Natalie Portman reveals her ‘dark moments’ in college during powerful Harvard commencement speech; The Best Advice Commencement Speakers Gave the Class of 2015: Bamboo Innovator Daily: 31 May (Sun)

Life

  • Natalie Portman reveals her ‘dark moments’ in college during powerful Harvard commencement speech: BI
  • The Best Advice Commencement Speakers Gave the Class of 2015; Graduation speeches. They are what they are. But remarks by the late and current CEOs of Apple offer advice applicable far beyond the office. Bloomberg
  • The Founder And The Inferiority Complex: Techcrunch

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Apple co-founder Steve Wozniak reveals his one philosophy on work and life; Jealous mountain goddesses can’t scare this gutsy groundbreaker who found success as an engineer outside her home country: Bamboo Innovator Daily: 30 May (Sat)

Life

  • Apple co-founder Steve Wozniak reveals his one philosophy on work and life: BI
  • Apple co-founder Steve Wozniak explains the biggest difference between Steve Jobs and Bill Gates: BI
  • She Had to Leave Japan to Find Success as an Engineer; Jealous mountain goddesses can’t scare this gutsy groundbreaker: Bloomberg
  • How to Find Your Place in the World After Graduation: NYT
  • How Zippo’s Founding Family Kept The Flame Alive: Forbes
  • Why one of Silicon Valley’s top investors says ‘don’t follow your passion’: BI
  • The question that Twitter’s CEO asks at every product meeting; “What’s a bolder choice we could be making?” he said. “What if you added this constraint to what you’re doing that forced you to be more creative or bold?”: BI
  • Lunch with the FT: Federico Marchetti; Yoox founder talks about being an outsider — and the world’s shopping habits: FT
  • Apple’s Jony Ive is tired of having to design everything: FT
  • How Elon Musk is educating his children: Quartz
  • Napoleon’s life rebuilt with Legos for Waterloo anniversary: JT
  • Scientists Curbing the Ethical Use of Science: NYT
  • Securing the future of family business: Star
  • The emotional side of family businesses: BT
  • Magna Carta: Eight Centuries of Liberty; June marks the 800th anniversary of Magna Carta, the ‘Great Charter’ that established the rule of law for the English-speaking world. Its revolutionary impact still resounds today: WSJ

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David Brooks’s Search for Meaning; From poverty to a $3 billion fortune – the incredible rags-to-riches story of Oprah Winfrey: Bamboo Innovator Daily: 29 May (Fri)

Life

  • David Brooks’s Search for Meaning: NewYorker
  • From poverty to a $3 billion fortune – the incredible rags-to-riches story of Oprah Winfrey: BI
  • A former CIA director’s advice on how to make hard decisions: FastCo
  • A clear corporate purpose is key to outperforming rivals: BT
  • Inventors, Entrepreneurs And The Space In Between: Techcrunch
  • Why are some companies so successful?: e27
  • A palette of plans: Choosing a strategy is a lot more complex for companies than it used to be: Economist

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Bill Gates: A Funny, Brutally Honest Memoir in Hyperbole and a Half: Unfortunate Situations, Flawed Coping Mechanisms, Mayhem, and Other Things that Happened by Allie Brosh: Bamboo Innovator Daily: 28 May (Thurs)

Life

  • Bill Gates: A Funny, Brutally Honest Memoir in Hyperbole and a Half: Unfortunate Situations, Flawed Coping Mechanisms, Mayhem, and Other Things that Happened , by Allie Brosh, GatesNotes
  • This Billionaire Mom Runs America’s Biggest Woman-Owned Business; under Thai Lee’s management SHI International has grown from a failing software reseller into one of the biggest and best-regarded IT proviider in the world with $6bn in sales: Forbes
  • How Jessica Alba Built A $1 Billion Company, And $200 Million Fortune, Selling Parents Peace Of Mind: Forbes
  • How Successful People Handle Stress: Forbes
  • Life in the age of anxiety: NYT
  • John Nash’s Legacy Lives on in Business Strategy: K@W
  • Interview with “king of cashmere” Brunello Cucinelli: PI
  • Smarter Every Year? Mystery of the Rising IQs: WSJ
  • Remembering John Nash: Finding equations to explain the world: Economist
  • Why It’s So Important For A Stock Operator To ‘Know Thyself’: Felder
  •  ‘Change the world through education’: KT
  • Entrepreneurs Raising the Next Generation of Chief Executives: NYT
  • Why Special Ops Stopped Relying So Much on Top-Down Leadership; Leaders that can persuade others to join their network by articulating a common purpose and rallying others around it will quickly outmaneuver those that rely on top-down: HBR
  • An Organization-Wide Approach to Good Decision Making: HBR

Books

  • Hyperbole and a Half: Unfortunate Situations, Flawed Coping Mechanisms, Mayhem, and Other Things That Happened: Amazon
  • Dare to Serve: How to Drive Superior Results by Serving Others: Amazon

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19 Things That Actually Happened in 1999: Yahoo! was worth more than Berkshire Hathaway. Today Berkshire is worth approximately $360 billion, or about $320 billion more than Yahoo!

http://dividendreference.com/articles/2015/1000193/19-things-that-actually-happened-in-1999/

PUBLISHED ON MAY 27, 2015. POSTED IN EDITORIAL AND TAGGED AOLBRKABRKBCSCOIBMINTCMSFTYHOO

19 Things That Actually Happened in 1999

BY MICHAEL JOHNSTON

The happenings on Wall Street in 1999 prove that sometimes truth is stranger than fiction. Although the events of 1999 are ancient history by many standards, some very clear memories no doubt remain for many investors. With technology and biotech stocks once again hot, a number of comparisons to the last bubble have been made. But the current environment can’t come close to matching 1999, either in terms of valuations or in the sheer madness of the markets. Below are 19 events that actually happened in 1999, highlighting the irrational exuberance that swept over investors (well, most investors).

  1. Yahoo! was worth more than Berkshire Hathaway.

High-flying Yahoo! had a market cap of nearly $100 billion in 1999, putting it ahead of Warren Buffett’s Berkshire Hathaway. Barron’s even ran a cover story on the Oracle of Omaha titled “What’s Wrong, Warren?” that questioned whether the end was near for Buffett:

To be blunt, Buffett, who turns 70 in 2000, is viewed by an increasing number of investors as too conservative, even passe. Barron’s noted that it wasn’t the only voice questioning Buffett; critics from a new corner of the world were becoming increasingly vocal:

Indeed, Buffett has even started taking flak on Internet message boards. One contributor called Berkshire a “middlebrow insurance company studded with a bizarre melange of assets, including candy stores, hamburger stands, jewelry shops, a shoemaker and a third-rate encyclopedia company.”

Today Berkshire is worth approximately $360 billion, or about $320 billion more than Yahoo! Read more of this post

Eccentricity is the vital ingredient for a city’s success; A Biologist-Turned-Buddhist and His Philosopher Father on the Nature of the Self and the True Measure of Personal Strength: Bamboo Innovator Daily: 27 May (Wed)

Life

  • A Biologist-Turned-Buddhist and His Philosopher Father on the Nature of the Self and the True Measure of Personal Strength: BrainPickings
  • Eccentricity is the vital ingredient for a city’s success: FT
  • Acquiring proven entrepreneurs is a smart way to innovate; LinkedIn co-founder Reid Hoffman on the art of importing and keeping business builders: FT
  • What’s Hot in the Art World? Algorithms; Admirers hold on to computerized formulas; paying $2,500 for a ‘qrpff’ necktie: WSJ

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The Carpenter: A Story About the Greatest Success Strategies of All; How to Recognize a Budding Entrepreneur; Why Some Entrepreneurs Feel Fulfilled—but Others Don’t; How the most creative people in business generate new ideas – Bamboo Innovator Daily: 26 May (Tues)

Life

  • How to Recognize a Budding Entrepreneur; New research identifies the four qualities that founders-to-be have in common: WSJ
  • How the most creative people in business generate new ideas: FastCo
  • Why Some Entrepreneurs Feel Fulfilled—but Others Don’t; Money is only part of the equation. New research offers surprising insights into the complex path to satisfaction: WSJ
  • A serial entrepreneur’s hard-earned lesson in taking risks: FastCo
  • John Nash: A life of brilliance, madness, and reawakening: Quartz
  • Family Ties Help When Firms Go Bust: Insead
  • Reconsidering the Charismatic CEO: Strategy&
  • How Emerging Markets Can Finally Arrive; Without capable domestic firms, emerging markets will inevitably get stuck somewhere along the way. Building world-class domestic firms is the overlooked key to economic development. Strategy&

Books

  • The Carpenter: A Story About the Greatest Success Strategies of All: Amazon
  • The Seed: Finding Purpose and Happiness in Life and Work: Amazon

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Bamboo Innovator Daily: 25 May (Mon) – 4 Rituals To Keep You Happy All The Time

Life

  • 4 Rituals To Keep You Happy All The Time: Barker
  • “The power of a mentor is to see the full abundance that resides within our children and to build a bridge for our children to see it in themselves”; Yogi Berra’s Best ‘Yogi-ism’ Was a Profound Act of Kindness: WSJ
  • Elon Musk on How to Tell if People Are Lying: Farnam
  • The Jingle Geniuses Making Millions Writing Music For Ads, Reality TV; The Jingle Punks make millions writing music for commercials, reality TV, and “literally anything” that needs a tune: Bloomberg
  • From the archives: Nash’s Nobel prize; The Economist’s coverage on the award of the Nobel prize for economics to John Nash in 1994: Economist
  • Lucy Kellaway: I would rather shine shoes than be a banker: FT
  • The New Dictators Rule by Velvet Fist; Today’s dictators use propaganda, censorship and relatively little violence: NYT

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Making Right Buffet’s Biggest Investment Mistake in Asian Wide-Moat Innovators – Bamboo Innovator Weekly Insight

 “Bamboo Innovators bend, not break, even in the most terrifying storm that would snap the mighty resisting oak tree. It survives, therefore it conquers.”
BAMBOO LETTER UPDATE | May 25, 2015
Bamboo Innovator Insight (Issue 84)

  • The weekly insight is a teaser into the opportunities – and pitfalls! – in the Asian capital jungles.
  • Get The Moat Report Asia – a monthly in-depth presentation report of around 30-40 pages covering the business model of the company, why it has a wide moat and why the moat may continue to widen, a special section on “Inside the Leader’s Mind” to understand their thinking process in building up the business, the context – why now (certain corporate or industry events or groundbreaking news), valuations (why it can compound 2-3x in the next 5 years), potential risks and how it is part of the systematic process in the Bamboo Innovator Index of 200+ companies out of 15,000+ in the Asia ex-Japan universe.
  • Our paid Members from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing.
Dear Friends,Making Right Buffet’s Biggest Investment Mistake in Asian Wide-Moat InnovatorsQuestion from a shareholder at the Berkshire Hathaway 2015 AGM: “Looking back on the last 50 years, what was the most memorable failure, and how did you deal with it?”

