Skin in the game

[giofranchi]

In the fall of 1853, an American craftsman named Elisha Otis, who had found a solution to one of the era’s toughest engineering problems, went looking for a grand stage to demonstrate his invention.

At the time, many American buildings had elevators. But the mechanics of how these crude contraptions worked – a combination of ropes, pulleys, and hope – hadn’t changed much since the days of Archimedes. A thick cable pulled a platform up and down a shaft, which often worked well – unless the cable snapped, at which point the platform would crash to the ground and destroy the elevator’s contents.

Otis had figured out a way around this defect. He attached a wagon spring to the platform and installed ratchet bars inside the shaft so that if the rope ever did snap, the wagon spring safety brake would activate automatically and prevent the elevator from plummeting. It was an invention with huge potential in saving money and lives, but Otis faced a skeptical and fearful public.

So he rented out the main exhibit hall of what was then New York City’s largest convention center. On the floor of the hall he constructed an open elevator platform and a shaft in which the platform could rise and descend. One afternoon, he gathered convention-goers for demonstration. He climbed onto the platform and directed an assistant to hoist the elevator to its top height, about three stories off the ground. Then, as he stood and gazed down at the crowd, Otis took an ax and slashed the rope that was suspending the elevator in midair.

The audience gasped. The platform fell. But in seconds, the safety brake engaged and halted the elevator’s descent. Still alive and standing, Otis looked out at the shaken crowed and said, “All safe, gentlemen. All safe.”

 

TO SELL IS HUMAN, by Daniel H. Pink

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

[rkbabang]

In the fall of 1853, an American craftsman named Elisha Otis, who had found a solution to one of the era’s toughest engineering problems, went looking for a grand stage to demonstrate his invention.

At the time, many American buildings had elevators. But the mechanics of how these crude contraptions worked – a combination of ropes, pulleys, and hope – hadn’t changed much since the days of Archimedes. A thick cable pulled a platform up and down a shaft, which often worked well – unless the cable snapped, at which point the platform would crash to the ground and destroy the elevator’s contents.

Otis had figured out a way around this defect. He attached a wagon spring to the platform and installed ratchet bars inside the shaft so that if the rope ever did snap, the wagon spring safety brake would activate automatically and prevent the elevator from plummeting. It was an invention with huge potential in saving money and lives, but Otis faced a skeptical and fearful public.

So he rented out the main exhibit hall of what was then New York City’s largest convention center. On the floor of the hall he constructed an open elevator platform and a shaft in which the platform could rise and descend. One afternoon, he gathered convention-goers for demonstration. He climbed onto the platform and directed an assistant to hoist the elevator to its top height, about three stories off the ground. Then, as he stood and gazed down at the crowd, Otis took an ax and slashed the rope that was suspending the elevator in midair.

The audience gasped. The platform fell. But in seconds, the safety brake engaged and halted the elevator’s descent. Still alive and standing, Otis looked out at the shaken crowed and said, “All safe, gentlemen. All safe.”

 

TO SELL IS HUMAN, by Daniel H. Pink

 

giofranchi

 

 

Another book added to my ever growing to-read list.  I seem to add 3 books to the list for every one I am able to read and take off the list.  Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.

 

[giofranchi]

Another book added to my ever growing to-read list.  I seem to add 3 books to the list for every one I am able to read and take off the list.  Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.

 

Yes! I think it is a good book. Most of all I think it is useful. Mr. Pink has the ability to focus on the 1% that is really important in many fascinating books and articles he has read. Then he knows how to put all those 1% together in a cohesive narrative. Nothing really new! But after reading a little book of 233 pages, you feel like you have read an entire library!!  ;D

I also enjoyed “Drive”.

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

 

 

[WhoIsWarren]

Yes great little story.  Kind of like how the Romans forced engineers to sleep under a bridge once it was completed.

 

I too will be adding the book to my reading list.  Cheers.

 

[txlaw]

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

[stahleyp]

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

 

Blackberry??? haha, just kidding!  :P

[boilermaker75]

In the fall of 1853, an American craftsman named Elisha Otis, who had found a solution to one of the era’s toughest engineering problems, went looking for a grand stage to demonstrate his invention.

