Billion Dollar Lessons - Paul B. Carroll & Chunka Mui

[Liberty]

[amazonsearch]Billion Dollar Lessons[/amazonsearch]

 

Billion Dollar Mistakes sucked, but this one - despite having almost the same title - seems much better. I'm only a few dozen pages in and already it's a whole other animal. Well-written, well researched, insightful and useful to both businesspeople and investors.

 

I can't recommend it yet because I haven't finished it, but the signs are good so far.

[oddballstocks]

I loved that book, I should read it again, I think I last read it three years ago or so. 

 

My view is success is often based on situational specific things whereas failure patterns seem universal.  This book only reinforced that.

 

Highly recommended.

[Valuebo]

Just read the preface and introduction tonight, seems promising. Agree with your first impressions Liberty, think it should be very useful for investors to avoid pitfalls.

[Liberty]

Just read the preface and introduction tonight, seems promising. Agree with your first impressions Liberty, think it should be very useful for investors to avoid pitfalls.

 

Great. I'm curious to know what you think when you are farther along. I'm on p. 118 and so far so good.

[infinitee00]

I finished reading the book last weekend. It was a pretty good read. The first 7-8 chapters were really very insightful and I am in fact reading them again. I had a feeling that the last 2/3 chapters were meant more for managers than investors but important nevertheless. Overall a very good book to think about business strategy and the pitfalls along the way that even good companies may face due to misjudgements by corporate leadership.

[Valuebo]

Just read the preface and introduction tonight, seems promising. Agree with your first impressions Liberty, think it should be very useful for investors to avoid pitfalls.

 

Great. I'm curious to know what you think when you are farther along. I'm on p. 118 and so far so good.

 

Well, I didn't have much time (or make time..) to read during the week, but am now at page 170 (chapter 7) after a short 'Sunday afternoon reading marathon'. I should finish it any day now.  :)

 

It is indeed well researched with a lot of business history and great examples (as far as I can judge). I'm in my early twenties so I missed the epic business failures of companies like Kodak, Motorola and Loewen. This is a great way of learning about them and their mistakes.

 

I particularly like the structure of the book. Should be helpful later when I pick it up again. Also love all the additional info you get with these kind of books. For example the part on Moore's, Metcalfe's and Reed's Law and their effects and implications on business. Such things always get me thinking, slowly connecting the dots from things I previously read elsewhere and gaining new insights.

[Liberty]

Thanks for the feedback. I've now finished it, and I gave it a grade of A in my list of books read. Definitely recommended to others here.

[Valuebo]

I'd rate it with a B or 4/5, not quite an A but close. Chapter 10 and 11 where indeed of little use for a student just starting his carreer.  ;) Will reread part 1 somewhere in the next 3-4 years.

[Jurgis]

Great book IMO, just finished reading it.

 

One thing I realized from reading it is that all the supersuccessful "outsider" companies have done pretty much the same things that were billion dollar mistakes for other companies. I.e. buyouts, expanding into close-by fields, expanding into unrelated fields, leverage, etc. All of these are also things that supersuccessful companies did as well. (Yeah, BRK is a conglomerate, strike one, bought out overpriced broken companies - GenRe/NetJets, strike two, three and so on ;) ). So you pretty much can't look at company A and say "well, it's doing things that led to billion dollar mistakes, so it's gonna fail, don't invest". I guess you pretty much have to look at the management (and culture??? - I still don't know if anyone can evaluate the culture effectively en moment and not just past with perfect 20/20 vision). And hope that management results stay as good as they were in the past.

 

There might be a few category killers that never strayed from straight and narrow even as they made killing while growing. WMT (didn't they fail somewhere abroad though?)? HD? MA/V? This would be a very very small list of investable companies. Maybe enough for very concentrated investors if they start at the right point in time. Not sure.

[Tompety03]

Thank you for recommending this book, I really enjoyed it.  I've typed up my notes and compiled a PDF of all the mistakes for future reference.

 

- Notes: http://www.boardofbooks.com/billion-dollar-lessons/review-and-notes/

- List of Failures: http://www.boardofbooks.com/2016/09/billion-dollar-lessons/

 

Jurgis - agree that a lot of companies profiled in the book were using similar strategies in broad terms as the companies in the Outsiders.  I think the idea is that there is a right and wrong way to pursue those strategies (managing the pace of acquisitions in a roll-up, entering real adjacencies, etc.) and management has a track-record of executing on that strategy.

 

A friend also recommended Dead Companies Walking, which is very similar.  It has some entertaining stories of meetings with mgt that illustrate how out of touch they can be with reality. 

 

Chris