BUSINESS MODELS


Investing in Companies and Sectors with Strong Competitive Advantage

Quotes and Index

 By DAVID WATSON

Produced in Association with The Serious Investor Groups network

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Extracts from the book Business Models can be accessed:

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Quotes and Index businessmodels.googlepages.com/businessmodelsquotes

 

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‘David Watson's writing is exceptionally clear.’

Sir John Templeton, author, philanthropist, Founder of the Templeton Growth Fund and John Templeton Foundation.

‘Business Models arms investors with an unmatched and comprehensive set of weapons. Essential reading.’

John Lander, Chairman of The Serious Investor Groups network.

Buy this book at:

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BUSINESS MODELS quotes in order as they appear in the book.

'David Watson's writing is exceptionally clear'.

Sir John Templeton, author, philanthropist, founder of the Templeton Growth Fund and the John Templeton Foundation.

 

'Business Models arms investors with an unmatched and comprehensive set of weapons. Essential reading.’
John Lander, Chairman of The Serious Investor Groups network.

 

‘Between every individual and his tomorrow a veil is drawn. There are ways by which this veil can be penetrated to some extent.’

Laurence Sloan, author of Everyman and his Common Stocks.

 

‘Competitive advantage is based not on doing what others already do well but on doing what others cannot do as well.’

John Kay, economist.

 

‘When I was young I used to think that wealth and power would bring me happiness. I was right.’

Gahan Wilson, cartoonist.

 

‘Look for companies that have high returns on capital, strong balance sheets, sustainable competitive advantages and shareholder-oriented management.’

Joe Mansueto, founder of investment information provider Morningstar.

 

‘I read the annual report of the company I’m looking at and I read the annual reports of competitors - that is the main source of material.’

Warren Buffett, CEO of Berkshire Hathaway.

‘We are watching the dinosaurs die but we don’t know what will take their place.’

Lester Thurow, MIT economist.

 

‘If you gave me $100 billion and said take away the soft drink leadership from Coca-Cola, I’d give it back to you and say it can’t be done.’

Warren Buffett

Wonderful castles, surrounded by deep, dangerous moats where the leader inside is an honest and decent person. Preferably, the castle gets its strength from the genius inside; the moat is permanent and acts as a powerful deterrent to those considering an attack; and inside, the leader makes gold but doesn't keep it all for himself. We like great companies with dominant positions, whose franchise is hard to duplicate and has tremendous staying power.’

Warren Buffett

 

‘The customer is the appreciating asset.’

Federal Express

‘For all the money we spend on marketing, we know very little about our customers.’

Robert Thomas, CEO of Nissan USA.

 

‘The essence of a megabrand is leveraging your brand into other product categories.’

Adelle Kirk, marketing consultant.

 

‘If I could be master of The Channel for 12 hours, I would be master of the world.’

Napoleon

 

‘The first word she said was Coke. The second was mummy.’

Enthusiastic American consumer of Coca-Cola.

 

‘Profit in business comes from repeat customers, customers that boast about your product, and that brings friends with them.’

Dr. Edwards Deming, management consultant.

 

‘More than anything else, it's debt that determines which companies will survive and which will go bankrupt in a crisis.’

Peter Lynch, author of One Up On Wall Street.                                                                      

 

When a chief executive officer is encouraged by his advisors to make deals, he responds much as would a teenager boy who is encouraged by his father to have a normal sex life. It's not a push he needs.’

Warren Buffett

                                                                                               

 ‘If a company gets too large, break it into smaller parts.’

Sir Richard Branson, CEO of Virgin.

 

‘I like the directors to own a number of shares substantial enough to give the ‘owner’s eye’, but not so many that they have control, can sit back and could at some future stage block a bid. I like to see a good cross-section of the directors with reasonable shareholdings and I always worry if the finance director is not among them.’

Jim Slater, author of The Zulu Principle.

 

‘In 1998 the markets learned a new reality of the post-cold war era - a nuclear power was allowed to default (Russia), but a hedge fund wasn't.’

Tom Gallagher, economic researcher, and his comment on Long Term Capital Management.

 

‘Some genius invented the Oreo. We’re just living off the inheritance.’

Ross Johnson, president of RJR Nabisco, commenting on ‘America’s favourite cookie’.

 

‘It is very easy to endure the difficulties of one’s enemies. It is the successes of one’s friends that are hard to bear.’

Oscar Wilde

 

‘Surround yourself with the best people you can find, delegate authority, and don’t interfere.’

Ronald Reagan

 

‘Prefer a loss to a dishonest gain: the one brings pain at the moment, the other for all time.’

Chilon, Greece, 6th century BC.

 

‘Here lies Robert Maxwell. He lied everywhere else.’

Private Eye, satirical magazine.

 

‘Don’t forget the golden rule. He who has the gold makes the rules.’

Anon

 

‘I have always thought the actions of men are the best interpreters of their thoughts.’

John Locke, philosopher.

 

‘We look for first class businesses accompanied by first class management.’

Warren Buffett

 

‘The bigger the headquarters, the more decadent the company.’

Sir James Goldsmith, billionaire businessman.

 

‘Few competitive advantages are as difficult to fight as a brand name. An economic advantage can be overtaken eventually, a patent may be lifted, but a great brand can be sustained for years.’

Mike Kwatinetz, investment advisor.

 

‘Loss of focus is what most worries me. Would you believe that not a few decades back they were growing shrimp at Coke and exploring for oil at Gillette?’

Warren Buffett

 

‘I think they’ll live up to their name.’

Warren Buffett’s opinion of junk bonds.

 

‘It makes me laugh when I hear investors say, ‘Well, it’s a non-cash item. A write down, I don’t care about’. This is management telling you it has made a $50-$60 billion mistake in buying a company.’

James Montier, global strategist on goodwill write-offs.

 

‘Put six bottles of port by my bedside and call me the day after tomorrow.’

A note to his butler from William Fiennes, 15th Baron Saye and Sele and ancestor of Sir Ranulph Fiennes, the world’s greatest living explorer.

 

‘Your premium brand better be delivering something special or it’s not going to get the business.’

Warren Buffett

 

‘I watch where the cosmetics industry is going and walk in the opposite direction.’

Anita Roddick, founder of The Body Shop.

 

‘I'm very proud of my gold pocket watch. My grandfather, on his deathbed, sold me this watch.’
Woody Allen, comedian.

 

‘It is the greatest mathematical discovery of all time.’

Albert Einstein referring to compound interest.

 

‘Fire the whole purchasing department. They’d hire Einstein and then turn down his request for a blackboard.’

Robert Townsend, author of Up The Organisation.

 

‘Competitive advantage comes from being different. Increasingly, difference comes from the way people think rather than what organisations make.’

Dr. Kjell Nordstrom, author of Funky Business.

 

‘A horse never runs so fast as when he has other horses to catch up and outpace.’

Ovid, Roman poet.

 

‘Why anybody thinks they will produce a gazelle by mating two dinosaurs is beyond me.’

Tom Peters, author of In Search of Excellence.

 

‘I would rather see a battalion enter the field than him.’

Duke of Wellington’s estimation of Napoleon.

 

‘Every time I reduce the charge for our car by one dollar, I get a thousand new customers.’

Henry Ford

 

‘You go to bed feeling very comfortable just thinking about two and a half billion males with hair growing while you sleep. No one at Gillette has trouble sleeping.’

Warren Buffett

 

‘The key to survival is to learn to add more value today and every day.’

Andrew Grove, Intel.

 

‘Capitalism without bankruptcy is like Christianity without hell.’

Frank Borman, astronaut and CEO of Eastern Airlines.

 

‘Since the industrial revolution began, going downstream and investing in businesses that will benefit from new technology, rather than investing in the technology companies themselves, has often been the smarter strategy.’

