head while I am working“, he said, „is faster, faster, faster“.

In fact, they expect their chefs to have privileges; they want them to be different. After all, those same privileges may someday await them when they are chef, and the chance to receive your plate of lentils before anyone else seems like fair reward for all those years of scut work.

But anger is not just an uncontrollable reflex, it's also a tool: it keeps people focussed. As one otherwise mild-mannered New York chef says in reference to the staff he regularly screams at, „Your need their fear. Otherwise it all goes to shit.“

I like it when someone gives me shit if I fuck up. Dont say, „Oh you poor thing, are you having a bad day?“ Get in my face.“

Make others look good in front of the people they care about most.

Ricardo Semler - The seven day weekend

• Relentlessly asking "Why" into deep levels
• Soon enough there are no easy, comfortable answers
• This explosion of technology means we must re-gain the time we've lost to the merging of personal and work life. People should be allowed and encouraged to re-arrange their week, drop the traditional notion of a weekend, and divide the seven days among company time, personal time and idleness
• Enjoy a sunny Monday on the beach after working through a chilly Sunday
• If I insist on standard work hours, I may be sacrificing a certain amount of employee potential every day. By encouraging uniformity, I lose productivity.
• Punctuality is a mind-set. It has no relation to watches.
• Stress is the difference between your expectation and reality.
• The list of stressful activities includes going on vacation - theres the expectation that it will be perfect, of how many things need to be arranged before you leave. Not to speak of the stress when you are about to return, and start to fret over the work or mail or errands awaiting you. No wonder there is so much shouting at airport counters.
• Another source of stress and disappointment is the expectation that the workplace is an extended family.
• The fact is, you dont have to like people to work with them.
• Organizations make it possible for employees to feel exhilaration once in a while. Let them get invovled to the point that they shout "yes!" and give each other High Fives because they did it their way - and it worked.
• If the people Arent motivated, they dont need to sign up for motivation training - they need a different job!
• Its human nature to lose interest in anything after time!
• People cannot be passionate about doing the same thing over and over. That particularly true about companies that are highly departmentalized. Even more so if the company spells out job parameters.
• Companies need to understand that interests tend to be cyclical. At Semco we offer incentives to employees to move around different jobs and departments.
• Employees need the latitude to try sifferent jobs because man of them emerge from an educatino system that compels them to make career and training choices at a very young age, when they have little information about professions and no experience.
• Thos who stick around simply learn to live with boredom. But thats a huge waste of human potential.
• We are of the opinion that assembling special people is more difficult than finding something for them to do- or, as is our case - letting them find something profitable to do. Wed become famous for hiring people without having a job for them
• Sales! people would exclaim - he has never sold a pencil in his life! Thats what qualifies him, I would insist. We need to find new ways to sell, and make more solid pitches to customers.
• A human resources department once had 90 people. We decided the department really had no reason to exist. … They blossomed because manager are uncomfortable dealing with personnel issues.

