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May30
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Know More:
Warren Buffett Berkshire Hathaway, Business Culture, Business Fundamentals, Business Leaders, Business Reputation, commodity business, Focus, Great Leader, Great Managers, Making Decisions, Management Style, Motivation, Understand Your Business
Banking: "If you can just stay away from following the fads and making bad loans, [it] has been a remarkably good business."
Is there anything different in investing than there is in business as far as the quality of decisions go? Not really. That's part of the point Warren Buffett makes in talking about banking as a business and investment possibility.
With investing, most people know that you don't throw a large part of your money into things like options and commodities, they're almost impossible to guarantee any success with. Only the very best experts in these fields know how to make money with these. And even if you hired the best to advise you, you would still only take a small percentage of your capital to invest there.  That's similar to what Buffett is saying about fads above: we need to stay away from them, no matter what business we're in. As far as banking goes, I lived in Texas when the Savings & Loan business fell, and it was unbelievable the risk these financial institutions had taken in reference to the oil industry. The whole thing almost collapsed; it would have if not for government intervention. This is all connected to the lure of fads.
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May30
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The Strategies that made Mary Kay Successful - 2Limiting the Product LineLast post we talked about the value that comes from limiting the product line a company offers. The value in that was the ease in which sales reps could...
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The 8th U.S. Circuit Court of Appeals at St. Louis overturned a ruling by a federal judge in Arkansas, saying that reassigning a worker to a lower-paying job after injury wasn't discriminatory by Wal-Mart (WMT).What the case dealt with was...
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“If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction.”In the current climate of instant communications over a variety of platforms, the way we view business...
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May29
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GE in the 1990s was all about looking outward. We traveled to other companies constantly to bring back best practices. It is one of the great ways to multiply the intellect in your organization.Many times a business can get its...
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When considering if Republican candidate for President of the United States, Ron Paul, would be good for business, I want to focus on one small, but important part of the picture: his opposition to federal interference in the market process.I...
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The offer by Rupert Murdoch and News Corp. (NWS-A) may have set off a series of events that could pit family members against one another and result in numerous lawsuits if depending upon decisions that are made.There are already different...
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The Supreme Court upheld a ruling by the United States Court of Appeals for the 11th Circuit, in Atlanta, to overturn a jury award to Lilly Ledbetter against Goodyear Tire and Rubber Company.The award overturned was for over $3 million...
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May28
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"It's not a healthy state not to grow - from the investment, employee, or strategic standpoint."Growth in business is a vast area that can be explored from numerous ways of looking at it. With Grove, he was talking here about...
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"To establish credibility we took a different approach to marketing ... we marketed the destination hard. Not just ads identifying the cities we served, but also here are the reasons you should be visiting those cities." This is a great...
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"Good ideas are too scarce to be parsimonious with."Parsimonious means stingy, frugal or conservative. When Buffett talks about the mistakes he has made throughout the years, most the time it is on the "parsimonious" side, rather than the other way...
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The Strategies that made Mary Kay Successful - 1Mary Kay had spent years in sales and direct sales before she started her company. There were a number of things she learned that she knew had to be a part of...
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Wal-Mart has partnered with the Bharti Group, led by chairman Sunil Bharti Mittal, to bring Wal-Mart (WMT) into India.The details of the partnership are being forged at this time, as in the beginning it will be a cash-and-carry (wholesale) joint...
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May27
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“I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work. I don’t know if you’re born with this kind of passion, or if you can learn it. But I do...
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"When has there ever been a divergence between shareholders and customers?" No one is out saying, "Let's screw this customer today, and if we do, our share price might go up 20 cents. They're just not doing it." Welch here...
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In moves that would attempt to increase their online audience, John Byrne, executive editor of Business Week print magazine and editor-in-chief of their online site Businessweek.com, said that Businessweek is thinking about the idea of creating a "business YouTube."The purpose...
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May26
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The Net changes everything. "That phrase drove me nuts!"When we consider the Internet climate today, we see some similarity between the phrase "the net changes everything" again.Every time some new gadget, widget or technology comes forth you hear a bunch...
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We Must Understand Our Marketing ChallengesAt the time that Southwest Airlines (LUV) started flying, Kelleher understood that there were two things the company had to do to be successful.First, he knew they had to create a new market. He understood...
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I don't worry about what I don't know — I worry about being sure about what I do know.When Buffett always talks about what he does know, he mentions people will be drinking Coke in 20 years, using Gillette razor...
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Small actions can have great symbolic importance when done by the organization’s top manager.There's nothing more powerful and important in management than to see the top manager living what the core values of the company state. And within those core...
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“I am just trying to get ideas, any kind of ideas that will help our company.”Sam Walton said at one time that he had probably been in more retail stores than anybody in America. The reason was what he said...
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May25
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"You want to be No. 1. There's nothing wrong with that. You don't want to be a loser. Nos. 3, 4, and 5 don't have the same flexibility. You don't have the same level of resources. You can't do R&D...
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"In the future, all companies will be Internet companies. I still believe that. More than ever, really."What was telling about Grove's statement above is he said it while the dotcom crash was in effect. The reason he was able to...
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People selling their homes are continuing to have a hard time moving them as sales for April fell, while prices declined from last year.According to the National Association of Realtors, annual sales for owners trying to sell their homes fell...
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May24
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"Will Southwest Airlines expand internationally?"Kelleher was asked this question doing an interview before a live audience. His response was so good because it showed that he always remained true to the core values of Southwest Airlines (LUV).He said: "It's a...
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In a bid to have their fraud conviction overturned, John Rigas and his son Timothy, formerly of cable giant Adelphia, had their appeal rejected by a federal appeals court on Thursday.The charges of bank conspiracy to commit bank fraud, bank...
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"Ted Williams, in his book The Science of Hitting, talked about how he carved up the strike zone into different zones and only swung at pitches that were in his sweet spot."Concerning the "The Science of Hitting" by Ted Williams,...
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In April a "leaked" memo from Michael Dell insinuated that the company would be looking at new channels to sell its computers through, which would include retail. Now in a big move, Dell (DELL) announced it will be partnering with...
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May23
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"She learned early on the importance of practicing disciplined time management."In another one of those habits that all successful business leaders employ, time management was one of the keys Mary Kay's success.She knew, along with all people that have big...
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“If you love your work, you’ll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you – like a fever.”The first thing I thought of...
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Microsoft (MSFT) has added another service of The Motley Fool to its MSN Money Web site, with the addition of the Caps stock-rating service. It will be exclusive to the MSN Money site.What the service does is enable users to...
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The strange world of the stock market manifested itself again today on the news that the Bancroft family, which holds the majority control of the shares in the Dow Jones & Co. (DJ), was getting together to talk about the...
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"I was all for de-layering and flattening organizations. Today I'd flatten them even more. Some companies are still too hierarchical.Being lean means a lot more than simply allocating resoureces in a highly efficient manner, although it definitely includes that.As Welch...
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May22
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In an industry where the honorific "visionary" is applied as liberally as lip gloss in Hollywood, Grove resolutely refused the label.A lot of the reason Grove hated this type of terminology and nonsense, was that within the tech community especially,...
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With the increasing pressure from unions and U.S. manufacturers, Treasury Secretary Henry Paulson has been pushing for what is being called "significant -- and quick -- concessions from the Chinese" on economic issues.Much of the issue centers around China keeping...
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May21
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As Boeing is Southwest's sole supplier of planes, how do you ensure a competitive price for a new plane?Kelleher was being interviewed at the time he was asked that question in front of a live audience. His answer to the...
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We just try to do smart things every day, and if there's nothing smart, then we sit on cash.Buffett was obviously talking about investing the money of the company here. But there is an important correlation between running a business...
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May20
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Mary Kay was a Great Teacher and CommunicatorAt a time before Mary Kay started her company, she worked for Stanley Products, a direct sales company. It was similar to what she would do in the future.When she had learned to...
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Wal-Mart is Really a Buyer for Their Customers - Saving Them Lots of MoneyWhat the great prices at Wal-Mart (WMT) has done for their customers has eliminated the need to sell to them. Low and middle income people especially rely...
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"...if you've got to pick a job in business, this is the best job God ever created. Every day is a whole new event."When Welch said that "Every day is a whole new event," it was powerful to listen to...
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The Day Andy Grove Fired HimselfIn the middle of the 1980s, Andy Grove was faced with a monumental problem with Intel (INTC). The growth of the company had come about mostly from manufacturing memory chips for computers. At the time,...
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Kelleher's Take on HiringWhen Kelleher was telling a story about hiring one time, he commented that he said he pretty much hated the term "Human Resources," which he said "sounds like something from a Stalin five-year plan."He said that he...
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May19
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“A public-opinion poll is no substitute for thought.” The idea of public-opinion polls being a part of the business leadership landscape doesn't bode well to me. What that means is people are starting to bring politics into the business realm;...
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"We treat our people like royalty. If you honor and serve the people who work for you, they will honor and serve you."Here we have again the continuing theme that all the great managers we talk about at managersrealm have:...
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“The secret of successful retailing is to give your customers what they want.”Not only is this the secret of successful retailing, but it is the secret of any business success.If this is the case (and it is), why do so...
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"You're not dealing with products as much here as you're dealing with people. It's a kick."This was Welch talking about his time spent at General Electric (GE). It is an enlightening statement if we pause and think of what it...
