The Capital Cities deal was finalized in less than 15 minutes. According to Charlie Munger, Berkshire’s long-term success was due to its ability to “generate funds at 3$ and invest them at 13%”. Apart from these individual annual meetings, managers were left alone. Wall Street Journal headlined it “Minnow Swallows Whale.” Within two years, Burke improved ABC’s margins from around 30% to over 50% by implementing a frugal, decentralized approach. [pg 19], In the Capital Cities culture, the publishers and station managers had the power and prestige internally, and they almost never heard from New York if they were hitting their numbers. Singleton enhanced free cash flow. PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download review, torrent download locations. I may be accurate, but I’m not precise.”, Ironically, this most technically savvy of cable CEOs was typically the last to implement new technology, preferring the role of technological “settler” to that of “pioneer.” Malone appreciated how difficult and expensive it was to implement new technologies, and preferred to wait and let his peers prove the economic viability of new services, saying of an early-1980s decision to delay the introduction of a new setup box, “We lost no major ground by waiting to invest. EPUB The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success By William N. Thorndike PDF Download ISBN novel zip, rar. … Over its first ten years as a public company, Teledyne’s earnings per share (EPS) grew an astonishing sixty-four-fold, while shares outstanding grew less than fourteen times, resulting in significant value creation for shareholders. As Buffett has said, “Charlie and I have always preferred a lumpy 15 percent return to a smooth 12 percent return.”, Being a CEO has made me a better investor, and vice versa. PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download ISBN novel zip, rar. They rarely paid dividends and emphasized cash flows over net revenue. The primary source of capital was float from insurance business complemented by cash from wholly-owned subsidiaries. Outsider CEOs often use “one-pager” analyses to do this.]. Really easy to read if you're interested in understanding a truly exceptional CEO. The CEOs he ended up profiling were Tom Murphy of Capital Cities, Henry Singleton of Teledyne, Bill Anders of General Dynamics, John Malone of TCI, Katharine Graham … From 1984 to 1996, Singleton focused on management succession. From 1971 to 1984, Teledyne witnessed a forty-fold increase in earnings per share. As he once said, “Computers require an immense amount of detail… I’m a mathematician, not a programmer. As Tom Might summarized it, “Acquisitions needed to earn a minimum 11 percent cash return without leverage over a ten-year holding period.” Again, this seemingly simple test proved a very effective filter, and as Might says, “Very few deals passed through this screen. The two core tasks CEOs have are management of operations and deployment of capital. As Charlie Munger described it to me, their companies were “an odd blend of decentralized operations and highly centralized capital allocation,” and this mix of loose and tight, of delegation and hierarchy, proved to be a very powerful counter to the institutional imperative. Sometimes the best investment opportunity is in your own stock. Until Anders took over. Amazon.in - Buy The Outsiders : Eight Unconventional CEOs And Their Radically Rational Blueprint For Success book online at best prices in India on Amazon.in. From this point on, the company never made another material purchase and never issued another share of stock. This decision had high symbolic value as it signaled to the Pentagon that the company was ready to grow again. Overview. Towards the end of the decade, he made large insurance transactions, buying the remaining half of GEICO for $2.3 billion and purchasing the reinsurer GeneralRe for $22 billion in Berkshire stock. Bestseller author of EPUB The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success By William N. Thorndike PDF Download new ebook or audio book available for download. [pg 7, Introduction]. Overview. Buffett’s story best exemplifies the idea of the CEO as an investor. For a company of 40,000 people, Teledyne’s headquarters had less than 50 people with no human resources, business development, or investor relations departments. What makes him a leader is precisely that he is able to think through things himself. [pg 18], The core economic rationale for the deal was Murphy’s conviction that he could improve the margins for ABC’s TV stations from the low thirties up to Capital Cities’ industry-leading levels (50-plus percent). Warren Buffett (CEO/Berkshire Hathaway) In his 2012 shareholder letter, Buffett praises The Outsiders as "an outstanding book about CEOs who excelled at capital allocation." When an executive later asked why he had made the investment, the bartender replied, “I’ve