The Wisdom Wall

“Outliers don't have work-life balance. They have standards that follow them everywhere.”

“It is to be remembered that oftentimes the most difficult competition comes not from the strong, intelligent, conservative competitor, but from the man who is holding on by the eyelids, is ignorant of his costs, and anyway has got to keep running or bust.”

“There is one thing I fear the most as a business leader. Regime change. Whether it's a coup d'etat or a democratic election, private businesses are always the first target.”

“Third, understand that much political and social conflict that appears to be about principles is actually driven by envy. The principles might be real, but the anger comes from envy.”

“When you see extreme outcomes, Berkshire Hathaway's success or New Coke disasters, cult conversions, corporate catastrophes, ask what combination of tendencies created this? Be alert when multiple tendencies are being used to manipulate you. Cults have figured this out. Sales organizations have figured it out too, and…”

“They're not being trained as managers. They're being trained as owners. If they're good owners, Bragg says, they can hire good management.”

“Every acquisition is really two acquisitions. It's the company you're buying today and the companies that might sell tomorrow. When opportunities are scarce, pay what it takes to get the asset you want. The people who nickel and dime their way out a great deal spend years regretting it.”

“Pay double, and you get your pick of the best workers. Turnover disappears. Theft becomes almost non-existent. People start treating your business like it's their business.”

“Most American corporations have fat salaries for the top people and treat the people at the end of the line as peons. I guess that is why, if you're on the ball, you can beat them.”

“Jim's new philosophy was crystal clear. No partners, no shareholders, no relatives.”

“The moment that officers or directors of a company begin to speculate in its stock, the ruin of the company is not far away, for it is impossible to serve both the company and the stock market.”

“There are tremendous values in the stock market, but in buying stocks, not in entire companies. Buying companies tends to raise the purchase price too high.”

“It was Charlie who told me, and I had never thought of it this way, he said, you get into a lot of trouble when you want your kids to live a different lifestyle than you're living. Uh, when you're getting a chauffeur to drive you to work, and you're telling your 15 or sixteen-year-old to go get a job at McDonald's, uh,…”

“I don't believe you can be the best in the world at anything and be a well-balanced person.”

“a friendship founded on business is a good deal better than our business founded on friendship.”

“If she is right, we will not gain anything by answering, and if she is wrong, time will vindicate us.”

“he said you basically have to live the life that you want your kids to live, and so if you want your kids to grow up with a middle-class life, you can't live in a mansion and then force a middle-class life on them. You can't be chauffeured to work while you're telling your kid to go work at McDonald's. That will just…”

“By behaving this way, Chung was making Hyundai regime-proof. Other Korean companies won contracts through political relationships. They prospered as long as their patrons held office. But the moment the political ones shifted, and in Korea they shifted constantly, those Companies were cast aside. Their entire value…”

“If we have to resort to bringing in the government to beat our competition, then we deserve to go broke. If we can't do it by offering a better, fifteen-cent hamburger, by being better merchandisers, by providing faster service and a cleaner place, then I would rather be broke tomorrow and start all over again and…”

“dirty fuel. It's just, it never goes out. Like you don't use it up. It just, you keep going with it and that drives in part society and it, It might drive that person to buy the yellow Ferrari or send their kid to the most expensive school, but they did that by creating some sort of economic value in life to get…”

“The financial crisis of 2008, for example, wasn't really a financial problem. It was a psychology problem. An incentives problem wrapped in a complexity problem.”

“action produces information. If you're unsure of what to do, just do anything, even if it's It's the wrong thing. This will give you information about what you should actually be doing.”

“Sears and True Value face their product, meaning they pay employees to go through the store and turn the labels out facing customers. It looks good, but it's tremendously expensive. We find it gets in the way of offering product at the lowest possible price.”

“The best-run companies develop their own managers from within. They rarely seek outsiders. In fact, it's a sign of weakness when a company goes outside too often for management personnel.”

“And what I find with the dirty fuel, if you will, at least for certain personality types, myself included, is it just never burns out. Like it never expires.”

“Many big law firms fearing disorder from envy and jealousy have long treated all senior partners alike In compensation, no matter how different their contributions to firm welfare, they're willing to destroy their incentive structure just to avoid triggering envy.”

“Munger and Buffett's advantage was that they genuinely didn't seem to experience envy. When asked about missing opportunities, they'd shrug and move on. When competitors succeeded, they'd analyze what happened objectively. This emotional detachment is a massive competitive advantage.”

“Employers grossly over-appraised the worth of face-to-face impressions. The anecdote to this is to underweight face-to-face impressions and overweight the applicant's Past track record.”

“In real life, Psychological tendencies rarely operate alone. They consistently combine and reinforce one another, creating effects larger and more unpredictable than the sum of the parts. That's what changes history. That's what builds and destroys companies.”

“I don't believe anything really revolutionary has ever been invented by committee, because the committee would never agree on it.”

“Abandoning a well-thought-out and well-researched plan is an act of desperation that occurs just before a crash and burn. Stay with the plan. A bad plan is more likely to work than no plan at all.”

“Recessions are market share redistribution events.”

“Vertical integration just isn't about efficiency, it's about becoming unkillable.”

“He understood that forcing change might create compliance, but letting people find their own way creates leaders.”

“Bragg thought in terms of generations, and in a world of quick flips and fast exit, the person willing to wait 20 years has no competition.”

