This week, Fred Kobrick, author of The Big Money, is guest blogging -- writing one post a day. Here's Fred's entry for today:
You know, when you think about it - not only do very few individuals beat the market, but also most pros do not. But, there are still many who think a simple formula or rule will do it for them.
The things we need to know most are how will a company make a lot of money; grow for along time, and overcome competitors. All else flows from that, including the numbers people are addicted to. I loved just batting around the plans of the great CEOs and how they would do it, and today all of that stuff is in public releases and web sites, so it can be great fun if you know what it is you are looking for.
When I met with Bernie Marcus as he brought his company Home Depot public, and Phil Knight when he did the same with Nike, I was not thinking about numbers, but winning. Each person wanted to win and had a strategy and business model and assumptions about what their market wanted and needed, and about how to beat their competition.
I loved hearing the stories of what would happen and why from companies that wanted to win, and of course, their main competitors had their own story to tell of how they were going to win the war.
Bernie Marcus had ideas about what his market wanted, and he was willing to take risks. For those of us that bet with him it was entertaining, educational, exciting, and very profitable. The numbers didn’t tell the real story since his strategy was to actually pay people more than competitors did, and attract and lock-in customers.
Each company has a story to tell, and learning how to judge what makes for a great story is fun and becomes a path to “the big money”.
Comments