Warren Buffett: “Back in the mid-1990s I looked to the shoe business in Dexter, Maine, and paid $400 million for something that was destined to go to $0 in a few years. I didn’t figure that out. I paid for some transactions in BRK stock – maybe the only instance in which I felt good about the share price going down. I would say almost any time we’ve issued shares, it’s been a mistake, wouldn’t you say, Charlie?”

Charlie Munger: “Of course.”

“What I had assessed as durable competitive advantage vanished within a few years. By using Berkshire stock, I compounded this error hugely. That move made the cost to Berkshire shareholders not $400 million, but rather $3.5 billion. In essence, I gave away 1.6 percent of a wonderful business — one now valued at $220 billion — to buy a worthless business. To date, Dexter is the worst deal that I’ve made. But I’ll make more mistakes in the future – you can bet on that. A line from Bobby Bare’s country song explains what too often happens with acquisitions: ‘I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.'”

– Buffett in 2008

Is it possible for an Asian billionaire to work alongside employees in a retail shop during weekends?

We know Sam Walton does. Even when Sam Walton was a billionaire, he still “show up regularly in the truck drivers’ break room at 4a.m. with a bunch of doughnuts and just sit there for a couple of hours talking to them.” Sam Walton would grill them: ‘What are you seeing at the stores?’ ‘How do the people act there?’ ‘Is it getting better?’ Former Wal-Mart CEO Lee Scott commented, “It makes sense. The drivers see more stores every week than anybody else in this company. And I think what Sam likes about them is that they’re not like a lot of managers. They don’t care who you are. They’ll tell you what they really think.”

Can an Asian billionaire put down his stature, face, pride and comfort to be as driven and humble as Sam Walton? Knowledge of the cognitive psychological underpinnings of the Asian entrepreneurs with Sam Walton-like psyche and the sustainability of the wide-moat businesses they built will enable the value investor to make right the investment process underlying what Buffett describes as the worst investment decision he has ever made in his entire life – his purchase of Dexter Shoes in 1993.

Shoe

Before we reveal the Sam Walton-like Asian shoe billionaire whose business has compounded by nearly 10-fold in market value since 2000 to $4.5 billion, beating the domestic index which is up 35% over the same period, generating a 12th straight record high profits from over 900 stores (180 are overseas), let us revisit Buffett’s investment decision in Dexter Shoes.

At the time, Buffett’s investment in Dexter in 1993 made a lot of sense.

First, Dexter Shoes is the type of boring, unsexy businesses like See’s Candies and Dairy Queen that Buffett had invested in numerous times before to generate compounding returns for Berkshire. Unsexy but you know what you are getting as an investor. When asked why he bought Dexter at that time, Buffett commented, “Dexter Shoe is exactly the type of business Berkshire Hathaway admires. It has a long, profitable history, enduring franchise and superb management. Dexter will continue to operate as it has in the past under its existing management.”

Second, Buffett had earlier acquired in 1991 two shoe businesses – worker boat manufacturer HH Brown and women’s and nurse’s shoes Lowell – that turned out to good investments. The management at HH Brown also endorsed Dexter’s owner-managers Harold Alfond and Harold nephew Peter Lunder, giving Buffett the confidence to proclaim, “Dexter, I can assure you, needs no fixing: It is one of the best-managed companies Charlie and I have seen in our business lifetimes”. Buffett expected in 1994 that Buffett’s shoe operations to have more than $550m in sales with pre-tax earnings topping $85m. Buffett commented then, “Five years ago we had no thought of getting into shoes.  Now we have 7,200 employees in that industry, and I sing ‘There’s No Business Like Shoe Business’ as I drive to work.”

Third, Dexter seemed to have built a moat and branding price premium advantage to withstand the onslaught of cheap Asian imports – despite the higher cost of producing over 7.5m pairs of shoes annually, including 15% of US output in golf shoes, mostly onshore in Maine. Dexter’s facilities were impressive in its production efficiencies with conveyor automation. In addition, Dexter had been a business innovator by pioneering three retail trends. Firstly, Alfond is credited with the invention of the factory outlet store in selling factory-damaged (FD) shoes in the 1960s. Harold cut out the middle man and sold FDs right from a store at the back of the factory. It was an instant success. Secondly, when factories were not making enough mistakes to supply FDs, Harold pioneered the next trend in the 70s of selling stale inventory, mostly quality shoes from previous seasons. Dexter factory outlet stores started to flourish with one store after the other in eastern United States. Other shoe retailers caught on and opened their stores next to Dexter. Harold pioneered the third trend of opening entire outlet malls along busy highways and lease retail space to dozens of competitor brands. At this time in the early 90s, Dexter employed close to 4,000 people and was generating $250m in sales with retail-manufacturing earnings and steady rental services income. Buffett came knocking on the door and Harold agreed to sell out for $443m, requesting Berkshire shares instead of cash. The value of Dexter business amounted to 1.6% of Berkshire shares which was selling for around $16,000 per share.

So what went wrong? The most cited explanation was that as much cheaper shoes manufactured overseas continue to flood the American market, Dexter lost its competitiveness. Starting from 1998, Dexter started to cut jobs, citing global competition. In 1999, Dexter began to close down its manufacturing facilities. By 2000, Buffett said, “our attempt to keep the bulk of our production to domestic factories has cost up dearly.” Due to operating losses at Dexter, Berkshire wrote off $219m of Dexter goodwill. A week after the 9/11 terrorist attack, Dexter announced it was closing its final manufacturing facility in Maine, the on located in its namesake town of Dexter. In the 1960s and 70s, the shoe industry employed roughly 30,000 people in Maine. By the time Dexter Shoe shut its doors in 2001, that employment figure had dropped to 3,300, according to the Maine Center for Workforce Research & Information. Today, that figure is below 1,300.

In a little-cited and forgotten quote that goes beyond the usual heuristic checklist measure of “long profitable history” to discuss about business dynamics, Buffett explained the most important reason to understand both the mistake and the Asian shoe billionaire who worked alongside his employees in the shop during weekends, as well as to identify potential future opportunities in retail innovators. Buffett admitted, “Shoes are a tough business.. most manufacturers in the industry do poorly. The wide range of styles and sizes that producers offer causes inventories to be heavy; substantial capital is also tied up in receivables.”

Thus, given the broad range of sizes and colors for a single product, controlling inventory risk is a major challenge in the shoe business with its small-lot, multi-type format, especially a burden for a brick-and-mortar outlet whose floor space is limited. The retail innovator who can solve this major challenge will have a real sustainable moat advantage. Despite its long profitable history and efficient manufacturing facilities, and even if it had outsourced to cheaper overseas production bases, Dexter had not yet solve this major challenge.

In Japan, this major challenge in the shoe industry faced by Dexter was compounded by the multi-tiered shoe distribution market, with distributors and wholesale firms at various stages between manufacturers and consumers. The structure remained even after a drastic shift to overseas production sites in the 90s, with the accumulated distribution costs being passed along in retail shoe prices. Japanese shoe retailers hedged inventory risk via product-return programs with manufactures and wholesale firms, while the upstream side added return-related costs in wholesale prices. Like Dexter, numerous shoe manufacturers and retailers have failed since the late 90s, including Asahi Corporation in April 1998, Americaya Shoes in April 1999, and the once-mighty Kutsu-No-Marutomi in Dec 2000.

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Masahiro Miki is the low-profile secretive billionaire founder of ABC Mart who worked alongside employees in stores during weekends. Miki owns around 30% of ABC-Mart and is ranked #11 on Forbes richest Japanese list with a net worth of $3.5bn. Not many people know that Miki-san is Korean-Japanese with a Korean name of Kang Jeong-ho, as he seldom shows himself in public. Like Dexter’s Harold Alfond who was an outstanding athlete and developed his passion for sports, Miki was an amateur boxer and sports lover. Miki, who had been interested in import clothing retail, switched to selling shoes when he realized that the Japanese shoe industry was not particularly competitive. Kokusai Boeki Shoji (International Trading Corp) was established in 1985 in Tokyo’s Shinjuku ward. Miki pursued brand businesses early on by securing domestic general-distributor rights to Hawkins in 1986 (it acquired trademark rights in 1995) and Vans in 1991 (it concluded a domestic trademark usage contract in 1994). This brand-management know-how has contributed greatly to ABC-Mart’s private brand-driven growth strategy. Miki entered the retail market in 1990 with the launch of ABC-Mart and opened four stores in central Tokyo that sold sneakers and work boots, riding the casual fashion trend at that time. In the late 90s, ABC-Mart accelerated the rollout of self-branded products utilizing the trademarks it had acquired, and broadened coverage by adding business and walking shoes.

ABC-Mart compounded its market value nearly 10-fold since 2000 to $4.4bn by streamlining the procurement structure and removing the middlemen from Japan’s multi-tiered shoe retailing structure and built a high-margin format. This was made possible with two innovations.

First, ABC-Mart…

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ABC-Mart also sought to solve the inventory challenge with an innovative in-store service that allows customers to directly place orders for shoes that are not in stock at its brick-and-mortar stores to the shoe retailer’s web outlet. Customers can place orders for shoes of any desired model or size from the in-store terminal when they are out of stock at the outlet they visit. They pay for the shoes there and then, and can choose to arrange home delivery or pick up the goods the next time they visit. The number of outlets that provide such services is around 600, roughly 80% of all ABC-Mart stores in Japan. The iPhone-based service, called “iChock,” minimize missed business opportunities due to items being out of stock as well as to reduce inventory at each store and improve capital efficiency.