Surely you must be joking mr feynman

• I don”t know whatš the matter with people: they don”t learn bz understanding: hez learn by some other way - by rote, or something. Their knowledge is so fragile.
• The electron is a theory that we use< it is so useful in understanding the way nature works that we can almost call it real.
• And, just like it should in all stories about philosophers, it ended up in complete chaos.
• So while all the biology guys were trying to understand these new things *atoms, physics, mathematics, statistics), I could spend my time learning the biology part.
• One day he told me to stay after class. “Feynman,”, he said, “you talk too much and you make too much noise. I know why. You/re bored. So I’m going to give you a book. You go up there in the back, in the corner, and study this book, and when you know everything, thats in the book, you can talk again. He gave me the real works - Advanced Calculus - it was for junior or senior course in college.
• “what can i do to stop them from coming to my larder without killing the ants? No poison, you gotta be humane to the ants.”What I did was this: in preparatin, I put a bit of sugar about six or eight inches from their entry point into the room, that they didnt know about. Then I made those ferry things again, and whenever an ant returning with food walked onto my little ferry, Id carry him over and put him on the sugar. Any ant coming toward the larder that walked onto a ferry I also carried over to the sugar. Eventually the ants found their way from the sugar to their hole, so this new trail was being goubly reinforced, while the old trail was being used less and less. I knew that after half an hour or so the old trail would dry up, and in an hour they were out of my larder. I didnt wash the floor: I didnt do anything but ferry ants.
• In other words, the experimental physicistst had nothing to do until their buildings and apparatus were ready, so they just built the buildings - or assisted in building the buildings.
• You musty have been in a situation like this when you didnt ask them right away. Right away it would have been OK. But now theyve been talking a little bit too long. You hesitated to long. If you ask them now theyll say, “What are you wasting my time all this time for?”
• Well, Mr Frankel, who started this program, began to suffer from the computer disease that anybody who works with computers noe knows about. Its a very serious disease and it interferes completely with the work. The trouble with computers is you pley with them. They are so wonderful. You ahve theses switches - if its an even number you do this, if its an odd number you do that - and pretty soon you can do more and more elaborate things if you are clever enough, on one machine. After a while the whole system broke down. Frankel wasnt paying any attention: he wasnt supervising anybody. … But if youve ever worked with comoputers, you understand the disease - the delight in being able to see how much you can do.
• Special engineers - clever boys from high school. Thez would tell them nothing. They came to work on IBM machines - punching holes, numbers that they didnt understand. Nobody told them what it was. The thing was going very slowly. I said that the first thing there has to be is that these echnical guys know what were doing. They were all excited: “Were fighting a war! We see what it is!”... Nearly ten times as fast. (If you work for a purpose)
• Then the son totld me what happened. The last ttime he was there, Bohr said to his son, Remember the name of that little fellow in the back over there? Hes the only guy whos not afraid of me, and will say when Ive got a crazy idea. So nnext time when we watnt to discuss ideas, were not going to be able to do it with these guys who say everyghing is yes, yes, Dr Bohr. Get that guy and well talk with him first.
• The next time I went to Oak Ridge, all the secretaries and people who knew who I was were telling me, “Dont come through here. Dont come through here!”The colonel had sent a note around to everyone in the plant which said, “During his last visit, was Mr Feynman at any time in your office, near your office, or walking through your office?” 
• I used to enjoy doing physics. Why did I enjoy it? I used to play with it. I used to do whatever I felt like doing. Whether it was interesting and amusing for me to play with. Id invent things and play with things for my own entertainment. … so i got this new attitude. Ill never accomplish anything. Ive got this nice position at the university teaching classes which I rather enjoz, and just like I read the Arabian Night for pleasure, Im going to play with physics, whenever I want to, without worrying about any importance whatsoever.