“Although we are interested in margin, it must never be done at the expense of our philosophy. Margin must be obtained by better buying, emphasis on selling the kind of goods we want to sell, operating efficiencies, lower markdowns, greater turnover, etc. Increasing the retail prices and justifying it on the basis that…”

“One of my favorite adages of his that he frequently found appropriate to repeat was, you train an animal, you teach a person.”

“He used to say, if you're not spending 90% of your time teaching, you're not doing your job.”

“He understood that when you're that far ahead, when your principles are that sound, copycats just validate your model. They expand the market, they train your customers, and they make your innovation normal.”

“He solved the eternal problem of expansion capital by making his managers into bankers. They funded growth not because they had to, but because they wanted to. Their equity was building while it sat there. Meanwhile, the company got interest-free loans from the very people most motivated to make those stores succeed.”

“Everyone thought personal service would become obsolete in the digital age. Instead, it became more valuable precisely because it was rare.”

“Second, the myth of management genius transferable to any industry was just that, a myth. It turns out running a carpet company required different skills than selling cars.”

“Anna would reflect on this years later and say everyone should get sacked at least once in their career because perfection doesn't exist.”

“The lesson, getting fired for your standards is different than getting fired for your performance. One is failure. The other is reconnaissance.”

“Standards were standards, and Anna's standards to nearly everyone appeared unreasonable. And also, just like Steve Jobs, that made everyone work harder, and be better, and pulled out the best version of themselves.”

“The first rule of transformation, you can't renovate a house with people still living in it.”

“When you explain every decision, people just learn to argue. When you just decide, they learn to anticipate.”

“When everyone agrees something will never work, That's precisely when they stopped testing it. Consensus kills innovation.”

“Don't play fair games. Build the game itself, and then charge admission.”

“If it were possible to plan for a year ahead, then there would be no need for judgment or management. Any question that came up could be settled by referring to the plan.”

“The formal decision-making process is usually the only protective covering for a much simpler informal process.”

“Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business, and then another chunk, until there's nothing left. I believe that the prime responsibility of a manager is to guard constantly against other people's attacks, and to put this guardian…”

“I won't pay 15 times earnings. That would mean I'd be only making a return of six or seven percent, and I can do that in treasury bills.”

“Well, Cy, he replied, I figured most of these millions of expected potential computer customers would would at first be intimidated by computers, but could anyone be intimidated by a computer named Apple? Besides, he said, all the others except Apple, if they failed, would just walk away. Apple's founders, I noted, had…”

“Identify lucrative routes, wage devastating fair wars, use anti-monopolistic rhetoric to rally public support and a bit of showmanship, and then demand large payoffs to end the competition.”

“The only way to make real money is to offer the public something entirely new that has style as well as substance. And which they cannot get anywhere else.”

“Without patent protection, the enormous investments required to develop truly new technologies would be financially unjustifiable, as competitors could simply copy successful products without bearing the R&D costs.”

“The path or formula to get rich over time is pretty clear. And almost, it's available to almost anybody, but you get into trouble when you start trying to rush the timeline.”

“And my hypothesis is that people at the tail end of the curve Have incredible strengths and incredible weaknesses. And by trying to address those weaknesses, whether it's school, society, nudging people, we actually limit, we put a ceiling on the strengths that those people can actually deliver to the benefit of the…”

“One of the The commonalities I find between exceptional people who've done exceptional things is they're always in the weeds.”

“Because my identity as a parent is wrapped up in your success. Paul Assaiante: No question about it.”

“the more a company exposes their values, uh, the less they actually value.”

“I don't believe in equal outcomes. I do believe in equal opportunity. Um, and I think we need to sort of get back to that.”

“what's best for the person is not necessarily best for the company, and what's best for the person is not best for their career.”

“I think groups as a rule, like a heuristic, make terrible decisions. Individuals should make decisions. Groups should provide input, but there should be one sort of person making the decision.”

“I find it entrepreneurs are actually Generally speaking, they're probably one or two standard deviations a little bit better about this because they care more about the outcomes and less about who gets the credit, but inside organizations, how you get promoted tends to be a story, right? That story is like how you save…”

“by keeping the power, we also have the excuse that somebody didn't execute properly, you know, like, you know, so we, we have, not only do we have this story in the narrative of how important we are on one hand, we also have the story in the narrative where when things go wrong, it's always somebody else's fault.”

“If you have a, have a company that's controlled by no one shareholder, you end up with this suboptimal strategy where you're always, you're almost forced to pursue the best strategy in the moment instead of the best strategy overall. Whereas when you have a controlling shareholder. Either be it through multiple voting…”

“Procedures are basically like an algorithm that you apply given a certain situation, certain inputs. And what I discovered is that it just eliminated thinking, um, because people would go, oh, there's no procedure for the slight deviation from what would happen. And I can't respond because At first you can, but you…”

“what happens is like post Snowden you end up hiring, I call it the storm trooper problem, which is like you end up basically hiring the same type of person, right? They're, they're sort of like never had a problem in their life. They, um, get straight A's. They do all the right things. They tie their shoelaces the…”

“there is no skill called decision making. There's no skill called problem solving. It's all contextual.”

