Game Theory

If you are not the leader, never play the game according to the rules the leader has set. Otherwise, you are certain to lose. In other words, do not try to "outexcel" the competitor in its area of excellence or strategic capabilities. Playing by the rules set by the leader in an industry is certain death over time. The leader understands the rules better. A better approach in my view, is to create a distinctive strategy to change the rules of play. By changing the rules of play, you neutralize and paralyze the leader.

Board Leadership

There is fundamental difference and potential conflict between the roles of chairman and CEO. The CEO runs the company, and the chairman runs the board, one of whose responsibilities is to monitor the CEO. If the chairman and the CEO are one and the same, it is hard for the board to criticize CEO or to express independent opinions. A separate chairman who is reponsible for setting the board's agenda is more likely to probe and encourage debate at board meetings. Therefore separating the two roles is essentially a check on the CEO's power.
 

Excellent Quotes by Warren Buffet

On Earning: 
" Never depend on single Income. Make Investment to create a second source"

On spending:
"If you buy things you do not need, soon you will have to sell things you need"

On savings:
"Do not save what is left after spending, but spend what is left after saving"

On taking risk:
"Never test the depth of the river with both the feet"

On Investment:
" Do not pull all eggs in one basket"

On expectations:
"Honesty is very expensive gift. Do not expect it from cheap people"

Micro and macro economic factors affecting Investment

Macro economics factors is the field of economics that studies the behavior of economy as a whole and not on just specific companies , but entire industries and economies.

Micro economic factors closely integrated to the company performance. It is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices.

An investor should have well awareness about the performance of the company. Micro economics tightly connect with the product, cost and demand in the market, that should affect the company  and profit to a great extend. Company sales growth, cost of sales, capital allocation, debt increase or decrease, market monopoly all covering under micro economic.

As a value investor, keep avoiding the macro economic factors because it does have nothing to do for us. Keep an eye on such events to get best business in a best price. It is clearly a temporary behavior and would change back to normal. 

 

Any changes in micro economic factors affect to the root of a company and its performance. As a value investor, it is advisable to keep track on a company on the basis of influential micro economic factors like what legend investor Warren Buffet does.

Management Accounting

Managerial Accounting or Management Accounting - Role in Business and Industrial Organizations

Management decision making requires accounting information.

The management process is a series of activities in a cycle of planning and control. Planning involves decision making - the purposeful choice from among a set of alternative courses of action designed to achieve some objective. Control also involves decision to plan a control action. The difference between planning and control decisions is planning is more open ended with less constraints. Control is a more constrained process in which the main objective is achievement of plans and the main input is actual results in a period and comparison of them with the planned results.

Management accounting formalizes plans of the organization as budgets. It also formalizes the control process by preparing as performance reports.