• Ok he says. The whole principle is this: The guy wants to be a gentleman. He doesnt want to be thought of as imploite, crude, or especially a cheapskate. As long as the girl knows the guys motives so well, its easy to steeer him in the direction she wants him to go. Therefore, he continued, under no circumstance be a gentleman. You must disrespect the girls. Furthermore, the very first tule is, dont buy a girl anything / not even a package of cigarettes / until youve asked her if shell sleep with tou, and youre conviced that she will, and that shes not lying.
• One day, about 3:30 in the afternoon, I was walking along the sidewalk opporsite the beach at Copacabana past a bar. I suddenly got thit TreMENdous, strong feeling:” Thats just what I want: thathll fit just right. Id just love to have a drink right now. I started to walk into the bar, and I suddenly thought to myself. Wait a minute! Its the middle of the afternoon. Theres nobodz here. Theres no social reason to drink. Why do you have such a terribly strong feeling that you have to have a drink? - and I got scared. I never drank ever again, since then. I suppose I really wasnt in any danger, because I found it very easy to stop. But that strong feeling that I didnt understand frightened me. You see, I get such fun out of thinking that I dont want to destroy this most pleasant machine that makes life such a big kick.
• Then, as now, Las Vegas made its money on the people who gamble, so the whole problem for the hotels was to get people to come there to gamble. So they had shows and dinners which were very inexpensive / amost free. You didnt have to make any reservations for anything: You could walk in, sit down at one of the many empty tables, and enjoy the show. It was just wonderful for a man who didnt gamble, because I was enjozing all the advantages - the rooms were inexpensive, the meals were next to nothing, the shows were good, and I liked the girls.
• The first time I was in Las Vegas I sata down and figured out the odds for everything, and I discovered that the odds for the crap table were something like .493. If I bet a dollar, it would only cost me 1.4 cents. So I thought to myself. “Why am I so reluctant to bet? It hardly costs anything!” So I started betting, and right away I lost five dollars in succession - one, two, three, four, five. I was supposed to be out only seven cents< instead, I was five dollars behind! Ive never gambled since then. Im very lucky that I started off loosing.
• But I decided then to never decide again. Nothing - absolutely nothing - would ever change my mind again. When youre young, you have all these things wo worry about - should you go there, what about your mother, And you worry and try to decide, but then something else comes up. Its much easier to just plain decide. Never mind - nothing is goinog to change your mind. I did that once when I was a student at MIT. I got sick and tired of having to decide what kind of dessert I was going to have at the restaurant, so I decided it would always be chocolate ice cream, and never worried about it again - I had the solution to that problem.
• And the reason that nobody got anywhere in that conference was that they hadnt clearly defined the subject of … and tehrefore no one knew exactly what they were supposed to talk about.
• Somewhere on the second day the stenotypist came up to me and said, “What profession are you? Surely not a professor.” “I am a professor,” I said. “Of what?” “Of Physics - science.” “Oh, that must the reason.” he said. “Reason for what?” He said, “You see, Im a stenotypist, and I ytpe everything that is saaid here. Now, when the other fellas talk, I type what they say, but I dont understand what theyre saygin. But every time you get up to ask a question or to say something, I understand exactly what you mean - what the question is, and what youre saying - so I thtought you cant be a professor.
• There were a lot of fools at that conference - pompous fools - and pompous fools drive me up the wall. Ordinary fools are all right: you can talk to them, and try to help them out. But pompous fools - guys who are fools and are covering it all over and impressing people, as to how wonderful they are with all this hocus pocus - THAT I CANNOT STAND!
• It turned out the other members of the commitee had done a lot of work in giving out the books and collecting reports, and had gone to sessins in which the book publishers would explain the books before they read them: I was the only guy on that comission who read all the books and didnt get any informatin from the book publishers except what was in the books themselves, the things that would ultimatelz go to the schools.
• The ambassador answered in a way I like to hear> “I dont know, he said. I might suppose something, but I dont know if its true.

