"A stock market is a complex system. One definition of a complex system was a place, where, as Zoran put it, "SMy favorite part of "Flash Boys": p.199
"A stock market is a complex system. One definition of a complex system was a place, where, as Zoran put it, "Shit will break and there is nothing you can do about it." The person whose job it is to make sure shit didn't break ran two kinds of career risks: the risk of shit breaking that was within his control, and the risk of shit breaking over which he had no control." ...more
This book is bipolar: half of it is best perspective on what is wrong with MBA-driven corporations and the other half is political drivel. Still, I liThis book is bipolar: half of it is best perspective on what is wrong with MBA-driven corporations and the other half is political drivel. Still, I liked it because so few business leaders have the guts to call the business school graduates on the carpet for their senseless destructive ways. ...more
Co-author Jeanne Harris spoke at the 2010 JMP Discovery Conference which I attended and received this book for free. This is not the type of book I woCo-author Jeanne Harris spoke at the 2010 JMP Discovery Conference which I attended and received this book for free. This is not the type of book I would typically choose to read. Here are a couple interesting points I noted: a) p. 103: "Analysts want to feel supported and valued by their organizations but they also want autonomy at work - the freedom and flexibility to decide how their jobs are done. Managers should provide goals and resources, and then give analytical people freedom to organize their own work. Autonomy is not abandonment, however. Managers (and customers for that matter) need to recognize analysts' work and make their contribution visible to senior management. b) p.152: "American Airlines uses analytics to optimize its route network and crew schedules. Without analytical tools, managing a complex hub-and-spoke network with over 250 destinations, twelve aircraft types, and 3400 daily flights would be nearly impossible. Nevertheless, it might be argued that American's optimized complexity works against it. Neither it nor other major U.S. airlines with similar complexity levels have been profitable for years. A much less complex airline model is offered by Southwest Airlines, which has only one aircraft type and not airport hubs. Southwest also uses analytics for seat pricing and operations, but its model is much simpler to optimize. Most important, Southwest has beee profitable for thirty-six consecutive years, and at several times over the recent past its market values has been worth more than the combined market value of all other U.S. carriers. This sobering comparison suggests that American and the other more complex carriers need to simplify their own business models." c) p. 180: "Your analytical decisions won't always be perfect. In most cases gathering and analyzing data significantly increases the likelihood that your answer will be right, or at least better than a guess. Sometimes your analytical decision will be wrong or suboptimal. Indeed, one of the biggest hurdles organizations face is learning not to keep the making the same bet when the model was wrong last time. Don't lose faith in data and analytics. You're better off overall making analytical decisions, even if sometimes you end up on the wrong side of a statistical distribution of outcomes."
This book partially counters David Bevan's viewpoint and lays blame for the Penn Central failure as substantially due to Bevan's and Saunders willingnThis book partially counters David Bevan's viewpoint and lays blame for the Penn Central failure as substantially due to Bevan's and Saunders willingness to obscure the financial health of the PRR and subsequent PC behind the maze of non-rail corporate entities. ...more
The Southern Pacific was one of the best of the Guilded Age railroads and it pioneered many aspects of modern American business. It spanned from the GThe Southern Pacific was one of the best of the Guilded Age railroads and it pioneered many aspects of modern American business. It spanned from the Gulf of Mexico in Texas across New Mexico, Arizona, California, Oregon, Nevada, and Utah. Sadly this book is California-centric with no concentration on operations in other states. It didn't even mention the regularity of train robbings east of Tucson and how the railroad dealt with it. Sections dealing with the Salton Sea and Pacific Fruit Express were interesting but otherwise this was as dry a corporate history as has ever been penned. ...more
The author presents a detailed thesis that mismanagement by the PRR and NYC merged leadership of Strauss and Perlman was the root of the rapid demiseThe author presents a detailed thesis that mismanagement by the PRR and NYC merged leadership of Strauss and Perlman was the root of the rapid demise of the Penn Central. Under the direction of Perlman the PC spent $300M on capital improvements in each of its first two years with virtually no return on that investment. The $600M exceeded the railroad's income potential and credit lines at a critical juncture in history. I really expected to read that excess government regulation drove the PC under, and although it contributed as evidenced by virtually all other eastern railroads also going bankrupt, the primary cause was Perlman and Strauss. ...more
My heavens this book sucked like no other I've ever read. The author is a former Professor of Business History at Harvard who I trust is a better clasMy heavens this book sucked like no other I've ever read. The author is a former Professor of Business History at Harvard who I trust is a better classroom lecturer than a writer. He follows no chronology in the history of railroads jumping across multiple decades in the same paragraph to pointless ends. He regularly adds useless commentary and witticisms that reveal his biases not only with regard to railroads, but also commerce, politics, and his view of "the American way". So why stick with this book to the end? I suppose there's just enough interesting facts and historical perspective to keep slogging... although I don't think even in the midst of Moby Dick that I told myself so many times that "this is a waste of time". The author does a good job of discussing colonial American transportation systems before the advent of railroads. He also covers all the facets of American business (skilled labor, middle management, operation of complex systems, law, banking) that were essentially birthed in the railroad industry. I was hoping for a more detailed explanation of the destructive power of government regulation which he constantly referenced but rarely addressed in specifics. The single most important fact gleaned from this book is that capital intensive industry's in the US are virtually pre-destined to bankruptsy. Bankers provide start-up capital, sell stocks and bonds to investors, but saddle emerging enterprises with too much debt to succeed. Financiers then buy back into the enterprise after courts wipe out the debt and leave investors penniless. On top of this the government identified railroads as monopolies and over-regulated them to near-extinction. Railroad executives and stockholders were more than happy to pocket every ounce of revenue for themselves knowing the government would not allow any railway to be liquidated. Why invest in the physical plant when you can hand over a dilapidated business for the government to fix. That's the result of excessive regulation. [Of course, everyone knows that death and dismemberment were the penalties of under-regulation.:] I'm hoping the most valuable nugget in this book is a reference to "No Way to Run a Railroad - the Untold Story of the Penn Central" by Stephen Salsbury found on page 415 in the source listings. The Source Listing says the following: "There is no comprehensive history of American railroads and probably never will be. Such a work would run to several large volumes, lack forward narrative drive, ... and suffer from weaknesses inherent in joint authorship undertakings." Funny that the author accomplished no narrative drive in a single volume composed all by himself. ...more