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News Selected by Stingy Investors
Suggested reading from our community of intelligent investors

Headlines
 
  08/09   The case for banning tipsManagement  
  07/01   Business out of excusesManagement  
  12/29   Sears Holdings liquidation saleManagement  
  12/29   How to make a fortune after 50Management  
  08/27   Why McDonald's winsManagement  
  08/26   Tales of when legends leaveManagement  
  07/22   Is he economically rational?Management  
  06/14   When two-thirds isn't enoughManagement  
  06/01   The golden age of drive-thruManagement  
  05/31   Can Progressives Fix the U.S. Postal...Management  
  02/06   Hedging Bankers Skirt Efforts to Overhaul...Management  


Recent News
 
The case for banning tips
"For over eight years, I was the owner and operator of San Diego's farm-to-table restaurant The Linkery, until we closed it this summer to move to San Francisco. At first, we ran the Linkery like every other restaurant in America, letting tips provide compensation and motivation for our team. In our second year, however, we tired of the tip system, and we eliminated tipping from our restaurant. We instead applied a straight 18% service charge to all dining-in checks, and refused to accept any further payment. We became the first and, for years, the only table-service restaurant in America where you couldn't pay more money than the amount we charged you. You can guess what happened. Our service improved, our revenue went up, and both our business and our employees made more money."
from DanH, 12:34 PM EST, 08/09/13, Management
 
Business out of excuses
"As other economies stumble, the Canadian economy looks golden. But any gold is badly tarnished when it comes to productivity. Output per hour worked in the Canadian business sector has grown less than 1% per annum over the past decade. Productivity from labour and capital combined has not grown at all. This is one of the worst records in Canadian history and one of the worst among developed economies."
from NormR, 1:59 PM EST, 07/01/12, Management
 
Sears Holdings liquidation sale
"My view: owning Sears as a property play is a demonstration of the arrogance and breathtaking naivete of much that passes on Wall Street. Sears Holdings has over 300 thousand employees. I don't know how you successfully liquidate a business integrated with that many lives. I don't know of anyone who has ever successfully liquidated a business with that many employees. I am not sure it can be done and it certainly can't be done by someone with my skill-set (highly analytical, ability to spy value or value traps but no people management skill and not much tact). The idea that Sears was going to be managed/liquidated by a bunch of hedge fund guys (people like me) well - that was comical."
from NormR, 4:18 PM EST, 12/29/11, Management
 
How to make a fortune after 50
"At an age when others might ready for pre-retirement, some folks pass age 50 determined to start a new life in the business world - and succeed beyond their rosiest business plan projections."
from NormR, 3:55 PM EST, 12/29/11, Management
 
Why McDonald's wins
"Employees and analysts say he's guided by a zeal for satisfying customers, even if it comes at the expense of his own ideas and preferences. A few years ago the company did extensive testing on new coffee-cup lids and rolled out a version that consumers liked -- and that Skinner, who happens to drink a lot of coffee, really didn't. Rather than overrule the masses, Skinner came up with his own solution: He keeps a stash of the old lids on hand."
from NormR, 12:00 PM EST, 08/27/11, Management
 
Tales of when legends leave
"The founder of a successful corporation steps down. Then what? At Ford Motor Co. and Walt Disney Co., long periods of stagnation or decline, followed by renewal. At Wal-Mart Stores Inc., continued success for a time, then new challenges. Now it is Apple Inc.'s turn, following Steve Jobs's resignation as CEO on Wednesday."
from NormR, 2:20 PM EST, 08/26/11, Management
 
Is he economically rational?
"I think of it as training to understand managements - see if they act like owners maximizing long-term profits, or as workers aiming to maximize their pay packets. You will earn more with companies that think like owners."
from NormR, 6:46 PM EST, 07/22/11, Management
 
When two-thirds isn't enough
"It's one of the great anomalies of our ownership society: shareholders own companies, but executives can easily slap them down. The hired help, in other words, holds the cards. The owners of Cedar Fair L.P., a leisure and entertainment company in Sandusky, Ohio, have learned this the hard way."
from RobS, 9:00 PM EST, 06/14/11, Management
 
The golden age of drive-thru
"Operational innovations at restaurants like Taco Bell rival those at any factory in the world. A view from the drive-thru window at how they do it"
from NormR, 12:37 PM EST, 06/01/11, Management
 
Can Progressives Fix the U.S. Postal Service?
"But a desire to maximize profits and an aversion to losing money leads to certain efficiencies that ought to be exploited in less fraught enterprises. At UPS and FedEx, management has a powerful incentive to hold down overall labor costs, and to preserve the flexibility and adaptability of the respective companies. When USPS negotiates with the any of the four unions that represent its employees, the dynamic is completely different: management has fewer incentives to hold down costs, even as labor exercises substantially more clout due to is political influence.The results are ludicrous"
from RobS, 9:02 PM EST, 05/31/11, Management
 
