You can’t tax business. Business doesn’t pay taxes. It collects taxes.
Lowering prices is easy. Being able to afford to lower prices is hard.
It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.
I believe that you have to understand the economics of a business before you have a strategy, and you have to understand your strategy before you have a structure. If you get these in the wrong order, you will probably fail.
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
When better business decisions are made, economists won't make them.
At university level, I had an economics lecturer who used to joke that I was the only student who handed in essays on British Airways notepaper.
It is not about bits, bytes and protocols, but profits, losses and margins.
In a business that's driven purely by economics, the fact that one or two unique shows happen to get on and reach a public for a brief time doesn't constitute a trend.
It is way less certain to be a wonderful business in the future. The threat is alternative mediums of information. Every newspaper is scrambling to parlay their existing advantage into dominance on the Internet. But it is way less sure [that this will occur] than the certainty 20 years ago that the basic business would grow steadily, so there's more downside risk. The perfectly fabulous economics of this business could become grievously impaired.
Ronald Coase, in his classic 1937 paper on 'The Nature of the Firm,' was the first to bring the concept of transaction costs to bear on the study of firm and market organization.
The only thing that was economic, I might say, about my music career, aside from the fact that I did everybody's tax returns in the band, was the decision I made to leave the music business on economic grounds.
Why not stakeholder action? There's no economic principal that says that management should be responsive to shareholders, in fact you can read in texts of business economics that they could just as well have a system in which the management is responsible to stakeholders.
So some guy may know how to make money in cocoa beans, but I don't so I just let him have that. But it's got to be something I understand. It's got to be a business with fundamentally good economics. It's got to be a management that I like and trust and admire. And it's got to be a price that makes sense.
We say we are trying to buy into businesses with excellent economics, run by honest and able people at a decent price. We buy very few securities, so we look at it as "focused" investing.
(Waste = Loss): The first rule of business is to survive and the guiding principle of business economics is not the maximisation of profit, it is the avoidance of loss
