The partners of Little Engine Ventures are invited to gather. We will confront our progress and blunders over the last 12 months and try to explain how our thinking has evolved since launch and where that may take us on our journey ahead. No questions are off limits. Come early. Stay late. Enjoy our city Read more about 2021 Annual Meeting[…]
A business owner should diversify when the market no longer responds profitably enough to justify reinvestment –and there is still entrepreneurial appetite, capacity, and talent remaining. The default should be reinvestment in one’s primary endeavor, where the insights and probabilities are strongest. If a firm begins to lose value, then the owner should make changes Read more about Diversification Motive[…]
Our General Managers run sales and operations. And they’re great. I provide “entrepreneurial services.” Some probably prefer I stand down, wild man. When we launched, I used the phrase “we believe in decentralization” quite often. At the time, I had a vague understanding of what that meant exactly. I figured the simple definition was “Hire Read more about Making Order While Retaining Decentralization[…]
I recently asked Mikel what I ought to write. He suggested I write about writing the annual report for Little Engine Ventures or write about reading annual reports. While it seems rather metacognitive to write about reading and writing, I’ll give it a whirl –please bear with me. As with all my writing, my hope Read more about Reading & Writing Annual Reports[…]
This week a prospective business seller said he didn’t run his business according to traditional cost accounting methods. (I had asked about gross margins to get a sense of gross profit. This is an important indicator to me because it often reveals intellectual property and annual growth ceiling.) He gently said, “that’s just not how Read more about Common Practice Too Often Replaces Common Sense[…]
I recently re-read Phil A Fisher’s classic, “Common Stocks and Uncommon Profits.” After first speed-reading a book, I return to those I think worthwhile, and the second time through take notes. On subsequent times I refine my notes. Below are my refined notes after several re-reads. Most of the words are the authors. Any errors Read more about Notes & Commentary on “Common Stocks & Uncommon Profits” by Phil A Fisher (with applications to private companies)[…]
Each year we revalue all companies we control. This investigation leads me to write somewhere between ten and twenty five pages per company. I then edit the valuation memos down to five to fifteen pages each. With so many new companies this year’s valuation memos took longer. This cut into my blog writing time. In Read more about Where Is All Your Writing?[…]
A friend said business can be compared to boating. I love boating and I love metaphors. So here goes: He said the body of water is akin to the industry. It could be a vast ocean or a small pond. The weather is the present business climate. The vessel is the business. It could be Read more about Water, Weather, Vessel & Captain[…]
Opportunity cost is one of those concepts that slinks away from you when you’re not looking. For that reason, I start with the definition. Opportunity Cost – “the loss of potential gain from other alternatives when one alternative is chosen” How can the opportunity cost be zero? When you select your best alternative you sacrifice Read more about Low Opportunity Cost Investing[…]
This upcoming Friday I have a meeting with a partner that was not able to attend the LEV Annual Meeting. During the scheduling process, I sent a link my notes and asked what our agenda was. He replied with the following: Review statements. How do I read these? Review current metrics and translation into goals. Read more about Too Much Information[…]