My name is usually associated with Iscar, and I am glad that it is. But Iscar is a well-known story, and I want to speak here not of billion-dollar businesses, but of two relatively new, relatively small projects I am now involved in: a not-large factory and a small school. A man must renew himself, and I decided to branch out in the direction of what seems to me a very important area: non-innovation.
Tuesday, March 25, 2008
Wednesday, March 19, 2008
Search Mission
When Google founders Sergey Brin and Larry Page wanted a C.E.O. for their rapidly growing company in 2001, they turned to a technology executive, Eric Schmidt, who had previously worked at Sun Microsystems and Novell. Coincidentally, Yahoo co-founders Jerry Yang and David Filo were also looking for a C.E.O. that year, and they picked a Hollywood insider: Terry Semel, who had run Warner Bros.
Schmidt sat down with Condé Nast Portfolio senior writer Russ Mitchell to talk about his plans for Google.
Schmidt sat down with Condé Nast Portfolio senior writer Russ Mitchell to talk about his plans for Google.
Tuesday, March 18, 2008
Betting Big, Winning Big: Interview With Bruce Berkowitz, CEO of Fairholme Capital Management
BRUCE BERKOWITZ, PRESIDENT OF FAIRHOLME FUND and CEO of Fairholme Capital Management in Miami, runs concentrated portfolios -- and keeps a lot of powder dry to pounce on opportunities as he looks for companies that throw off a lot of free cash. This approach has paid off nicely for the firm, which now oversees about $9 billion, the vast majority of it in the no-load Fairholme1 Fund (ticker: FAIRX), of which Berkowitz is president. Since its launch at the end of 1999, the fund has finished near the top of its Morningstar category, with an annual "since-inception" return of 16.27%, trouncing the S&P 500's performance of minus 0.03% over the same period. The fund also bests most of its peers based on one-, three- and five-year returns.
Friday, March 14, 2008
Tony Dye
It was in 1996 that Dye first argued that, at 4,000, the FTSE 100 was overvalued. He moved a chunk of his clients' money into cash, withdrawing some £7 billion from the stock market. As share prices continued to soar, he was attacked by his clients and ridiculed in the City and the press. In 1999 Phillips and Drew (P&D) lost more clients than any other fund manager and came a humiliating 66th out of 67 in an institutional fund league table. The Times described the firm as a "standing joke".
The irony was that the hundreds of fund managers who had followed the herd and been proved disastrously wrong kept their jobs, while Dye paid the price for his independence of mind. Yet he remained philosophical, taking wry comfort from Keynes's observation that "worldy wisdom teaches that it is better to fail conventionally than it is to succeed unconventionally".
In recent years Dye had issued regular warnings that house prices were overvalued, and he predicted a crash "about as bad in real terms as the crash in the 1980s". In 2002 he wrote to the Financial Times accusing Mervyn King, the soon-to-be Governor of the Bank of England, of being unwilling to speak out on the cost of housing in the UK and of "recognising a bubble [only] after it has burst".
The irony was that the hundreds of fund managers who had followed the herd and been proved disastrously wrong kept their jobs, while Dye paid the price for his independence of mind. Yet he remained philosophical, taking wry comfort from Keynes's observation that "worldy wisdom teaches that it is better to fail conventionally than it is to succeed unconventionally".
In recent years Dye had issued regular warnings that house prices were overvalued, and he predicted a crash "about as bad in real terms as the crash in the 1980s". In 2002 he wrote to the Financial Times accusing Mervyn King, the soon-to-be Governor of the Bank of England, of being unwilling to speak out on the cost of housing in the UK and of "recognising a bubble [only] after it has burst".
Can You Beat the Market? It’s a $100 Billion Question
INVESTORS collectively spend around $100 billion a year trying to beat the stock market. That’s the finding of a rigorous effort to measure the total costs of Americans’ efforts to surpass the returns they would have received by simply holding a stock index fund. The huge price tag helps explain why beating a buy-and-hold strategy is so difficult.
The study, “The Cost of Active Investing,” began circulating earlier this year as an academic working paper. Its author is Kenneth R. French, a finance professor at Dartmouth; he is known for his collaboration with Eugene F. Fama, a finance professor at the University of Chicago, in creating the Fama-French model that is widely used to calculate risk-adjusted performance.
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