Ayn Rand’s Atlas Shrugged Part I Movie Trailer Released

Atlas Shrugged is being made into a trilogy and the trailer for the first installment has been released.  You all know that, although I enjoyed the book immensely, I think Ayn Rand’s ideas and mental models were incomplete (e.g., they ignore the component of human nature that results in oligarchical power structures eventually destroying entrepreneurship [...]

from Joshua Kennon

My Birthday In Pictures

The birthday festivities began around midnight.  Most of my family was over visiting going over some details of something we needed to discuss.  Then, later that night (er … morning) I got an email from Molly, who sent me a charitable gift card to Kiva, a wonderful organization. I woke up to one of my [...]

from Joshua Kennon

Think Like a Spider Web, Not an Organizational Chart

Here is the best thing I heard all day … Life is not an organization chart. Life is more like a spider’s web. Things happen in strange ways. – Ross Perot There is a lot of truth in this. You cannot think lineally about your life or business. You need to think in three-dimensions. This [...]

from Joshua Kennon

One of the Mansions In Charlie Munger’s Secret “Mungerville” Up for Sale

Given that I wrote about Charlie Munger so much this week (re-reading part of his biography caused him to be on my mind), I thought this was interesting … Years ago, through a tiny property subsidiary called MS Properties (or something along those lines), that is a subsidiary of Wesco Financial Corporation, that is a [...]

from Joshua Kennon

You Will Make Mistakes. Forgive Yourself. Move On. Start Rebuilding.

“His son died, his marriage ended, he lost a lot of money,” said Charles, Jr.  “He just walks away from that (emotionally).  Dad says to himself, that doesn’t work.  Don’t revisit it.  There are some things my dad could deal with better if he faced them more.  My dad, if he had a bad experience [...]

from Joshua Kennon

The First $100,000 Is Hardest

“Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.  Making the first million was the next big hurdle.  To do that a person must consistently underspend his income.  Getting wealthy, he explains, is like rolling a snowball.  It helps to [...]

from Joshua Kennon

The Secret World of Brooks Brothers

Before I “arrived” as they say, I had no idea how different clothes shopping was for men once they became successful.  Honestly, I never thought much about it but the assumption was that in terms of logistics, it would be just like shopping at Wal-Mart only with better surroundings, better service, higher quality and higher [...]

from Joshua Kennon

How to Solve the Trade Deficit – Part IV

This is part of my special on How to Solve the Trade Deficit. You can read Part I, Part II, or Part III if you missed them. The Increased Competition for Jobs Is Domestic, As Well You mention that standards of living have fallen, despite gains in things like iPods with 25,000 songs and the [...]

from Joshua Kennon

How to Solve the Trade Deficit – Part III

This is Part III of my special on How to Solve the Trade Deficit.  If you missed the earlier parts, you can read Part I or Part II first. How to Solve the Trade Deficit – Knowledge Workers vs. Manual Workers In many ways, your question about the trade deficit has very little to do [...]

from Joshua Kennon

Mental Model: Social Loafing

If you were starting a project or business, common sense would tell you that you could produce 5x as much output if there were five people working on your goals than if there were just one person.  If you are running a counseling program, ten counselors should be able to do 10x the work as [...]

from Joshua Kennon

The Strap on my Montblanc Star Chronograph Automatic Broke (Another Lesson in the Time Value of Money)

When I was 22 years old, or thereabouts, I bought a Swiss made Montblanc Star Chronograph Automatic stainless steel watch from Borsheim’s during the Berkshire Hathaway shareholder meeting.  I wanted something that would last, God willing, for the rest of my life and would remind me of when I was young, just starting out, and [...]

from Joshua Kennon

Pornography Study Failed After Researchers Couldn’t Find a Single Man Who Hadn’t Viewed X-Rated Material

Human behavior fascinates me to no end.  Today, I was reading through yet another batch of research papers and studies and one of them made me do a double-take.  Scientists in the United Kingdom wanted to research whether or not pornography degraded women by changing how men viewed them or treated them. The first task [...]

