A Most Unlikely Master of Capital Allocation - Commoncog

If the most unlikely, most un-businesslike person could become a masterful capital allocator late in her life, then perhaps you could, too.

This is a companion discussion topic for the original entry at https://commoncog.com/unlikely-master-of-capital-allocation

Sharing some of my observations after reading this case

I like the conclusion Cedric made that we too, wherever we started, can learn about capital allocation. This is definitely uplifting.

However, i think one of the most important point in this article is how Graham, who has a knack for spotting talent, and a stellar track record to back, “spot” a pre-famous Buffett and trust this outsider to guide her along the way.

The case is also another instantiation of path dependence - the idea that the opportunities available to you at any point in time depends on the choices you made in the past. But it’s also important to note if I were in Graham’s shoes when Buffett bought, will the end results be the same? Will I be open enough to learn? Heck, can I even spot a brilliant mentor before he is famous?

The case is an instantiation of “patient but decisive” too, of setting a criteria combined with a willingness to wait and willingness to act quickly once the opportunity manifests.

  • On patience: I can only wonder how hard the FOMO is (wrt acquisitions), frustration is (wrt COO hiring) and unpopularity is (wrt chief editor change earlier)
  • On decisiveness: How Graham quickly executed the cable television acquisition over a busy weekend.

I learn a lot every time members write what they notice in cases. This is yet another example:

In some ways there is a path dependence here: Buffett became increasingly famous and well-connected due to his association with Graham. I think he still would be pretty famous even if she hadn’t trusted him and promoted him within her circles, but it happened so much earlier and faster given that she let him into her life, onto her board, and trusted him.

Also great call outs that I had not adequately thought through. I guess, to extrapolate to current events, imagine sitting out the current AI boom and waiting till 2034, after waves of consolidation, before starting to buy the best, most proven assets.