IKEA, Munger, 2020's Best Podcasts, and Yen Liow
"How successful you are is a function of how you deal with failure."
Happy holidays! Welcome to issue #2. As always, excited to share what I’ve been reading, learning, and compressing. Hoping this can be a huge value to you too.
Here’s the format of today’s email:
Part 1: Ingvar Kamprad’s (IKEA founder) Testament
Part 2: Charlie Munger’s Zoom Talk at Caltech
Part 3: Best Podcasts of 2020
Part 4: Under the Spotlight: Yen Liow
Part 5: Bonus Quirky Content - Something to Read, Watch, and Listen
The Testament of a Furniture Dealer by Ingvar Kamprad, IKEA founder
Came across this neat document this week (link). They’re IKEA’s principles, yet can apply to running any kind of business.
The product range – our identity
The main emphasis must always be on our basic range – on the part that is “typically IKEA”. It must reflect our way of thinking by being as simple and straightforward as we are ourselves.
The ΙΚΕΑ spirit – a strong and living reality
The true IKEA spirit is still built on our enthusiasm, from our constant striving for renewal, from our cost-consciousness, from our readiness to take responsibility and help out, from our humbleness in approaching our task and from the simplicity of our way of doing things.
Profit gives us resources
Profit is a wonderful word! Let us start by stripping the word profit of its dramatic overtones. It is a word that politicians often use and abuse. Profit gives us resources. There are two ways to get resources: either through our own profit, or through subsidy. All state subsidies are paid for either out of the state’s profit on operations of some kind, or from taxes of some kind that you and I have to pay. Let us be self-reliant in the matter of building up financial resources too. The aim of our effort to build up financial resources is to reach a good result in the long term.
Reaching good results with small means
Wasting resources is a sin. Expensive solutions to any kind of problem are usually the work of mediocrity.
Simplicity is a virtue
Exaggerated planning is the most common cause of corporate death. Exaggerated planning constrains your freedom of action and leaves you less time to get things done.
Doing it a different way
By always asking why we are doing this or that, we can find new paths.
By refusing to accept a pattern simply because it is well established, we make progress.
Concentration – important to our success
"The general who divides his resources will invariably be defeated." Focus resources and concentrate for maximum impact.
Taking responsibility – a privilege
Making mistakes is the privilege of the active – of those who can correct their mistakes and put them right. Our objectives require us to constantly practise making decisions and taking responsibility, to constantly overcome our fear of making mistakes. The fear of making mistakes is the root of bureaucracy and the enemy of development.
Most things still remain to be done. A glorious future!
Happiness is not reaching your goal. Happiness is being on the way. It is our wonderful fate to be just at the beginning. The positive joy of discovery must be our inspiration in the future.
Most of the job remains to be done. Let us continue to be a group of positive fanatics who stubbornly and persistently refuse to accept the impossible, the negative. What we want to do, we can do and will do together.
Charlie Munger’s Zoom Talk at Caltech
Good investing requires a weird combination of patience and aggression and not many people have it. It also…requires a big amount of self-awareness and how much you know, and how much you don’t know. You have to know the edge of your own competency. And a lot of brilliant people are no good at knowing the edge of their own competency. They think they’re way smarter than they are. And of course, that that’s dangerous and it causes trouble.
Classic Charlie. One thing I miss due to the pandemic is all the content, videos and speeches we usually get from conferences. So this will do for now. Check out the full transcript here (link).
Every week I share compilations, some resources, and interesting links.
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Best Podcasts of 2020
How successful you are is a function of how you deal with failure. If you deal with failure well and persist, you have a higher probability of being successful.
So what drives Bill Ackman?
Independence. Independence financially, independence to say what you think, and independence to live the life you want to live.
The ideal would be to make money with your mind, not with your time. So if I can just make one good decision a year, and that makes me all the money that I need for that year, then that’s perfect. And that’s the way it should be, because we’re living in an age of infinite leverage and your judgment just gets multiplied through this massive force multiplier through code, capital, community, labor, what have you.
Just an absolute banger of a podcast. Nearly 2 hours long but wish it was longer!
All media industries are a product of content, business model, and technology. The technology usually comes first, that informs the business model, and that drives content.
One of my big takeaways from this one was, get after it. Don’t wait for opportunities to fall into your lap. Create them yourself.
My feeling was you have to drive, you have to work. You cannot be a victim, you cannot wait for the phone to ring. You have to go out and generate and get your brand out there and get going.
Want a lot of good suggestions? I’ve compiled the tweet below.
Want some obscure suggestions? I’ve compiled the tweet below too!
Under the Spotlight: Yen Liow
Each week I provide a little spotlight on an investor or operator I admire.
Yen Liow (@yliownyc) is this weeks focus, in a nutshell:
Born in Kuala Lumpur, Malaysia. Son of a dentist and a middle school teacher.
Immigrated to Australia when he was five. Best friend growing up was Richard Gunn, son of transport and property magnate Peter Gunn, with Peter initially mentoring and teaching Liow.