“what I found is cognitive biases are sort of great for explaining why we make mistakes in hindsight, but they're not necessarily really good for preventing or anticipating mistakes in the future, because what happens is any reasonably intelligent person sits down in front of this checklist and then creates all of these…”

“I worry that if we can't separate people from ideas, that we inadvertently get into almost a moral selection bias.”

“He had already figured out that if the return on borrowed money exceeded the cost of the loan, Then the rational move was to borrow more. Interest was just the price of growth, and the more you grew, the more you could borrow again.”

“Not only do I think that was a key to how quickly and fast they rolled everything up, but it probably enabled them to keep going a lot longer than they otherwise would have, because it took so long to figure out what was going on.”

“Trust is everything to a businessman. The moment you lose trust, it's all over. If I have to choose between reputation and money, I will always take reputation.”

“A higher price would signal that it was worth paying attention to. A dime said ordinary. 12 cents said special.”

“The simplicity wasn't just about efficiency. It allowed them to concentrate on quality at every step. When you're only doing nine things, you can do all nine perfectly.”

“The system was valuable precisely because it was theirs, because it had a name, an identity, a track record. Customers who'd eaten at McDonald's in one location would recognize it in another location. A copy wouldn't have that. Copy was just another hamburger stand.”

“What made McDonald's wealthy was owning or controlling the land under every restaurant. Franchisees paid rent. That rent was McDonald's real income. It was steady, it was predictable, and it was growing with every new location.”

“The best product innovations that McDonald's ever had came from operators solving local problems. The company just gave them a system in scale. They gave the company its future.”

“the grandmasters have an instinctual move in their head. And 99.9% of the time that's the move they make. And then why do they take all this time before they make a turn? Well, because they're checking, they're verifying that their, their instinct is correct.”

“It's why index fund reading beats selective reading, because it allows you to capture the information that most people miss.”

“When a principle shows up consistently across all three buckets, when it's true in physics, and true in biology, and true throughout human history, you can trust it completely.”

“Every interruption to constant progress breaks compounding. You fall off the exceptional curve and onto a linear one, or worse, you start sliding backwards.”

“When I look back at some of the outliers episodes we've covered over the past year, I see repeatedly that the businesses they built almost uniformly had win-win relationships with all of these counterparties. And when they misstepped their businesses stumbled, it's almost always because they reneged on one of these…”

“He said, 80% of a retailer's cost is payroll. Fewer items means less labor, less time ordering, less time stocking, less time checking out.”

“Jim realized that 80% of legal claims weren't about the product. They were about a failure to deliver customer satisfaction.”

“To him, you could make money honestly, or you could make money once.”

“Saul told him the lawsuit consumed everything, every thought, all of his energy, and that even if you won, you still lost. Only the attorneys made money.”

“Bad money is worse than no money. Do you remember when I interviewed Whole Foods founder John Mackey? He called bad money hitchhikers. Bad money will pay for the gas. As long as you do what they want and go where they want to go, and slowly you lose yourself and your vision of your company.”

“Customers didn't want to pay for wider aisles or brighter lights. They didn't want fancy displays or carpeted floors. They wanted help, knowledge, fair prices, and availability.”

“You can't give authenticity to an actor. The best spokesperson for your company are the people who actually believe in what you're building.”

“And then overpaying, you make overpaying seem rational, and in a way it kind of is rational, where it's like, well, this is only going to come up once.”

“Your success as a recruiter depended entirely on your recruit success as sellers. If you recruited people and abandoned them, then they'd fail and quit, and you'd earn nothing. But if you genuinely helped them succeed, then everybody in this system made money.”

“We finally concluded that we would not break the basic set. We decided we would rather face a customer's initial ire than having her fail to get the desired results.”

“She established competitions with prizes, not cash. Cash tended to disappear into household budgets, but prizes were visible, permanent, constant reminders of achievement. They were status symbols.”

“knowing a lot of incredibly wealthy people. One thing that I noticed that's really interesting is their social circles get smaller and smaller and smaller. And I think in part, like, um, people start asking you for things and then you create this sort of like seed of distrust almost”

“your mind gives up before your body long before your body. And this is a mental toughness thing. This isn't a physical, like you're going to collapse thing.”

“I have this idea of like, things are hard when they're choices, but they're not when they're rules.”

“It's easier to motivate people through hatred of an opponent than through love of your own candidate.”

“The antidote here is to force yourself to see the virtues, even in what you dislike. Ask yourself, what is this person, company, idea doing well? If you genuinely can't think of a single thing, that's the hating tendency at work.”

“When I talked to Daniel Kahneman about this, he said, you delay intuition by focusing on the separate problems. Take the separate dimensions and really think about each dimension separately and independently. Don't allow people to give the final judgment. Say, we will wait until we cover the whole thing. If you find a…”

“When someone responds with disproportionate anger about something small, often it's because their sense of fairness was violated.”

“Knowing this, some seller of an ordinary industrial product will often change his product's trade dress and raise its price significantly, hoping the quality-seeking buyers will Will be tricked into becoming purchasers by mere association of his product and its high price. This industrial practice frequently is…”

“The mental rules of thumb that evolution gives us to deal with risk are not adequate, Munger writes. They resemble the dysfunctional golf grip you would have if you relied on evolution instead of golf lessons.”

“Open outcry auctions are designed to trigger this too. You bid, and then someone outbids you. You almost had it. Just one more bid. The cycle keeps going. Social proof convinces you the last price was reasonable, and deprival super reaction makes you desperate not to lose what was almost yours.”

