Blink key points

 I recently read my first Malcolm Gladwell book after seeing several of his talks in online videos. The key points were:

1. Initial impressions as often as powerful as detailed analysis 
2. Trust instincts especially if developed over time through experience 
2. Avoid rushing into situations (high bpm heartbeat)

Definitely an interesting book to check out!

Huge sell-off in the Australian market

With the huge sell-off in the Australian market on 9/8/11 did anybody pick up some shares selling at under intrinsic value?

I know many investors that have been sitting on cash over the last year would be responsible for the large recovery during the second half of the day.

Personally I feel there is a likely large fall coming up again and to be even more prepared I've ordered a copy of Roger Montgomery's Valua.Able book. Since I haven't read Benjamin Graham's Security Analysis before I feel this would be a better introduction to analysis company values. I have read Intelligent Investor before so am looking forward to more detailed scenarios applicable to the Australian market.

Let me know if you have read both Roger Montgomery and Benjamin Graham's book and what you thought about them!

Order is Heaven's first law

"Order is Heaven's first law" Pope (poet)

While reading Dale Carnegies book 'How to Stop Worrying and Start Living' I came across the above quote for the first time. My first thought was 'wow' - what a simple maxim to summarize the current state of the business world!

Think about one of websites you use most. What is the first thought in your mind? My guess is that you were thinking 'Google'. Google has led the way in setting order to the internet by indexing the wide variety of information. Even Bill Gates in his book 'Business at the Speed of Light' states that information only becomes useful knowledge once it is properly ordered.

Dale Carnegie recommends keeping your thoughts in order go avoid mental stress. He compares the effect of having a clear work desk to that of a messy desk. The benefit is a clear desk is that more work gets done in an effective manner.

By the way if you are interested to find out more about the history of Google then check out 'The Google Story'

The Greatest Trade Ever

Facinating book by Gregory Zuckerman on how John Paulson made $20 billion betting against the housing bubble. The Greatest Trade Ever outlines in simple (relatively) language how independent thinking pays off in the end. I'm nearly half way through the book and it's already got me thinking about the Australian housing market.

On page 50 it describes how by 2005 US home prices were on average almost 2.4 times annual incomes, compared with a seventeen-year average of about 1.7 times. How many times the average Australian income are Australian home prices at the moment? I've read from differnet sources recently that the median-priced property in Australia is approximately 7.8 times the average Australian wage!

 (for example http://australianpropertyforum.com/blog/main/3240563)

Wu Tang and the Long Tail of Hip Hop

A friend just recommended the new Wu-Tang album Legendary Weapons and it got me thinking about how the Wu has moved along the long tail of music. It's my gut feeling that the hip hop tail has gotten flatter and will continue to get flatter. So where on the tail does the Wu-Tang sit nowadays?

Back in 2000 it would have been easy to argue the the Wu-Tang were definitely amongst the top groups in hip hop, thus they would have been near the head of the tail. But with the recent decline in music sales experienced in the industry over the last 10 years together with the decline in Wu-Tang album sales...well what are you thoughts.

BTW in case you haven't had a chance to check out Chris Anderson's book 'The Long Tail' here is a great clip of him from TED explaining the concept: http://www.ted.com/talks/chris_anderson_of_wired_on_tech_s_long_tail.html

Alternatively check out the original Wired article here: http://www.wired.com/wired/archive/12.10/tail.html

Long tail of investing

Just finished the Long Tail by Chris Anderson and it got me thinking about how this applies to investing in general. Successful investors often will have to invest outside of mainstream 'hits' where the majority of regular investors and funds are active. By this account it would mean they are looking further down the tail of investment options. What are your thoughts? Would an investor like Warren Buffett or even John Paulson be known as 'mainstream' or 'long tail' investors?