Hedging Bankers Skirt Efforts to Overhaul Pay
"Intent on fixing a banking system that contributed heavily to the recent financial crisis, lawmakers and regulators pushed Wall Street to overhaul its pay practices. Big banks responded by shifting more compensation into stock, a move intended to align employees' interests more closely with those of investors and discourage excessive risk-taking. But it turns out that executives have a way to get around those best-laid plans. Using complex investment transactions, they can limit the downside on their holdings, or even profit, as other shareholders are suffering."
from RobS, 10:35 AM EST, 02/06/11, Management
 
The president as micromanager
"While watching the speech, I tweeted that 'Obama sounds remarkably similar to the CEOs I used to listen to on earnings calls: the ones with mediocre EPS and a failing business model.' This wasn't a crack at Obama, or Democrats it was a reaction to the content. And after watching the responses, the impression lingers--indeed, maybe it's strengthened. The nation is facing some really difficult problems, particularly on the fiscal front. There's no longer any way to put it off pretty soon, the government is going to have to start making some very hard choices about taxes and spending. No matter what it chooses, that probably means lower economic growth, angry voters, and some real loss on the part of whoever's ox is gored."
from NormR, 11:57 AM EST, 01/26/11, Management
 
The downfall
"Next time you go to an AGM, if you think there is cause for concern, ask the CEO during the QandA if management could leave the room for 15 minutes because you have a few questions to ask the independent directors concerning executive compensation, and point out that it would not be appropriate for management to be present for such a discussion. Don't be afraid. The meeting is for you, the shareholder. If the CEO gets defensive, that might be taken as a bad sign. If the independent directors get defensive, that could be taken as a really bad sign, because it would suggest that, in their hearts, they don't represent shareholders at all."
from NormR, 3:15 PM EST, 01/02/11, Management
 
Web Focus Helps Revitalize The Atlantic
"How did a 153-year-old magazine - one that first published the "Battle Hymn of the Republic" and gave voice to the abolitionist and transcendentalist movements - reinvent itself for the 21st century? By pretending it was a Silicon Valley start-up that needed to kill itself to survive."
from NormR, 1:24 PM EST, 12/13/10, Management
 
Why work doesn't happen at work
"Jason Fried has a radical theory of working: that the office isn't a good place to do it. At TEDxMidwest, he lays out the main problems (call them the MandMs) and offers three suggestions to make work work."
from NormR, 3:09 PM EST, 11/27/10, Management
 
The Times' Paywall and Newsletter Economic
"Even if paywall economics can eventually be made to work with a dramatically reduced audience, this particular referendum on the future (read: the present) of newspapers is likely to mean the end of the belief that there is any non-disruptive way to remain a going concern."
from NormR, 7:09 PM EST, 11/09/10, Management
 
The Perfect Stimulus: Bad Management
"One day, a position opened above me, and I was the most obvious candidate to fill it. My boss called me into her office and said she had some bad news. She explained that the media was giving our company a lot of heat because almost all of our managers and executives were white males. Promoting me, she explained, would only make things worse. I asked how long I might need to wait for all of this to blow over. My boss was vague, but she said the timeline involved smoothing out the effects of two centuries of corporate discrimination."
from NormR, 11:30 PM EST, 11/06/10, Management
 
The Next Level
"In this environment, it would be easy for Netflix to fall back on its safety cushion, milk the existing DVD business for all it's worth, and try to slow down customers' migration into streaming, particularly since a customer who streams movies is less lucrative than one who rents three DVDs a month. But then, a decade from now, we'd be writing Netflix obituaries that sounded just like the ones for Blockbuster. Sometimes you have to destroy your business in order to save it."
from RobS, 4:06 PM EST, 10/15/10, Management
 
What Happened to Yahoo
"What went wrong? The problems that hosed Yahoo go back a long time, practically to the beginning of the company. They were already very visible when I got there in 1998. Yahoo had two problems Google didn't: easy money, and ambivalence about being a technology company."
from Eric, 12:19 AM EST, 09/09/10, Management
 
