Stewarding Future Leaders
Stewardship is defined as the responsibility to shepherd and safeguard the interests of others. Many of us are in positions of stewardship on behalf of others in public corporations, private enterprises, and charitable organizations. Warren Buffett, perhaps the most widely followed business leader of our time, speaks often of the importance of stewardship in business. It is striking, then, to see the dearth of courses discussing the concept of stewardship at top American business schools.
In the online course catalogs of the top five MBA programs in the America (as recently ranked by US News and World Report), “stewardship” is nowhere to be found in any course title. To put this into context, each of these schools offers at least five classes with the word “leadership” in the title. In the detailed descriptions of courses offered at Stanford’s Graduate School of Business, tied for #1 in the same report, the word “leadership” appears 108 times. The word “stewardship” is not mentioned once. The closest mention of the word appears in the context of how to steward yourself in a course entitled “Leading Your Life.”
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Value Investing Getting Too Crowded? Another Golden Age of Growth Investing Is On The Way
One of the landmark events on the calendar of investors took place last month—the Value Investing Congress in New York. But it behooves us to remember that an alternative approach also exists—that of growth investing.
While the two styles share many common principles, growth investing focuses on identifying companies with above-average growth rates, whose share prices today are considered inexpensive relative to their intrinsic value over the long term.
The dearth of investors who publicly tout the principles of growth investing is one sign that its golden age may now be upon us. The Wikipedia entry on “Value investing” lists more than a dozen current well-known value investors including Berkshire Hathaway chairman Warren Buffett. Value investing is a sensible discipline, and its success has attracted many acolytes. When too many people are performing the same analysis and arrive at the same conclusion, however, it becomes the crowded trade.
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Another Golden Age of Growth Investing
One of the landmark events on the calendar of investors takes place this week — the Value Investing Congress in New York. But it behooves us to remember that an alternative yet equally tenable approach also exists — that of growth investing. While the two styles share many common principles, growth investing focuses on identifying companies with above-average growth rates, whose share prices today are considered inexpensive relative to their intrinsic value over the long term.
The dearth of investors who publicly tout the principles of growth investing is one sign that its golden age may now be upon us. The Wikipedia entry on “Value investing” lists more than a dozen current well-known value investors including Berkshire Hathaway chairman Warren Buffett. Value investing is a sensible discipline, and its success has attracted many acolytes. When too many people are performing the same analysis and arrive at the same conclusion, however, it becomes the crowded trade. By contrast, the only investor listed in the Wikipedia entry for “Growth investing” is Thomas Rowe Price, Jr., who died many years ago. Philip Fisher, another legend whose Common Stocks and Uncommon Profits is generally considered to be the reference work on growth investing, goes entirely unmentioned.
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Not-So-Dire Diagnosis
Warren Buffett once famously stated that “Berkshire [Hathaway] buys when the lemmings are headed the other way,” conjuring up visions of rodents blindly following one another off a cliff. But the idea that lemmings participate in mass suicide is a myth, propagated by a Disney documentary. The widespread misuse of the lemming metaphor by investors to illustrate herd behavior itself reveals the herdlike behavior of investors and the scarcity of original insight.
Original insight is also uncommon among doctors. Physicians are trained through rote memorization, and independent views are often ridiculed by peers and prosecuted by malpractice attorneys. The hiring of physicians as consultants by investment firms seeking unique perspectives has instead led to a greater tendency toward consensus thinking.
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