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May18
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"Only the Paranoid Survive"Andy Grove is of course known for the book he wrote called, "Only the Paranoid Survive," which when it comes down to it is an anti-complacency book. Two of Grove's major qualities known by most that know...
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"We say everybody is a leader, no matter what your job is."With the statement above, Herb Kelleher laid down the gauntlet for all businesses to follow. When he talked about everyone being a leader, he wasn't simply talking about customer...
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May17
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“Your premium brand had better be delivering something special, or it’s not going to get the business.”I particularly like this comment by Buffett because it really gets to the heart of a problem with many companies. The problem is they...
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"There are two things people want more than sex and money ... recognition and praise."In this somewhat provacative statement, Mary Kay does hit on something far more important than it looks. How many people have you met that can get...
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There are very few businesses in the world that don't need programmers and engineers as the world continues to transition to digital. From that reality executives that spoke at the Reuters Global Technology, Media and Telecoms Summit in New York...
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Rupert Murdoch is reportedly ready to spend only $100 million, a relatively small amount, on the launch of their Fox Business Channel which will challenge the supremacy of CNBC. The source is alleged to be an insider within News Corp....
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May16
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Although he had lost his business, this setback would not deter Walton.One of the commong attributes of successful business leaders is their ability to bounce back from defeats and setbacks. If we're in business or business management, there will be...
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"I was expecting this halo above him, this deity. It was like talking to your grandfather. You feel comfortable around him. You don't expect him to be so down-to-earth."This a comment made by a General Electric (GE) employee after sessions,...
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May15
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General Electric CEO Jeff Immelt said on Tuesday that in spite of the slower housing market he sees the U.S. economy as being on a solid base. "The U.S. economy is good," Immelt said in an interview with Reuters. "It...
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"...if you don't have a lot of capital, you can't fight a war of attrition."One big mistake a number of business leaders make is to start a price war thinking they can take down their competitors. As Kelleher says, unless...
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"If a flower is watered, it flourishes. If not, it shrivels up and dies."One of the quirks of human nature is to always look for something that is being done wrong, rather than for what is being done right. For...
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May14
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“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” Many times in the course of our management careers, we have all sorts of little things that...
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She became an international figure but there was never a change in her personality.What's important about Mary Kay never changing her personality was that she was genuine; one of most important attributes we can have in our personal makeup.The reason...
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“We’re all working together; that’s the secret.”When talking about something that seems so obvious above, it's tempting to dismiss it as a slogan that you hear everyone repeat. And in some cases you would be right. Many managers and companies...
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May13
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Welch made Crotonville a central part of his mission to transform GE into an informal learning organization. What was really great about what Welch and other leaders of General Electric did at Crotonville was to have meetings and sessions that...
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"One thing I tell our people is that the intangibles are much more important than the tangibles..."Kelleher said this in an interview when he was talking about the extraordinary performance that his company enjoyed; not just in low fares, but...
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How Branson OrganizesIt doesn't take much for a manager to get caught up in the endless situations that happen throughout the day and get overwhelmed by the feeling of helplessness, while feeling the growing pressure of the weight upon them.The...
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May12
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“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”Buffett has said this particular truth in a number of different ways, but it always has the same impact on me.Concerning complexity though, have...
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Those who are blessed with the most talent don't necessarily outperform everyone else. It's the people with follow-through who excel.What I particularly like about Mary Kay's comment on talent is that it really helps to balance off what is being...
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Wal-Mart was able to distinguish itself from its competitors by seeing the customer as the boss.When Sam Walton understood that the customer was boss, everything he did from then on was based upon that reality. Every decision he made was...
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What Welch Looked for in Every Potential LeaderWelch had coined a term after he was at the GE helm for a time, that he looked for in his leaders: he called it "E to the fourth power." What he meant...
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May11
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"Sometimes, you need a little courage...to buck popular opinion"Not only has the willingness and strength to buck popular opinion been one of the foundations of great companies, it has become increasingly such as instant communication has put increasing pressure on...
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"Even though I'm often asked to define my 'business philosophy', I generally won't do so because I don't believe that it can be taught as a recipe."One of the reasons it's so important to understand the principles of business and...
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May10
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“You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If...
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No matter how busy you are, you must take time to make the other person feel important.In the hustle and bustle of doing business, so many times the real purpose of a business is forgotten. I'm not talking about the...
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The Power of "Float" in Growing a BusinessOne of the great tools of business owners is what is called "float." When you think of an insurance company for instance, when they receive premiums from customers, they are able to take...
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The recent hoopla over the college student who wasn't awarded a degree because of a photo and caption that was placed upon her profile on MySpace, where she had the words "Drunken Pirate" underneath of a photo of her drinking...
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May 9
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Welch would openly challenge upcoming promotions, assignments, and succession plans.What I like about Welch with this is the effect that this will have upon managers.The most important thing is right at the beginning where it says that Welch will openly...