Ralph Wanger, CEO of The Acorn Funds.

 

‘Huge numbers of baby boomers have sophisticated tastes. They want less of the cheap fattening foods at places like McDonald’s. As soon as their kids are old enough, they go elsewhere.’

Cheryl Russell, demographer.

 

‘There are three ways of losing money. Racing is the quickest, women the most pleasant, and farming the most certain.’

Lord Amherst

 

‘There has obviously been a great disservice done by the gross misallocation of capital in the TMT sector around the world. We went from a world where the focus was on EBIDTA (earnings before interest, taxes, depreciation and amortisation) in valuing these companies to PS (price to sales) to one focused on EPS (earnings per share). I define EPS in this way, ‘the estimated probability of survival’.

Marc Gabelli, fund manager in 2001.

 

‘Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company.’

Bill Gates, co-founder of Microsoft.

 

‘The information revolution has changed people’s perception of wealth. Intellectual capital is far more important than money.’

Walter Wriston, CEO of Citicorp.

 

‘There seems to be an unwritten rule on Wall Street: If you don’t understand it, put your life savings into it. Shun the enterprise round the corner, which can at least be observed and seek out one that manufactures an incomprehensible product.’

Peter Lynch

 

‘Technology companies should be valued at a discount to the shares of companies like Disney and Coca-Cola, which have long-term earnings.’

Bill Gates

 

‘Somebody said to me, ‘But the Beatles were anti-materialistic’. That’s a huge myth. John and I literally used to sit down and say, ‘Now let’s write a swimming pool.’

Sir Paul McCartney

 

‘I look for businesses in which I think I can predict what they’re going to look like in ten to fifteen years’ time. I don’t think the internet is going to change how people chew gum.’

Warren Buffett

 

‘The only big companies that succeed will be those that obsolete themselves before someone else does.’

Bill Gates

 

‘The question is, then, do we try to make things easy on ourselves or do we try to make things easy on our customers, whoever they may be?’

Erwin Frand

‘Necessity is the theme and the inventress, the eternal curb and law of nature.’

Leonardo da Vinci

 

‘A good negotiator lets the other person think they are getting the best deal.’

Anon

 

‘Constant reorganisation can create the illusion of progress while producing inefficiency and demoralisation.’

Petronius, Roman author.

 

‘If you have ten thousand regulations you destroy all respect for the law.’

Winston Churchill

 

‘You better start swimming or you’ll sink like a stone, for the times they are a’changin.’
Bob Dylan

 

'Most other fund managers refuse to believe that the cycle exists any more: they believe that consumers can go on spending indefinitely.’

Peter Webb, Eaglet investment trust.

 

‘Change is the law of life. And those who look only to the past or the present are certain to miss the future.’

John F Kennedy

‘Don’t confuse genius with a bull market.’

Wall Street slogan.

 

‘Truth is the daughter of time.’

Josephine Tey, author.

 

‘The hangover may prove to be proportional to the binge.’

Warren Buffett

 

‘When you combine ignorance with leverage, you get some pretty interesting results.’

Warren Buffett

 

‘Whenever you get a wild excess on the upside, the following correction doesn’t just go back to normal; it almost always falls way below normal.’

Sir John Templeton, author, philanthropist, founder of the Templeton Growth Fund and the John Templeton Foundation.

 

‘For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity.’

Sir John Templeton

 

‘Mr. Greenspan, I always enjoy your presentation because, frankly, I wonder what world you live in.’

Bernie Sanders, Republican Congressman.

 

‘There cannot be a crisis next week. My schedule is already full.’

Henry Kissinger, USA statesman.

 

‘Never trust an economic boom fuelled by consumer debt.’

Neal Weintraub, author of Tricks Of The Floor Trader.

 

‘We view our level of liquidity or gearing as probably the most fundamental decision we have to make on behalf of the shareholders of Personal Assets - much more so than which individual stocks we should buy or sell.’

Ian Rushbrook, fund manager.

 

‘If you warn 100 men of possible forthcoming bad news, eighty will dislike you right away. If you are right, the other twenty will as well.’

Anthony Gaubis, investment counsellor.

 

‘Protection against adverse market conditions was provided by our liquidity, the diversity within the portfolio and the increased investment in asset classes which are less directly correlated to markets. Your company has been an investor in selected hedge funds in the pursuit of absolute and relatively consistent returns.’

The Lord Rothschild, chairman of RIT Capital Partners.

 

‘Draw a circle around those businesses you understand and then eliminate those that fail to qualify on the basis of value, good management and limited exposure to hard times’.

Warren Buffett

 

‘While you’re negotiating for a 35 hour week, remember that they have only just got 66 hours in Taiwan and you’re competing with Taiwan.’

Victor Kiam, of ‘I liked the shaver so much I bought the company’ fame.

 

‘Diageo. Based on the Latin word for day and the Greek word for world. Diageo captures what this business is all about - bringing pleasure to consumers every day around the world.’

The logic behind the new name for the merged Guinness and Grand Metropolitan.

 

‘What good is health? You can’t buy money with it.’

Charlie Munger, Vice President of Berkshire Hathaway.

‘We’ll all be jockeying for position in Playboy and Penthouse.’

RJ Reynolds, on new tobacco advertising bans.

 

England is a nation of shopkeepers’.

Napoleon

 

‘NASDAQ stands for No Actual Sales, Dividends, Assets or Quality.’

Sean Corrigan, financial journalist.

 

‘If only Karl had made capital instead of writing about it.’

Jenny, wife of Karl Marx.

 

‘A gold mine is a whole in the ground with a liar at the top.’

Mark Twain

 

‘Behind every great fortune there lies a great crime.’

Honoré de Balzac, writer.

 

Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell.’

John Galbraith, economist and author of The Great Crash.

 

‘We might as well have a plague of frogs. We’ve had everything else.’

Harassed airline spokesman, reflecting on falling tourism after foot and mouth disease, the economic slowdown, September 11 terrorism and the army guarding Heathrow from the threat of missile attack.

‘He who does not smile should not open a shop.’

Chinese proverb

 

‘Don’t tell my mother that I work in an advertising agency. She thinks I play the piano at a whore house.’

Jacques Seguela, title of his autobiography.

 

‘An out-of-town visitor to New York was admiring the elegant vessels harboured off the Financial District; ‘Those are the bankers' and brokers’ yachts!’ exclaimed the guide. ‘But where are the customers' yachts?’ questioned the naïve visitor in response.

Fred Schwed, author of Where Are The Customers’ Yachts?

 

‘To err is human, but to really foul things up requires a computer.’

Paul Ehrlich, scientist.

 

‘Who is your boss, really? In reality, 99% of the population works for Bill Gates.’

Linda Smith, comedian, on Microsoft.

 

‘Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement.’
Dan Quayle, the unforgettable US Vice President.
 

‘There are things worse than death. Have you ever spent an evening with an insurance salesman?’

Woody Allen

 

Nearly all of us made promises we can't keep on account of the turn in Wall Street. I promised my wife a rope of pearls. I can't get the pearls but I've the rope - and I'm thinking of using it myself.’

Eddie Cantor, author, on the great crash of 1929.

 

‘It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price’.

Warren Buffett

 

‘Earnings are the engine that drives the share price.’

Jim Slater, author of ‘The Zulu Principle’.

 

‘When you buy a stock for its book value, you have to have a detailed understanding of what those assets really are. At Penn Central, tunnels through mountains and useless rail cars counted as assets.’

Peter Lynch

 

‘The hardest thing to do is to actually pick up the phone and buy or sell that share.’

David Wash, former deputy editor of Investing for Growth newsletter.

 

‘Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.’

