Book Highlights - Donuts, Charlie, Walmart
I apologize in advance, you might be craving donuts after this weeks email. 🍩
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This week I seriously couldn't put down - ​​The Donut King​. It just kept getting better. Ted starts talking about how he began purchasing donut shops, how he did it with very little out of pockey and how much money he was making in the process. Spoiler, LOTS.
Ted also starts to talk about his gambling addiction which played a huge role in the trajectory of his wealth and his donut empire. More on that with the final review once I finish it.
I made a couple videos on The Donut King this week. Both on the same information, but one more "long form" and one "short form" for different posting preferences. Because you're an OG subscriber, I'll leave you both.
Books Of The Week
- ​​The Donut King By Ted Ngoy
- ​​The Tao Of Charlie Munger​ By David Clark​
- Made In America By Sam Walton
- We earned enough money to provide for our family and put a little in savings, and we were happy to have the stability. But we also saw that we had quickly maxed out our earning potential at the two shops. At best, we could hope to add a few thousand per year by growing our customer base. We were working long days with no breaks and no possibility of vacations, so the stability came at quite a cost.
- In the great American tradition, I decided the only way we would improve our quality of life was to expand. Now that I had a grasp on the donut business, I thought it would theoretically be possible to acquire more shops and train employees to do the hard work. In truth, I had no idea if it would be a profitable model.
- So often in business of any kind, the best way to make money is to help other people make money.
- There is an important lesson here for anyone who hopes to become successful in business. Sometimes the greatest opportunities are hiding behind unattractive masks. Say the words "donut shop" to a business school student and they'll conjure images of tired laborers endlessly frying and glazing dough. But success in business is about spotting opportunities without being swayed by image or emotion.
- By 1985, ten years after arriving in my new homeland penniless, I was netting $100,000 per month. We had surpassed our own wildest expectations, and we had become the embodiment of every immigrant's dream: we were rich.
- Charlie's approach is contrary to human nature, but right there it should tell you that it is a winning investment strategy. For one of the most successful of all investment strategies is to be a contrarian investor—to go in the opposite direction—to buy when others are selling. And not being in a hurry is contrary to everyone who is in a hurry, which is just about everyone else in the world.
- Charlie believes that if you aren't buying like crazy when you have the opportunity to buy a business that has a huge potential, it is a big mistake.
- People are looking for a simple method they can learn from reading one book that will make them rich. It doesn't happen that way-unless they get real lucky One is actually better off reading a hundred. business biographies than a hundred books on investing. Why? Because if we learn the history of a hundred different business models, we learn when the businesses had tough times and how they got through them; we also learn what made them great, or not so great.
- This is hard to believe, but it's true: in my whole life I never played in a losing football game. I certainly can't take much of the credit for that, and, in fact, there was definitely some luck involved. I was sick or injured for a couple of games that we wouldn't have won with or without me so I dodged the bullet on a few losses that I could have played in. But I think that record had an important effect on me. It taught me to expect to win, to go into tough challenges always planning to come out victorious. Later on in life, I think Kmart, or whatever competition we were facing, just became Jeff City High School, the team we played for the state championship in 1935. It never occurred to me that I might lose; to me, it was almost as if I had a right to win. Thinking like that often seems to turn into sort of a self-fulfilling prophecy.
- Somehow over the years, folks have gotten the impression that Wal-Mart was something dreamed up out of the blue as a middle-aged man, and that it was just this great idea that turned into an overnight success. It's true that I was forty-four when we opened our first Wal-Mart in 1962, but the store was totally an outgrowth of everything we'd been doing since Newport-another case of me being unable to leave well enough alone, another experiment. And like most other overnight successes, it was about twenty years in the making.
Until next time...
Readers are leaders,
