Trading Pit Hand Signals — Ebook

It goes back way before Citizens United…

These organizations [joint stock companies] had raised hackles from the very beginning. Sir Edward Coke (1552-1634), for example, had complained that “they cannot commit treason, nor be outlawed or excommunicated, for they have no souls.” Two centuries later, the lord chancellor, Edward Thurlow (1731-1806), echoed his words: “Corporations have neither bodies to be punished, nor … Continue reading

“Paul Revere’s Ride” by Longfellow

Paul Revere’s Ride Henry Wadsworth Longfellow Listen my children and you shall hear Of the midnight ride of Paul Revere, On the eighteenth of April, in Seventy-five; Hardly a man is now alive Who remembers that famous day and year. He said to his friend, “If the British march By land or sea from the … Continue reading

Nucor: Ken Iverson

To my eyes, two of the most fascinating sights to behold are hot metal in motion and a group of people in headlong pursuit of a shared purpose. Those images are the essence of Nucor. They convey how we turned a confused, tired old company on the brink of bankruptcy into a star player in … Continue reading

NYT: Best Business Books Ever? “Liar’s Poker,” by Michael Lewis (even though I’ve since become convinced that the anecdote that gives the book its title never happened). “The Devil’s Candy,” by Julie Salamon. (Greatest dissection of the movie business ever written.) “The Box,”, by Marc Levinson. (Hard to believe you can write a great book about the rise and importance of … Continue reading

Mr. Welch and Mr. Lucky

For the past twenty-four years, I have had a lucky charm — a brown leather briefcase — that has come with me everywhere. My assistant, Rosanne, has nicknamed it “Mr. Lucky.” I won the briefcase in an Atlanta golf tournament in 1977, the year I first came to Fairfield. It has seen better days. It’s … Continue reading

CEO Interview Guide

  from Neff, Thomas J. and James M. Citrin, Lessons from the Top: The Search for America’s Best Business Leaders. (New York: Doubleday, 1999).  Leadership Questions What are the characteristics that make for a successful CEO today? Have these characteristics changed drastically in the last 10 or 20 years? In looking ahead, what skills and characteristics … Continue reading

A Prescription for Success in Business

from Neff, Thomas J. and James M. Citrin, Lessons from the Top: The Search for America’s Best Business Leaders. (New York: Doubleday, 1999). While the business leaders profiled here demonstrate as wide a range of personalities and styles as any cross section of the population, we did find, as we had hoped, a series of traits … Continue reading

Security Printing Overview

from Warner, Richard D. and Richard M. Adams II, Introduction to Security Printing. (Pittsburge: PIA/GATF Press, 2005). Security printing: “the process of converting printed products using limited-access materials and supplies along with unique or specialized technologies and a multiplicity of printing processes to produce security end products under secure operating procedures and manufacturing/distribution protocols.” Security end … Continue reading

The Wisdom of Crowds: Bubbles and Crashes

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005) Bubbles and crashes are textbook examples of collective decisionmaking gone wrong. In a bubble, all of the conditions that make groups intelligent — independence, diversity, private judgement — disappear. You don’t see bubbles in the “real” economy — they’re essentially a phenomenon of financial markets. When … Continue reading

The Wisdom of Crowds: Corporations

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). The 20th century corporation (Ford, for example) was Vertically integrated. “What a company could do for itself, it should do for itself.” Hierarchical, with many layers of management. Centralized, with final decisionmaking power concentrated among very few executives (or just one) This began to break down … Continue reading

The Wisdom of Crowds: Collaboration

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). Collaboration generates a diversity of perspectives and makes collaborators more individually productive. “Division of cognitive labor” allows scientists to incorporate many different kinds of knowledge, and to do so in an active way (rather than simply learning the information from a book.)” In small groups, the … Continue reading

The Wisdom of Crowds: Individual Irrationality

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). Markets work according to theory, even when real people (aka imperfect agents) are working within them, with only partial information. Cooperation problems: can be solved even if each individual is single-mindedly pursuing his own self-interest. People are not fully rational players — they care about what’s … Continue reading

The Wisdom of Crowds: Collective Organization

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). Pedestrians are a well-organized crowd, “in which lots of small, subtle adjustments in pace and stride and direction add up to a relatively smooth and efficient flow.” They are solving coordination problems: “to solve [a coordination problem], a person has to think not only about what he … Continue reading

Wisdom of Crowds: Decentralization

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). Decentralization has been a central tenet of management theory for the past 20 or so years — self-management, self-organization, and social networks are all prized more and more. Internet rises as the example of decentralized system (economic, organizational, etc) Decentralization: “power does not fully reside in … Continue reading

Wisdom of Crowds: the Challenger Explosion

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). Within minutes of the explosion of the space shuttle Challenger, investors began dumping stock of the 4 major participating contractors. Three firms began to creep back up after an initial decline, and one stayed down. The market had implicated a responsible party, without any external commentary … Continue reading

Wisdom of Crowds: Independence

Independence is not a given — we’re social beings. Economists tend to overemphasize autonomy/individuality and downplay social structures and interactions. Social proof: the tendency to assume that if lots of people are doing something or believe something, there must be a good reason why. This is different from conformity, it’s completely voluntary. When other people … Continue reading

The Wisdom of Crowds: Collective Decisionmaking

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005). If a crowd is asked to guess a value for something (say, a number of jellybeans in a jar), the average of the guesses will be a value that’s about 95% accurate, far better than the individual answers. The guessers are not working as a group, … Continue reading

Wisdom of Crowds: Diversity

Markets, for example, are usually prima facie diverse because they’re made up of people with different attitudes toward risk, different time horizons, different investing styles, and different information. On teams  or in organizations, by contrast, cognitive diversity needs to be actively selected, and it’s important to do so because in small groups it’s easy for … Continue reading

The Wisdom of Crowds: Decision Markets

Iowa Electronics Market (IEM) project — futures markets that use the crowd wisdom associated with a market to predict election results. Hollywood Stock Exchange (HSX) does the same with box office returns. DARPA’s FutureMap program was a short-lived set of internal markets, which would have been quite small and open only to intelligence analysts, and perhaps … Continue reading