CONTENTS
Acknowledgements ix
Introduction: The Q Culture xi
PARTI:
A TALE OF TWO MARKETS 1
Chapter 1. Mr. Market’s Bipolar Disorder 3
Swings, Bubbles, and Crashes / 5
Be an Anomaly / 11
Barrel of Monkeys? / 12
Chapter 2. Prozac Market 17
Obscurity / 17
Simplicity / 18
The PerfectDream / 22
Tidying Up the Tale / 28
Chapter 3. Chaotic Market 33
New Wave / 33
NextW ave / 36
Complexity / 46
Behavioral Finance / 47
Chapter 4. Amplified Volatility 51
Information Volatility / 51
Transaction Volatility / 59
Trader Volatility / 63
Prognosis / 66
Chapter 5. Take the Fifth 69
Who’s in Charge? / 70
Sticking to Your Knitting / 71
Alchemy / 81
The Long Run / 86
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vi Contents
PARTII:
SHOW ME THE MONEY 89
Chapter 6. Apple Trees and Experience 91
Fools and Wisdom / 91
Horse Sense / 100
Chapter 7. Your Circle of Competence 105
The Initial Circle / 106
The Nurtured Circle / 109
A Full Circle / 114
Decision Making / 116
Chapter 8. Recognizing Success 119
Business Fuel / 120
Managers under the Microscope / 124
Bang for the Buck / 128
The Full Tool Chest/ 131
Chapter 9. You Make the Call 133
Assets / 134
Earnings / 138
Silver Bullets and the Margin of Safety / 142
Cash / 144
MarketCircularit y / 146
Chapter 10. Making (Up) Numbers 153
Perennials / 153
Satire / 157
Charades / 162
Coda / 167
PARTIII:
IN MANAGERS WE TRUST 169
Chapter 11. Going Global 171
The Two-World Story / 172
Illusions of Duty / 176
One World to Come / 180
Contents vii
Chapter 12. Rules and Trust 193
The Family Manager / 193
Local Governance / 195
General Governance / 200
Your Voice att he Table / 202
Chapter 13. Directors at Work 205
Hail to the Chief / 206
Pay / 207
Deals / 212
Capital / 215
Checking Up / 217
Chapter 14. The Fireside CEO 221
Master Servants / 221
Action / 222
Lights / 230
Trust/ 235
Conclusion: The V Culture 243
Notes 245
Index 257