With its extensive name-brand lineup and exclusive private-brand products, sales has been brisk despite the April 1 2015 sales price hike, posting a 12th year record high profits. While ABC-Mart has been the poster child of deflation-era retailing, with stores advertising shoes for as little as ¥2,900 ($28) and ¥3,900, along with clearance sales, it has found success in rolling out products that appeal to fashionistas who do not mind paying a little extra for style. ABC-Mart stores are also hot spots for many Chinese tourists who buy four or five pairs at once. ABC Mart found overseas success with over 180 stores, with over 150 stores in South Korea and the rest in Taiwan.

In Aug 2012, ABC-Mart also completed the $138m purchase of LaCrosse Footwear, a rival to Berkshire’s HH Brown and Justin Brands. Workwear consumers of the LaCrosse and Danner brands in America include people in law enforcement, transportation, mining, oil and gas exploration and extraction, construction, government services and other occupations that require high-performance and protection footwear as a critical tool for the job. Outdoor consumers include people active in hunting, hiking, outdoor cross-training. LaCrosse purchased storied bootmaker Whites Boots in 2014. Both these brands also sell well in Japan.

********

We have emphasized in earlier articles our observation that most Asian companies are “one-man-shop” operations with the founder making all the decisions. The willingness to build a culture of decentralization/ empowerment and invest in a system to cascade decision rights throughout the organization is an important signal that the founder desires and cares to scale up the company in a sustainable manner by not hoarding knowledge. Technology is an important tool in empowering the employees and in giving them an informational advantage in their respective roles and responsibilities at work.

Sam Walton himself solved the major problem of inventory and working capital to scale up the business by having a continual commitment in the intangible IT investments. Sam Walton’s penchant for a reliable and speedy information system is grounded in pragmatism: “Once we had those scanners in the stores, we had all this data pouring into Bentonville over phone lines. I like my numbers as quickly as I can get them. The quicker we get that information, the quicker we can act on it. What I like about it is the kind of information we can pull out of it on a moment’s notice.”

The story of Dexter Vs ABC-Mart also reminds us of Kmart Vs Wal-Mart. The once mighty Kmart was bigger than Wal-Mart in 70s and 80s; it declared bankruptcy on Jan 22, 2002. K-Mart is the typical cheap gets cheaper, cigar-butt value trap with the halo of a successful founding entrepreneur. While Wal-Mart commits itself in IT investments in order to scale up its store network in a sustainable manner, Kmart was busy acquiring various companies that include Furr’s Cafeterias of Texas, Bishop’s Buffet chain, pizza-video parlors, Payless Drug Stores, the Sports Authority, and OfficeMax as outlets for its retained earnings. By the end of 80s, Kmart was at least ten years behind Wal-Mart in its operational capabilities. As Kmart fell ever further behind, its need for outside-of-the-core growth platforms became a self-fulfilling prophecy. Wal-Mart now collects more data about consumers than anyone in the private sector. Wal-Mart mined this data into actionable business intelligence to ensure that consumers have the products they want, when they want them, and at the right price. For example, they have learned that before a hurricane, consumers stock up on food items that do not require cooking or refrigeration.

Ironically, IT investments was the tipping point factor that “killed” Kmart. It spent $2b in 2000/01 – and using IBM, the same IT supplier as Wal-Mart. The key Is discipline and integrating technology into business model to achieve “emptiness” in an indestructible intangible asset: Wal-Mart shared its info with supplier in exchange for greater discounts to integrate with its EDLP (everyday low prices) business strategy, whilst Kmart simply “invest” and “collect data” without a purpose.

********

Entrepreneurship generates substantial emotions because it is an extreme context in terms of time pressures, uncertainty and the extent of personal consequences tied up in the fate of the firm. People are heterogeneous in their motivations for engaging in the entrepreneurial process. Understanding the micro-foundations of entrepreneurial action and the notion of hot cognition, the emotions that influence cognitive processing in the entrepreneurial context, and the “why” underlying these activities is critical for the value investor to avoid costly investment mistakes. The emotions generated from making progress on a challenging entrepreneurial task – solving the inventory problem in order to scale up – increases the entrepreneur’s scope of attention, hot cognition and (access to) resources and impact subsequent activities in the entrepreneurial process.

Both Sam Walton and Masahiro Miki faced a lot of resistance and doubts when they spent heavily on IT system – the money could have been spent on tangible assets like property. In the end, the scale and constancy of the investments involved in building the indestructible intangibles discourage imitators and disrupts complacent incumbents. They “stick to their guns” and that made all the difference to understanding the wide-moat advantage that they have built up. The Heart of entrepreneurship is summed up best by Sam Walton in his inspiring autobiography Made in America:

“It is a story about entrepreneurship, and risk, and hard work, and knowing where you want to go and being willing to do what it takes to get there. It’s a story about believing in your idea even when maybe some other folks don’t, and sticking to your guns.”

Both Sam Walton and Masahiro Miki are unwavering in their core values, just like the Bamboo: Even through the strongest hurricanes, the bamboo will bend but never break; when covered with snow, it will patiently wait for it to melt down, and then rise up And in the end, the bamboo stands tall, green and beautiful. For the traditional Chinese, the bamboo represents the value of “uprightness”. At Moat Report Asia, we are of the conviction that the future is created one Bamboo Innovator at a time. If you also share in our values and investment process, and support our conscious efforts to promote entrepreneurialism in Asia, we invite you to join us in this uplifting journey to make a positive difference to society.

Warm regards,

KB

The Moat Report Asia

www.moatreport.com

http://accountancy.smu.edu.sg/faculty/profile/108141/KEE-Koon-Boon

A new monthly issue of The Moat Report Asia is now available!

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This month, we highlight a wide-moat innovator who is the #1 in Asia in a patented automotive electronics part that is part of the fast-growing Advanced Driver Assistance System (ADAS) market worth >$22bn by 2018, doubled from $11bn in 2014. The ADAS market is driven by more stringent safety requirements from governments forcing the automotive industry to develop automotive electronics solutions to increase vehicle safety. [Company’s name] is the third-largest in the world behind Valeo (FR EN) and Bosch. It has >50% market share in new cars sold in China, and the installation rate of this ADAS product on China’s auto is still low (35%+ on new cars vs 80%+ in developed markets). Established in 1979 by founder and Chairman Mr. C, [Company’s name] is one of the rare Tier-1 automotive suppliers in Asia to major OEM car makers that include Ford, GM, Daimler, Hyundai, Nissan, China’s top 10 auto companies such as Great Wall Motor, thereby directly shipped to them and involved in their R&D processes and early stage processes of concept car design and prototyping, creating a pre-emptive advantage in winning new orders. Over the past 36 years, [Company’s name] has forged formidable competitive advantages in scale, product quality, technological know-how and R&D capabilities and in May 2012, [Company’s name] outgunned illustrious industrial automotive giants Valeo (founded in 1923) and Bosch (founded in 1886) to sign a breakthrough global 10-year contract with GM, with the commencement of worldwide shipment to 18 countries and 25 factories at the end of 2016.

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Bamboo Innovator Daily: 24 May (Sun) – Contributor, Competitor, Craftsman: A Commentary on Motivation and Vocation; Fairfax Financial Ltd chief Prem Watsa tells his ‘Horatio Alger’ story

Life

  • Contributor, Competitor, Craftsman: A Commentary on Motivation and Vocation: Convenantcap
  • What to Learn in College to Stay One Step Ahead of Computers: NYT
  • Fairfax Financial Ltd chief Prem Watsa tells his ‘Horatio Alger’ story: FP
  • How to Change Minds: Blaise Pascal on the Art of Persuasion: BP
  • Ten communication secrets of great leaders: Quartz

Read more of this post

Bamboo Innovator Daily: 23 May (Sat) – Lessons From a Buffett Believer; Why Do We Experience Awe? Because it moves us to do things for the greater good

Life

  • Every Man an Archimedes; Insights can seem to appear spontaneously, but fully formed. No wonder the ancients spoke of muses. WSJ
  • Why Do We Experience Awe? Because it moves us to do things for the greater good: NYT
  • 13 of the best graduation speeches of all time: BI
  • Lessons From a Buffett Believer: WSJ
  • Think different: Yancey Hai left a 21-year career in banking for power systems maker Taiwan’s Delta Electronics, and has not looked back.: BT
  • Watch Robert De Niro tell graduates about dealing with rejection: Quartz
  • Bouncing off Tharman’s trampoline: BT
  • Elon Musk didn’t like his kids’ school, so he made his own small, secretive school without grade levels: BI
  • 10 innovation lessons inspired by Homer Simpson: FP
  • Embracing Disruptive Change: Why Is it So Difficult? WSJ
  • What Google looks for in entrepreneurs when it’s thinking about acquiring a company: BI
  • How Discovery keeps innovating; CEO Adrian Gore describes how the South African company has been shaking up its industry through business-model innovation and explains what helps to catalyze new ideas. McKinsey
  • Inside “(Dis)Honesty – The Truth About Lies.”: Forbes
  • Signs That You’re Being Too Stubborn: HBR
  • Notes To The Charlie Rose 3 episode interview of Warren Buffett: RBCPA
  • Revealing Seven Personality Traits That Have Made Warren Buffett A Cheerful Billionaire: VW
  • Buffett in WSJ Op-Ed: Better Than Raising the Minimum Wage: Help Americans who need it with a major, carefully crafted expansion of the Earned Income Tax Credit: WSJ
  • SEC Commissioner Stein Says Overlooking Bank Criminal Activity Will Lead To Further Criminal Activity: VW
  • A new startup thinks it can stop Wall Street cheaters by monitoring how much traders laugh: BI
  • Meet the real-life ‘Wolf of Wall Street’ Instagrammer who claims he can turn your ‘pennies into millions’: BI
  • A Life-Changing Guide for Emotionally Sensitive People: TinyBuddha
  • Retelling Another Person’s Story Can Make It Your Own; Repeatedly retelling an incident can trick your brain into believing it was your own experience: WSJ
  • A great leadership reading list — without any business books on it: WaPo
  • Proof of Cheating Casts Pall Over the SAT: Barron’s
  •  Psychologist says this key skill can make people highly effective leaders: BI
  • Interview: M&A advisers Michael and Yoel Zaoui; Brothers Michael and Yoel have advised on takeovers worth $152bn in two years and changed the fate of business empires: FT
  • What’s Behind Big Science Frauds?: NYT

