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Vol 2: Capital MONEY! Leadership Series - #2 It's not about you

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Vol 1: Capital MONEY! Leadership Series - #1 Full Dedication to Serving Others

#1 Law of Leadership:  Full Dedication to Serving Others  Managers are frequently being confronted with difficult situations and decisions that materially impact the people on their teams both positively and negatively. Any manager can make the easy decisions, but only leaders have the conviction to make the difficult ones. In order to have the conviction to consistently make the difficult decisions, a leader needs to be fully dedicated to serving others. If a manager isn't dedicated to service, then all they are is a face in an org chart with some people under it. They aren't a leader.  Suppose you have a rock star employee that is performing way above their peers and you think they deserve to be promoted. Then suppose your boss told you that only you or your employee could be promoted this year, and that the decision was up to you. In situations like this our self aggrandizing ideas of Leadership are pressure tested. And if you're dedicated to serving others you will ma...

Vol 0: Capital MONEY! Leadership Series - Laws of Leadership

Full Dedication to Serving Others It's not about you Give people purpose Give people context Give people the tools and environment they need to succeed  Give people the freedom and autonomy to succeed their way Give people the freedom to fail for the right reasons  Give people genuine praise often and publicly   Give people constructive feedback often and privately Empower people to  give you constructive feedback without fear , then act on it In our leadership series we will provide an article on each of our Laws of Leadership.  The need for leadership is everywhere. Capital MONEY! has created its leadership series to give our community actionable steps to become better leaders in their personal and professional lives. We believe that implementing our leadership philosophy will help you no matter your circumstance, whether you're the CEO of a Fortune 100 company or just starting your career as a plumber*.  There is a need for great leaders in all fiel...

Business Valuation Vol 1: PayPal

Prologue This article is not intended to provide specific investment advice, it does not recommend that you buy or sell anything. The purpose of this article is to illustrate a transferrable framework that can be used as a tool to assign preliminary valuations to businesses. This framework, like all frameworks, isn't perfect and can't predict the future or answer the countless qualitative questions that should be considered when making an investment decision.  Business Valuation Vol 1: PayPal Suppose you saw that PayPal's stock price had fallen in recent weeks and you're curious to know how it has performed throughout 2021, so you compare it to the S&P 500 as shown in Figure 1. Suppose you recently learned that PayPal owns Venmo, which you and a lot of people you know have been using for years. You begin wondering if now is a good time to buy PayPal stock.   Figure 1: What Can You Do With This Information?   You've identified two things 1. PayPal has products th...

"No Rules Rules Netflix and the Culture of Reinvention" - Reflections on Correlation vs Causation

I recently read  No Rules Rules Netflix and the Culture of Reinvention and it brought to focus the importance of identifying correlation vs causation.  Society has a bad track record on identifying the cause of why certain people or companies are successful. It is often easy and enticing to say that Successful Person A does X, thus X is the reason Person A is successful. Or that Successful Company B does Y, thus Y is the reason Company B is successful. And even in instances where it is not explicitly asserted that X is the reason Person A is successful or that Y is the reason Company B is successful, it is certainly implied. Why are you telling me about it if you think it has nothing to do with their success?   Some examples There is no shortage of #riseandgrind type tropes about some successful person being successful because they wake up at 4am to do cross fit and run a marathon before work every day. Unless you're a professional athlete or personal trainer, the t...

Investing Vol I: The Warren Buffett Way to Identify Investable Businesses

These were provided in Berkshire Hathaway's shareholder letters for many years. They were provided to attract prospective businesses interested in being acquired by Berkshire Hathaway (BH). If an owner was interested in selling their company and their business met these criteria, then they could contact Warren Buffett to see if BH would be interested in acquiring them. BH acquired multiple businesses through this process.  These 3 criteria apply to investing in shares of public companies as much as they do for acquiring entire companies. At the core of Warren Buffett's investment philosophy in public companies, is to treat shares as what they are - ownership in a business.   Investing. It's simple, but it's not easy. Successful investing is about consistently buying assets for less than their future value. That sounds simple enough, buy low sell high. I got this. You don't have unlimited money to invest with, so successful investing also requires efficient capital ...

Warren Buffet's Letters to the Shareholders of Berkshire Hathaway - The Best Resource for Investing, Business, and Leadership

We would like to elaborate on what we recently  posted on twitter .  Capital MONEY! believes that Warren Buffett's letters to the shareholders of Berkshire Hathaway are the single best resource for learning about investing, business, and leadership. If you were to read only one thing on those topics, it should be Warren Buffett's shareholder letters. In addition to providing a wealth of wisdom on a wide range of topics, reading the letters from oldest to newest gives a unique historical perspective on 20th century America.  The terrific news is that they are all available for free on the  Berkshire Hathaway  website. They are also available for sale in paper copy if you prefer. We will provide a number of posts summarizing and highlighting the wisdom found in Warren Buffett's letters, but a few of the key principles are below..  Discipline . For both investing and business operations, much of Warren Buffett's success has come from having the discipline to s...

When Cash is King vs When Cash is Trash

Cash. It's better to have too much than too little. But there can be too much of a good thing.   When Cash is King Capital MONEY! knows that when unexpected obligations arise that there is nothing better than having a pile of cash ready to handle it, and that's why we stress the importance of an emergency fund in our  10 Steps Guaranteed to Build Wealth  article. This is as true for businesses as it is for people. Similar to how a person should have an emergency fund, a business should hold more than enough cash to pay for all its operating expenses and absorb any adverse impacts that can occur through the normal course of business.  We also believe that the success of a for-profit enterprise is its ability to generate free cashflow over the long term. A good business is one that generates a lot of free cashflow relative to the amount of money (aka capital) invested in it. All else equal, it is easy to see that you would rather own Business A than Business ...