Outsiders, one of the greatest investment books for managment team


I recently re-read several investment books and found that one of them is worth recommending to everyone — “Outsiders“. After reading it these few days, I thought it was great, so I hurried to find out the record of my previous reading, and found that I had read this book before, but I didn’t care about it before.

Table of Contents

Reasons to recommend “Outsiders”

I would recommend this book for the following reasons:

  • This is a rare book on the market that specifically discusses how the management team (including board of directors, directors, chief executives, chief financial officers, chief operating officers, etc.) of listed companies in the US can successfully run a listed company, “specially from investors view”.
  • The eight chief executives discussed by the author are all large listed companies in the US stock market, and each of them is very successful.
  • This is not a book published by the company itself. Regardless of Asia and foreign countries, Taiwan is particularly serious. Every day a large number of biographies of business founders are listed, and they all sell great (I personally think this is like a tax on the IQ of everyone). Most of these are commissioned by large-scale business essays from public relations companies. The content is the same as the founder’s formula from childhood, working from childhood, being bullied in school, working hard, overcoming adversity, and reversing life. I rarely read books of this kind, and personally only read the biography of the author, the CEO himself. As for how to divide it up, it was not written by myself, rather than written by someone else or a cheerleader, or a public relations essay made with money. I can only say that if you read many enough before, you will be able to judge whether the biography in your hand is by the founder himself or not.
  • The focus of this book is to explore the factors behind the success of business operations. The author found that some of them have great things “in common”. By studying this book carefully, we can find out companies that can succeed in the future and improve the effectiveness of your investment.
  • In the venture capital industry, there is a common golden rule in the industry. “We invest in the founders, which are far more important than the company’s products”. The focus of this book is on business operators, not on business, or financial engineering, not to mention operating indicators that most people think.
  • Buffett rarely recommends finance books, but he recommends this one.

Common characteristics of these chief executives

The author found that most (not all) of these 8 executives have the following common points:

  • They are all masters of capital allocation and think this is one of the chief tasks of the chief executive.
  • All of them attach great importance to corporate cash flow, which is more important than earnings per share.
  • Most of these companies don’t like to distribute dividends.
  • Most of these executives believe that stocks repurchase is an important means to enhance the intrinsic value of a company.
  • Do not conduct mergers and acquisitions just for the sake of mergers and acquisitions, and do not believe that the unspoken rules (they resist) of the business world can only expand the scale of enterprises through mergers and acquisitions.
  • These executives were very low-key, frugal life, rarely interviewed, did not have a beautiful corporate headquarters, and did not have strong redundant staff and financial advisors.
  • These chief executives have been in power for a long time, are supported by strong inner beliefs, insisted on their own opinions, and did not easily compromise with the world. Later, they all proved that they were right.
  • Extremely rational, focusing on the long-term development of the company.

The companies mentioned in the book

Some of the companies mentioned in the book are now out of the market, or are no longer on the spotlight. But the experience is still useful, and it is very rare practical business experience. include:

  • Henry Singleton of Tyler Dyne (ticker: TDY): I especially recommend that you study this person and the growth history of this company; because this chapter is the focus of this book.
  • Warren Buffett of Berkshire (ticker:s BRK.A and BRK.B)
  • Tom Murphy of Capital Cities/ABC: Buffett has repeatedly praised Tom is one of the best manager. Capital Cities/ABC was finally merged into Disney (ticker: DIS).
  • Bill Anders of General Dynamics (ticker: GD). Anders bring this defense industry giant back to life.
  • John Malone of TCI (ticker: TCOMA): EBITDA was originally invented by this man.
  • Kathleen Graham of the Washington Post : The Washington Post was later sold to Jeff Bezos, the founder of Amazon (ticker: AMZN).
  • Bill Stilitz of Purina: Purina was acquired by Nestlé (ticker: NSRGY).
  • Dick Smith of General Cinema: Has been acquired by AMC Cinemas (ticker: AMC).
credit: Amazon.com

The value of this book

I have read a lot of financial books, but books that really discuss the management of listed companies in the U.S. stock market, not too many. Moreover, the author of this book has spent some time and discovered that these CEOs have many common points. These common points are the key to the success of super-excellent companies. Of course, this is not a coincidence — This is what I have always emphasized: There is no formulas in investment, but there are methods, this book is one of the methods I call.

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