Books

  • The Emotionally Sensitive Person: Finding Peace When Your Emotions Overwhelm You : Amazon
  • The Good Struggle: Responsible Leadership in an Unforgiving World: Amazon
  • Defining Moments: When Managers Must Choose Between Right and Right : Amazon
  • Leading Quietly: Amazon

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Bamboo Innovator Daily: 22 May (Fri) – Conquering complexity with simple rules; Want To Do Big Things? Make Yourself Small; You are not special: How to get from narcissism to thoughtfulness

Life

  • Conquering complexity with simple rules: Forbes
  • Want To Do Big Things? Make Yourself Small: Forbes
  • You are not special: How to get from narcissism to thoughtfulness: Economist
  • Melinda Gates on Bill, ending poverty, and her plans to invest in women and girls: Fortune
  • Incumbents as attackers: Brand-driven innovation: McKinsey
  • Here’s How to Make Millions as an Art Forger: Bloomberg
  • The battle of Waterloo: Appallingly bloody, yet decisive, the battle of Waterloo in June 1815 deserves the attention it is getting 200 years later: Economist
  • The pressure on companies to form alliances with rivals is growing inexorably: Economist

Books

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Bamboo Innovator Daily: 21 May (Thurs) – All Lives Have Equal Value: Reflections On My First Year as CEO of the Gates Foundation by Sue Desmond-Hellmann; Why Reading Books Is the Best Thing You Can Do

Life

  • All Lives Have Equal Value: Reflections On My First Year as CEO of the Gates Foundation: Medium
  • Why Reading Books Is the Best Thing You Can Do: Investorfieldguide
  • What kind of leadership is needed in flat hierarchies? FastCo
  • The Fine Line Between Success And Bankruptcy: Techcrunch
  • For an Octopus, Seeing the Light Doesn’t Require Eyes: NYT
  • American Innovation Lies on Weak Foundation: NYT
  • How to Earn Respect as a Leader: HBR
  • Focus on Winning Either Hearts or Minds: HBR
  • Trader transcripts: ‘If you ain’t cheating, you ain’t trying’: FT
  • Meet the French Billionaire Who Wants to Rule U.S. Cable: Bloomberg
  • What’s Wrong With ‘Mathiness’ in Economics?: Bloomberg

Books

  • More Than a Numbers Game: A Brief History of Accounting: Amazon
  • The Story Solution: 23 Actions All Great Heroes Must Take : Amazon

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Bamboo Innovator Daily: 20 May (Wed) – Inside the Magic: The definitive history of ILM, the special effects powerhouse that revolutionized moviemaking and changed entertainment forever

Life

  • Inside the Magic: The definitive history of ILM, the special effects powerhouse that revolutionized moviemaking and changed entertainment forever: Wired
  • 6 strategies great leaders use for long-term success:BI
  • 11 pieces of life-changing advice from commencement speeches by tech celebrities: BI
  • Here’s what’s on Bill Gates’ summer reading list: GatesNotes
  • How To Stop Worrying: Barker
  • ‘Despicable Me’ founder shares secret of success: KT
  • When it comes to you and your group, keep your verbs humble: JT
  • With yoji jukugo (四字熟語), four little characters can say so much: JT
  • Management Accounting Skills Found Lacking in Entry-Level Talent: WSJ
  • Warren Buffett impressed by children’s money-making ideas: reuters
  • “Competitive Intelligence” Shouldn’t Just Be About Your Competitors; It’s about seeing the market as a whole. HBR
  • Explain Your New Strategy By Emphasizing What It Isn’t; Contrasts will help your team understand how to prioritize. HBR
  • Andreessen Horowitz’s lessons for Asian VCs and founders: e27
  • Buddhism played a key role in Korea: KT
  • David Letterman: Comedian, late night legend. and shrewd businessman?: Fortune
  • Dogbert Explains What CEOs Do: Zerohedge
  • Why Thought Leadership Is Absolutely Essential To Professional Services Firms: Forbes
  • That’s billion, with a bee: Measuring the massive cost of hive collapse: Reuters

Books

  • The Magic of Reality: How We Know What’s Really True: Amazon

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Bamboo Innovator Daily: 19 May (Tues) – Berkshire Hathaway’s Disintermediation: Buffett’s New Managerial Model; A conductor who’s taught classes at Google and Goldman Sachs explains how great leaders inspire brilliance

Life

  • A conductor who’s taught classes at Google and Goldman Sachs explains how great leaders inspire brilliance: BI
  • From welfare to one of the world’s wealthiest women – the incredible rags-to-riches story of J.K. Rowling: BI
  • Families Find the Principles That Keep the Business Going: NYT
  • Learning From Mistakes: The question, would you go back and undo your errors is unanswerable. The question is: What wisdom have you learned that will help you going forward? : NYT
  •  ICE’s Jeffrey Sprecher Has Built a Global Trading Powerhouse: II
  • How Doctors Deliver Bad News; Doctors are trying new ways of solving an old problem—how to tell patients they aren’t going to get well: WSJ
  • The Plain-Vanilla Accountant Goes Out of Style: WSJ
  • Leading Teams through Change at the Speed of Business: Strategy&
  • The crazy story of an ex-cop busted for running a website that taught people how to cheat polygraphs: BI
  • Leadership Lessons From the Brothers Grimm; Whether it’s kissing frogs, slaying dragons or battling wits with the wicked witch, fairy tales hold salient leadership lessons for today’s executives. Insead

Books

  • The Ignorant Maestro: How Great Leaders Inspire Unpredictable Brilliance: Amazon

Investing Process

  • Berkshire Hathaway’s Disintermediation: Buffett’s New Managerial Model : SSRN

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Long-Term Contract Accounting Fraud in Asia From Construction to Software

 “Bamboo Innovators bend, not break, even in the most terrifying storm that would snap the mighty resisting oak tree. It survives, therefore it conquers.”
BAMBOO LETTER UPDATE | May 18, 2015
Bamboo Innovator Insight (Issue 83)

  • The weekly insight is a teaser into the opportunities – and pitfalls! – in the Asian capital jungles.
  • Get The Moat Report Asia – a monthly in-depth presentation report of around 30-40 pages covering the business model of the company, why it has a wide moat and why the moat may continue to widen, a special section on “Inside the Leader’s Mind” to understand their thinking process in building up the business, the context – why now (certain corporate or industry events or groundbreaking news), valuations (why it can compound 2-3x in the next 5 years), potential risks and how it is part of the systematic process in the Bamboo Innovator Index of 200+ companies out of 15,000+ in the Asia ex-Japan universe.
  • Our paid Members from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing.
Dear Friends,Long-Term Contract Accounting Fraud in Asia From Construction to SoftwareA Dreamer and an Accountant is a lethal combination. McDonald’s Ray Kroc had financial wizard Harry Sonneborn to advise him that real estate was the key to a franchise’s financial success. Thomas Edison had his right-hand business partner Samuel Insull who took care of financing, operations, hirings, firings and mergers.Tanaka Hisashige and Ichisuke Fujioka, the “Thomas Edisons of Japan”, must have wished there is a competent accountant to exercise financial stewardship over their business creation Toshiba (6502 JP, MV $14.6bn). Toshiba was involved in an accounting scandal in inflating profits by over ¥50bn ($419m) for the three year cumulative period through FY13 after calling for an urgent press conference at its headquarters in Minato City, Tokyo, on 15 May 2015 to appoint an independent investigation committee to probe the accounting issues, four years after the Olympus accounting fraud revelation in 2011 that hid $1.7bn in losses in a 13-year cover-up.Starting from a small workshop rented from the second floor of a temple in Roppongi, Tokyo in 1873, six years after the Meiji Restoration and at the age of 74, Hisashige-san produced the first telegraph equipment in Japan. After meeting Thomas Edison in 1884 while on a tour in the United States, Fujiioka-san pledged to devote himself to establishing a Japanese electric power industry, succeeded in developing an economical, durable light bulb and in constructing an electric railway, taking Japan into the age of electricity. Hisashige’s firm, later renamed Shibaura Engineering Works, merged with Fujiioka’s Tokyo Electric Company to form Tokyo Shibaura Electric, which soon became known as Toshiba.

The in-house investigation into the accounting scandal relates to the underestimation of costs for 9 out of the 250 projects using the percentage-of-completion (POC) accounting method: 4 projects totalling ¥6bn at the power systems company, 4 projects totalling ¥30bn at the social infrastructure systems company and one project totalling ¥14bn at the community solutions company. Toshiba derived around 11% of operating income from its power and social infrastructure business. This is the second accounting investigation in less than two years for Toshiba, which has twice delayed reporting its earnings for the year ended in March because of irregularities. The new panel’s probe will extend to Toshiba’s 593 consolidated subsidiaries, including electrical engineering giant Westinghouse Electric, owned by Toshiba since 2007.

Toshiba and one of its listed subsidiaries, Toshiba Plant Systems & Services (1983 JP, MV $1.2bn), are also members of the JPX-Nikkei Index 400, which was started last year to showcase Japan’s best shares to institutional investors and shame executives of companies that weren’t picked into improving capital efficiency to make the cut. It selects the 400 companies in Japan with the highest return on equity and profit over the past three years. Corporate governance is another factor in choosing the members. The gauge recalculates its constituents every year using data from the last business day of June, and publishes the results in August. Sony Corp was among 31 members that got replaced in 2014. Interestingly, Toshiba has four outside board directors, an apparent sign of good “corporate governance” to keep checks and balances on the managers. Toshiba is now in a race to report its restated earnings before the June 30 deadline. Toshiba risks losing the attention of about ¥650bn tracking the JPX-Nikkei 400 in exchange-traded and mutual funds should it get kicked out of the JPX-Nikkei Index.

We wish to highlight the area of revenue recognition and the accounting for long-term contracts, in particular the percentage-of-completion (POC) accounting method, which has received relatively little inspection from academics and practitioners. There are important implications for value investors given that the POC accounting method is common across industries from construction/infrastructure/property and defence to software.

In essence, long-term contracts present special problems for revenue recognition, which allows for both the POC method and the completed contract method (CCM). Under the CCM, no revenue is recognized until the project is 100% complete; and, the related project costs are held as inventory. The POC method recognizes revenue and costs as measurable important progress milestones on a project (output-based measure) or based on a ratio of costs incurred to date over expected total contract costs (input-based measure 1: cost-to-cost method) or based on comparing measures such as labor hours, labor dollars, machine hours or quantities of material consumed to date to the total quantity estimated forte entire project (input-based measure 2: efforts-expended method). Under the POC method, managers can opportunistically manipulate the percentage of completion to recognize revenue prematurely and conceal contract overruns.

The following can be manipulated to affect revenue recognition:

  • Concealing subcontractor, labor and other project costs
  • Subjective estimation of costs to complete the projects
  • Shifting costs between projects
  • Improper allocation of indirect overheads to projects
  • Misallocation between project and non-project costs
  • Improperly deferring project costs
  • Premature expensing of pre-contract costs
  • Commingling of project and other costs
  • Recognition of unapproved change orders and claims that have no basis for inclusion in contract value
  • Setting improper project milestones where cost-to-cost is the more appropriate basis

Note: Should the above red flags be found, value investors should adjust downward the revenue by an amount that is the difference between unbilled receivables (or amount due from customers in contract work) and the work-in-progress (WIP).

Past prominent cases involving POC accounting fraud include:

  • Defence contractor Halliburton (HAL US) had increased revenue by $434m during 1998-2001 by booking cost overruns on construction projects before clients agreed to pay for them. In the wake of the recent Toshiba scandal, South Carolina Electric & Gas, a client of Westinghouse and its business partner Chicago Bridge & Iron (CBI US), had filed a petition on the incremental capital costs on a nuclear plant construction that total $698m, of which $539m are associated with delays and other contested costs.
  • Data-mining software company MicroStrategy (MSTR US), worth $31.1bn at its peak as compared to its present market cap of $2bn, had recognized over half ($17.5m) of the licensing revenue immediately in a $27.5m multi-year licensing agreement with NCR. The foundation of MicroStrategy’s product had been its corporate data-mining program which combs through terabytes of data looking for interesting relationships; MicroStrategy’s customers McDonald’s, Wal-Mart, NCR could use the program to detect customer buying patterns. According to the NCR order, because MicroStrategy’s software license sales were part of multiple-element transactions that included other services such as product support and development and consulting, the company was required to apply POC accounting. However, for a number of transactions that were subsequently restated due to a misapplication of the accounting standard, MicroStrategy had (1) improperly separated software license sales from their service elements and (2) characterized revenue in multiple element transactions as product or software revenue and recognized it at the time of the transaction. Without this $17.5m addition to third quarter revenue in 1999, MicroStrategy would have reported a revenue decline of 20% from the previous quarter and a loss instead of a profit.
  • Similar accounting issues to MicroStrategy arose for…

Recent accounting scandals in Asia who had potentially abused the POC accounting method include water treatment company Sound Global (967 HK, $1.36bn) whose auditors identified audit issues of missing RMB2bn cash shortfall and had reported matters to Singapore’s Ministry of Finance in an announcement on May 4, around three months after allegations of fraud by Emerson Analytics which the company denied with the media supporting the management and blasting the short-seller for the unfair attack. For instance, unbilled receivables (amount due from customer for contract work) at Sound Global soared over five-folds from RMB203m in FY09 to RMB1.1bn in FY13, representing around 15% and 35% of sales respectively, an indication of aggressive revenue recognition before projects are actually completed in the subjective use of the POC accounting method. Managers often opportunistically manipulate the estimates under the POC accounting method to inflate revenue and profits to achieve compliance with existing and future debt covenants and to raise more external financing in debt and equity. Note that the total debt at Sound Global had jumped from RMB227m in FY09 to RMB3.8bn in FY13.

Another example is Japanese vacuum machinery company Ulvac (6728 JP, MV $796m). Around 2010, Ulvac reported that its full year ended Jun 2010 sales were down 1% and operating profit was up 38%. However, the result was due to the switch to POC accounting method and aggressive accounting in revenue recognition much earlier. Interestingly, Ulvac disclosed in the footnotes that had it used the same revenue recognition method as before, its sales would have been down 21% and there would be a loss. Since Jun 2010, Ulvac’s share price is flat, underperforming the 100% rise in the Nikkei index.

Ulvac (TSE: 6728 JP) Stock Price Performance 2010-2015

Ulvac

********

When Samuel Insull was not named the president of what is now known as General Electric, he left and went on to build a electricity utilities empire using financial engineering and complex holding companies structure carrying out M&As and became one of the richest man in the world with a personal worth of over $150m (over $1.7bn in today’s dollars). To pay for expansion, Insull had sold low-price bonds and stock. Over a million middle-class Americans bought in – but their investments were made worthless by the Great Depression. Overnight, Insull went from a hero on the cover of Time magazine to the villain who had stolen the people’s money. It was said that before Enron, there was Insull. Charged with fraud, Insull was tried in 1934 and acquitted of the charges. But his reputation was destroyed, and he left the country for good. Four years later, Insull died of a heart attack in the Paris subway in 1938 with 84 cents in his pocket.

When financial and accounting wizards Harry Sonneborn and Samuel Insull left Ray Kroc and Thomas Edison respectively, they were in a “percentage of completion” mode in not being able to build an idea larger than themselves to complete the work. The awkward Dreamer and the suave professional Accountant is the “completed contract”. When separated from the Dreamer and her vision, the Accountant often flounders and loses his Way. Similarly, the technical interpretation and application of the POC accounting method cannot be separated from the wide-moat business model analysis of the company since the long-term nature of the contract with the customer determines the economic substance and viability of the business’ work in progress, of an idea larger than oneself.

Warm regards,

KB

The Moat Report Asia

www.moatreport.com

http://accountancy.smu.edu.sg/faculty/profile/108141/KEE-Koon-Boon

A new monthly issue of The Moat Report Asia is now available!

Access the in-depth idea presentation:

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This month, we highlight a wide-moat innovator who is the #1 in Asia in a patented automotive electronics part that is part of the fast-growing Advanced Driver Assistance System (ADAS) market worth >$22bn by 2018, doubled from $11bn in 2014. The ADAS market is driven by more stringent safety requirements from governments forcing the automotive industry to develop automotive electronics solutions to increase vehicle safety. [Company’s name] is the third-largest in the world behind Valeo (FR EN) and Bosch. It has >50% market share in new cars sold in China, and the installation rate of this ADAS product on China’s auto is still low (35%+ on new cars vs 80%+ in developed markets). Established in 1979 by founder and Chairman Mr. C, [Company’s name] is one of the rare Tier-1 automotive suppliers in Asia to major OEM car makers that include Ford, GM, Daimler, Hyundai, Nissan, China’s top 10 auto companies such as Great Wall Motor, thereby directly shipped to them and involved in their R&D processes and early stage processes of concept car design and prototyping, creating a pre-emptive advantage in winning new orders. Over the past 36 years, [Company’s name] has forged formidable competitive advantages in scale, product quality, technological know-how and R&D capabilities and in May 2012, [Company’s name] outgunned illustrious industrial automotive giants Valeo (founded in 1923) and Bosch (founded in 1886) to sign a breakthrough global 10-year contract with GM, with the commencement of worldwide shipment to 18 countries and 25 factories at the end of 2016.

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Bamboo Innovator Daily: 18 May (Mon) – Fashion designer Diane von Furstenberg says this is the key to success: Trusting Yourself

Life

  • Apple CEO Tim Cook Urges GWU Graduates To Develop Moral Compass; ““The sidelines are not where you want to live your life. The world needs you in the arena.”: VIMEO
  • Fashion designer Diane von Furstenberg says this is the key to success: Trusting Yourself: BI
  • Listening well in a chorus of data: Markit’s focus on quality sets it apart from its competitors, says co-founder and president Kevin Gould.: BT
  • Mozart-loving chickens may answer quest for healthier nugget: Reuters
  • 5 Challenges When Startups Move Into the Big Leagues: WSJ
  • Does body language help a TED Talk go viral? 5 nonverbal patterns from blockbuster talks: TED

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Apple CEO Tim Cook Urges GWU Graduates To Develop Moral Compass; “The sidelines are not where you want to live your life. The world needs you in the arena.”

http://www.huffingtonpost.com/2015/05/17/tim-cook-commencement_n_7301156.html

http://recode.net/2015/05/17/tim-cook-to-college-grads-dont-spend-your-life-on-the-sidelines/

http://venturebeat.com/2015/05/17/apple-ceo-tim-cook-tells-graduates-values-and-justice-belong-in-the-workplace/

http://bigstory.ap.org/article/1807cd2e9c284851b5a6adeb2f079bb4/apple-ceo-tells-george-washington-u-grads-live-values

Apple CEO Tim Cook Urges GWU Graduates To Develop Moral Compass

The Huffington Post  |  By Irina Ivanova

Posted: 05/17/2015 3:36 pm EDT Updated: 5 hours ago

Apple CEO Tim Cook urged graduating George Washington University students to follow their values and find a job that helps them do good in a commencement speech delivered Sunday. Cook talked of justice and injustice in a speech that paid homage to Martin Luther King Jr., Robert F. Kennedy and Jimmy Carter, delivered to a crowd on the National Mall in Washington, D.C., VentureBeat reported. The university expected about 25,000 people to attend the commencement exercises, according to the outlet.