“Businesses die exactly the same way. Slow deterioration that nobody notices because each day is only slightly worse than the day before.”

“First, extreme stress can completely flip your cognitive patterns and loyalties. People under maximal stress don't just think worse. They can end up thinking the complete opposite of what they believed before.”

“He said, old people like me get pretty skilled without working at it, at disguising age-related deterioration because social convention like clothing hides much decline.”

“Munger's observation is that undue respect for authority is so strong that terrible CEOs remain in control of important institutions long after it's obvious they should be removed. Authority misinfluence tendency protects them.”

“Throughout my career at Apple and other places, you always find a lot of geeks who try to reach levels without doing the in-between ones first, and it won't work. It never does. That's just cognitive development. Plain and simple. You can't teach somebody two cognitive steps above from where you are.”

“That was the power of the open architecture. Every third-party company that made a product for the Apple II became, in effect, a marketing arm for Apple. Every ad they bought, every review they got, every innovation they created made the Apple II more valuable.”

“Job's closed system only worked because Wozniak's open system funded them. The Apple II kept the company alive for years. Its profits bankrolled everything that came after. Those eight expansion slots Wozniak fought for Became the financial engine that allowed Jobs to eventually build his vision.”

“The last thing you should do is the first thing you feel you should do. In other words, during predicaments, when you've lost all sense of direction, don't trust your senses. Don't act on impulse.”

“My experience he reflected later indicates that over 80% of legal claims Originally, because of a failure to deliver customer satisfaction. Therefore, it has always been my conclusion that most of our claims can be eliminated if we simply meet or exceed customer expectations.”

“Make your plan. Conform to the land, not the other way around. Either work with it or walk away.”

“After your business is over, you may take him to dinner and theater, but wait until the transaction has been closed and the money paid.”

“Before making a deal, if anyone is fool enough to offer you the full amount, take it. If you're offered less, tell them and you'll give them an answer in the morning. Think the matter over carefully in the evening. If you decide that it will be to your advantage to accept the offer, say so in the next day.”

“If you're in a big meeting, and there's a person sitting off in a corner not saying anything, that's probably the person you have to convince. They're the decision maker.”

“The lesson he took away from his time is that loyalty is earned through shared sacrifice, not money.”

“In business, reliability beats everything else. Speed without predictability is useless.”

“People don't follow mission statements. They follow their personal incentives. If your incentives point the wrong way, that's where people are going to go.”

“When speed matters, seeing beats talking.”

“This one policy created more accountability inside FedEx than a thousand meetings ever could. It turned every employee into an owner because failure hit the bottom line immediately.”

“Sometimes being early looks exactly like being wrong.”

“In consolidating industries, you either own the market or you're at its mercy. There's no comfortable middle ground.”

“Selling high quality merchandise is more cost effective than selling inferior merchandise.”

“That 25 dollars isn't a fee, it's a commitment. Nobody pays 25 dollars just to join a club and then shop somewhere else.”

“The only sustainable relationship is win-win. Think about compounding. What we know about compounding is that all the advantages from compounding go to the end. They come at the end. And the only way to get to the end, the only way to extend your timeline and anything that you're doing is win-win.”

“Sometimes the best hire is the one that makes everyone else uncomfortable. Catherine chose talent over internal politics and an outsider's perspective over insider loyalty.”

“The only way to assert the right to publish is to publish.”

“Maximum freedom requires maximum transparency.”

“By not making tires, he could always offer customers the best option without defending a bad product. In the long run, what is best for the customer is best for the company.”

“Give people real ownership, not promises. Share profits monthly, Not maybe someday. Promote from within, not from above.”

“Leasing wasn't just a financing option, it was a customer retention system disguised as a payment plan.”

“The lesson, bad partnerships don't just slow you down, they kill your future. Jimmy learned it's better to own 100% of something smaller than 25% of something with the wrong people.”

“Second, she learned that in creative industries, speed beats perfection because perfection without deadlines is just procrastination with better excuses.”

“Pattern recognition can't be taught. It can only be earned through obsessive accumulation of high quality inputs.”

“The insight she had was that aspiration without accessibility is just snobbery. Accessibility without aspiration is just a commodity. The magic lives in the tension between the two.”

“Standards aren't what you accept from others. They're what you demand from yourself when no one's watching.”

“accepting good enough in small things trains you to accept it in big things.”

“having the higher standards doesn't guarantee recognition, it only guarantees you'll deserve it.”

“When you maintain exceptional standards, you don't need to attack mediocrity. It exposes itself.”

“Most people organize their entire lives around being liked by nearly everyone. They don't want to offend anyone. Outliers have the courage to be disliked.”

“Standards aren't standards if they're negotiable. They're absolute or they're not standards.”

“When you believe in yourself completely, rejection is data, not a verdict.”

“Most people prepare for interviews by thinking about answers. Outliers show up with solutions. It's the same with cold emails today. Don't tell someone how you would solve their problems. If you want to get noticed, just solve their problem.”

“When you finally get power, use it immediately. Hesitation invites resistance.”

“Comfort breeds complacency, and discomfort breeds decision.”

“This is how disruption often works. You don't invent new behavior. You legitimize behavior that already exists.”

“The insight, people don't buy aspirational images. They buy aspirational narratives.”

“The first rule of disruption is if you're going to get cannibalized, it's better to eat yourself.”