Dennis Gartman, trader.

‘Buy low, sell high’. This advice seems obvious, but investors always ignore it. The demand curve for investment assets is like that for a luxury good-the higher the price, the greater the demand.’

Edward Chancellor, author of ‘Devil Take the Hindmost’.

 

‘Trying to sell an illiquid stock in a down market brings to mind the galley slaves in Ben-Hur, chained to their bench while the ship sinks.’

Ralph Wanger

 

‘Investment results largely depend on how one behaves near the top and near the bottom.’

John Maynard Keynes, economist and renowned investor.

 

‘A picture is worth a thousand words.’

Fred Barnard, advertiser.

 

‘Buying on the dips would be a great strategy if we only knew what point on the dip was lowest.’

Todd Jaycox, consultant.

 

‘My philosophy is to float like a jellyfish and let the market push me where it wants to go.’

Stuart Walton, in ‘Stock Market Wizards’.

 

‘My basic advice is don't lose money.’

 Jim Rogers, co-founder of The Quantum fund with George Soros and author of ‘Investment Biker’.

‘Reading the printed financial records about a company is never enough to justify an investment. One of the major steps in prudent investment must be to find out about a company's affairs from those who have some direct familiarity with them.’

Philip Fisher, author of ‘Common Stocks and Uncommon Profits’.

 

‘Investing without research is like playing poker without looking at the cards.’

Peter Lynch

 

‘Never underestimate the power of an irate customer.’

Joel Ross, management guru.

 

‘One 1’.

Number plate on a university vice chancellor’s car.

 

‘Always tell the truth. That way you don’t have to remember anything.’

Mark Twain

 

‘Company accounting is a jungle with many species of animal – some benign, some carnivorous – and its own rules. Anyone who believes this is an exaggeration should read one of the entertaining studies of the securities industry, most notably Liar’s Poker.’

Terry Smith, Accounting For Growth.

 

‘Enron: strong buy.’

Four analysts continued this recommendation until a few days before the fraudulent Enron collapsed. The four banks that employed them received huge fees from Enron as they were involved in selling $25 billion of its securities and advised on numerous lucrative takeovers.

                                                                       

‘My accountant says that I did this at a very bad time. My stocks are down. I'm cash poor, or something. I've got no cash flow. I'm not liquid. Something is not flowing. I don't know, but those people have got a language of their own.’

Woody Allen,Manhattan’.

 

‘The most important thing in communications is to hear what isn’t being said.’

Peter Drucker, management guru.

 

‘When managements take the low road in aspects that are visible, it is likely they are following a similar path behind the scenes. There is seldom just one cockroach in the kitchen.’

Warren Buffett

                                                           

‘I am pleased with the overall fourth quarter performance. We will run each of our businesses as well or better than before.’

Richard Parsons, CEO of AOL Time Warner, after announcing a 2002 goodwill write-off of $100 billion, a world record and equivalent to Bulgaria’s GNP.

‘When it comes to the pricing of financial assets, perceptions count. Reality is of lesser consequence’

Charles Babbin, author of ‘Investment Secrets of the Masters’.

 

‘There is nothing more short-term than a 60 year old CEO holding a fistful of share options.’

Professor Gary Hamel, author of ‘Competing For The Future’.

 

‘An executive who hedges his share options is a little bit like the captain of a ship who sees an iceberg up ahead and heads for his lifeboat without waking the sleeping passengers.’

Louis Lavelle, compensation consultant.

 

‘There is nothing we receive with so much reluctance as advice.’

Joseph Addison, poet.

 

‘Great stocks are extremely hard to find. If they weren’t, then everyone would own them.’

Philip Fisher

 

‘Some people automatically sell the winners and hold on to their losers, which is about as sensible as pulling out the flowers and watering the weeds.’

Peter Lynch

 

‘The trend is your friend most of the way, trend followers only get hurt at inflection points, where the trend changes.’

George Soros, billionaire trader and philanthropist.

 

‘I avoid fads like the plague.’

Philip Carret, described by Warren Buffett as the person with the best long-term investment record.

 

‘In my 70 years of looking at markets, I have known a lot of people who went bankrupt, many of them because they ignored the need for diversification.’

Sir John Templeton

 

‘If you have a harem of forty women, you never get to know any of them very well.’

Warren Buffett

 

‘Buy when most people including experts are overly pessimistic, and sell when they are actively optimistic.’

Benjamin Graham, author of ‘The Intelligent Investor’.

 

‘The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do.’

Warren Buffett.

 

‘Why look for the needle in the haystack? Buy the haystack!’

John Bogle, founder of Vanguard Funds.

 

‘Whoever desires constant success must change his conduct with the times.’

Machiavelli

 

‘If you can look into the seeds of time, and say which will grow and which will not.’

William Shakespeare, from Macbeth.

 

‘Never flinch - make up your own mind and do it.’

Margaret Thatcher

 

‘The ultimate risk is not taking a risk.’

Sir James Goldsmith

 

‘Experience is the name everyone gives to their mistakes.’
Oscar Wilde
 
‘Wall street professionals know that acting on ‘inside’ tips will break a man more quickly than famine, pestilence, crop failure, political readjustments, or what may be called normal accidents.’
Jesse Livermore, Reminiscences of a Stock Operator.
 
‘Sell on any first profit warning.’
Nicola Horlick, ‘superwoman’ fund manager.
 

‘The best time to invest is when you have the money. This is because history suggests it is not timing which matters, but time.’

Sir John Templeton

 

‘Markets can remain irrational longer than you can remain solvent.’

John Maynard Keynes, economist.

 

‘Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular.’

Stanley Druckenmiller, Soros Fund Management.

 

‘There are only two ways to rise in this world, either by one’s one industry or the stupidity of others.’

Jean de la Bruyere, author.

 

‘To write it took three months; to conceive it - three minutes; to collect the data in it – all my life.’

F Scott Fitzgerald, author of The Great Gatsby.

 

 

 

 

