The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

by William N. Thorndike Jr.

only purchase companies if the price translated into a maximum multiple of five times cash flow after the easily quantifiable benefits from programming discounts and overhead elimination had been realized. This analysis could be done on a single sheet of paper (or if necessary, the back of a napkin). It did not require extensive modeling or projections.

Buffett believes the key to longterm success is “temperament,” a willingness to be “fearful when others are greedy and greedy when they are fearful.”4

the value of being in businesses with attractive returns on capital, and the related importance of getting out of low-return businesses.

Buffett’s approach to managing Berkshire’s stock investments has been distinguished by two primary characteristics: a high degree of concentration and extremely long holding periods. In each of these areas, his thinking is unconventional.

“We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort level he must feel with its economic characteristics before buying into it.”

extreme form of decentralization increases the overall efficiency of the organization by reducing overhead and releasing entrepreneurial energy.13

The meetings attract enormous crowds (over thirty-five thousand people attended the 2011 meeting), and Buffett has taken to referring to them as “the Woodstock of capitalism.”

avoidance of unnecessary turnover, which can interrupt the powerful chain of economic compounding that is the essence of long-term value creation.

The outsider CEOs believed that the value of financial projections was determined by the quality of the assumptions,