Inside the secret world of Trader Joe's
"Apple's retail stores aren't the only place where lines form these days. It's 7:30 on a July morning, and already a crowd has gathered for the opening of Trader Joe's newest outpost, in Manhattan's Chelsea neighborhood. The waiting shoppers chat about their favorite Trader Joe's foods, and a woman in line launches into a monologue comparing the retailer's West Coast and East Coast locations. Another customer suggests that the chain will be good for Chelsea, even though the area is already brimming with places to buy groceries, including Whole Foods and several upscale food boutiques.But Trader Joe's is no ordinary grocery chain. It's an offbeat, fun discovery zone that elevates food shopping from a chore to a cultural experience."
from Eric, 8:36 PM EST, 08/30/10, Management
The case for banning tips
"For over eight years, I was the owner and operator of San Diego's farm-to-table restaurant The Linkery, until we closed it this summer to move to San Francisco. At first, we ran the Linkery like every other restaurant in America, letting tips provide compensation and motivation for our team. In our second year, however, we tired of the tip system, and we eliminated tipping from our restaurant. We instead applied a straight 18% service charge to all dining-in checks, and refused to accept any further payment. We became the first and, for years, the only table-service restaurant in America where you couldn't pay more money than the amount we charged you. You can guess what happened. Our service improved, our revenue went up, and both our business and our employees made more money."
from DanH, 12:34 PM EST, 08/09/13, Management
 
Business out of excuses
"As other economies stumble, the Canadian economy looks golden. But any gold is badly tarnished when it comes to productivity. Output per hour worked in the Canadian business sector has grown less than 1% per annum over the past decade. Productivity from labour and capital combined has not grown at all. This is one of the worst records in Canadian history and one of the worst among developed economies."
from NormR, 1:59 PM EST, 07/01/12, Management
 
Sears Holdings liquidation sale
"My view: owning Sears as a property play is a demonstration of the arrogance and breathtaking naivete of much that passes on Wall Street. Sears Holdings has over 300 thousand employees. I don't know how you successfully liquidate a business integrated with that many lives. I don't know of anyone who has ever successfully liquidated a business with that many employees. I am not sure it can be done and it certainly can't be done by someone with my skill-set (highly analytical, ability to spy value or value traps but no people management skill and not much tact). The idea that Sears was going to be managed/liquidated by a bunch of hedge fund guys (people like me) well - that was comical."
from NormR, 4:18 PM EST, 12/29/11, Management
 
How to make a fortune after 50
"At an age when others might ready for pre-retirement, some folks pass age 50 determined to start a new life in the business world - and succeed beyond their rosiest business plan projections."
from NormR, 3:55 PM EST, 12/29/11, Management
 
Why McDonald's wins
"Employees and analysts say he's guided by a zeal for satisfying customers, even if it comes at the expense of his own ideas and preferences. A few years ago the company did extensive testing on new coffee-cup lids and rolled out a version that consumers liked -- and that Skinner, who happens to drink a lot of coffee, really didn't. Rather than overrule the masses, Skinner came up with his own solution: He keeps a stash of the old lids on hand."
from NormR, 12:00 PM EST, 08/27/11, Management
 
Tales of when legends leave
"The founder of a successful corporation steps down. Then what? At Ford Motor Co. and Walt Disney Co., long periods of stagnation or decline, followed by renewal. At Wal-Mart Stores Inc., continued success for a time, then new challenges. Now it is Apple Inc.'s turn, following Steve Jobs's resignation as CEO on Wednesday."
from NormR, 2:20 PM EST, 08/26/11, Management
 
Is he economically rational?
"I think of it as training to understand managements - see if they act like owners maximizing long-term profits, or as workers aiming to maximize their pay packets. You will earn more with companies that think like owners."
from NormR, 6:46 PM EST, 07/22/11, Management
 
When two-thirds isn't enough
"It's one of the great anomalies of our ownership society: shareholders own companies, but executives can easily slap them down. The hired help, in other words, holds the cards. The owners of Cedar Fair L.P., a leisure and entertainment company in Sandusky, Ohio, have learned this the hard way."
from RobS, 9:00 PM EST, 06/14/11, Management
 
The golden age of drive-thru
"Operational innovations at restaurants like Taco Bell rival those at any factory in the world. A view from the drive-thru window at how they do it"
from NormR, 12:37 PM EST, 06/01/11, Management
 
Can Progressives Fix the U.S. Postal Service?
"But a desire to maximize profits and an aversion to losing money leads to certain efficiencies that ought to be exploited in less fraught enterprises. At UPS and FedEx, management has a powerful incentive to hold down overall labor costs, and to preserve the flexibility and adaptability of the respective companies. When USPS negotiates with the any of the four unions that represent its employees, the dynamic is completely different: management has fewer incentives to hold down costs, even as labor exercises substantially more clout due to is political influence.The results are ludicrous"
from RobS, 9:02 PM EST, 05/31/11, Management
 