INDEX

A

AA 21

Abbey 175, 235

Ability to attract top talent 78, 100

Accounting firms 7, 22

Addictive or highly compulsive 77-78,

102

Addison, Joseph 240

Advertising 4, 12, 20, 27-28, 30, 35, 57,

68-70, 72, 78, 82, 101, 145-146, 148-149,

166, 185, 213, 233, 276

Aero Inventory 8, 23, 36, 53, 161

Aerospace 20, 23, 37, 53, 56, 77, 79, 81,

83, 86, 87, 100, 105-106, 109, 114-115,

118, 120, 121, 140, 160, 161, 162, 268

Aerospace, defence 86, 106, 109, 144

Aggreko 168

Airbus 160

Airlines 15, 30, 36, 40, 72, 74, 78-79, 88,

92, 96, 160, 169

Albemarle & Bond 8, 15, 20, 35, 39, 41,

175

Alcohol 60, 63, 84, 102, 123

Allen, Woody 68, 175, 224

Alliance & Leicester 7, 21, 82, 175, 236

Alliance UniChem 59, 232

Allied Domecq 146

AMD 69

Amersham 148

Amherst, Lord 98

Amstrad 117

Anglo American 155

Antofagasta 155

AOL Time Warner 8, 34, 166, 231, 236

Appropriate gearing 7, 31, 270, 280

Arcadia 43

ARM 7, 18, 171

Arthur Andersen 8, 46, 130

Asda 24, 101, 150

Ask Central 24, 67

Asset-backed shares 7, 31, 270, 280

Associated British Ports 59

Association of British Insurers 49, 52,

285

237, 238

AstraZeneca 148

Atkins 168

Attracts capacity in the good times 79,

118

Auditors, opinions and policies 8, 44,

271, 280

Automobiles 76-79, 86, 90, 95, 97, 100,

105, 108-110, 114, 117, 144, 162

Avesco 9, 68

Avoiding shares 244

B

BAA 7, 15, 74, 119, 169, 236

Babbin, Charles 233

Bacardi-Martini 101

BAE Systems 8, 25, 33, 91, 160, 161,

235, 265, 269

Baltimore Technologies 172, 235

Balzac, Honoré de 156

Bancassurance 21

Banks 11, 16-17, 19, 20, 22, 26-28, 35,

41, 43, 52, 60, 64, 76-79, 87-90, 94, 97,

100, 105, 109, 115, 121, 131, 133-135,

140, 143-144, 158-159, 173-175, 177,

179, 183, 208, 221-222, 234

Barclays Bank 7, 20, 174

Bargaining power over suppliers 3, 9, 10,

72, 272, 281

Barings 29

Barnard, Fred 197

Barratt Developments 8, 43, 59

Barriers to entry and exit 7, 10, 218, 270,

279

Based on a quirk that politicians can

remove 79, 119

Basic industries 142, 144, 157

BCCI 8, 46

Being number one or two in the sector 7,

12, 270, 279

Being the bacon in the sandwich 79, 120

Belhaven 7, 8, 23, 28, 35, 39, 54, 57, 64,

165

Berkeley Group 59

Berkshire Hathaway 7-8, 10, 16, 20, 26,

42, 45, 55, 59, 147, 215

Beta vii, 157, 247

Beverages 10, 29, 42, 76, 77, 79, 89, 93,

94, 105, 108, 110, 118, 120-121, 140,

142, 144-146, 165, 208

BHP Billiton 155, 236

Biotrace 8, 36, 123

BMW 61, 113, 142, 162

BOC 9, 61, 74, 158

Bogle, John 249

Bolt-on acquisitions 8, 32, 150, 155, 175,

178, 214, 268, 270, 280

Boo.com 8, 53

Boots, 232, 237

Borman, Frank 92

BP 8, 12, 22, 52, 64, 157

Bradford & Bingley 13, 82, 175

Brand viii, 9-12, 21-22, 25-28, 32, 41, 56-

57, 64-66, 68, 72, 82, 85, 89, 91, 98, 109,

113-116, 145-150, 153-154, 163, 165,

167, 220, 231, 271, 281

Brand loyalty rather than a well-known

name 9, 56-57, 271, 281

Branson, Sir Richard 28, 35, 42, 57, 70,

169

British Airways 7-8, 15-17, 42, 54, 57,

169

British American Tobacco 58, 122, 149

British Energy 12, 91, 123, 153

British Gas 15, 47, 156

British Land 236

British Leyland 57, 162

British Sky Broadcasting 7, 31, 57, 69,

71, 82-83, 166-167

Broadcastle 8, 35, 39-40, 64, 175

Broker forecasts iv, 182-183, 220-221,

223, 248

Bruyere, Jean de la 272

BT 12, 14-15, 24, 54, 107, 151-152

Buffett, Warren xiv, 2, 10, 13, 16, 20, 26,

32, 42, 45, 52, 54-55, 58-60, 66, 86, 101,

107, 123, 129, 131, 138, 140, 148, 169,

173, 176, 182, 215, 229, 240, 244-247,

253, 282

Builders 26, 79, 90, 97, 115, 122, 184

Bull market acquisitions 8, 33, 270, 280

Bunzl 59

Business entertainment 98

Business Models

286

Buying opportunistically 9, 73, 272, 281

C

Cable & Wireless 152, 235-236

Cadbury Schweppes 146-147, 232

Canals 14, 94, 103

Canary Wharf 178

Cantor, Eddie 178

Capita 168

Carnival 119, 164

Carpetright 8, 49, 53

Carret, Philip 240, 244

Cars 11, 15-16, 20, 22, 27, 36, 57, 61, 63,

65-66, 71, 74, 82, 91, 93, 96, 103-104,

107, 110, 113-114, 120, 136, 141, 155,

162, 169, 176, 186, 210, 232

Cash flow iv, 8, 26, 43-44, 149, 170, 176,

186, 220, 224-227, 234, 265, 271, 280

Cathay Pacific 23, 30

Cattles 59, 175

Celsis 9, 30, 36, 55, 123, 148

Centrica 21, 154

Chancellor, Edward 193

Changes in professional advisors 8, 45,

271, 280

Changing sector and FTSE index 8, 10,

34, 270, 280

Channel Tunnel 98

Character Group 68

Chemicals 26, 40, 77, 89-90, 96, 102,

105, 108, 120, 140, 144, 157, 158, 245

Chemring 21-22, 59, 161

Chilon 46

China 43, 68, 93, 95, 118, 141, 155, 163,

170

Chinese proverb 163

Choosing customers 7, 19, 270, 280

Chorion 7, 9, 20, 68

Churchill, Sir Winston 30, 39, 123

Cisco 91, 109, 171

Coca-Cola 7, 12-14, 25, 29, 32, 56, 65,

69, 81, 85, 104, 107

Collaboration 36, 77, 81

Commodities 24, 78, 102-103, 155, 157,

193

Commodity product vii, 4, 15, 18, 26, 29,

57, 68, 86, 89, 112, 115, 120, 146, 149,

153-156, 171, 173-175, 268

Compass 36, 167, 230

Competitive advantage xi-xiv, 2, 4-74,

76-121, 140-179, 182-184, 231, 260, 264,

269-272, 275, 279-282

Competitors iii, vii, 3-7, 10-11, 13, 15-18,

23-24, 41, 44, 50, 56, 68-69, 71-72, 76-

77, 80-82, 87, 103, 106-107, 114, 154,

210, 218, 225, 268, 270, 273, 275-279

Computacenter 173

Concorde 98, 169

Conflicts of interest 8, 13, 46-47, 55, 117,

133, 221, 232, 245, 271, 280

Connaught 168

Consensus 183, 221, 223, 245, 247, 250

Consolidation 22, 55, 77, 81-82, 143,

145, 148, 150, 155-156, 159, 165, 167-

168, 172, 175, 268

Construction 40, 43, 77, 83, 85, 87, 90-

91, 97, 105, 108-109, 144, 158-159, 168,

