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Charlie Munger: Lessons From an Investing Giant

Aug 30, 2013

THE INTELLIGENT INVESTOR

Charlie Munger: Lessons From an Investing Giant

By Jason Zweig

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One of the least appreciated virtues in investing is courage. Filings with the Securities and Exchange Commission in March and again this month show the extraordinary gumption of Charlie Munger, Warren Buffett’s business partner and vice chairman of Berkshire Hathaway. Mr. Munger, who will turn 90 years old next Jan. 1, is a model for individual investors who wonder how they can possibly beat the professionals at their own game. The pros have more information than you, and their trading machines are faster. But you still have an edge over them—so long as you play a different game by your own, more sensible rules. You can be patient; the pros can’t. You don’t have to be part of the herd; they do. Above all, you can be brave; they almost never are. What makes Mr. Munger a model for individual investors? In the first quarter of 2009, during the most desperate days of the financial crisis, Mr. Munger took 71% of the cash at Daily Journal, a small publishing company he chairs, and poured it into the bank stocks that so many other investors were fleeing. By March 31, 2009, his bet already had gained 60%. With other purchases he made later, Mr. Munger invested $49.7 million into stocks and bonds that today are worth $128.4 million, according to financial statements Daily Journal filed on Aug. 20. Read more of this post

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From humble beginnings in a father’s living room, Ng Cheong Choon’s Rainbow Loom, a kit to make bracelets out of rubber bands, has skyrocketed in popularity; 600 retailers carry Rainbow Loom, and just over one million units have been sold at a retail price of $15-17

August 31, 2013

Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands

By CLAIRE MARTIN

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Cheong Choon Ng, above, designed Rainbow Loom, a suddenly popular crafts kit that turns rubber bands into bracelets. The key to selling the kits, it turned out, was educating buyers about how to use them.

LAST weekend in Fair Harbor, N.Y., on Fire Island, a few dozen children gathered on the boardwalk for the local tradition of selling lemonade, baked goods and painted seashells to passers-by at sunset. Among the children was Julia Colen, a 12-year-old vacationer from New Jersey, who in addition to hawking cupcakes and drinks was presiding over a stand overflowing with brightly colored bracelets. Julia and a friend had made the jewelry out of tiny rubber bands, using a crafts kit called Rainbow Loom. “We had a lot, at least 100,” Julia estimated of their inventory, which they priced at $1 to $2 apiece. Sales were impressive that night — “we made like $68,” she said. Read more of this post

What Amazing Leaders Do Differently

What Amazing Leaders Do Differently

Shane Snow

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In my work as a startup founder over the last few years, I’ve been fortunate enough to find myself surrounded by some incredible young leaders, be mentored by a few wise executives, and spend time with rockstar leadership thinkers like Jack Canfield and Sir Freeman Dyson. It’s been humbling, but awesome. As I’ve attempted to step into the role of leader myself (along with my two fantastic cofounders), and fumbled repeatedly along the way, I’ve come to appreciate great leaders who make what turns out to be a very hard thing look easy. Amazing leaders often do things counter-intuitively. Here are seven patterns I’ve observed in the best leaders in my life, despite the natural pressure for powerful people to do otherwise:

They change their minds.

One of the most courageous things a leader can do is admit when he or she is wrong, and admit it often. Tim Cook, CEO of Apple, said that the late Apple founder Steve Jobs was a notorious, but deliberate, flip-flopper. “I saw it daily,” Cook said in an interview with AllThingsD. “This is a gift, because things do change, and it takes courage to change. It takes courage to say, ‘I was wrong.’” Read more of this post

The Seven Deadly Sins of Investing; Financial crisis be damned—investors are still making the same mistakes the always have

August 30, 2013, 5:58 p.m. ET

The Seven Deadly Sins of Investing

Financial crisis be damned—investors are still making the same mistakes the always have.

KIRSTEN GRIND

It has been nearly five years since the depths of the U.S. financial crisis, and investors have learned a lot since then. Or have they? Despite the downturn that left many investors reeling from losses on everything from real estate to the stock market, when it comes to investor behavior—those hard-wired instincts that drive us all—little has changed, say psychologists and financial advisers. Investors still make the kinds of mistakes that have gotten them in trouble for decades. They are wooed by the hottest new trend, they want to follow the crowd—consequences be damned—and they just can’t seem to pay enough attention to important details, such as the steep annual fees charged by many mutual funds. Read more of this post

What if Apple’s iWatch is… a TV?

What if Apple’s iWatch is… a TV?

By Jonny Haskins, 11 hours ago

Jonny Haskins has a theory about Apple’s iWatch. It was originally published on his own blog, Pixel Lounge.

Like many people, I enjoy guessing as to what technology is going to bring and what innovations will transform our lives.  The quicker we all innovate, the quicker I will be to owning my life’s dream – that flying car (it better be in my lifetime!). In today’s world, things are so mundane and boring, so drip-fed to us commercially and unsystematically, that our dreams of the future are comparatively dull.  An exception is Elon Musk who seems to be the one person in the world who’s challenging this approach and is not scared about taking on the auto industry with his electric Tesla’s and hovering rockets, not to mention the challenging foray of other ideas like a levitating Hyperloop train in a vacuum tube. Read more of this post

Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change

Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change Hardcover

by Edmund S. Phelps (Author)

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In this book, Nobel Prize-winning economist Edmund Phelps draws on a lifetime of thinking to make a sweeping new argument about what makes nations prosper–and why the sources of that prosperity are under threat today. Why did prosperity explode in some nations between the 1820s and 1960s, creating not just unprecedented material wealth but “flourishing”–meaningful work, self-expression, and personal growth for more people than ever before? Phelps makes the case that the wellspring of this flourishing was modern values such as the desire to create, explore, and meet challenges. These values fueled the grassroots dynamism that was necessary for widespread, indigenous innovation. Most innovation wasn’t driven by a few isolated visionaries like Henry Ford; rather, it was driven by millions of people empowered to think of, develop, and market innumerable new products and processes, and improvements to existing ones. Mass flourishing–a combination of material well-being and the “good life” in a broader sense–was created by this mass innovation.

Yet indigenous innovation and flourishing weakened decades ago. In America, evidence indicates that innovation and job satisfaction have decreased since the late 1960s, while postwar Europe has never recaptured its former dynamism. The reason, Phelps argues, is that the modern values underlying the modern economy are under threat by a resurgence of traditional, corporatist values that put the community and state over the individual. The ultimate fate of modern values is now the most pressing question for the West: will Western nations recommit themselves to modernity, grassroots dynamism, indigenous innovation, and widespread personal fulfillment, or will we go on with a narrowed innovation that limits flourishing to a few?

A book of immense practical and intellectual importance, Mass Flourishing is essential reading for anyone who cares about the sources of prosperity and the future of the West. Read more of this post

When Work Is Challenging, Economies Thrive

When Work Is Challenging, Economies Thrive

by Justin Fox  |  12:30 PM August 30, 2013

“In economics, consumption is the sole end of production,” the late, great Swedish economist, politician, and social commentator Gunnar Myrdal wrote in 1930. “This is a stock phrase of all the textbooks since Adam Smith: Man works in order to live.” Myrdal, though, didn’t think that was right: [T]here are many people who live in order to work, who consume in order to produce, if we like to use those terms. Most people who are reasonably well off derive more satisfaction in their capacity as producers than as consumers. Indeed, many would define the social ideal as a state in which as many people as possible can live in this way. Read more of this post

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