Book: The Outsiders

“Leadership is analysis” - William Stiritz

I recently finished a book called “The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success” by William Thorndike, Jr. ( http://www.amazon.com/The-Outsiders-Unconventional-Radically-Blueprint/dp/1422162672/ref=sr_1_3?ie=UTF8&qid=1378951419&sr=8-3&keywords=The+Outsiders).  It is a fantastic book that explains why companies and CEO’s that focus on capital allocation have had great success. I have discussed this idea earlier in my “Capital Allocators” post. Nothing in the book was revolutionary to me as I already am a believer and user of what the author points out, however I did learn a lot about the history behind several companies and people.  For those that are less familiar with why capital allocation is so important this book is a must read and should be an eye opener. Some of the important points in the book are the following:

- As a group they shared old-fashioned, pre-modern values including frugality, humility, independence, and an unusual combination of conservatism and boldness. 

- Hedgehogs know one thing and do it well, but foxes have connections across fields and to innovate, this book is about foxes. 
- They were not blindly contrarian.
- These managers avoided the institutional imperative.
-  These eight CEO’s were not charismatic visionaries, nor were they drawn to grandiose strategic pronouncements.  They were practical and agnostic in temperament, and they systematically tuned out the noise of conventional wisdom. 
-  They disdained dividends, made disciplined occasionally large acquisitions, used leverage selectively, bought back a lot of stock, minimized taxes, ran decentralized organizations, and focused on cash flow over reported net income.

 If you get the book pages 218-220 provide a better summary of the books key points.  If I were creating a curriculum for students about investing this would be required reading. 

If you would like to buy the book please click on the link below and it will take you to my Amazon Store. You will NOT be charged extra for going through my store.

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success