178

Construction, building materials 158

Consumer goods 107, 127, 142, 144-145,

162

Contrarian vii, 5, 121, 171, 243, 245, 248,

252, 282

Copyrights 106-107, 167

Corporate governance 8, 42, 47-51, 189,

229, 237, 271, 280

Corrigan, Sean 151

Corus 65

Cost of inputs compared to selling price

79, 116

Crazes 78, 103, 244

CRC 7, 25, 94

Cross-selling 7, 21-22, 270, 280

Crossing the chasm 78, 104

Cruising 43, 60, 119

Currys 69

Customers iii, 3-5, 7, 12, 15-20, 24-29,

57, 66, 76-77, 84-88, 109-110,165,

169, 216, 270, 280

Cut losses and run profits 240-241

Cyclical consumer goods 142, 144-145,

162

Cyclical services 142, 144, 150, 163

Cyclicals 79, 142

D

Dairy Crest 146

Index

287

Dana Petroleum 9, 64

De Beers 9, 73

Debenhams 164

Deep Pan Pizza 64

Defence 20-21, 83, 86-87, 91, 105-106,

109, 132, 140, 144, 160-161, 264-268

Defensive viii, 87, 106, 145-148, 150,

153, 167-168, 170, 257

Deflation and inflation 78, 89

Dell 7, 29, 117

Deming, Dr Edwards 28

Demographics 77-78, 90, 95, 147

Depreciation 9, 40, 62-63, 79, 99, 121,

158-159, 169, 187-188, 220, 224, 226,

233, 234, 271, 281

Diageo 9-10, 12, 35, 54, 60, 145-146,

165, 232

Dicom 40, 59, 63, 65, 172

Differentiation vii-ix, 3-5, 9-10, 12,

14, 19, 56, 66, 74, 96, 146, 159, 161, 268,

271, 281

Direct Line 7, 29

Disney 43, 56, 60, 104, 111, 166

Distributors 4, 26, 78-80, 82, 103, 116,

118, 120, 173, 210

Diversified industrials 78, 94

Diversifying risk 246

Dividend iv, 8, 38-39, 44, 133, 135, 142,

183-184, 227-230, 246, 253, 257, 270,

280

Dixons 18, 232

Do not own a zoo 246

Dolby 65

Domino’s Pizza 50, 67, 165

Dot coms 78, 100

Dreman, David 240, 282

Druckenmiller, Stanley 240, 258

Drucker, Peter 227

Dumbing down of products creates niche

markets 9, 57, 271, 281

Duty free 119

Dying sectors 77, 79, 120

Dylan, Bob 126

E

easyJet 15, 42, 70, 72, 160, 169, 170

Economic cycle iii, iv, xi, xii, xiii, 5, 27,

58, 67, 73, 87, 96-97, 105, 112, 114, 118-

119, 121-122, 126-129, 133, 136-137,

139-140, 144 159, 178, 182-183, 247,

250, 260, 265

Economic cycle of opportunity iv, 143-

144

Economics iii, vii, 3, 5, 7, 30, 33, 36, 40,

43, 52-53, 76, 78, 81, 89, 91, 95, 99, 101,

116, 134, 158, 161, 162, 185, 193,

216, 218, 245, 247, 253, 270, 280

Economies of scale 8, 11-12, 32, 35, 81-

82, 145, 148, 165, 270, 280

Egg 175

Ehrlich, Paul 171

Einstein, Albert 70, 73

Elasticity of demand 77, 84

Elasticity of supply 77, 85

Electricity and other utilities 105, 144,

153

Electronic, electrical, engineering 144,

161-162

Electronics 60, 74, 78-79, 93, 100, 106,

113, 140-141, 150, 161, 264, 266

EMAP 230

EMI 167

Endless restructuring 79, 120, 121

Energy 12, 78, 91, 95, 123, 153

Engineering 20, 40, 43, 52-53, 62, 76, 78-

79, 90, 93, 96-98, 105, 120-121, 140-142,

144, 161, 162, 168, 278

Enron 46, 221, 224

Enterprise Inns 59

Entry and exit barriers 77, 80, 82

EPS viii, 99, 182-184, 186-187, 224, 226-

227, 233, 237, 269

Equitable Life 42, 177

Estate agents 66, 90, 106, 174, 208

Ethical investors 42, 149

Eurocopy 7-8, 28, 33

Eurotunnel 116, 169

Excellent, honest, well-motivated

management 8, 52, 271, 280

Excess capacity weakens suppliers 79,

117

Expro International 36

F

Factors of production viii, 2, 44, 89, 115,

127, 131, 224, 231

Faroe Petroleum 64

Business Models

288

Fashion goods 73, 109

Fayed, Mohamed al 70

Fear and greed 247, 250, 253

Federal Express 18

Federal Reserve 127, 129, 134

Feed off another’s growth 8, 35, 270, 280

Fiat 13, 119

Fiennes, William, 15th Baron Saye and

Sele 64

Financial services 20-22, 25, 40, 42, 60,

64, 70, 77-79, 85-86, 89-90, 92, 94, 98,

100, 108-110, 116-117, 119-121, 150,

167, 210

Financials 142, 144, 173

First and late mover advantage 7, 13, 270,

279

Fisher, Philip 208, 240, 282

Fitzgerald, F Scott 282

Flexible 249

Flying Brands 22

Focus on competitive advantage 9-10, 58,

271, 281

Follow the man when a talented director

moves on 8, 53, 271, 281

Food 4, 16, 18, 24, 26, 29, 57, 64, 70, 72-

73, 77-81, 83-84, 86-87, 89-90, 92, 97,

100, 105, 108, 110-114, 120, 140, 142,

144, 146, 150, 165, 178, 208, 212-214

Food and drug retailers 142, 150, 208

Food producers 79, 80, 87, 90, 92, 105,

112, 120, 140, 142, 146, 208

Food producers and processors 87, 105,

120, 142, 144, 146, 208

Food retailing 77, 79, 81, 83, 89, 114,

120, 213

Ford 7, 9, 14, 22, 40, 61, 65, 71, 77, 104,

210

Ford, Henry 41, 84

Foreign and Colonial 133

Formula One 27, 70, 107, 162

Forth Ports 59

Frand, Erwin 110

Freeview 71, 167

French Connection 163

Friends Provident 8, 39, 82, 177

FRS 3 and normalised pre-tax profit 188

Funds 17, 20, 34, 38, 54, 70, 94, 128, 138,

177, 193, 220, 245, 249, 253

Future xi, 4, 27, 88, 100, 126-128, 136,

161, 182, 187, 192, 226, 234, 236, 246,

250, 255

G

Gabelli, Marc 99

Galbraith, John 157, 240, 282

Gallagher, Tom 39

Gambling 40, 78, 102, 123, 251

Gap 163

Gartman, Dennis 192, 240

Gates, Bill 100, 104, 108, 172, 272-273

Gateway 9, 29, 71

Gaubis, Anthony 137

Gearing viii, 7, 31, 67, 136, 149, 161,

178, 185, 248, 269-270, 280

GEC 20, 54, 269

Geest 146

General Electric 8-9, 43, 65

General industrials 142, 144, 160

General insurance 26, 79, 114-115, 118-

119, 175-176, 255

General Motors 40

General retailers 90, 98, 105, 108, 110,

141, 144, 163, 208

Gillette 56, 58, 86, 148

GKN 162

GlaxoSmithKline 9, 22, 47, 68, 114, 148,

237

Global potential of a sector 78, 91

Global reach 7, 22, 43, 82, 145, 265, 270,

280

Golden cross 200-201

Goldsmith, Sir James 53, 252

Good institutional and directors’

