The Outsiders- Eight unconventional CEOs and their Radical Blueprint for Success
By William N. Thorndike, Jr.
Who is the greatest CEO of last century? If your answer is Jack Welch of GE then you need to read this book to learn about eight exceptional CEOs whose performance eclipse all others.
William Throndike dissects utterly contrarian but fascinating group of business leaders who created exceptional long-term value for their companies and share holders. Eight CEOs featured in this delightful book are:
1). Tom Murphy and Capila Cities Broadcasting
2). Henry Singleton and Teledyne
3). Bill Anders and General Dynamics
4). John Malone and TCI
5). Katharine Graham and The Washington Post Company
6). Bill Stiritz and Ralston Purina
7.Dick Smith and General Cinema
8). Warren Buffet and Berkshire Hathaway
Each of these CEOs basically acted as astute investor and capital allocator of company’s capital. When you read individual account of each CEO you think you are reading about professional value investor. Henry Singleton’s story does not look diferent from that of Warren Buffet’s. And neither does his performance in shareholder value creation.
See these examples:
Henry Singlton- If you had invested $1 in his company in 1963 you would have earned back $180 in 1990 when he retired. This period includes one of the worst decade for investing in US - 70s.
Tom Murphy- If you had invested $1 in 1966 you would have earned back $204 in 1995. Again he managed this despite 70s.
You read story after story of eccentric, brilliant and contrarian individuals who chalked their own roadmap and who stood by their principles despite external noise. They didn’t give damn to wall street. You see in these stories clear principles of value investing. Examples after examples of strategies and discipline they employed during share buyback and other external buy outs. They only paid the price that was less than what the business was worth. Another characteristic of many is patience. They sat on their asses when the market was roaring. Some times for years. They only bought from undemanding sellers. Many used leverage very strategically. Many had no qualms selling their assets/companies if price was sky high. Many were hard negotiator when it came to buying and selling assets.
If you wanted examples of ultra rational homo-economicus then these are the ones.
This is splendid read for any value investor. It helps us learn many valuable principles of value investing.
My question to all is:
Who in India can be characterized as extraordinary and shrewd allocators of their capital?
I can think of Ajay Piramal, Motherson Sumi’s Sehagal…any one else guys?