ad astra per alia porci

lessons from edward lampert
July 5, 2007, 9:23 am
Filed under: investments/finance/economics, Lifeskills

I have been going through this Businessweek article on investor Edward Lampert again and I feel that there are some things I can learn from the article and Lampert’s life about how to achieve success (at least in the investment field).

Some pointers and observations:

  • Greater risks often comes with greater potential for gains. Evaluate risk properly and be active in pursuing gains.
  • Believe in your judgement but be careful and thoughtful in formulating one.
  • Be an independent thinker: do not follow the crowd just for the sake of it or because it is “conventional wisdom”.
  • Lampert searches for deep value and/or poorly-runned companies; he than actively seeks to change the way the company does things to unlock value.
  • Like Buffett, Lampert buys companies that generates a lot of cash flow to aid his investment activities. He is obsessed with how capital and cash is used in a business.
  • Lampert seeked high-powered mentors- to advance in a career, find good mentors.
  • Lampert studied Buffett’s moves very closely- study the greats extremely closely for lessons.
  • Lampert’s intense drive to succeed was a result of his father’s death. Many self-made millionaires and successful businessmen have some burr in their side that fuel their drive to succeed.
  • Lampert read up and is very knowledgeable- study and read a lot. Than study and read even more.
  • Lampert plotted a path that led him to his dream career- he was Tobin’s research assistant, an intern at Goldman Sachs and was a member of the student investment club while at Yale.
  • Lampert’s investment philosophy: “Evaluating risk and valuing risk is really what it is all about.” – Learn how to evaluate risk quickly using incomplete information.

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