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Bamboo Innovator Daily: 17 May (Sun) – The fastest way to figure out if you’re doing something truly important with your life; Inside Zappos CEO Tony Hsieh’s radical management experiment that prompted 14% of employees to quit

Life

  • Why leaders need to focus on how they treat employees: Fortune
  • The fastest way to figure out if you’re doing something truly important with your life: BI
  • Kierkegaard on Popular Opinion, the Petty Jealousies of Criticism, and the Only Cure for Embitterment in Creative Work” BP
  • LA tech guru and ex-MySpace CEO reveals the 2 keys to successful startups: BI
  • Inside Zappos CEO Tony Hsieh’s radical management experiment that prompted 14% of employees to quit: BI
  • What Art Collectors Can Learn From Art Thief Larry Salander; Advice from burned collectors, robbed of $100 million.: Barron’s

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Bamboo Innovator Daily: 16 May (Sat) – The Upright Thinkers: The Human Journey from Living in Trees to Understanding the Cosmos; Isaac Newton stuck needlelike bodkins into his eyes to better understand changes in light and color; Antoine Lavoisier drank nothing but milk for two weeks to examine its effects on his body

Life

  • It Is, in Fact, Rocket Science; Why do we reduce great discoveries to epiphany myths? NYT
  • Imagination as a Journey of Survival and Discovery: WSJ
  • Rather Than Fight or Flee, Take Responsibility: NYT
  • The Greatest Generation of Scientists: NYT
  • When Personal Tragedy Strikes, Downshifting at Work Doesn’t Always Help: HBR
  • A psychiatrist says this skill is the best indicator of a person’s ability to succeed: BI
  • The man who oversaw electronics design on Dyson’s first robotic vacuum cleaner came to Silicon Valley this week to deliver a blunt message: keep it simple and test relentlessly. EETimes
  • Where Would the Kardashians Be Without Kris Jenner? The mother, and manager, of reality TV’s most famous clan has created a strange new form of family business — and changed the nature of celebrity. NYT
  • CEO who raised the minimum wage at his company to $70,000 a year reveals the most important quality he looks for when hiring: BI
  • How removing fear can be your innovation trump card; WaPo
  • To Lead Effectively, You Must Handle Uncertainty: Forbes
  • Nikesh Arora: Tough player at SoftBank; Armed with $100 and two suitcases, he rose to the top of US tech. Now he is taking on Japan: FT
  • MIT lecturer explains 5 key skills that separate innovators from imitators: BI
  • 4 psychological tricks to instantly appear more competent: BI
  • Why Tesla employees fear Elon Musk, as told by one of the company’s co-founders: BI
  • In Praise of Moonshots: WSJ
  • The Future Is in the Quaking Swamps; the remarkable connection between Peter Thiel and H.D. Thoreau: IFG
  • Why the art market is about Piketty and Picasso; Paintings are of high value because of inequality: FT
  • How to Get People to Pitch In: We cooperate because it makes us look good. NYT
  • How to Understand Italy: NYT
  • Decoding the Enigma of Satoshi Nakamoto and the Birth of Bitcoin: NYT
  • Use Stress to Your Advantage: To perform under pressure, research finds that welcoming anxiety is more helpful than calming down: WSJ
  • How Homo Economicus Went Extinct: Consumers and investors don’t act rationally, but for generations economists have pretended they do.: WSJ

Books

  • The Upright Thinkers: The Human Journey from Living in Trees to Understanding the Cosmos: Amazon
  • The Lucifer Effect: Understanding How Good People Turn Evil: Amazon
  • Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do: Amazon
  • Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts: Amazon

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Bamboo Innovator Daily Insight: 15 May (Fri) – Mark Zuckerberg: Let your kids play video games; The Magic of Moss and What It Teaches Us About the Art of Attentiveness to Life at All Scales

Life

  • Mark Zuckerberg: Let your kids play video games: BI
  • The Diffusion of Useful Ignorance: Thoreau on the Hubris of Our Knowledge and the Transcendent Humility of Not-Knowing: BP
  • The Magic of Moss and What It Teaches Us About the Art of Attentiveness to Life at All Scales: BP
  • How to Make Use of Our Suffering: Simone Weil on Ameliorating Our Experience of Pain, Hunger, Fatigue, and All That Makes the Soul Cry: BP
  • Want a new invention? Organise a competition and offer a prize: Economist
  • Management training: Keeping it on the company campus; As more firms have set up their own “corporate universities”, they have become less willing to pay for their managers to go to business school: Economist
  • Minding the Family Store for the Next Generation: A century-old retail business lays the groundwork for succession; Only 30 percent of family businesses survive into the second generation, and only 12 percent are viable into the third. Bloomberg
  • Asia’s richest man blames ‘Western education’ for controversial son: WCT
  • If you want to be the next Menulog, you’ve got to be prepared to fail: BRW

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Bamboo Innovator Daily Insight: 14 May (Thurs) – The one thing Bill Gates understood immediately but took 20 years for Steve Jobs to realize; Warren Buffett on How he Keeps up with Information

Life

  • The one thing Bill Gates understood immediately but took 20 years for Steve Jobs to realize: BI
  • Warren Buffett on How he Keeps up with Information: Farnam
  • Happy birthday, Mark Zuckerberg! 13 quotes that show how he built the social network that took over the world: BI
  • From a college dropout to a $54 billion fortune – the incredible rags-to-riches story of Oracle founder Larry Ellison: BI
  • The real story behind Android’s little green robot mascot: BI
  • When Do You Do Your Best Thinking? How six innovators work through their work problems: Bloomberg
  • Why Hitler was such a successful orator: BI
  • Bond Trader’s Judge Asks What’s Puffery and What’s Fraud; “Our hope going forward is that people will just stop lying, about anything.”: Bloomberg
  • Elon Musk’s Space Dream Almost Killed Tesla: Bloomberg
  • The Psychology of Choking Under Pressure: NYT
  • Asian Families Slow to Consider Succession: Nearly 90% of Asia’s wealthy lack a plan to transfer control of the family business to the next generation. Barron’s
  • 11 Things Ultra-Productive People Do Differently: Forbes
  • A leader needs a sidekick: Greatness is not accomplished nobly, and the glorious achievement of Lincoln was made from muck. JA
  • A former exec realized how big Alibaba was going to be when Jeff Bezos copied part of its founder’s speech: BI
  • Picasso is not just a valuable abstract: The financial worth of any work of art remains as mysterious and unknowable as Mona Lisa’s smile: FT
  • How do you govern a disrupted world?: McKinsey

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Bamboo Innovator Daily Insight: 13 May (Wed) – Gates: 50 Years of Warren’s Wisdom; Marc Andreessen paid a midnight visit to the founders of Airbnb that ‘changed the company forever’; From pumping gas to a $6 billion fortune — the impressive rags-to-riches story of Forever 21′s husband-and-wife cofounders

Life

  • 50 Years of Warren’s Wisdom: GatesNotes
  • Marc Andreessen paid a midnight visit to the founders of Airbnb that ‘changed the company forever’: BI
  • From pumping gas to a $6 billion fortune — the impressive rags-to-riches story of Forever 21′s husband-and-wife cofounders: BI
  • Mr HDB Mr Lim Km San: He proved HDB critics wrong: AsiaOne
  • Warren Buffett tells Bill Gates why he’s such an optimist: BI
  • How playing World of Warcraft every day for a year led Robert Hohman to found a US$1 billion start-up: SCMP
  • A UK productivity evangelist with eyes on £300bn prize; John Neill believes ‘Unipart Way’ can help UK business compete: FT
  • Bill Gates, Andy Grove and Steve Jobs: The Strategies They Shared: NYT
  • What the Starbucks CEO Learned from Gen. McChrystal: Generalship is more like gardening than playing chess says the man who tracked down Saddam Hussein and al-Zarqawi.: WSJ
  • To Win People Over, Speak to Their Wants and Needs: HBR
  • What sets LeBron James truly apart? His mind. Fortune
  • The incredible life of Jimmy Choo founder Tamara Mellon: BI
  • CEO: How a small shift in my language opened up massive growth opportunities: BI
  • What Is Strategy, Again?: HBR
  • Schwarzman: Harvard Admitted Rejecting Me Was a Mistake: Bloomberg
  • Elon Musk’s childhood was ‘excruciating’ and he got beaten up a lot: BI
  • Comic book writer explains how she gets paid to make people uncomfortable: BI
  • 10 proven tactics for reading people’s body language: BI
  • Google has a secret apartment where Larry Page and Elon Musk meet to discuss crazy ideas about the future: BI
  • The world’s lust for new technology is creating a ‘hell on Earth’ in Mongolia: BI
  • Banks Rethink Common Sales Tricks: Long-acceptable trading tactics on Wall Street become potential criminal offenses: WSJ
  • Buddhist Monk in Thailand Relies on Karma for Lending Success; Microlender sets interest according to borrower’s good deeds, avoids defaults with neighborly peer pressure: WSJ
  • ‘Revolution of the Eye: Modern Art and the Birth of American Television’ Review: WSJ

Books

  • Team of Teams: New Rules of Engagement for a Complex World: Amazon

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Bamboo Innovator Daily Insight: 12 May (Tues) – Hulu founder to new grads: Don’t be afraid to pave your own road to success

Life 

  • Hulu founder to new grads: Don’t be afraid to pave your own road to success: BI
  • What’s the Point of a Professor? We used to be mentors and moral authorities. Now we just hand out A’s. NYT
  • How to spot a compliment with an ulterior motive: BI
  • Words in Japanese that describe timing and conditions make it easy for speakers to be incredibly precise using very few words. JT
  • The 22 most memorable quotes from the new Elon Musk book, ranked: WaPo
  • 15 Words of Wisdom on Finding an Edge: JJ

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Beyond Ordinary Succession to Transgenerational Legacy: The Berkshire Hathaway Way to Identify Asian Family Innovators from the German Louis Deal

 “Bamboo Innovators bend, not break, even in the most terrifying storm that would snap the mighty resisting oak tree. It survives, therefore it conquers.”
BAMBOO LETTER UPDATE | May 11, 2015
Bamboo Innovator Insight (Issue 82)

  • The weekly insight is a teaser into the opportunities – and pitfalls! – in the Asian capital jungles.
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Dear Friends,Beyond Ordinary Succession to Transgenerational Legacy: The Berkshire Hathaway Way to Identify Asian Family Innovators from the German Louis Deal“I like it that we have cracked the code in Germany.. I would really be surprised if we don’t make at least one deal in Germany in the next five years. I’ve had probably four or five letters in the last couple months, ever since the Louis deal was announced. We’re eager, we have the money, and we do fit the family situation occasionally. Prices may be a little more attractive than in the US.. We would like more companies from around the world to buy.”– Buffett at the Berkshire Hathaway AGM 2015Ordinary succession describes processes, family and successor attributes that characterize the transfer of ownership and control, but does not explain how features and conditions of entrepreneurship can be transferred and how succession can be performed to ensure transgenerational legacy. Thus, whether a professional manager or a family member is chosen as the successor is of second-order importance in accomplishing transgenerational entrepreneurship unless a missing essential ingredient is first established.This missing ingredient can be found in Detlev Louis Motorrad-Vertriebs, Berkshire’s first ever direct investment in a family business innovator in Europe in Feb 2015. The Detlev deal is essential in not only understanding the essence of “Berkshire Beyond Buffett”, but also offers an update to Buffett’s 1996 “An Owner’s Manual” to guide value investors in asking a different sort of right questions in determining whether the wide-moat characteristics of a business can endure beyond ordinary succession to transgenerational legacy, as well as to identify potential family innovators in Asia which we will highlight later with the case of Japan’s low-profile innovator Workman Co (7564 JP, MV $1.1bn) with a similar business model to Louis.First, a deceptively simple question: Why would you want to buy a family business that wants to sell itself? Families’ commitment to entrepreneurship declines precipitously once control is passed from the founding to later successive generation. Also, the really good ones will not want to sell out. If so, how to attract the really good ones to come to you – voluntarily?