shareholdings 8, 37, 270, 280

Goodwill iv, viii, 31-33, 39-40, 45, 50,

62-63, 79, 99, 106, 121, 130, 146, 148-

149, 152, 168, 173, 186, 188, 220, 222,

224, 226, 231-236, 269, 279

Gorilla viii, 5, 10, 12-13, 15, 19, 24, 26,

38, 54, 72, 80-83, 91, 118, 120, 146-148,

152-154, 167, 171, 176

Government 25, 35, 42, 47-48, 65, 74, 82,

87, 93, 99, 119, 122-124, 135, 147, 149,

151, 248

Government spending 78, 91, 95, 98,

159-160, 164, 172

Graham, Benjamin 31, 182, 240, 247,

253, 282

Granada 82, 235

Green Cay Asset Management 138

Index

289

Greenspan, Alan 127, 129, 132-133

Greggs 59

Grove, Andrew 89

Growth in profits for a decade or more 9,

59

Gucci 113

Guinness 57, 89, 145-146

Gunther, Max 282

H

Haji-Ioannou, Stelios 70

Halifax 9, 66

Hamel, Professor Gary 236

Hanson 9, 58

Harassed airline spokesman 160

Hardys & Hansons 7, 9, 28, 32, 39, 52,

55, 63-64, 165, 186, 220, 225, 237

Harris, Lord 53

Harrods 70

Harry Ramsden’s 9, 67

Hays 168

Headroom to grow 8, 38, 270, 280

Health 26, 30, 36, 41, 67, 78-79, 80, 84,

91-92, 96, 99, 105, 140, 142, 144, 147,

162, 213

Healthcare 55, 78, 90, 95, 147-148

Heavy industry 12, 62, 79, 121, 128

Hedge funds 39, 138, 249

Henry Boot 59

Hewlett Packard 9, 16, 61, 171

High depreciation and amortisation of

goodwill 79, 121

High dividends 8, 38, 270, 280

High growth markets 78, 104

High value product 78, 105

Hilton 107, 164

Hit Entertainment 7, 27, 167

Hitachi Credit 52, 237

Holmes Place 67, 165

Homeserve 167-168

Honda 22, 101, 162

Horlick, Nicola 57, 70, 255

Hornby 8, 43

Household goods 76, 83, 105, 110, 144,

162

Housing bubble 131-134, 158-159

HSBC 7, 11, 13, 22, 33, 175, 223, 237

Hubs and spokes 78, 92

I

IATA 93

IBM 14, 17, 24, 30, 49, 56, 65, 273, 274,

275

ICAP 8, 39

ICI 12, 158, 230

Imperial Tobacco 149, 230

Information technology 17-18, 40, 63, 71,

73, 77-79, 82-83, 87-89, 91, 94-95, 97,

99, 101, 105, 108, 110, 116-117, 120,

142, 144, 168, 171-172, 208

Information technology hardware 95,

105, 144, 171-172

Ingenta 167

Instinct 241, 251

Insurance 3, 16, 18, 21-22, 26, 29, 39, 60,

67, 71, 78-79, 81, 83, 88, 91-94, 97, 100,

105, 109, 114-115, 118-119, 121-123,

144, 174-178, 208, 244, 255

Intel 16, 36, 56, 69, 89, 109, 114, 171,

277-278

Intellectual capital 78, 101

Intellectual property rights and

proprietary products 78, 106

Interbrew 65

Intercontinental 164

Interlink Foods 7, 25, 52

International comparative advantage 93

Internet 4, 15, 18, 21, 29, 34, 60-61, 66,

68, 71, 77, 85-86, 88, 90, 92, 96, 99-100,

102, 105, 108, 110, 116-117, 120, 141,

150-152, 163, 166-167, 170, 172, 176,

211, 214, 275-278

Internet threat 78, 107

Invensys 12, 161

Investor qualities 251

iSOFT 172

ITV 9, 57, 69, 82, 166

J

Jackson, Michael 70

Japanese cars 11, 35, 65, 82, 93

Jarvis 168

Jaycox, Todd 200

JD Wetherspoon 8-9, 38, 67

JDS Uniphase 236

John Laing 168

Business Models

290

John Menzies 11

Johnson Matthey 59, 158

Johnson, Ross 40

JVC 9-10, 65, 69

JZ Equity 39

K

Kay, John 2

Kelda 232

Kennedy, John F 127

Keynes, John Maynard 195, 257

Kiam, Victor 140

Kindleberger, Charles 282

Kingfisher 232

Kirk, Adelle 21

KISS principle viii, 8, 39, 204, 250, 270,

280

Kissinger, Henry 134

KPMG 7, 29, 46

Kwatinetz, Mike 56

L

Lack of competition 7, 14, 93, 213, 270,

279

Landaround 101

Lastminute.com 9, 57, 73

Launching new products 9, 13, 60, 271,

281

Lavelle, Louis 237

Lean manufacturing 9-10, 61, 271, 281

Lefevre, Edwin 282

Legal & General 236

Legislation and regulation 78, 92, 169

Leisure 32, 36, 61, 72-73, 77-79, 84, 86,

88, 90, 93-95, 108, 110-111, 115, 120-

121, 142, 165-166, 178, 225

Leisure and hotels 105, 117, 145, 164,

166, 208

Leverage viii, 131, 138

Liberty International 236

Licht, Leonard 240

Life insurance 11, 19, 21-23, 35, 58, 60,

78, 81-82, 88, 92, 97, 105, 109, 116, 140,

144, 174-178, 208

Like-for-like sales growth 9, 61-62, 67,

271, 281

Likert, Rensis 101

Linux 17, 275

Livermore, Jesse 240, 254

Lloyds 8, 20, 22, 32, 122, 176

Lloyds TSB 7-8, 14, 32, 39, 45, 64, 175,

232, 238

Locke, John 51

LogicaCMG 172

Logistics viii, 61, 169-170

Logitech 16

Long tail liability insurance 79, 121, 176

Long Term Capital Management 39-40,

255

Long-term contracts 7, 18, 23, 55, 97,

109, 168, 270, 280

Long-term and opaque pricing 77-78, 109

Lonmin 155

Low break-even point 8, 40, 270, 280

Low-cost activities ix, 53, 260

Low-cost overseas production 78, 93, 95,

104, 161

Low depreciation and amortisation 9, 62,

271, 281

Low-ticket items ix, 24, 84-86, 145-147,

150, 153, 163

Luminar 9, 36, 72, 165

Lynch, Peter 19, 31, 103, 186, 209, 240-

241, 251, 282

M

Machiavelli 249, 282

Macintosh 17, 275

Mackay, Charles 282

Make life easy 78, 110, 211

Make once, sell many times 77, 110, 164,

172

Making mistakes 254

Man Group 138

Mansueto, Joe 6

Marconi 8, 20, 33, 43, 54, 171, 194, 199,

234, 235

Margin of safety 31-32, 63, 103, 178,

182-183, 185, 187, 200, 223, 246, 252-

253

Market size 38, 78, 94, 189

Marks & Spencer 12, 22, 59, 61, 71, 163,

192, 203, 212, 236

Marlborough 56

Mars 41

Index

291

Marx, Jenny 153

Matalan 54, 67, 163

Materiality 77, 85

Maximising profit from different revenue

streams 9, 63, 271, 281

Maxwell, Robert 8, 48, 49

McAlpine 7, 18, 23, 159

McCarthy, Conor 28

McCartney, Sir Paul 106

McDonald’s 7, 14, 20, 56, 61, 95, 96

McNealy, Scott 279

Mears 8, 18, 23, 39

Media x, 14-15, 35, 42, 47, 57, 68-71, 73,

78, 81, 85, 87-88, 90, 100, 105, 108, 110-

111, 117, 120, 134-135, 145, 166, 208,

245, 248, 254, 278

Media and entertainment. 82, 179

Megatrends 78, 95, 99, 140-141, 169,

247, 267

Mercedes 56, 71, 113

Merchant Retail 7, 9, 23-24, 37, 67, 73,

164

Metnor 94

Michael Page 7, 11, 168

Microsoft iv, 7-10, 13-14, 16-17, 21, 36,

