Nearly Unreasonable, But Not Quite

The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.

– GK Chesterton

Thinking Rather Than Polling

A contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling. Unfortunately, Bertrand Russells observation about life in general applies with unusual force in the financial world: Most men would rather die than think. Many do.

– Warren Buffett, 1990 Berkshire Hathaway Annual Letter

Compete Asymmetrically

The formula for successful entry is the same for all industries: compete asymmetrically. This means introduce products which change the basis of competition and deter competitive responses by making your goals dissimilar from those of the incumbents. This is classic “ju-jitsu” of disruptive competition.

– Horace Dediu

Watch All Parts Of The Cycle

You own the cheap stock, it becomes the target of a deal, you do the arbitrage, they screw up the deal, it becomes a bankruptcy, and you play that. We don’t forget the companies we trade in. We try to watch the companies over all parts of that cycle. We watch the acquisitions, we think about whether they’re sensible, and we don’t lose track.

– Michael Price, The Vulture Investors

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