“In a visual culture, perception beats reality. Control the image, and you control the narrative.”

“When budgets shrink, profitable divisions survive. Unprofitable ones don't, no matter how prestigious they are.”

“The lesson, your sub-brands can take risks your main brand can't. Use them as laboratories.”

“First principle of real power is don't join other people's networks. Create your own and be the one everything flows through.”

“Revenue plus relevance equals irreplaceable.”

“A large part of her success is due to the fact that she's decisive and clear, and I think it gets rid of the wrong people very quickly, and the right people love it.”

“Don't fight the system. Architect situations where the system has to choose you.”

“The key lesson here is that if you are well positioned, be it with a surplus or margin of safety or whatever you want to call it, you control your own circumstances, and when you don't have that, you are controlled by them.”

“Good positioning eliminates forced decisions. You don't need to be smarter than others to outperform them if you're better positioned. Anyone looks like a genius when they're in a good position, and even the smartest person looks like an idiot when they're in a bad one.”

“Their promising venture now faced the constraint that kills more startups than any other, running out of cash while running towards success.”

“What I learned was that a bank statement ought never to be in such shape that it has to be explained. Everything ought to be on the statement. A statement of condition can be a prospectus. In fact, it is the best possible kind of prospectus, but it ought not to be prepared in enthusiasm.”

“Losing money is not pleasant, but every business must at times lose money. Losing money is really serious if you do not know why you are losing, or if you do know why and cannot help yourself.”

“A great many salesmen make the mistake of thinking that pestering a man is the same as selling him, and they get their prospects into such a state of exasperation that they would not buy a gold dollar from them at 50% off. Just getting to a man is not enough. It is when and how you get to him.”

“There is no real profit in high prices because high prices automatically cut down volume. But the only possible way to lower prices and still keep business is to save in the cost of manufacturing by improved processes.”

“Solving problems at their source builds trust that advertising dollars can't buy. While the customer was wrong, Firestone sent solutions instead of arguments.”

“I would almost as soon try to make tires without rubber as to try to make them without a chemist.”

“Positioning is leverage. When everyone else is desperate, the person with options holds all the power.”

“Sometimes the best strategy isn't the most sophisticated one. It's the one bold enough to cut through the noise and force immediate market response.”

“High agency means treating every no as research, not rejection. Create what you're denied access to.”

“While others sought to duplicate their strengths in founding teams, Grove recognized that more and noise needed someone fundamentally different from themselves. They had vision, they had technical credibility, but what they lacked was operational discipline.”

“The best person to worry about product quality first is the designer. As the product goes into manufacturing and the designer takes on a new product design, he loses interest. A third independent body should take over the quality control function from the engineers at that stage to ensure meaningful results and…”

“The true genius of leadership lies in recognizing when incremental improvements become futile and when you must abandon the very business that made you successful, the golden goose, if you will, even while it's still generating enormous profits.”

“The greatest business failures often come from not playing the game poorly, but from continuing to excel at games that no longer matter.”

“Top executives are often the last to recognize the fundamental shifts because they're insulated from market realities and emotionally invested in the status quo. Middle managers, by contrast, operate at the intersection of the company and the outside world. They usually have a better sense than the senior management of…”

“If you're running an organization or you're senior level in an organization, your ceiling is determined by the talent you attract, not the talent you possess.”

“The only way you can make money in some businesses is by not entering them.”

“In the end, what made Teledyne remarkable wasn't just Singleton's financial wizardry or Robert's operational discipline, but the seamless integration of the two, while most conglomerates of the era were ultimately dismantled or vastly underperformed the market, Teledyne prospered because it paired sophisticated capital…”

“Companies that will sell one division and buy another because today this division generally sports a low multiple, and the one they're buying has a high multiple, and they think that may rub off on the whole company. That absolutely turns me off. The whole concept is repulsive. We don't do things like that. We look at…”

“One of the things that sets Vanderbilt and other outliers apart is their willingness to tolerate pain. Most people have no capacity to endure pain, financial or psychological, and if you can, you can gain a real advantage.”

“Titles alone didn't guarantee authority. CEOs holding little equity can be removed by boards or investors, whereas those with controlling stakes can dictate strategy and vision despite opposition.”

“Vanderbilt helped pioneer the concept of the giant corporation distinct from the individual ownership or management. By merging older railroad companies into a single entity focused on efficiency and profitability, he also shifted their original public service missions.”

“This dismissive logic that if something were possible, industry giants would have already done it is the comfortable assumption incumbents have relied on throughout history, right until an outsider proves them catastrophically wrong.”

“If you do what everyone else is doing, you're going to get the same results everybody else gets. But difference for its own sake isn't enough. It has to be the right kind, the kind that wins. That's advantageous divergence.”

“People do not want all purpose. They want high-tech specificity.”

“Why do you spend so much for a Picasso? The linen-unders painting cost two dollars and 75 cents. Each jar of paint perhaps a dollar 75. You're paying for creativity, for experience, for something that works for you.”

“Start in a second-tier store, and you become a second-tier brand. Your prices have to match your location. Your image follows your prices. Your future shrinks to fit your beginning.”

“one of the advantages to being family-owned is that they can think in decades, not just quarters.”

“Being family-owned meant they could do what public companies couldn't. Discard entire batches of product if they weren't perfect.”