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Kelleher Looked for Humble PeopleWhen Kelleher looked at the hiring process for Southwest Airlines (LUV), he counted one thing as the most important aspect of the people that would be hired: humility.With the unique business culture of Southwest, he knew...
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May 8
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In a vote of confidence, Thomson and Reuters (RTRSY) announced that if their merger goes through, they will make Tom Glocer CEO of the company. A unique move in that he is CEO of Reuters who would be taken over...
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The Power of a Great BrandWhile I've never believed the idea that brands are dead - like some people in certain circles like to maintain - there are those that believe every new little saying and fad, and then take...
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May 7
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“There seems to be some perverse human characteristic that likes to make easy things difficult.” We talk about the vital importance of simplicity all the time at managersrealm, and here again we find ourselves with Warren Buffett trying to get...
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When the bid by Rupert Murdoch and News Corp. (NWS-A) was first announced, it looked like it was a far too steep of a price to pay for Dow Jones (DJ), which includes the venerable Wall Street Journal. The offering...
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"Most people live and die with their music still unplayed. They never dare to try."While this is a motivational quote and encouragement for people to be willing to take chances and try by Mary Kay, I want to bring it...
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May 6
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The unending calls by those with their pet causes has been permeating the business world for years. Many businesses without thinking through, and in many cases, not even understanding what they're getting into, have embraced all sorts of causes that...
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"We had to keep expenses to a minimum. That is where it started. Our money was made by controlling expenses."There was another time when Walton talked about controlling expenses alone cannot make the company money. So it seems that he's...
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How Welch was able to give input to so many managers.We've talked before about Welch's knowledge of his workers and the open communication within General Electric (GE) that allowed a free flow of information that resulted in him knowing a...
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May 5
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"Take the competition seriously but not yourself."Have you ever seen one of those battles between companies and CEOs where there seems to be one that's funny and and seems to be enjoying life and the other in a bad mood...
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"...the discipline of writing everything down ensures that I have to listen to people carefully."I like the two-sided practical value in what Branson says here. Not only does he take down notes to read later, but he also uses the...
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Thomson Corp. (TOC-TO), based in Toronto, has approached Reuters to attempt to work out a deal to buy the financial services company. Reuters (RTRSY) confirmed that they've been approached by a suitor.Some wondered if it was in response to Rupert...
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May 4
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“Risk comes from not knowing what you’re doing.”Buffett in his usual wisdom says something that here that must be examined. It's very simple to understand and yet very few do it.Do what? Know what they're doing. Many people look at...
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She never cared, quite frankly about how big her business was - she cared about the women and that's her legacy.This is a comment one of Mary Kay's colleagues made concerning her goals and focus. I like it because it...
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High expectations are the key to everything.Very few business leaders say they start out with the idea of being the biggest at something, usually, like Sam Walton said above, there will be high expectations of being the best at what...
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May 3
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For the first time in its history Wal-Mart (WMT) has released the figures showing how much they've contributed to their associates through their numerous benefit programs. Included in the $1.1 billion figure for the fiscal year is its 401(K) accounts,...
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"What counts is what you deliver"Many companies and business leaders claim that they have meritocracies, but in reality they make decisions based upon the class or status of a person and their credentials. Welch would have none of that.One thing...
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"We've got a heck of a story to tell."Rather than go into the entire story of Southwest Airlines (LUV), it's better to think about the fact that it seems that everyone knows the general story of the airline. That's an...
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Branson writes his staff "chitty-chatty" letters to tell them everything that is going on and to encourage them to write him with any ideas or suggestions.The more we read about the great managers of companies, the more the importance of...
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May 2
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“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Buffett's comment makes me think of the incredible pressure to do things to make yourself look good...
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Responding to finding numerous consistencies in exam answers, a professor of the business school decided to take a deeper look into other things that had been handed in by the students.After finding more a judicial board took over and performed...
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May 1
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"When you come to a roadblock, take a detour."Have you ever met a stubborn manager or business leader? We don't have to go to far to make that experience a reality do we?Now in reference to Mary Kay saying, "When...
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Walton went into a store and noticed that an employee was welcoming its customers as they walked in.Sam Walton said one time that Wal-Mart got its best ideas from clerks and stockboys. He's referring to the fact that those that...
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"We're in the cat-and-dog insurance business in England. I don't really want to be in that business, but the guy who brought me that idea wanted to be in it, and I trust him. He'll take it and make it...
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That's similar to what Buffett is saying about fads above: we need to stay away from them, no matter what business we're in. As far as banking goes, I lived in Texas when the Savings & Loan business fell, and it was unbelievable the risk these financial institutions had taken in reference to the oil industry. The whole thing almost collapsed; it would have if not for government intervention. This is all connected to the lure of fads.
