Wednesday, January 18, 2012

Quote of the Day: Eclecticism.

Woody Allen once explained why eclecticism works:  "The 
real advantage of being bisexual is that it doubles your chances 
for a date on Saturday night."   
--- Warren Buffet. 1995 Letter to Shareholders.

Another quote from the same letter is relevant to Jerry Yang's resignation from Yahoo. It explains why, for example, Amazon would fail much faster with the same kind of chairman.

Retailing is a tough business.  During my investment career, 
I have watched a large number of retailers enjoy terrific growth 
and superb returns on equity for a period, and then suddenly 
nosedive, often all the way into bankruptcy.  This shooting-star 
phenomenon is far more common in retailing than it is in 
manufacturing or service businesses.  In part, this is because a 
retailer must stay smart, day after day.  Your competitor is 
always copying and then topping whatever you do.  Shoppers are 
meanwhile beckoned in every conceivable way to try a stream of 
new merchants.  In retailing, to coast is to fail.

     In contrast to this have-to-be-smart-every-day business, 
there is what I call the have-to-be-smart-once business.  For 
example, if you were smart enough to buy a network TV station 
very early in the game, you could put in a shiftless and backward 
nephew to run things, and the business would still do well for 
decades.  You'd do far better, of course, if you put in Tom 
Murphy, but you could stay comfortably in the black without him. 
For a retailer, hiring that nephew would be an express ticket to 

tags: quote, control

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