from Joshua Kennon

Mental Model: Goldovsky Errors

How can a dead body hang in a tree for nearly 14 hours and not be noticed by a town?  How can experts at one of the world’s top scientific institutions miss an easy-to-spot mistake for almost 30 years yet a 5th grader spots in 2008 after only a few seconds?  Why can’t you remember [...]

from Joshua Kennon

Mental Model: The Dunning–Kruger Effect

Have you ever wondered why some people come to erroneous conclusions despite all the counter evidence, overestimate their abilities, and constantly make mistakes whereas other, more intelligent people often claim ignorance and throw things on the “too hard” pile? I mean, the reality is that 49.99% of people must be below average at any given [...]

from Joshua Kennon

Here Is One of My Secrets to Making Money (Or, How I Once Bribed Women to Code for Me with Diamonds, Rubies, and Chanel)

The Secret: Strike Deals Where Everyone Has Limited Downside and Harness the Super Power of Incentive Some of you have been writing to me privately and asking about the early days when we started out and were trying to build our companies.  I thought it would be useful to share some of the things we [...]

from Joshua Kennon

Response to What Is Probably the Most Ignorant Message I’ve Received In 10 Years of Writing Finance Articles

A reader named Medusa wrote me and, to keep it short, explained that I shouldn’t believe people should be rich because the Bible is against rich people, that I was going to die a miserable, lonely old man with no one who loved me because I saved my money instead of spending it, and that [...]

from Joshua Kennon

Voltaire the Investor

How One of History’s Greatest Thinkers Amassed a Fortune One of the people upon whom I have based the way I live my life is Francois Marie Arouet de Voltaire, or Voltaire for short. Born on November 21st, 1694, he passed away on May 30th, 1778 after a long and extraordinarily successful life pushing for [...]

from Joshua Kennon

Why the iPhone Will Continue to Dominate the Smart Phone Market Even if It Doesn’t Have the Biggest Screen or Fastest Processor

It All Comes Down to the Existing Investment Consumers Have Made in their iTunes Library of Music, Movies, Games, Apps, and Television Shows It seems that a handful of tech folks and business bloggers – and, in fact, even my own brother – don’t seem to understand that the reason people choose the iPhone over [...]

from Joshua Kennon

The Concept of Mental Models Goes Back Thousands of Years

You are only playing a single note. You should find others who can teach you how to use the other holes in your intellectual flute. – Zi Yu accuses Prince Mou of having a one-track mind, Zhou Dynasty When Charlie Munger talks about the importance of “mental models“, he is espousing the same wisdom shown [...]

from Joshua Kennon

Mental Model: The Revolution of Satisfied Expectations

The Revolution of Satisfied Expectations: “Research conducted by Daniel Kahneman of Princeton University, and by others who have come to approximately the same conclusion, shows that most people judge their well-being not by measuring where they stand but rather based on whether they think their circumstances and income will improve in coming years.  For example, [...]

from Joshua Kennon

The Best Habit I Have …

Another batch of books arrived from Amazon.com following my book buying binge at Borders the other night.  That’s typically how it goes, though … I buy a few dozen books at a time, mostly in business, philosophy, psychology, investing, finance, history, and biography (all non-fiction – I’m not a big fiction reader). Early in my [...]

from Joshua Kennon

What “Take Our Country Back” Really Means

From a purely sociological and psychological perspective, I would have to agree with the recent assertions by Frank Rich in The New York Times regarding the true meaning of “take our country back”, which has been the battle cry of the Tea Party Movement.  In fact, I believe, after much reflection and study, that most [...]

from Joshua Kennon

Health Care Reform Taxes Will Hit Top 1% of Households

I don’t think there is any reasonable chance health care will be overturned as unconstitutional because it is written in such a way that you aren’t technically required to buy health insurance, you will just be subject to a special excise tax if you don’t. A lot of very, very expensive lawyers made sure the [...]

from Joshua Kennon

Mental Model: The Drunkard’s Search

The Drunkard’s Search: The tendency for people to search in the easiest places, rather than the ones that are the most likely to yield results.  The name comes from the idea of a drunkard seeking his car keys under a street lamp because the light is better instead of where he most likely lost them. [...]