“The big money isn't in the buying or the selling. It's in the waiting.”

“Other collectors he noticed were reluctant to donate their treasures to the buildings that bore another person's name. His solution was characteristic Mellon. Maximize the outcome by minimizing ego. He explicitly refused to put his name on the building, instead insisting on calling it the National Gallery of Art.”

“The greatest innovations often come not from inventing something new, but taking an existing idea to its logical conclusion with relentless execution.”

“The family had fallen into a trap that still snares successful companies. They started serving customers like themselves, wealthy ones, forgetting that their wealth had come from serving everyone else.”

“If you want perspective, you want to go to somebody who's at the end of the maze, who, who's done it before. And it's almost regardless of when they did it, it could be, you know, six months before, and it could be. 2030 years before, but they're going to give you perspective, which removes blind spots. And if you want…”

“I always think of this as like a mosaic. So you have a border and you have different size pieces. And some of those pieces are family, some are work, some are maybe your hobbies. Uh, health is definitely one of the big pieces there and they, they shrink and they sort of like, but they can never go away. Sometimes…”

“if we just spent a couple hundred books a year in grade two and grade three on books that kids want to read, whatever that year that is, whatever is, whether it's Ninjago or whatever is culturally relevant in the moment that the kids are into, Uh, you'll save all this money downstream.”

“I'm going to work out every day and the duration or scope can change, but I'm going to exercise every day. And the conversation went from, should I work out today? Which in my head is like, oh, I have a really busy day. I didn't sleep well. I'm not going to work out today. I'll do extra tomorrow. You negotiate with…”

“One thing I noticed is that procedures eventually circumvent judgment. And so what happens is, um, if you follow the procedure, you never get in trouble. Even if what you're doing is absolutely the wrong outcome, and you should know it's going to lead to the wrong outcome, you can just throw your hands up and be like,…”

“One thing that I think is very underappreciated about them is that they never find themselves out of position. They're always operating from a position of plenty or a position of strength. So no matter what happens in the environment, they can always take advantage of it. They're never forced by circumstances. Into a…”

“what do all those people have in common? Well, a small degree of skill improvement can lead to a massive distortion in outcomes.”

“the fear of looking like an idiot keeps us from doing things that we, we know are probably going to lead to growth or success or, uh, not to use the word success, but performance. Uh, you know, they're going to make us better, and we don't want to do them because we fear looking like an idiot, and the older we get, the…”

“And everybody looks like a genius when they're in a good position and everybody looks like an idiot when they're in a bad position.”

“So if you're living in a mansion, and you get picked up in a chauffeur, and you tell your fifteen-year-old to go get a job at McDonald's, it's gonna cause resentment. Uh, so you have to live whatever lifestyle you want them to grow up in. So if you want your kids to grow up in a middle-class lifestyle, you actually…”

“the best decision makers in the world almost always operate from a position of strength. And that sort of strikes me because when you operate from a solid position or foundation, Nearly every move you make is good. It's all accumulative. Whereas when you operate from a poor position, things almost always go from bad to…”

“I'm formulating a hypothesis as we talk, that if you were to give somebody a complicated scenario, and this was their only interview question, and the only question was identify the most important thing in this scenario, that that would correlate to outstanding job performance.”

“these micro moments have more of an impact on your life than that in a lot of ways. Because, you know, if I, I might pick the right spouse, but if I don't turn these ordinary moments into extraordinary outcomes, It doesn't matter. Like that whole choice is like a multiply by zero. I can pick the perfect person, but…”

“you don't feel like you can be all in with somebody who's violating or, or not maintaining their agreements with you, who's not showing you respect by keeping their time. So how can I go all in for this person? I'm not going to go all in for them. I'm going to work nine to five and I'm going to do my job and I might do…”

“procedures eventually circumvent judgment. And so what happens is, um, if you follow the procedure, you never get in trouble. Even if what you're doing is absolutely the wrong outcome, and you should know it's going to lead to the wrong outcome, you can just throw your hands up and be like, well, I followed the…”

“And in the context of a workplace, if there's layoffs or something like that, the first thing that goes in a knowledge organization is communication and transparency.”

“email is a medium where you want to be seen as reliable, right? We have this innate desire, but anybody can just email you and usurp your time without your permission.”

“it takes willpower to make good decisions. It doesn't take a lot of willpower to follow a schedule.”

“And you follow those rules because, as Daniel Kahneman has said, it's easy to follow rules. Even yourself, you follow rules. Other people, if you say it's my rule, they'll just leave you alone.”

“An optimistic mindset isn't going to make good things happen, but a negative mindset is going to almost guarantee that negative things happen.”

“where we do like we accept failure in science, but we won't accept failure when it comes to an education system. So any, anybody who comes in and tries something else, they have this really weird, uh, equation, right? Where you have a very linear, small upside and a very exponential downside, uh, if things go wrong.”

“my belief on this is that we don't learn from experience. We learn through reflection. So we have an experience, we reflect on that experience, and from that reflection, we draw abstractions or relationships, and those abstractions and relationships become An action that we take the next time we're in a certain…”

“I think of consuming other people's abstractions as the illusion of knowledge. I'm the line cook, not the chef, right?”

