Emerson

Strategic Concepts & Mechanics

Strategic ManeuverLeveraged Buyouts Solve the Owner's Estate Trap

Structural VulnerabilityRaw Land Is the Worst Inflation Hedge

Mental ModelAvoid Catastrophe Before Chasing Growth

Strategic PatternMarket Price Chronically Understates Intrinsic Value

Mental ModelInvest in Your Own Company, Not Tax Shelters

Identity & CultureReturn-on-Assets Incentives Over Profit-Sharing

Structural VulnerabilityGreed-Driven Capital Floods Kill Every Gold Rush

Operating PrincipleMandatory Sabbaticals Prevent Executive Burnout

Mental ModelTake the First Loss or Drown in Ten

Capital StrategyPension Funds in High Cash Flow, Not Stocks

Risk DoctrineBoth-Sides Dealing Invites Derivative Suits

Strategic ManeuverUnrelated Diversification as Cycle Insurance

Structural VulnerabilityNew Capacity Destroys Its Own Price Forecast

Risk DoctrineBrilliant Chairman as Single Point of Failure

Strategic ManeuverBuy Leaders in Small Ponds, Never Minnows in Oceans

Implementation TacticStop the Party While Everyone's Dancing

Implementation TacticOpen-Ended Incentives Beat Capped Payouts

Primary Evidence

"ADVICE: When you are dealing with a company like Emerson, with a fan- tastic track record and, which is, in my opinion, the most efficient, highly di-"

Source:How to Lose $100,000,000 and Other Valuable Advice

"versified company in the United States, don't be worried about taking their shares on an acquisition even though the multiple is high. Where there might have been a serious drop in the value of their shares in igy^, even if they had failed to increase their earnings every quarter as they did, the management of that company is so superior that in the long run, taking their shares would have been far preferable to selling out at a low price the way we did. At the present time, Emerson has now completed twenty-one years with a perfect record of having increased their earnings per share every quarter over the prior quarter during that entire period."

Source:How to Lose $100,000,000 and Other Valuable Advice

Appears In Volumes

How to Lose $100,000,000 and Other Valuable Advice