The Tao of Charlie Munger - David Clark

• He decided that each day he would devote one hour of his time at the office to work on his own real estate projects (90/60/1 rule)
• I succeeded because I have a long attention span
• I think that, every tiem you see the word EBITDA, you should substitute the word “bullshit earnings.” … Charlie considers interest, depreciation, and taxes to be very real expenses that have to be paid.
• If you want accurate numbers from financial companies, youre in the wrong world
• Derivates hide risks
• never set aside any reserves to cover its losses
• risk exposure
• Charlies lessno here is that a combination of supersmart people and large amounts of leverage often ends in disaster.
• The economic reality of the hedge fund business model makes it madness for hedge funds to do anything but leverage up and throw the dice.
• “All of humanitys problems stem from mans inability to sit quietly in a room alone.
• Waiting, for most investors, is no tan easy thing to do.\
• Applies to mutual and hedge fund managers, hey are driven to produce quarterly results.
• When Charlie and Warren say that they intend to hold an investment forever, they mean forever
• View a stock as an ownership of the business and judge the staying quality of the business in terms of its competitive advantage.
• it it has a durable competitive aadvantage, he will keep an eye on it in the hope that at some future date it will be selling at a bargain price or even a fair price.
• Companies that have manufactured the same product or provided the same service for fifty or more years.
• Its the strong swimmers who drown
• Strong swimmers are the ones who swim way out and potentially get themselves in trouble. Weaker swimmers stay close to shore, where it is safe.
• How do we know when the stock market is too high? When the financial press starts writing articles about how Charlie and Warren have lost their Midas touch.
• Thats contrary to human nature, just to sit there all day long doing nothing, waiting. … For an ordinarz person, can you imagine just sitting for five years doing nothing? You dont feel active, you dont feel useful, so you do something stupid.
• Greedy bankers: Mortgage lending became a dirty way to make money. You take people that cant handle credit and try to make very high returns by abusing and encouraging their stupidity - thats not the way I want to make money in banking. You should try to make money by selling people things that are good for the customer. … In the old days banks kept home mortgages on their own books, so they were very careful whom they loaned money to. But then the business model changed and banks started selling the mortgages they wrote to other companies. It no longer mattered whom they loaned money to, because they were oing to sell off the mortgage as soon as they wrote it.
• I dont think anyone should buy a bank if they dont have a feel for the bankers. Banking is a business that is a very dangerous place for an investor. Without deep insight, stay away
• As Warren says, if you get into a card game and you cant figure out who is the patsy, you are the patsy.
• Inflation is the friend of people who own assets. Inflation is also he enemy of the people who own cash or bonds.
• It wasnt greed that drove our grandparents to work so hard, it was the fear that they wouldnt be able to pay the rent and their family would go gunfray. Today that fear is gone. It has been replaced with a sense of entitlement that demands that health care be free, that a college education be free, that freee food and housing be provided if one is out of work.
• I do not think you can ttrust tbankers to control themselves. They are like heroin addicts.
• Bankers can destroy themselves and an entire nations economz. Bankers are entrusted with an enormous amount of other peoples money and should be conservative in investing it.
• About trading with derivatives> Its like having thousands of professional poker players. What damn good are they doing for anybody?
• A carry trade is the borrowing of large amounts of money at one rate and using it to buy an asset that earns a higher rate of return.
• all of Berkshires business have in common> Keep costs low.\
• Berkshire itself> Doesnt have a public relations or investor services department and for many years the annual report was printed on the cheapest paper possible and had no expensive color photos.
• A great business at a fair price is superior to a fair business at a great price.
• the product was the same year after year. The business required very little in capital expenditures, so it was possible to take money out of it every year to invest in other businesses.
• From Carl von Clausewitz: No war plan outlasts the first encounter with the enemy.
• Strategz of decentralization frees Berkshires subsidiary managers - the people with the best knowledge - to adapt their businesses to the economic environment as they see fit, without being meddled with by a less knowledgeable home office. It also allows Charlie and Warren to avoid the financial costs and inefficiencies of running a large corporate bureaucracy.
• Spend each day trying to be a little wiser. One inch at a time, day by day.
• He implemented a self/educatin regime for one hour a day
• The compounding effect of knowledge
• The best way to get a good spouse is to deserve a good spouse.
• Extreme specialization is the way to succeed.
• Its specialists who make the big bucks - everyone else, the little bucks
• Just keep thinking and reading, and you will be all right
• That is all there is to the investment game
• you think a lot, and you read a lot
• Overspending can make us miserable.
• Oh, its just so useful dealing with people you can trust and getting all the others the hell out of your life.
• In my whole life, I have known no wise people who didnt read all the time - none, zero. Youd be amazed att how much Warren reads - and how much I read. My children laugh at me. They think Im a book with a couple legs sticking out.
• Thats what manhood is, taking life as it falls. Not whining all the time annd trying to fix it by whining.
• I dont think its terribly constructive to spend your time worrying about things you cant fix
• I constantly see people rise in life who are nott tthe smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a litlle wiser than they were when they got up, and boy, does that help, particularly when you have a long run ahead of you.
• compounding our intellect.
• Thomas Edison:”I failed my way to success.”