When the late German entrepreneur Detlev Louis passed away in Oct 2012 at the age of 93, the eponymous-named firm endured and continued to grow to extend its as Europe’s #1 for motorcycle clothing, helmets and accessories with 74 stores in Germany and Austria and annual sales of Euro 270m. This was despite the setback of the sudden death of the second generation Stephan Louis in Jul 2011 due to heart attack at the age of 57, as well as changing consumer dynamics with the disruption of online ecommerce that bankrupted its rival Polo in Dec 2011.

The wide-moat characteristics of Detlev Louis that attracted Buffett to pay $450m is a microcosm of Berkshire Hathaway, itself a collection of companies acquired over the past 50 years to propel it to eclipse General Electric to become the largest conglomerate in the world worth $365bn and perched at #4 in the Fortune 500 list. Berkshire’s essence is that of a family business innovator, run by executives who consider themselves owners nurturing the company for the next generation, rather than hired hands. And sellers of businesses sometimes sell out to Berkshire at a price less than what they could have received elsewhere.

When asked in 2008 why family business owners would want to sell to Berkshire, Buffett quipped:  “You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever. Or you can sell it to some pawn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.” In other words, Berkshire offered the family businesses and entrepreneurs a sense of a permanent home and the autonomy to continue running the business, as argued by Lawrence Cunningham, author of the insightful book Berkshire Beyond Buffett. And this distinctive corporate culture of permanence and decentralized autonomy has been a core set of values and the glue that unites Berkshire’s bewildering variety of companies, such that bigger is not riskier and there isn’t the (steep) holding company discount to its book asset value.

Louis

Top Left: The late Detlev Louis in a photo with his congenial wife Ute; Top Right: Buffett the biker at the AGM; Bottom: Workman (TSE: 7564 JP) Stock Price Performance 1997-2015

Buffett and Munger also emphasized the point of Berkshire’s culture at the AGM 2015:

Shareholder question from Lawrence from Germany: “You are heralded for your integrity. How can investors judge the state of Berkshire’s culture long after the two of you are gone?”

Buffett: “I think you will be very pleased with the outcome. I think BRK’s culture runs as deep as any large company should. A few days ago, the company closed on a transaction in Germany. The owners had spent 35 years or more building a retail business… it’s a vital part of Berkshire to have a clearly defined, deeply embedded culture that pervades the company. Once Charlie and I aren’t around, it will be clear that it’s not a force of personality, that it’s institutionalized.”

Munger: “As I said in the annual report, I think BRK is going to do fine after we’re gone. In fact, it will do a lot better… but at any rate, it will never again at the rate it did in the early years. There are worse tragedies in life.”

Underlying the corporate culture traits at Berkshire is the “missing ingredient” that we hope will help spark the generation of deeper questions in understanding the persistency of wide-moat: Imprinting.

Imprinting is a learning process that initiates a development trajectory that produces persistent outcomes. Building on the work of Stinchcombe (1965) in his work “Social Structure and Organizations”, organizational research on imprinting has highlighted the enduring impact of prior history on organizational outcomes by demonstrating how organizations assume elements of their environment that persist well beyond their founding phase. Imprinting has to take place and take root before the succession process can become successful.

We have observed that transgenerationally entrepreneurial families possess entrepreneurial legacy, the reconstructed narratives of the family’s entrepreneurial behavior and resilience that motivate and give meaning to entrepreneurship with today’s risks in perspective, motivating current and next-generation leaders to engage in strategic activities that go beyond ordinary succession and thereby nurture transgenerational legacy. Actions that leaders take and routines that develop during periods of environmental stress and organizational change, such as frugality in spending and calculated boldness in expansion during a severe recession, lead to profound differences in structures, strategies, and product offerings that become “imprinted” in that they persist over time. Transgenerational entrepreneurial family firms are stronger and quicker in creating new products and services as niches develop, enter new markets, adopt new technologies, and implement new ways of organizing business activities.

At Louis, the imprinting over the years enabled the firm to endure the death of both the founder and the second-generation. Founded in 1936 as a small repair shop and built by Detlev since 1946, the firm was a pioneering innovator in multi-channel sales offering an extensive range of over 32,000 products, launching its first motorcycle accessories mail-order catalogue in 1967. This was a time when motorcycle was pushed massively into the background by the car. But Detlev believed in the unique fascination with motorcycling in which he developed tuning and accessories for his races. The wide range of products, reasonable prices and almost always good services made the consumer experience at Louis more enjoyable, garnering it a loyal customer base of a million mostly very satisfied customers. The popularity of Louis stores prompted the development of a modern logistics center with conveyor technology in 1991 to supply its growing network of store branches. In 1997, the reach into the consumer was extended by online trade which generated around 20% of its sales in 2014. Throughout its history, Louis has taken care to imprint the values of economic foresight, openness to new ideas, hard work and excellent people management into its corporate culture and into its successors Nico Frey and Joachim Grub- Nail. Thus, value investors can utilize the imprinting idea to generate interesting general questions to assess the sustainability of the wide-moat beyond ordinary succession. These include:

  • What was the breakthrough or innovation story in the corporate history (eg first motorcycle accessories catalogue) that enabled the company to grow and differentiate itself amidst the competition? Did the founder and management sought to imprint the intangible values (eg determination and economic foresight in establishing multi-channel sales) in the culture?
  • How did the firm cope during environmental stress (eg online ecommerce threat, price war amongst rivals), organizational change (death of second generation), and periods of expansion (eg complacent vs sober in setting up the modern logistics center)? Were the intangible values (eg frugality in spending, openness to new ideas, boldness) imprinted?

To run a distribution and store network effectively takes a decentralized “core-periphery” system, an essential source of “emptiness” in Bamboo Innovators in which fibers of greatest strength occur in increasing concentration toward the periphery of the bamboo, a powerful architecture from a builder’s viewpoint. At the “periphery”, the Louis stores have penetrated into the hearts of the motorcycle culture. At the “core”, the centralized support of the modern logistics center enabled the vitality of the stores to provide a comprehensive range of products with efficient inventory and working capital management. The core-periphery business model at Louis is a microcosm of Berkshire itself: Operating managers at the “periphery” like Louis with autonomy in doing their jobs are greatly motivated by the trust and empowerment to outperform. The operating subsidiaries are all united by the distinctive corporate culture and values at the “core”.

Are there similar Louis in Asia? How can value investors use imprinting and the core-periphery business model to identify these family innovators?

One such transgenerational Bamboo Innovator is Japan’s Workman Co (7564 JP, MV $1.1bn), dubbed the “Uniqlo of workwear market” and owned by the Tsuchiya family with a majority control of over 52%. Established in 1982 as an “artisan workshop” in Gunma prefecture, Workman is a specialty retailer of work uniforms and related goods including work gloves and safety shoes, operating 700 stores (both its own stores and franchised stores) in 41 prefectures in Japan, generating around $49m in profits from $404m in sales in FY14. Since its listing in 1997, it has compounded over 600% as compared to a flattish Nikkei 225 index.

Like Louis, Workman offers a wide range of over 7,500 items that meet customers’ needs.  Workman uses sales data and other feedback from its outlet managers to jointly develop with manufacturers its own brand of products that are tailored to meet specific customer needs and price demands, in the same way that Uniqlo is both developing and making its products. Own-brand products make up over 60% of Workman’s product line-up. The remaining products sold are purchased from manufacturers produced nearly exclusively for it at low prices in exchange for assuming risks of stock valuation losses. The firm enjoys economies of scale as the number of its outlets has increased substantially. In addition, the firm has found ways to effectively reduce costs by procuring goods from overseas and by using private brand products, especially for consumable supply goods. For instance, a set of dozen cotton work gloves is priced at around ¥160, half of the regular market price.

Workman is a member of the low-profile unlisted Beisia (Iseya) group of companies, a large distribution group founded in 1958 in the northern Kanto region with ¥8,300bn ($69bn) in group sales, making it one of the top 20 business groups in Japan. which also includes the shopping mall chain Beisia (107 stores in Tokyo metropolitan area), the home center Cainz (188 stores throughout Japan), the convenience store chain Save On (582 stores in Kanto district), car parts and accessories chain AutoR (60 outlets). Yoshio Tsuchiya is the chairman of Workman since 1984 and is also chairman of Beisia since Jun 2009. Like Berkshire and Louis who have imprinted distinctive values into the culture, the Beisia group imprinted the unconventional idea in hierarchical Japan of a profit-sharing system in 1967 and was an early pioneer in adopting the IT system to be more efficient in its inventory management in 1974. Beisia was also an innovator in management system with the overseas training system in 1975. Beisia opened its modern Isesaki logistics and distribution in 1980, followed by the Tokyo Information Center in 1984 in the application of data analytics of supplier and consumer intelligence.