“I have an idea that, you know, I've written about recently called the 24 hour rule, which is no matter what happens in your day, you get that day to celebrate or cry or the next day you have a new page and it's a blank page. And you have to move on. You can't hang on to yesterday's wins or yesterday's losses. You just…”

“The odds of those things being relevant and useful Are a lot less. So you want to find somebody who's done the same thing that you're doing and just did it. So next level success, somebody who just did your job, got promoted out of it.”

“in the short term, you're as good as your intensity, but in the long term, you're only as good as your consistency.”

“Your first thoughts are rarely your best thoughts. And so the ability to stick with a problem, uh, for longer than other people, which in this case might be, you know, four seconds or four minutes, uh, offers a unique advantage and perspective, right?”

“And then when you need to be right, you spend all of your time and effort, not only, you know, probably unconsciously undermining other people, um, but trying to prove that you're right to other people and you're closed to new data. You're closed to different, uh, perspectives.”

“it's much better for me if I'm going to give up to actually walk the full 10 than it would be to take the shortcut. Because I took the shortcut once and I've only done this once ever, but it took me three months. Cause every time I passed it on the way back, it became harder and harder not to take the shortcut after…”

“It's hard in a knowledge environment, though, right? Because You have so much of your, your worth. You, you want to contribute to something. I think there's a biological need to contribute to something larger than us. And if your identity, you're not mechanically making something, you can't see there's nothing tangible…”

“There's two types of nurture. There's chance and there's chosen, right? Chance is like what country I'm born into, what my parents do for a living, what my, uh, you know, what my situation is, what my environment is like, what circumstances that my zip code, right? Like I had no say in any of that. That's all luck. But…”

“reflection is the work of learning. I, I honestly, I think of it as that. And if you think of it as that, it changes the questions you ask other people too, because it now you're, you're not asking other people what to do. You're asking them to, to basically open their mind about the reflections on their experiences…”

“if you're stuck in that middle area, even if you're successful, you're only going to be incrementally successful. And if you're a failure, you're not going to be too far from success. So you're sort of like keeping yourself in this boundary where you can always convince yourself that you're sort of right or not very…”

“So there's always somebody you can compare yourself to Who's doing the exact optimal thing in the moment, but since the environment and the context in which we operate is always changing, eventually, um, positioning wins, but it never wins in the moment, but it wins over time, right? So over, over a hundred years,…”

“I have a friend, uh, Randall Stuttman, who gave me vocabulary around how I approach decisions on it, and I never had vocabulary around it, but he basically said, you decide as soon as possible or as late as possible, but never in between.”

“There's a downside to that too, which is really interesting because then you lose the excuse of the equipment's the problem. If only I had the right tools I could like deliver, right? Like, so you, there's a subtle sort of undercurrent to it, which is, uh, I expect you to be amazing at what you do and keep getting…”

“Like nothing great would be accomplished without ego. We'd never try anything new. We'd never, um, you know, endeavor to do anything because we would, we need to feel confident.”

“Like if you think maybe Warren Buffett's a good example, right? There's the, the 2008 housing crisis hits and there's a whole bunch of people who, who imitate Warren Buffett, right? They talk like him, they go to McDonald's every morning and they eat their egg McMuffin and they, they say all the right things. And being…”

“So the quality of the idea almost inarguably went up a little bit. Uh, how much is, is sort of like irrelevant, but the ability, the desire of the person on the other end to own the idea, to execute it went down. And it always went down by so much that the expected outcome from the project is always, almost always…”

“So if you think of four permutations of relationship, there's win-win, win-lose, lose-lose, lose-win, but in, if we map that to biology, only one of those survives across time, right? Which is, the relationship has to be win-win”

“I think that there's, there's a spectrum between emotional and rational. And at points on that spectrum where we're making a decision or we have a choice, we're faced with a situation in life, we need to know when rational is going to serve us and when it's going to harm us. And I don't think that the notion that we…”

“And your understanding of how other people are applying models is also going to be a key element of strategy in the future, right? So if we, we can anticipate that our competitors are following models that they learned in business school, well, now we know how they're likely to respond to what we're doing. Uh, and…”

“never follow a sycophant or a yes man who's been in their job for a long time if the boss also hasn't changed.”

“I mean, there's no way that you can live a life in today's day and age and only make decisions in your circle of competence, only make decisions where you have plank knowledge, You have to go outside of that, but the strategies you employ when you go outside of that are incredibly important”

“We will let it simmer, she would routinely say. It was her standing counsel against deciding anything in haste, and John D. Rockefeller would use those exact words to outmaneuver and outweigh Wall Street tycoons and independent refiners for the next 70 years.”

“The refiner had control sitting at the choke point between the raw material and the customer.”

“If you could only ship by water, you could only ship when the lake wasn't frozen. If you could only ship by rail, the railroad dictated your rates, but when you could play them off one another, you actually got much lower rates.”

“What Kroc invented was a way to replicate the system and cross an entire country, a structure that aligned the interests of the company, the franchisee, the supplier, and the customer. A machine for turning one restaurant's success into 10,000.”

“the other thing about compounding, I think people misunderstand is that all the advantages come at the end. And not at the beginning. They're very slow at the beginning, but it's that last double that makes a huge difference.”

“Munger points out that loving admirable people and ideas with special intensity is a huge advantage in life. Liking the right people and the right behaviors helps you become a better person.”

“And in investing, ask yourself, if I didn't already own this, would I buy it today at the current price? If the answer was no, you might be driven by liking tendency and not rational analysis.”