from Joshua Kennon

A Brief Flirtation with a Cinnabon Franchise

I mentioned yesterday in the article on Dairy Queen franchise owners that after graduating from college, Aaron and I had looked into putting capital to work by opening several franchises in the town where we grew up.  We thought it would be a good place to invest the money we were earning from our other [...]

from Joshua Kennon

The Dairy Queen Franchisee Revolt

In the year following graduation from college, Aaron and I looked into opening several Dairy Queen franchises in Kansas City, Missouri and the surrounding suburbs near where we had grown up before leaving for the east coast.  Even though we figured we’d end up in a no-income-tax state such as Texas, Washington, or Nevada (paying [...]

from Joshua Kennon

Mental Model: Satisficing

Satisficing: A psychological and economic phenomenon that results from consumers choosing a product that meets criteria at an adequate level, rather than expending a great deal more time to find a fully optimal solution. Put another way, people are not looking for optimal solutions in their life.  They are looking for a combination of “just [...]

from Joshua Kennon

Does Religion Have a Responsibility to Look to Science?

Here’s an interesting question: Does religion have just as much responsibility to examine scientific evidence as it does religious tradition and scriptural text? Put another way: Throughout history, religion taken as a whole has lagged behind scientific discovery and development, only to redefine itself decades, or even centuries, later.  In the case of Christianity, the [...]

from Joshua Kennon

Department Store Sales Make Me Really Happy

Although I’m normally a Nordstrom’s guy myself, I have to say that after reading an article a few years ago (The Wall Street Journal or The Financial Times maybe?) about the vastly improved quality of department stores suits such as the J.C. Penny brand thanks to the use of expert tailors in Hong Kong for [...]

from Joshua Kennon

Using Cash to Increase Your Value Investing Returns

One of the least discussed secrets of great practitioners of the value investing strategy is the use of cash, cash equivalents, and bonds to augment returns.  From Benjamin Graham and Warren Buffett to Wallace Weitz and Marty Whitman, intelligent use of excess funds has as much to do with growing your capital over the long run [...]

from Joshua Kennon

Common Characteristics of Value Investing Stocks

There are several common characteristics that often present themselves in stocks that are thought to be attractive to those who follow a value investing strategy.  These have been written about extensively by famous value investing firms such as Tweedy, Browne & Company, and even Benjamin Graham himself.  By understanding the traits that frequently manifest themselves with [...]

from Joshua Kennon

Charlie Munger Value Investing Strategy

Charlie Munger, the Vice Chairman of Berkshire Hathaway, former hedge fund manager, and billionaire value investor, was instrumental in changing Warren Buffett’s way of thinking about value investing. Charlie insisted that the investor would be better served by focusing on better quality businesses, even if the price were higher, because those businesses could be held [...]

from Joshua Kennon

Why Income Inequality Will Always Exist as Part of the Post-Industrial Revolution Global Economy

First: Before we begin, the education system in the United States over the past few decades has done such a poor job teaching basic logic that by virtue of the headline alone, it is statistically likely that you have already made a decision about whether or not this short essay on pay inequality is “good” [...]

from Joshua Kennon

How to Make $10,000,000 After Taxes in a Few Years

I’m sitting in my investing office, looking over the river behind the property, figuring out what I’m going to do for the day. I’ve got a cup of coffee in my Seattle’s Best mug from Border’s and am listening to Roosterspur Bridge by Tori Amos. The ideal would be to plow into a giant pile [...]

from Joshua Kennon

The Psychology of Human Misjudgment by Charlie Munger

By Charlie Munger (Warren Buffett’s partner at Berkshire Hathaway) Speech at Harvard Law School (1995) Transcription of The Psychology of Human Misjudgment, comments [in brackets] by Whitney Tilson.  Note from Joshua Kennon: I’ve written a lot about Charlie Munger over the years, especially the influence he has had on my life and how we run [...]

from Joshua Kennon