Ricardo Semler - Maverick

• ... our Sultan for HR (Yes, we still love to mock titles)
• Our board meetings have two open seats for the first employees that sign up, and two more for any person in a leadership capacity that cares to show. And we still depate strategy openly schedule meetings on a volunteer basis, and have leaders intervieweg by their future subordinates.
• Instead of ont headquarter building, we distribute identical offices across town
• As I tell our people constantly: we've all learned how to answer email on Sundays, but none of us has learned to go to the movies on Monday afternoon Until we learn that, we are email slaves harnessed to the wicked ways of the Profit and Loss Master.
• all financial information at Semco is openly discussed. Indeed, our workers have unlimited access to our books
• For truly big decisions, such as buying another company, everyone at Semco gets a vote. A few years ago, when we wanted to relocate a factory, we closed down for a day and everyone poiled into buses to inspect three possible new sites.
• If we're afraid to let people decide in which section of the plane to sit, or how many stars their hotel should have, we shouldn't be sending them abroad to do business in our name, should we?
• Semco has a profit-sharing plan. At Semco, profit-sharing is democratic.
• Our workers knew that production would suffer if they didnt coordinate their schedules, so thats what they did
• Well, we dont have as many bosses as we used to. As workers began to excercise more control over their jobs and assume more voice in our polices, the need for supervisors diminished. We have also reduced our corporate staff, which provides legal, accounting, and marketing expertise to our manufacturing untis, by more than 75%.
• Before people are hired or promoted to leadership positions, they are interviewed and approved by all who will be working for them. And every sic months managers are evaluate by those who work under them. The results are posted for all to see. Does this mean workers can fire their bosses? I guess it does, since anyone who consistently gets bad grades usually leaves Semco, one way or another.
• We simply do not believe our employees have an interest in coming in late, leaving early and doing as little as possible for as much money as their union can wheedle out of us. After all, these same people raise children, join the PTA, elect mayors, governors, senators and presidents. They are adults. At Semco, we treat them as adults. We trust them. We dont make our employees ask permission to go to the bathroom, or have security guards search them as they leave for the day. We get out of their way and let them do their jobs.
• In business, effort is too often confused with results
• And we had so damn many numbers, inside so damn many folders, that almost no on e was looking at them. But no one would admit it.
• In either plan we try to think in zero-based terma. Budgets should always be based on rethinking the company; most of the time, though, they_re not much more than last years numbers projected forward, and are about as ood as warmed-up coffee at two in the morning
• we introduced a programme that requires each executive to make an educated guess about the revenues, expenses, and profits for his department at the end of each month. A few days later, the official report is distributed
• People were afraid to sign their name to anything.
• if our executives were ashamed of their salaries, it might be becuase they felt they weren't really earning them, for if they merited their pay they could easily prove their worth, whether it was based on specialized knowledge, experience, education, or the mastery of a large departmene with a big budget and staff. Executives should be proud of what they earn, and their salaries ought to provide everyone with an incentive to rise.
• profit-sharing doesnt create employee involvement, it requires it.
• Man is by nature restless. When left too long in one place he will inevitably grow bored, unmotivated, and unproductive. ... a minimum of two years and a maximum of five years in a job were ample.
• There are so many benefits from job rotation, borh for employees and employer, that is a wonder so few companies encourage it. It obliges people to learn new skills, which makes life interesting for them and makes them more valuable.
• That led us to draw up a form subordinates now use to evaluate their managers twice a year.
• Its always better to ask for forgiveness than to ask for permission
• Our advances in technologyhave far outstripped our advances in mentality.