MBA from Harvard Business School and is a former Adjunct Professor at Columbia Business School.
Currently Managing Partner at Aravt Global, a fundamental global equity investment firm in New York.
Super interesting, albeit private-ish, guy. Admittedly I’m still trying to read up and learn as much as I can. For me personally, it’s always cool seeing an Aussie do amazing work!
Yen’s 5 Pieces of Advice for Students interested in Investment Management
ea (Polynesian word for personal sovereignty)
You have to completely own your journey. Be accountable for your training and your path and don’t cede that responsibility to anybody. Be proactive and relentlessly invest in your own training. The quality of your lives literally depends on this decision. You have to own it.
Do a speed-reading course.
We read a lot in this business. Effective reading is a highly learnable skill and it takes less than eight hours to become good at it. It is a huge advantage over time. Besides all of the work-related reading I do daily, I try to read 70-100 books a year. I do not read this much because I was born with any special skill – it was a skill I learned 25 years ago and I make time to use it.
Do case studies.
Deeply study the best and worst investments in history. Even better, do it with a bunch of friends. Learn in clusters. This business is about pattern recognition. The more cases you do, the more you can create conviction around pattern recognition. This is how you learn in dog years. You need to be deeply prepared for luck to be successful.
Be prepared for the emotional side of this game.
I don’t think anyone can fully express to you how emotionally demanding this business can be at times, and if you are not emotionally aligned for the game, it can be very painful. It’s the best business in the world for those who are curious and emotionally resilient. There are lots of ways to make money, but it is really important to find one that fits well with the way that you are built emotionally. You have to discover it as early as you can. Markets are a very expensive place to find out who you are. I think authenticity and selfawareness are absolutely crucial for success and the more time you are introspective about what drives your emotions, the stronger you will be. I don’t think this is something you can work out in school. It is something you just have to come to the business to learn.
Do not fear your mistakes.
When you enter this industry, you will fail more often and with fiercer intensity than you ever have before. Do your best to fall forward. Learn and move on. Most of what I have shared with you was learned from mistakes I have made (and I have made a lot of them). Just do not let them stop you. - Graham & Doddsville Spring 2019 issue
Bonus: There’s a BizCard for his podcast episode!
Yen Liow CBS Class - Mastery: Learning How to Learn [90 mins]
Finally, here’s my wish for you. You find your why, you work out your how. You choose a game wisely that you find fulfilling. Don’t just choose success, seek fulfillment. Learn to lead yourself and then others. Surround yourself with peers you admire and respect. Acquire mentors who show you the path or assist you, and then learn like crazy, work like crazy, and win like crazy. I hope you embrace and enjoy the struggle that is the journey of excellence.
Yen Liow has been my favourite investor I found out about in 2020. I hope you might share some of my enthusiasm and can learn something too.
I think investing is the best business in the world. You’re getting paid to learn. I literally think it is Disneyland for curious and competitive adults. It’s a true privilege to be in it. - Graham & Doddsville Spring 2019 issue
Bonus Quirky Content
Something to read: Eat A Peach: A Memoir by David Chang
One of my favourite books this year. If you like Anthony Bourdain’s books you’ll like this. Chang’s 33 rules for becoming a chef at the end of the book are worth it alone. Seriously, these rules are unreal, and applicable to a lot of jobs, not just being a chef.
Rule 17. Don’t edit in your head.
A man of genius makes no mistakes. His errors are volitional and are the portals of discovery. — James Joyce, Ulysses
Let me build on something I’ve said multiple times in this book: there are bad ideas, but all ideas are worth chasing. Sometimes when you’re sure a certain idea will be a failure, you end up surprising yourself and it turns out better than you thought. But I promise that if you take the idea as far as you can and try as many ways of getting there as possible, at some point you will learn something that makes it worthwhile. I see so many young chefs who dismiss a thought without first seeing how it turns out. Every dish and service is an opportunity to collect data. It’s only a mistake if you don’t learn from it
Something to watch: Jackie Chan - How to Do Action Comedy [9 mins]
I’m a sucker for a good video essay. And this one is probably my favourite.
Bonus: I’ve made a YouTube playlist of video essays. [Link]
Jackie’s style always ends with a real payoff for the audience. By fighting his way from the bottom, he earns the right to a spectacular finish.
He doesnt win cause hes a better fighter. He wins because he doesn’t give up. This relentlessness makes his finales really impressive and really funny
Something to listen to: Val & Annie Hollingsworth - 7th Gen Hollingsworth & Vose - Manufacturing Innovation Since 1728 [The Business of Family] [62 mins]
Not every day you get to hear about a 7th generation family company. Especially one so heavily involved in R&D and innovation. Interesting hearing how they manage the choppy waters of an old family company.
Ultimately, you have to trust other people to become the real experts and get in-depth, so it’s more a matter of helping find and develop the right people and giving them what they need
Until next week, have a good one!
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