40, 56, 65, 69, 74, 81, 87, 100, 104, 107,

111, 114, 172-173, 237, 260, 263, 272-

279

Midland Bank 43

Millennium Dome 98

Mining 11, 14, 40, 60, 73, 76, 78, 89, 96,

98, 100, 105, 115, 121, 144, 154-156, 179

Minorplanet 162

Mitchells & Butlers 236

MITIE Group 18

mmO2, 13, 50, 54, 151, 235

Moats 7, 10, 16, 82, 106, 140, 269-270,

272, 279

Mobile phones 15, 27, 36, 60, 61, 63, 69-

70, 78, 91, 94, 99-100, 102, 104, 112,

114-115, 151-152

Modest head office 3, 8, 43, 53, 271, 281

Modigliani and Miller 31

Monopoly, oligopoly and cartels 79, 111

Montier, James 62

Moore’s Law 109

Morgan Stanley 101

Morrison, David 282

Morrison Supermarkets 8, 32, 39, 54, 55,

151, 209, 220, 236

Mortgage banks 21, 28, 52, 77, 82, 87, 97,

174-175, 183

Morton, James 282

Motivation 77, 86

Moule, Michael 240

Moving averages 198-201, 203-204

Moving up and down the value chain 9,

11, 64-65, 77, 79, 117, 271, 281

Munger, Charlie 147

Music 15, 64, 71, 78-79, 105, 107, 108,

111, 150, 167

Must-have products 15, 79, 94, 104, 112,

147, 217, 264, 275

N

Napoleon 22, 83, 150, 194

Nestlé 28, 32, 41, 72, 146-147

Net cash per share 186

New products. 16, 36, 79, 96, 99, 111-

115, 146, 148, 157, 265

Newton, Sir Isaac 103

Next 61, 163, 236

Niche player 7, 24, 38, 146-147, 152,

270, 280

Nildram 71

Nissan 19, 162

Nokia 9, 25, 56

Non cyclical consumer goods 144-145

Nordstrom, Dr. Kjell 76

Northern Foods 146

Northern Rock 64, 175, 236

Not dependent on a few customers 7, 24,

270, 280

Not dependent on a few suppliers 9, 73,

272, 281

NSB Retail Systems 8, 54, 235

NXT 162

O

O’Shaughnessy, James 202, 240, 282

Obsolescence 61, 65-66, 78, 108-109,

149

Offshore banking 119

Oil 13, 22, 36, 42, 58, 64, 72-73, 76-79,

81-82, 87-89, 91-92, 94-95, 98, 101, 105-

106, 108, 111, 117-118, 120-122, 128-

129, 140-141, 143-144, 148, 153, 155-

157, 174-175, 179, 228

Oil and gas 77, 82, 88, 94, 105, 108, 140,

144, 156, 179

One-off action provides revenue for years

8, 10, 40, 271, 280

OPEC 42, 72, 81, 111, 117, 156

Oracle 172

Order out of chaos 255

Outperforming 254

Outsourcing to third parties 78, 96

Ovid 80

Owning the customer 7, 25-26, 270, 280

P

P&O 170

Pacific Rim 93-95, 120

Parsons, Richard 231

Past success 8, 54, 271, 281

Patents 16, 41, 95, 106-107, 217

Payments in advance 7, 26, 270, 280

Peacock 67, 164

Pearson 166

PEG 183-184, 221

Pepsi 9, 12, 69-70, 89

PER ix, xiii, 24, 33, 130, 135, 142, 149,

159, 182-184, 188, 224, 227, 232, 250,

257, 268

Personal Assets 20, 136, 138

Peters, Tom 81

Petrol 29, 36, 69, 74, 81, 84-85, 90, 102,

107, 111, 117, 123, 150, 157

Petronius 120

Pharmaceuticals 16, 22, 60, 68, 71, 76,

78-79, 80-81, 83, 85, 87, 89-91, 94-95,

100, 105-106, 114-116, 118, 120-121,

140, 142-144, 147, 157, 179, 235

Pharmaceuticals, health, personal care

144, 147

Picks and shovels 25, 94, 103

Pizza Express 9, 62

Planet Hollywood 9, 70

Plasmon 7, 8, 24, 38, 49

Player ix, ix, 7, 11-13, 16, 24, 30, 38, 56,

81-83, 94, 102, 118, 122, 145-147, 149-

152, 163-164, 172, 174-175, 177, 250,

268, 270, 275, 280

Po Na Na 67

Polly Peck 8, 12, 47

Porter, Michael 282

Positional goods 79, 113

Predictability of demand 77, 86, 87

Premier Direct 9, 24, 71, 72

Premier Oil 64

Price to book value 186

Price to cash flow 186, 227

Price to research ratio 187

Price to sales ratio 187

Price, Thomas Rowe 240

Private Eye 48

Private finance initiative 23, 91, 119, 159,

168

Proctor, William 282

Product differentiation 3-4, 9-10, 66, 146,

159, 161, 271, 281

Product pipeline 79, 115

Profit margin 3, 40, 65, 68, 80, 105, 142,

144, 146, 149, 152, 154, 156, 158-159,

161-162, 164-165, 167, 170-171, 173,

182, 184, 269, 275

Profit zone 6, 9, 27, 60, 63, 65, 67-68, 94,

108, 117, 171, 222, 271-272, 281-282

Prone to litigation 79, 122

Prone to the economic cycle 79, 114, 122,

162

Proshare 211, 283

Provident Financial 9, 59, 175

Prudential 82, 177-178

Public perception 8, 41, 271, 280

Q

Quantum Fund 138, 203

Quayle, Dan 173

R

RAC 7, 21, 27, 167

Racal 9, 54

Radstone Technology iv, 6-7, 10-11, 14,

16, 20, 32, 43, 64, 72, 171, 263-272, 279

Railtrack 12, 91, 123, 169

Ratner 7, 17

Reach ix, 22, 33, 35, 43

Reagan, Ronald 44

Real estate 91, 93, 97, 142, 144, 164, 178,

208

Recession resistant viii, xi, 77-78, 80, 87,

97, 121-122, 137, 142-178, 260, 265

Reckitt Benckiser 148, 232

Recovery plays 79, 114, 119, 121

Recreate the company 8, 42, 271, 280

Recurring contacts 7, 27, 270, 280

Recurring revenues 7, 10, 28, 55, 86, 88,

140, 153, 167, 174, 270, 280

REFS vii, 182, 202-203, 223, 283

Relative strength xiii, 192, 202-204

Rentokil Initial 11, 168, 230, 232

Research and development to maintain

lead 79, 114

Resources 142, 154

Retailing 22, 29, 39, 43, 61, 65, 67, 77,

79, 81, 83, 85-89, 97, 101, 111, 114, 117,

120, 140, 150, 163, 170, 178, 213

Return on capital employed 62, 185, 224-

225, 269

Reuters 92, 167, 210, 235, 283

Reverting to the norm 131

Rexam 230

Richmond Foods 21, 28, 39, 41, 72, 147,

195

Rio Tinto 155

RIT Capital Partners 138, 200

Rivalry 77, 83

RJ Reynolds 148

RJR Nabisco 8, 40

Roddick, Anita 67

Rogers, Jim 70, 203, 240

Rolex 106, 113

Rolling out a consumer chain 9, 67, 271,

281

Rolls-Royce 23, 53, 113-114, 160

Rose, Stuart 43

Ross, Joel 212

Rothschild, The Lord 138

Rothschilds 240

Royal & Sun Alliance 12, 123, 176, 235

Royal Bank of Scotland 7, 12

Rushbrook, Ian 136, 240

Russell, Cheryl 95

Ryanair 15, 40, 54, 57, 72, 169

S

Sage 59, 232

Sanders, Bernie 133

Scalable ix, 85, 111, 173

Schroders 236

Schwager, Jack 282

Schwed, Fred 169

Scotch 69

Scottish & Newcastle 9, 58, 146, 165

Scottish Power 25, 153

Scuttlebutting iv, ix, xi, xiii, 67, 69, 164,

183, 207-218

Secondary profit zones 9, 67, 68, 222,

271, 281

Sectors to avoid iii, 79, 96, 118