At the time, many American buildings had elevators. But the mechanics of how these crude contraptions worked – a combination of ropes, pulleys, and hope – hadn’t changed much since the days of Archimedes. A thick cable pulled a platform up and down a shaft, which often worked well – unless the cable snapped, at which point the platform would crash to the ground and destroy the elevator’s contents.

Otis had figured out a way around this defect. He attached a wagon spring to the platform and installed ratchet bars inside the shaft so that if the rope ever did snap, the wagon spring safety brake would activate automatically and prevent the elevator from plummeting. It was an invention with huge potential in saving money and lives, but Otis faced a skeptical and fearful public.

So he rented out the main exhibit hall of what was then New York City’s largest convention center. On the floor of the hall he constructed an open elevator platform and a shaft in which the platform could rise and descend. One afternoon, he gathered convention-goers for demonstration. He climbed onto the platform and directed an assistant to hoist the elevator to its top height, about three stories off the ground. Then, as he stood and gazed down at the crowd, Otis took an ax and slashed the rope that was suspending the elevator in midair.

The audience gasped. The platform fell. But in seconds, the safety brake engaged and halted the elevator’s descent. Still alive and standing, Otis looked out at the shaken crowed and said, “All safe, gentlemen. All safe.”

 

TO SELL IS HUMAN, by Daniel H. Pink

 

giofranchi

 

 

Another book added to my ever growing to-read list.  I seem to add 3 books to the list for every one I am able to read and take off the list.  Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.

 

I already own more books than I can read in my remaining time, even if all I do is read starting today! But that doesn't stop me from constantly buying more books. I am like Jerry in the movie Conspiracy Theory. I can't go by a book store without buying a book. But unlike Jerry, at least I keep buying a different book each time. That is unless I forgot I already have it!

[Investmentacct]

 

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

 

May be Byddf

[txlaw]

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

 

I probably should have quoted Gio's post.

[txlaw]

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

 

I probably should have quoted Gio's post.

 

Nobody is curious? 

[racemize]

Guess what company Mr. Munger mentioned at the DJCO meeting . . .

 

I probably should have quoted Gio's post.

 

Nobody is curious?

 

I'm curious, but you were a bit too cryptic for me to figure out what you meant (perhaps I'm just dense).  I read the DJCO meeting notes already as well, so is this something new or something that was in there already?

[constructive]

I assume he mentioned Otis, owned by UTX?

[bargainman]

Another book added to my ever growing to-read list.  I seem to add 3 books to the list for every one I am able to read and take off the list.  Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.

 

It's going to get worse.  The rate of data generation keeps increasing and increasing at a massive rate.  Terabytes of data, big data.  Here's a fun stat:

 

72 hours of video are uploaded to YouTube every minute

 

So it's basically impossible to watch all the video on youtube :-)

[txlaw]

I assume he mentioned Otis, owned by UTX?

 

Yes indeed. 

 

He mentioned Otis Elevators as an example of a US manufacturing concern that actually had/has a moat.  This was related to the question about manufacturing in the US.

 

I found it surprising to see Gio post on Otis, when I had only heard about the company a couple of days before.

[eclecticvalue]

Another book added to my ever growing to-read list.  I seem to add 3 books to the list for every one I am able to read and take off the list.  Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.

 

It's going to get worse.  The rate of data generation keeps increasing and increasing at a massive rate.  Terabytes of data, big data.  Here's a fun stat:

 

72 hours of video are uploaded to YouTube every minute

 

So it's basically impossible to watch all the video on youtube :-)

 

Same thing is happening with the blogs and news. There's too much of it. Its crazy how the posts accumulate if you don't look at your rss feeds. When I think about it if you ignore the rss feeds you can be highly productive. I know people will be saying "duh" but there is so much to consume that it is highly addicting.

[giofranchi]

I assume he mentioned Otis, owned by UTX?

 

Yes indeed. 

 

He mentioned Otis Elevators as an example of a US manufacturing concern that actually had/has a moat.  This was related to the question about manufacturing in the US.

 

I found it surprising to see Gio post on Otis, when I had only heard about the company a couple of days before.

 

txlaw,

I would really like to say that Mr. Munger and me share some sort of “telepathic thought affinity”… unfortunately, I must admit that was just plain good luck!!  ;D ;D ;D

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes