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Frederik Gieschen

@NeckarValue

Feb 1

Lessons from the Titans is filled with observations on legendary industrial companies. These are some of my favorites.

“Their secrets are hardly secrets at all—continuous improvement, rigorous benchmarking, disciplined investment, principled leadership, solid business systems.”

“The reasons for failure and the formulas for success haven’t really changed at all. Whether it be 1950, 1980, or 2020, they are pretty much exactly the same.”

There's no silver bullet: sustainable success is simple but not easy.

The book emphasizes the compounding advantage of getting a lot of small things right.

“... three common drivers: a relentless discipline on costs, cash flow, and capital deployment.”

Read 17 tweets

Frederik Gieschen

@NeckarValue

Jan 25

@scuttleblurb

Loved this with @scuttleblurb and @LibertyRPF

"Most people, including me, will flip through one essay after the next like nothing, oblivious to the hard work We are spoiled with great content. I personally subscribe to over a dozen newsletters. Most sit in my inbox unread."

"Some will cancel their subscription if they have to waste even 5 seconds logging in to read a 5,000 word post. "Too much friction".

“Fluff” is also friction ... the more insidious content-specific kind where you don’t make a meaningful point"

"finding aligned partners has been a long process. Getting to scale took 5+ years, it came all at once, and there are a million scenarios where I make the same moves and things don’t work out. Just because someone isn’t managing money doesn’t mean they aren’t capable of doing so"

Read 8 tweets

Frederik Gieschen

@NeckarValue

Jan 25

It's easy to overtrade when volatility is high and the market can make even legends look like fools.

Soros entered the the crash of '87 badly positioned: short Japan, long the US.

Japan held firm and the bounce in US markets looked like it was fading. Soros dumped his position.

He told the trader: "I'm going to walk out of here, they're not going to carry me out."

Survival was key. He had confidence in making it back - unless he lost his capital.

For a while he looked like a fool. Barron's: "A Bad Two Weeks: A Wall Street Star Loses $840 million"

But Soros was still in the game and could go on winning.

Druckenmiller: "He knows all he has to do is stay in the game and his talents will come back. For the threat of looking silly, he's not going to jeopardize the fund."

Read 6 tweets

Frederik Gieschen

@NeckarValue

Jan 22

@tom_morganKCP

"A lesson I wish I’d learned much earlier in life is that people are not always believable in the same domains that they think they are.

... some influential, very high-IQ people often have limited awareness of exactly where their circle of competence ends." by @tom_morganKCP

"Whenever someone offers you their opinion, a superb initial question paraphrases Morgan Housel: “what have you experienced that makes you believe what you do?”"

"there are probably no universal “tells” for lying, but the ideal approach is to observe closely enough to get a baseline of behavior, then you can notice deviations. Across thousands of interactions this translates to an intuitive recognition of an articulate incompetent."

Read 6 tweets

Frederik Gieschen

@NeckarValue

Jan 19

Life of an industrials analyst

"We read a fair number of trucking message
boards, usually to see what truckers think of their
equipment or what they think about the economy"

"I’ve toured countless factories on five continents ... Usually I get to talk to line operators and learn about
products, production schedules, and culture.

Employee engagement is a key metric of a well-run
company. ... In modern production, quality is critical"

"I arrived in Peoria, Illinois, for a factory visit that showed just how disorganized production can get
when a sharp rise in demand meets a poorly running
system.

most memorably, there were bins filled with components labeled “re-work.” ...bins were stacked more than head high"

Read 4 tweets

Frederik Gieschen

@NeckarValue

Jan 17

"I am attracted to ugly ducklings because I view myself as one. ... I gravitate toward investments that remind me of important aspects of my self-image, and can sometimes see something special in them before it is clear to the stock market."

"watering the flowers and cutting the weeds" vs “cut your losers and let your winners run”

"They are both tapping into the same fundamental feature of the universe – inertia, momentum, Newton’s First Law"

"with winners/losers, the buck stops with price. vs flowers/weeds with operating results.

The difference comes when your assessment of results differs from the stock price. Then you sell the weed that is still a “winner” and buy the flower whose stock price is dropping."

Read 5 tweets

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