Hedging Bankers Skirt Efforts to Overhaul Pay
"Intent on fixing a banking system that contributed heavily to the recent financial crisis, lawmakers and regulators pushed Wall Street to overhaul its pay practices. Big banks responded by shifting more compensation into stock, a move intended to align employees' interests more closely with those of investors and discourage excessive risk-taking. But it turns out that executives have a way to get around those best-laid plans. Using complex investment transactions, they can limit the downside on their holdings, or even profit, as other shareholders are suffering."
from RobS, 10:35 AM EST, 02/06/11, Management
 
The president as micromanager
"While watching the speech, I tweeted that 'Obama sounds remarkably similar to the CEOs I used to listen to on earnings calls: the ones with mediocre EPS and a failing business model.' This wasn't a crack at Obama, or Democrats it was a reaction to the content. And after watching the responses, the impression lingers--indeed, maybe it's strengthened. The nation is facing some really difficult problems, particularly on the fiscal front. There's no longer any way to put it off pretty soon, the government is going to have to start making some very hard choices about taxes and spending. No matter what it chooses, that probably means lower economic growth, angry voters, and some real loss on the part of whoever's ox is gored."
from NormR, 11:57 AM EST, 01/26/11, Management
 
The downfall
"Next time you go to an AGM, if you think there is cause for concern, ask the CEO during the QandA if management could leave the room for 15 minutes because you have a few questions to ask the independent directors concerning executive compensation, and point out that it would not be appropriate for management to be present for such a discussion. Don't be afraid. The meeting is for you, the shareholder. If the CEO gets defensive, that might be taken as a bad sign. If the independent directors get defensive, that could be taken as a really bad sign, because it would suggest that, in their hearts, they don't represent shareholders at all."
from NormR, 3:15 PM EST, 01/02/11, Management
 
Web Focus Helps Revitalize The Atlantic
"How did a 153-year-old magazine - one that first published the "Battle Hymn of the Republic" and gave voice to the abolitionist and transcendentalist movements - reinvent itself for the 21st century? By pretending it was a Silicon Valley start-up that needed to kill itself to survive."
from NormR, 1:24 PM EST, 12/13/10, Management
 
Why work doesn't happen at work
"Jason Fried has a radical theory of working: that the office isn't a good place to do it. At TEDxMidwest, he lays out the main problems (call them the MandMs) and offers three suggestions to make work work."
from NormR, 3:09 PM EST, 11/27/10, Management
 
The Times' Paywall and Newsletter Economic
"Even if paywall economics can eventually be made to work with a dramatically reduced audience, this particular referendum on the future (read: the present) of newspapers is likely to mean the end of the belief that there is any non-disruptive way to remain a going concern."
from NormR, 7:09 PM EST, 11/09/10, Management
 
The Perfect Stimulus: Bad Management
"One day, a position opened above me, and I was the most obvious candidate to fill it. My boss called me into her office and said she had some bad news. She explained that the media was giving our company a lot of heat because almost all of our managers and executives were white males. Promoting me, she explained, would only make things worse. I asked how long I might need to wait for all of this to blow over. My boss was vague, but she said the timeline involved smoothing out the effects of two centuries of corporate discrimination."
from NormR, 11:30 PM EST, 11/06/10, Management
 
The Next Level
"In this environment, it would be easy for Netflix to fall back on its safety cushion, milk the existing DVD business for all it's worth, and try to slow down customers' migration into streaming, particularly since a customer who streams movies is less lucrative than one who rents three DVDs a month. But then, a decade from now, we'd be writing Netflix obituaries that sounded just like the ones for Blockbuster. Sometimes you have to destroy your business in order to save it."
from RobS, 4:06 PM EST, 10/15/10, Management
 
What Happened to Yahoo
"What went wrong? The problems that hosed Yahoo go back a long time, practically to the beginning of the company. They were already very visible when I got there in 1998. Yahoo had two problems Google didn't: easy money, and ambivalence about being a technology company."
from Eric, 12:19 AM EST, 09/09/10, Management
 
Inside the secret world of Trader Joe's
"Apple's retail stores aren't the only place where lines form these days. It's 7:30 on a July morning, and already a crowd has gathered for the opening of Trader Joe's newest outpost, in Manhattan's Chelsea neighborhood. The waiting shoppers chat about their favorite Trader Joe's foods, and a woman in line launches into a monologue comparing the retailer's West Coast and East Coast locations. Another customer suggests that the chain will be good for Chelsea, even though the area is already brimming with places to buy groceries, including Whole Foods and several upscale food boutiques.But Trader Joe's is no ordinary grocery chain. It's an offbeat, fun discovery zone that elevates food shopping from a chore to a cultural experience."
from Eric, 8:36 PM EST, 08/30/10, Management