worked at a lot of corporate events over the years, but Capital Cities was the only company where you couldn’t tell who the bosses were.” [pg 34]. Over seventeen and a half years, General Dynamics generated a phenomenal 23.3% compound annual return compared to the 8.9% for the S&P 500. Not surprisingly, Singleton bought extremely well, generating an incredible 42 percent compound annual return for Teledyne’s shareholders across the tenders. The company’s guiding human resource philosophy, repeated ad infinitum by Murphy, was to “hire the best people you can and leave them alone.” As Burke told me, the company’s extreme decentralized approach “kept both costs and rancor down.” [pg 23], As Burke [COO] said in describing his early years in Albany, “Murphy delegates to the point of anarchy.”. It was an environment that selected for and promoted independent, entrepreneurial managers. They avoided corporate perks and media spotlight. This was the era of conglomerates, who enjoyed high price-to-earnings(P/E) ratios at a time when the cost of acquiring companies was far lesser in P/E ratio terms. [pg 41, Singleton]. You will meet eight individualistic CEOs whose firms' average returns outperformed the S&P 500 by a factor of twenty in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later. Meet eight iconoclastic leaders who helmed firms where returns on average outperformed the S&P 500 by over 20 times. In this episode, we read Warren Buffett's #1 book recommendation from 2012, The Outsiders. Learn how their approach generated exceptional returns across industries and market conditions. See all formats and editions Hide other formats and editions. Executive ability. Accessibility is very important to us and we are continually improving, if you have any issues accessing anything on our site, please contact hi@youexec.com or call (817) 968-3932, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom, You Exec LLC, 18 Bartol Street #1090, San Francisco, CA 94133, US. The defense industry’s excess capacity meant that companies had to either shrink businesses or grow through acquisitions. Managers were expected to outperform their peers, and great attention was paid to margins, which Burke viewed as “a form of report card.” Outside of these meetings, managers were left alone and sometimes went months without hearing from corporate. In the ’70s, when fear of inflation was high, Buffett defied the conventional wisdom of investing in hard assets. Chief Outsiders CMOs help CEOs address their need to keep appropriate focus on both the short term and long term strategies needed to maximize growth. Warren Buffett bought his first share at Berkshire Hathaway for $7. Anders offered to buy Lockheed’s smaller fighter plane division, to which Lockheed’s CEO responded with a counter-offer of $1.5 billion for the F16 division. William N. Thorndike’s 2012 book, The Outsiders, about eight of the most successful CEOs in US history, provides a framework for thinking about Tencent’s business. Unlike other media company CEOs, he stayed out of the public eye (although this became more difficult after the ABC acquisition). The Outsiders shared personal traits like frugality, humility, independence, and an analytical approach. Anders insisted that the company bid only on projects they had a good chance of winning, and the returns were compelling. The overall headcount was cut by 60%. Buy a discounted Hardcover of The Outsiders online from Australia's leading online bookstore. He keeps a blank calendar, does not use a computer at the office, and utilizes most of his time in reading and thinking. As a result of this pricing discipline, he never prevailed in an auction, although he participated in many. Fantastic read on 8 phenomenal CEOs. This company generated vast amounts of floats, premium income in advance of losses, that Buffett effectively invested in securities and purchasing companies like the Omaha Sun. Murphy knew what he wanted to buy, and he spent years developing relationships with the owners of desirable properties. The best CEOs are not managers, but capital allocators. It’s as if Sports Illustrated put only the tallest pitchers and widest goalies on its cover. As Phil Beuth, an early employee, told me, “The company was careful, not just cheap.”, The company’s hiring practices were equally unconventional. To do this, they didn’t simply focus on the numerator, total company value, which can be grown by any number of means, including overpaying for acquisitions or funding internal capital projects that don’t make economic sense. For a slightly expanded tl;dr scroll to the bottom for a 10-item checklist. Investment Strategy Analyst Tom Martin reviews The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, written by William N. Thorndike, Jr. In 1986, he made a massive $500 million investment to help Tom Murphy of Capital Cities acquire ABC. 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