Saturday Serendipity
Quote, Mental Model, Twitter thread, Idea.
The reading time for this post is only about 3 minutes!
Quote
“I think it’s much more interesting to live not knowing than to have answers which might be wrong. I have approximate answers and possible beliefs and different degrees of uncertainty about different things, but I am not absolutely sure of anything and there are many things I don’t know anything about, such as whether it means anything to ask why we’re here. I don’t have to know an answer.” ~ Richard Feynman.
Mental Model
Northern Pike Model
Northern Pike is a carnivorous fish. Munger keeps this model in his head as a biological model.
I am going to quote him from Peter Bevelin’s book :
“One of the models in my head is the ‘Northern Pike Model’. You have a lake full of trout. But if you throw in a few northern pikes, pretty soon there aren’t many trout left but a lot of northern pikes. Walmart in its early days was the northern pike. It figured out how the customer could be better served and just galloped through the world like Genghis Khan.” ~ Munger
To say this simply this model is trying to tell us that competition is ruthless and even biology has a few cases where the competition dominates a water body at the cost of other fish.
In life
All of us face competition in our life it can be in whatever profession or field. The current state of the world has made it ruthless in terms of competition. This model can be a reminder for you that if you don’t stay on your toes you can be eaten up by the competition.
In Investing
As an investor, you want to invest in a business which has a ‘moat’ or a ‘competitive advantage’. If you don’t buy a business which has this eventually you will get beaten by the competition. Walmart and Apple are like Northern Pikes they ate up all the businesses that used to dominate. If you even have a moat you can die. Blackberry and Nokia were market leaders with the consumers hooked on their smartphones but now Apple has come in and in dominate the industry and Blackberry and Nokia are nobody.
Twitter Threa
Idea
The opposite of a good idea can also be a good idea:
This is one of the big ideas from the book Alchemy and it is an amazing one. What do you mean by this idea? Let’s see an example of Coca-Cola’s competitor.
If you were to compete with Coke how would you compete with it?
The answers I got are a better drink at a better price with a better design of cans, a healthier drink, etc. Nobody answered saying I want a disgusting-tasting drink, a higher price, a bigger can and even more unhealthy than coke. You would call this person/business crazy. You could never compete with coke with this right? But guess what this happened.
That company is called Red Bull. It is so big now that it can fund its F1 team on the side.
So this is the idea I am trying to convey. The opposite of a good idea is also a good idea. This concept was eye-opening for me. I was taught this by Prof. Bakshi.
That’s it for this week hopefully these 3 minutes of your life add value.