The Outsiders

I recently read a book by William Thorndike called "The Outsiders."  It tells the story of eight unconventional CEO's and their radically rational blue print for success.   In most cases, they outperformed their peers by over 20X in terms of long term value creation.  Here are three unconventional traits that all eight of the outsiders possessed:

1) They were masters at asset allocation.  They made asset allocation decisions based on long term value creation, not based on meeting Wall Street's quarterly earnings projection. They all had highly centralized investment decisions but very decentralized operations.  The "Corporate Head Count" could typically be counted on two hands.  

2) They were all comfortable with concentration in things they knew well.  In almost every case these CEOs bought their stock back when Wall Street undervalued them.  They were cautious to pull the trigger, but they bet big when they did.  

3) They were all frugal and non-flashy.  None of them had fancy ivory tower offices or drove over the top expensive cars.  In comparison to their peers, it was proven that there was actually an inverse relationship with lavish headquarters and investor returns.  

No matter what your journey may be, long term value creation, a highly specialized focus and a non-flashy demeanor should be able to serve you well.  If that what's it takes to be an "Outsider" you can sign me up!


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