Importantly, Workman has the core-periphery business model in applying the know-how at the “core” of the Beisia group to maintain efficient systems for distribution, inventory management and information gathering and application. Due to its clout and dominance, Workman receives income in the form of centre fees from…

There is an interesting story imprinted about the frugal culture, the mechanism and unconventional measures built and maintained throughout the company’s history that allows Workman to sell products at amazingly low prices. In its new product presentation launches in which Workman unveils new products to the owners of its franchise stores, the highlight of the presentation event is a fashion show featuring new work wear. All of the models that appear in the show are young people who are Workman’s newly recruited employees. “It would cost about 100,000 yen to hire one professional fashion model for the show. So we use our employees instead,” said Workman’s president with an unconcerned look. Workman is determined to cut costs whenever it can do so. There is simply no room for compromise about this.

Indeed, there is no compromise at Workman, the low-profile Asian Bamboo Innovators, and BRK’s operating businesses in imprinting these BERKSHIRE values elucidated by Cunningham and value investors will do well by observing and assessing the imprinting to identify the longevity of the wide-moat innovators:

Budget conscious, as in thriftiness

Earnest, as in keeping promises

Reputation, as in personal and corporate integrity

Kinship, in terms of legacy and a family orientation

Self-starters, as in entrepreneurial behavior

Hands off, as in delegating decisions and responsibility

Investor savvy, in terms of capital investment

Rudimentary, as in easy-to-understand businesses

Eternal, as in a long-term perspective

Warm regards,

KB

The Moat Report Asia

www.moatreport.com

http://accountancy.smu.edu.sg/faculty/profile/108141/KEE-Koon-Boon

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This month, we highlight a wide-moat innovator who is the #1 in Asia in a patented automotive electronics part that is part of the fast-growing Advanced Driver Assistance System (ADAS) market worth >$22bn by 2018, doubled from $11bn in 2014. The ADAS market is driven by more stringent safety requirements from governments forcing the automotive industry to develop automotive electronics solutions to increase vehicle safety. [Company’s name] is the third-largest in the world behind Valeo (FR EN) and Bosch. It has >50% market share in new cars sold in China, and the installation rate of this ADAS product on China’s auto is still low (35%+ on new cars vs 80%+ in developed markets). Established in 1979 by founder and Chairman Mr. C, [Company’s name] is one of the rare Tier-1 automotive suppliers in Asia to major OEM car makers that include Ford, GM, Daimler, Hyundai, Nissan, China’s top 10 auto companies such as Great Wall Motor, thereby directly shipped to them and involved in their R&D processes and early stage processes of concept car design and prototyping, creating a pre-emptive advantage in winning new orders. Over the past 36 years, [Company’s name] has forged formidable competitive advantages in scale, product quality, technological know-how and R&D capabilities and in May 2012, [Company’s name] outgunned illustrious industrial automotive giants Valeo (founded in 1923) and Bosch (founded in 1886) to sign a breakthrough global 10-year contract with GM, with the commencement of worldwide shipment to 18 countries and 25 factories at the end of 2016.

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Bamboo Innovator Daily Insight: 11 May (Mon) – People laughed at this entrepreneur’s idea – now it’s a $500 million business, thanks to his mom’s encouraging words

Life

  • People laughed at this entrepreneur’s idea – now it’s a $500 million business, thanks to his mom: BI
  • How The HondaJet Took Flight: An Engineer’s 29-Year Obsession: Forbes
  • From New Zealand to Pittsburgh, a Moneyball Approach to Helping Troubled Kids; In a program pioneered in New Zealand and arriving soon in Allegheny County, Pennsylvania, social workers use data to figure out who’s most at risk. Bloomberg
  • How Uncertainty Fuels Anxiety: An inability to live with life’s unknowns can lead to worry and distress. Atlantic
  • Your Brain Is Primed To Reach False Conclusions: 538
  • Will White-Collar Work Get an Uber Disruption? Bloomberg
  • How To Improve Self-Esteem: A New Secret From Research: Barker
  • Celframe billionaire Arun Pudur is Asia’s wealthiest entrepreneur under 40; the software firm now produces the world’s second most popular word processor after Microsoft: AsiaOne

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Bamboo Innovator Daily Insight: 10 May (Sun) – Presidents, Mother’s Day and American Tradition

Life 

  • Presidents, Mother’s Day and American Tradition: Forbes
  • Creating grit in students; What if the secret of success is failure? Should an educator ever cause a student to feel frustated, even to fail?: JP
  • Gen. Stanley McChrystal’s Lessons Learned: Five years after his firing, the former U.S. commander in Afghanistan on modern warfare, Islamic State and applying military lessons to the business world: WSJ
  • Rodents Could Predict the Next Big Quake: bloomberg
  • How Hells Angels and criminal gangs came to control much of the Vancouver docks: NP
  • Is the Game Hive the Next Chess? The game Hive, in which players control bugs of different types, has unique tactics, but it echoes some concepts from chess: WSJ

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Bamboo Innovator Daily Insight: 9 May (Sat) – 25 daily habits that will make you smarter; The Navy SEAL Art of War: Leadership Lessons from the World’s Most Elite Fighting Forc

Life

  • 25 daily habits that will make you smarter: BI
  • 9 Ways Mentally Strong People Prevent Self-Pity From Sabotaging Their Success: Forbes
  • How one woman survived a bad career break, then launched a life-changing business; The inspiring, never-say-die story of Homa Dashtaki and White Moustache yogurt.: FastCo
  • How to be good: Biologists and philosophers offer different answers on how to help altruism flourish. By Stephen Cave: FT
  • How WisdomTree’s Jonathan Steinberg Made Good on a Second Chance: NYT
  • The Life of the Mind: Can biographies really help us understand the scientific ideas that shape our world?: WSJ
  • Boyz II Men’s Nathan Morris And Shawn Stockman, On Their Formula For Success: Forbes
  • Behavioural economics has made headway, but still has a long way to go: Economist
  • The long hard task of America’s founding fathers: Economist
  • Tired Of Recruiting’s Broken Image, Airbnb Rewrites The Playbook: Forbes
  • Scents of Smell Rooted in Math: Nose knows different odors, no matter how powerful, thanks to predictable patterns transmitted to brain: WSJ
  • How Our Brains Judge Crime Cases: WSJ

Books

  • The Navy SEAL Art of War: Leadership Lessons from the World’s Most Elite Fighting Force : Amazon, BI

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Bamboo Innovator Daily Insight: 8 May (Fri) – What 13 highly successful people read every morning: Buffett reads the Wall Street Journal, the Financial Times, the New York Times, USA Today, the Omaha World-Herald, and the American Banker in the mornings

Life

  • What 13 highly successful people read every morning: BI
  • Danger of doing the right thing; We all have a moral accounting system. We need to become aware of the process, and learn to stay the repeat the good: KT
  • 11 years ago, a mom wrote one letter a day to her daughter to help her through 6th grade – and her advice is timeless: BI
  • Competing With Ordinary Resources: MIT
  • 10 Core Questions That Will Tell You If You’re Ready To Become A Thought Leader: Forbes
  • Here’s how standardized tests like the SAT have poisoned America’s classrooms: BI
  •  Twitter CEO Dick Costolo Q&A: What to Do When People Say ‘You Suck’: Bloomberg
  • Chess champion Magnus Carlsen told us how he decides to make a move, and it’s not what we expected: BI
  • The eight essentials of innovation; Strategic and organizational factors are what separate successful big-company innovators from the rest of the field. McKinsey
  • Dogbert Explains ‘Diversification’ In Today’s Market: Zerohedge
  • Daniel Loeb Criticizes Warren Buffett, in a Rare Public Swipe: Hedge-fund investor Loeb sees a ‘disconnect’ between words and deeds of esteemed Berkshire CEO: WSJ
  • Learning the Language of Indirectness: HBR
  • What Big Companies Get Wrong About Innovation Metrics: HBR
  • How to Give a Killer Presentation: HBR
  • Warren Buffett Under Attack On Multiple Fronts: Forbes
  • Kynikos Associates Jim Chanos thinks the weak minded follow personalities, while the strong follow ideas: VW
  • In the NBA, No Job Is Safe; Why winning coaches are still getting fired despite success on the sidelines: WSJ
  • My Number One Advice for Startups or VCs: Conviction > Consensus: BSOTT
  • Why Compassion Is a Better Managerial Tactic than Toughness: HBR

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Bamboo Innovator Daily Insight: 7 May (Thurs) – Questions of Character: Illuminating the Heart of Leadership Through Literature; What Hollywood Can Teach Us About the Future of Work: The winners will have curiosity, creativity and more tools available to help them connect with their audience

Life

  • What Hollywood Can Teach Us About the Future of Work: The winners will have curiosity, creativity and more tools available to help them connect with their audience: NYT
  • CEO of the Bill & Melinda Gates Foundation explains the most important leadership lesson she’s ever learned; Sue Desmond-Hellmann: Helping People Find Their Sweet Spot: BI, NYT
  • Baby Buffett: Will Bill Ackman Resurrect The Ghost Of Howard Hughes And Build A Corporate Empire?: Forbes
  • Forbes think Bill Ackman might be the next Warren Buffett: BI
  • 10 lessons to learn from world’s fastest growing startups: Dailysocial
  • Hargreaves Lansdown founder: ‘Most fund managers are complete morons’; Peter Hargreaves, who became a billionaire by selling funds, has made an outspoken attack on the managers who run them: Telegraph
  • How Not to Drown in Numbers: The key question isn’t “What did I measure?” but “What did I miss?”: NYT
  • These are the richest billionaires in every European country – and how they made their money: BI
  • The World’s Largest Companies: Forbes
  • Volkswagen battle highlights contrast between family-run firms in Asia and Europe: SCMP
  • The origin of complex life: Shape-shifters; The ancient ancestors of animal and plant cells have just been identified: Economist
  • We can already send thoughts from one brain to another – and that might eventually let us download skills: BI
  • Op-Ed: Dear startup founders, don’t be thankless; Founders should not forget that along with the huge sums, comes an obligation to act responsibly: e27
  • Is this the rudest CEO resignation letter ever?: Telegraph
  • Relying on Product Reviews? Knowing How a Company Treats Its Customers Is Just as Valuable: NYT
  • Get in the Right State of Mind for Any Negotiation: HBR

Books

  • Questions of Character: Illuminating the Heart of Leadership Through Literature: Amazon

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