Business Archives

Tenets of Berkshire Hathaway’s Investment Strategy

How to Build the Next Trillion Dollar Business

What is Berkshire Hathaway’s investment strategy? Can the company perpetually maintain its impressive rate of return on investments? Berkshire Hathaway’s investment strategy involves using the cash collected from the conglomerate’s insurance subsidiaries and investing it in other businesses at a much higher rate of return. The strategy has helped the company to grow to be as large as it is today. However, even Charlie Munger notes that it will be difficult to maintain the company’s historical returns because it is harder to find underpriced investments when you have billions than when you have a few million. Read on to discover

How to Identify Your Circle of Competence

What is the meaning of a circle of competence? Why must you know what you are good at? Charlie Munger defines your circle of competence as an area of expertise that matches your skills and experience. It is the subject area you are good at. Knowing your area of expertise helps you recognize where your boundary is and avoid dabbling in ventures that will lead to failure. Read more about the importance of knowing your circle of competence.

The 2 Types of Competition in Business

What are the types of competition in business? Why are conservative companies reluctant to invest in hot new technologies? In Poor Charlie’s Alamanack, Charlie Munger identifies both competition between rivals and creative destruction through technology as the two primary types of competition in business. Competition between rivals can be friendly or fierce, while competition caused by new technology can either level the playing field or give a company a decisive advantage. This is why Berkshire Hathaway is reluctant to invest in hot new technologies. New technologies are not always easy to understand and the company’s operators prefer to invest in

How to Invest Wisely in the Stock Market

How do you master how to invest wisely? What is the investment strategy of Warren Buffett and Charlie Munger? You master how to invest wisely when you learn to find fairly-priced, high-quality businesses with good management. Buffett and Munger applied these principles along with a focus on investing in companies that are underpriced by the market to become the legends they are today. Read on to fully discover how to invest wisely in the stock market.

Erin Meyer: Monochronic and Polychronic Cultures

How does time perception differ across cultures? What are the two types of cultural time perception? Time isn’t a fixed item—it is a concept, and each culture conceptualizes time differently. In her book The Culture Map, cultural expert Erin Meyer divides the methods of perceiving time into two overarching types: linear-time (aka monochronic) and flexible-time (aka polychronic). In this article, we’ll explain the difference between monochronic and polychronic cultures and present some strategies you can use when working with people who perceive time differently than you do.

How to Join a Group Conversation Without Intrusion

How do you join in a group conversation without being rude? Is there a polite way to interrupt an ongoing conversation? Whether you’re at a work party, a family get-together, or a business meeting, it’s important to connect with others. But that’s not always easy when they already know each other or are already engaged in a conversation. So, here are some tips on how to insert yourself into a group conversation.

The 3 Common Characteristics of a Good Business

What are the major characteristics of a good business? Why is Toyota an excellent example of a good business? A decisive competitive advantage, well-designed incentive systems for employees, and a reputable brand backed by product quality are all key characteristics of a good business. Toyota is an excellent example of a good business because its efficient manufacturing processes give it a competitive advantage in the market, its well-designed incentive systems reward employees that contribute to improvements in the company’s processes, and it has established and preserved a brand reputation for reliability and quality. Read on to understand more about the

Deductive vs. Inductive Thinking: What’s the Difference?

What is the difference between deductive vs. inductive thinking? Which cultures tend to adopt either style of thinking? Deductive thinking moves from broad, overarching principles to specific observations. In contrast, inductive thinking moves from specific data points to overarching hypotheses or theories. According to cultural communication expert Erin Meyer, Latin Americans tend to be deductive thinkers, whereas North Americans and people from Anglo-Saxon countries tend towards inductive thinking. In this article, we’ll consider the difference between deductive and inductive reasoning in a cultural context.

How to End a Conversation Without Burning Bridges

Do you ever get stuck in a conversation and don’t know how to end it? Is there a way to politely escape a conversation? Whether you’re at a business party, an event, or a family reunion, odds are that at some point you’ve been stuck in an awkward conversation. Luckily, you don’t have to fake a phone call to get out of it—just try one of these tips. In this article, we’ll explore how to gracefully end a conversation without burning any bridges.

The Link Between Team Diversity and Innovation

How are team diversity and innovation connected? How can working abroad increase one’s chances of making an impactful discovery? In his book Range, David Epstein discusses the link between team diversity and innovation. Epstein says that the more diverse the backgrounds of the team members, the greater the chance they will make a discovery or innovation Here’s David Epstein’s argument.