Seguela, Jacques 166

Self-reinforcing 78, 98

Selfridges 237

Selling directly 7, 10, 29, 270, 280

Sellotape 9, 69

September 11th 56, 72, 118, 121, 160,

165, 237

Serco 168

Serious Investor Groups v, 211, 283

Severn Trent 23

Shakespeare, William 250

Share buy-backs 43, 54, 154, 186

Share price driver 39, 55, 183, 186, 202

Shareholder values 9, 54, 55, 271, 281

Shell 8-9, 14, 16, 42, 64, 92, 107, 157

Shire Pharmaceuticals 235

Short ix, 100, 126, 138, 198, 203

Skoda 57

Slater, Jim v, 34, 182-183, 221, 240, 282

Sloan, Laurence xi

Slywotzky, Adrian 282

Smith, Linda 172

Smith, Terry 220, 282

Smiths 160-161

Société Générale Asset Management 70

Software 4, 14, 21, 36, 59, 63, 65, 78-79,

83, 85, 93, 95, 100, 105, 107, 110-113,

115, 118, 142, 171-173, 204, 208, 218,

265, 273, 275-278, 283

Software and computer services 105, 144,

172

Somerfield 64, 150

Something new 9, 54-55, 70, 87, 233,

271, 281

Sony 13, 56, 65, 69, 166

Soros, George 138, 203, 240, 242, 258,

282

South Sea bubble 103

South Staffordshire 6-8, 28, 34

Southwest Airlines 15

Speciality finance 39, 105, 144, 173, 174

Spending other people’s money 78, 98

St. James’ Place 101

Stagecoach 8-9, 35, 43, 55, 170

Standard Chartered 175

Standard Life 175

Standard Oil 111

Stature of customers 7, 29, 270, 280

Steel vii, 4, 11, 35, 40, 62, 65, 79, 96, 114,

120-121, 185, 252

Sticky customers ix, 17, 77, 88, 97, 153,

174, 177, 260

Stock market bubble 114, 130-132

Stockbroking 77-78, 81

Stop loss x, 103, 189, 197, 203-204, 242-

243, 245, 256

Strategy 2-3, 12-13, 15, 19-20, 34, 37, 40-

41, 43, 55, 87, 94, 137-138, 153, 195-196,

198, 200, 203, 243, 245, 248-249, 256-

257, 272, 274-276

Strong cash flow 8, 26, 43-44, 149, 226,

265, 271, 280

Substitutes 3, 7, 17-18, 73-74, 77, 88,

118, 265, 270, 279

Sugar vii, 4, 78, 84, 102

Superior product or service xii, 9, 17, 68-

69, 271, 275, 281

Supermarkets 8, 11, 15, 21, 24-27, 29, 32,

39, 54-56, 58, 60-62, 64, 67, 71, 78, 80,

82, 87, 89, 90-92, 110, 114-115, 117-118,

120, 145-147, 150-151, 176-177, 209,

212, 214, 220, 236 294

Suppliers iii, vii, 3, 5, 9-10, 12, 22-23, 25-

26, 35, 55, 61, 65, 72-74, 76, 79, 82, 87-

88, 106, 112, 116-118, 120, 153, 161,

208, 210, 218, 268, 272, 281

Support and resistance 197-198, 201,

203-204

Support services 6, 18, 34, 36, 53, 79, 83,

91, 92, 100, 105, 108-110, 118, 120, 144,

167, 208

Supported by a famous personality 9-10,

69-70, 271, 281

Surfcontrol 18, 172

Switchboard business model 92, 173

Switzerland 106

Synergy Healthcare 148

T

Taube, Nils 240

Techinvest 28

Technology x, 3, 14, 32, 39-40, 54, 56,

60, 66, 76, 78, 80-81, 91, 94-97, 99-100,

103-104, 106-108, 112-118, 151, 155,

167, 170, 172, 187, 208, 218, 236, 264,

266-267

Telecom plus 7-9, 14-15, 24, 26, 38-40,

43, 52-54, 62-63, 152, 199, 237

Telecommunications x, 11, 14, 20, 25-26,

36, 64, 73-74, 76-77, 79, 83, 85, 87, 89,

93, 95, 100, 105-106, 108, 110-111, 115,

117-118, 120-121, 142, 144, 151, 153,

166, 179, 208, 228, 234

Television 11, 15, 18, 22, 27, 35, 57, 60,

68, 70-72, 78, 82, 86, 90, 97, 99, 104-105,

123, 161, 163, 166, 167

Templeton, Sir John 31, 70, 131-132,

138, 240, 246, 256-257, 282

Tesco 7, 9, 12, 22, 25-26, 50, 58, 62, 64,

66-67, 71, 91, 150, 164, 196, 197

Textiles 14, 26, 52, 79-80, 83, 93, 114,

120, 162

Tey, Josephine 128

TGI Friday’s 64

Thatcher, Margaret 17, 93, 119, 243, 251

The Art of War 194, 282

The trend is your friend 194, 204, 240-

242, 245, 251, 255

This time it is different 257-258

Thomas, Robert 19

Thurow, Lester 12

TJ Hughes 67

TMT x, 14, 32-34, 41, 43, 71, 79, 96, 99-

100, 104, 107, 112, 121, 130, 151-153,

166, 171, 183, 186, 194, 204, 221, 227,

234, 237, 245, 266

Tobacco 26, 31, 39, 42, 58, 64, 76-80, 82-

90, 94, 97-98, 100, 102, 105, 108, 114-

115, 120-123, 140, 142, 144, 148-149,

183, 208, 230

Toll bridge – intangible 79, 115

Toll bridge – tangible 79, 116

Tomkins 9, 63

Townsend, Robert 73

Toyota 9, 13, 22, 56, 61, 65, 113-114, 162

Trabant 17

Trademarks 106, 107

Trading iii, xiii, 189, 193, 200, 203-204,

243-244, 252, 258

Train, John 282

Transactional x, 16, 23, 26, 29, 67, 87-88,

109, 150, 163, 165, 169, 217

Transport 35, 40, 61, 73-74, 78-79, 86-

87, 90-91, 99, 105-106, 110-111, 121,

141, 144, 169-170, 208, 213

Tribal 168

Twain, Mark 154, 216

Tzu, Sun 194, 282

U

UK Shareholders Association 211

Ultimate Leisure 36, 225

Umeco 7-8, 23, 36-37, 53, 161

Unethical 79, 123

Unilever 30, 146

Unique selling point 9, 70-71, 217, 271,

273, 281

Unite Group 36

US 15, 18-19, 33, 43, 46, 48, 50, 53, 56,

61, 72, 81, 92, 94, 96, 104, 107, 119, 122-

123, 128, 130, 134, 142, 149, 154-156,

158-162, 164-165, 170-174, 176, 222-

223, 228, 234, 236-237, 255, 264, 266-

267, 268-269, 276

Utilities 21, 24-27, 40, 67, 73, 77-80, 82,

84, 86, 88, 93, 97, 100, 105, 108, 111-

112, 116-118, 120-121, 123, 140, 142,

144, 150, 152-154, 179, 208, 215, 228

V

Value added x, 20, 43, 77, 80, 84, 89, 117,

153, 167, 170

Value chain viii, ix, x, 3-4, 9, 11, 18, 26,

36, 64-66, 74, 77, 79, 99, 116-117, 150,

161, 172, 271, 281

Value statistics iii, 185, 187

Versailles 8, 46, 47

Victrex 158

Vinci, Leonardo da 112

Virgin 8, 17, 28, 35, 42, 56, 60, 69-70

Vodafone 8, 12-13, 33, 50, 53-54, 61, 91,

109, 152, 188, 196, 230, 233-235

Volkswagen 57, 101

VT 25

W

Walton, Stuart 202

Wanger, Ralph 94, 194, 240

Watermark 7, 30, 36, 52

Weak and numerous suppliers 79, 118

Webb, Peter 126

Weinstock, Lord 54

Weintraub, Neal 135

Welch, Jack 43

Wellington, Duke of 83

WHSmith 11, 164

Whitbread 65

Wigoder, Charles 53

Wilde, Oscar 42, 254

Williams Inference 92

Wilson, Gahan 4

Wimpey 159

WorldCom 8, 49, 130

WPP 166

Wriston, Walter 101

X

Xansa 172

Y

Yule Catto 158

 

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