Search Results for: munger

How credit cards bribe the purchasing agent

January 11, 2010

“They competed on the basis of raising prices. What other industry do you know that gets away with that?” Charlie Munger talks about how you can bribe the purchaing agent. I have one more anecdote: I have fun with this when I speak in front of students and professors. I say, “You all understand supply […]

Gresham’s Law: Why Bad Drives Out Good As Time Passes

December 23, 2009

Whenever coins containing precious metals have been used along with base metal coins of the same denomination, both legally accepted as tender, the bad coins have driven the good coins out of circulation. Gresham’s Law is named after Sir Thomas Gresham (1519-1579), an English financier in the time of the Tudors. However, the original principle […]

The decline of Berkshire Hathaway’s stock from Triple-A status

November 11, 2009

From Alice Schroeder’s new chapter: THE CRISIS: The decline of Berkshire Hathaway’s stock from Triple-A status in the updated (and condensed) version of The Snowball. As the financial crisis evolved, the lame-duck Bush administration and the new Obama administration followed a consistent course under Federal Reserve Chairman Benjamin Bernanke and Treasury Secretary Timothy Geithner, with […]

The Mis-Match Problem

August 04, 2009

In this video, Malcolm Gladwell speaks on the challenge of hiring in the modern world. One of those challenges, the mis-match problem, happens when we use criteria to judge someone for a job that is radically out of step with the actual demands of the job itself. Despite our best intentions we do this all […]

Mental Model: Supply and Demand

July 16, 2009

Supply and demand is a foundational economic mental model. Understanding it is instrumental in building a better picture of how the world works. *** The law of demand states that there is an inverse relationship between the price of a good and the quantity of the good demanded. Demand can be influenced by: the income […]