"...keeping you great" Ten Minutes with the Growth Guy
HEADLINES:
Warren Buffet -- once again on top, Buffet was named the wealthiest person in the world by Forbes magazine with a net worth of $62 billion (Gates third with $58 billion) and his firm, Berkshire Hathaway, was named the second most admired company in the U.S. -- a good week for Warren.
Warren Buffet's Annual "Letter to the Shareholders" -- a perennial must-read, please take ten minutes this week and scan through Buffet's letter. And if you're short of time, just read pages 5-8, his section entitled "Businesses -- The Great, the Good, and the Gruesome" -- he outlines three different business models, emphasizing how beautiful his Sees Candy investment has been. Though it's in a slow growing market the key is that it doesn't take much capital to grow the business, therefore the return on equity over time is extremely high (The Great). In turn, businesses that might have nice bottom line profit and nice growth rates can be Gruesome if they require increasingly large amounts of capital to fuel the growth. It's nice to have a business in your portfolio (or product line in your business) that will provide steadily increasing profits without capital infusions, giving you money you can invest in other ventures. This is why they call them "cash cows." Entrepreneurs are generally terrible at maintaining these kinds (or parts of their existing) businesses because they get bored quickly! Read pages 5-8 several times.
Stock Market Returns More Like 7% at Best -- and if you have a few more minutes, read pages 18-19 where Buffet once again takes on the investment community who wants you to believe you can achieve 8%-10% annual returns in the U.S. equity market. He's thinking 7% max after the hefty "helper" fees. My take, which is the theme for our Growth Summit in the fall -- its time to "get out of Dodge" and go global with your business. I've found some outstanding experts in the field to speak -- stay tuned.
Favorite Buffet Quote -- "My behavior resembled that of a politician Molly Ivins once described: 'If his I.Q. was any lower, you would have to water him twice a day.'"
Entrepreneurs to the Rescue -- so like EVERY major challenge the world has ever faced, it's the entrepreneurs that must come to the rescue. Notes Stephen Watkins, founder of Entrex and the Private Company Index (PCI), "Buffet's insight into the market returns underscores not the "Bubbles" people talk about...it is an overwhelming "effervescence" caused by the vast increases in the supply of capital through main street American investors buying a limited supply of public companies...we need to recognize that of the 20,000 public entities...trading only happens in 1700 of them...but real economic gains are in the 24,000,000 private companies which not only produce 50% of the GDP but 80% of job growth. Wealth needs to be created, and transactionalized, in private companies which would bring real economic gain to the economic growth engine... away from the hype of supply and demand in the public markets 1700 companies and false economic returns." Hopefully Watkins can create a private company market space -- a vision he's been pursuing for six years! Keep going Steve.
Most Admired Company List -- and if you need something else to read, FORTUNE released their annual "Most Admired Company List." Apple landed on top followed by Berkshire Hathaway (way to go Buffet!), GE, Google, Toyota, Starbucks, FedEx, Proctor and Gamble, Johnson & Johnson, and Goldman Sachs Group. And FORTUNE had an outstanding and somewhat critical article on Steve Jobs and then Steve, I think yesterday, responded. It's some fascinating reading for the week. And if you only have one minute, take a look at this segment of Jobs interview -- he describes how Apple would survive without him and why he's so demanding on people.
Beef Jerky -- FYI, FORTUNE Small Business magazine has a Makeover section and needs a couple "meaty" comments to this month's Makeover of a company that sells beef jerky. The best and most insightful comments will likely be included in the print magazine -- deadline for comments is tomorrow, Friday, March 7. Here's a link.
(Pride Warning) -- Sheikh Mohammed Business Excellence Awards -- this is Dubai's largest and most prestigious annual business awards program which held its awards ceremony this past Tuesday. What a surprise when I found out that The Dubai Chamber of Commerce wanted to use the Rockefeller Habits book as a core gift, placing it on the seats of all 600 attendees representing the top CEOs and business leaders from the region (yes, I autographed all 600!). The book was positioned as Successful Business habits through the design and stylish packaging. Thank you to our wonderful Dubai coaching and marketing partner Biz-Ability. Our One-Page Strategic Planning template and other tools/techniques are making their way through that part of the world. Go Global!