“Ask yourself, if I were making this decision fresh today with no history, what would I do? If the answer is different, act on it.”

“Don't rely on your ability to see clearly once denial has set in. By the time denial activates, you've already lost the ability to accurately assess the situation.”

“This is the pain of losing something is much higher than the pleasure of gaining the same thing. Losing 10 dollars hurts more than gaining 10 dollars feels good, and if you almost get something you want and it's jerked away from you at the last moment, you react as if you've owned it for years and lost it.”

“Social proof triggers most powerfully when you're puzzled or stressed, when you're both At the same time, that's when you're most vulnerable.”

“Reason respecting tendency is so strong that even meaningless or incoherent reasons will also increase compliance. Psychology experiments demonstrated this. People successfully jumped to the head of lines at copying machines Simply by explaining, I have to make some copies. But that's not actually a reason. Everyone in…”

“Plowing the money back into my business was a smart move. I get to keep all the proceeds from extra seeds, so it really increased my cash flow. But I learned something far more profitable. Forgo those things that give you momentary satisfaction. Look at the long term. Defer profits for something more substantial. Pass…”

“sometimes you don't make money on the product itself. You make money on what the product makes possible.”

“This obsession with information gave her an edge in an era before SEC regulations, standardized accounting, or financial transparency.”

“The people who owned the freezers didn't grow blueberries, and the blueberry growers didn't own the freezers. Nobody controlled the whole chain.”

“If your stock traded at a higher multiple than your target, you could buy their earnings and instantly improve your own. Do this repeatedly, and you could create growth impossible through operations alone. Growth was rewarded with a higher share multiple, creating a flywheel.”

“In fashion, your appearance is your argument.”

“Anyone who does business with Mr. Ford never gets a chance to rest and enjoy honors. The pressure for better methods is continuous.”

“The persistent problem nobody else wants to tackle eventually find their permanent home with the person willing to solve them.”

“As Andy would later observe, people who have no emotional stake in a decision can see what needs to be done sooner.”

“You can tell you're going through a strategic inflection point if the way you traditionally have done business no longer delivers the kind of results that we used to get. Well, the new way of doing business involves so much uncertainty that you can't easily bring yourself to embrace it.”

“We go to an extreme in splitting businesses up so that we can see problems which would be passed over in companies where the units are larger. By our plans, no one business all by itself will become too large.”

“Singleton is extremely intelligent. He tries to work out the best moves, and maybe he doesn't like to talk too much because when you're playing a game, you don't tell everyone else what your strategy is.”

“Well, you can't predict when the next crisis will hit. You know there will be one. When it does, those who borrowed too much or expanded too fast fight for survival while those who stayed strong and liquid pounce on opportunities.”

“Systems that work for 10 people often break at a hundred, and what works for a hundred can collapse at 1000.”

“Falling sales forced inventory cuts, driving away customers who expected selection, causing more and more sales drop.”

“You know, any business is undervalued if you map 20% growth indefinitely.”

“And the, the interesting thing about long-term too, is like, it allows for compounding and what, what we know about compounding is like all the gains come at the end, not at the beginning. Right? So if you take yourself off that path through a loss of trust or, you know, transactional behavior or not a win-win…”

“anything that you do that negates being in a long-term relationship takes you off compounding to begin with. So if you think long-term and you know from compounding that all the advantages come at the end, not at the beginning, they're very slow to accrue, but then they're too large to ignore.”

“That once you start thinking about balance and you think about living a holistic life, it becomes impossible, I think, in, in my experience.”

“And so often what we do in day-to-day life is we consume other people's abstractions without the reflections. And so we have this illusion of knowledge. So when we're journaling, what we're doing is we're teasing out that illusion of knowledge, but we're also taking our experiences and we're translating them actively…”

“So in decision-making, we, we advocate sort of an approach when we work with people on improving their decision-making about write the decision down at night that you're about to make, and then read it in the morning and see if it still makes sense to you. And what you're really doing is you're doing a couple of…”

“At some level, like in biology, we're, we're, we're wired with a hierarchical instinct, right? We see it in animals, we see it in tribes, we see it in how we organize organizations, and then how we curb or direct that instinct becomes sort of like culture or philosophy or religion, which is saying that, you know, to,…”

“if you do the same thing as everybody else, you're going to get the same results as everybody else. So you have to sort of deviate if you want to deviate results, but you need to create an advantageous divergence. You have to not only diverge from what everybody else is doing, but you have to be correct.”

“I think that a lot of confidence comes from not necessarily what we've done, but how we talk to ourselves.”

“I'm never worried about productivity on a daily basis. I'm worried about the aggregation of days. Like, any given day, I'm super fortunate. I don't have to be, um, productive, but if I'm not productive for a series of days, that's a much different problem, but it compounds too, right?”

“I think to understand other people, asking yourself what story they're telling themselves about themselves is the key to sort of understanding and gaining perspective and seeing the world through their eyes.”

“I found when I was managing people, they would always put their toe through that door, but it wouldn't be a foot, it would be a toe, and how you responded to that first sort of, here's something you could do better, or this criticism, or whatever you want to call it, or a fact you, you don't know about yourself, how…”

“All the time you spend thinking about something you don't control comes at the expense of something you do control.”

“The value proposition that seemed obviously superior to industry insiders, longer lasting quality turned out to matter less and less to consumers than price.”