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The Outsiders

By: William N. Thorndike Jr. - Read: September 4, 2024 - Rating: 8/10

A look into the exceptional capital allocation abilities of eight unconventional CEOs in completely unrelated industries who all outperformed the market and competitors by a massive margin.

Thorndike highlights how each CEO combined long-term thinking with what he calls the "capital allocation toolbox" to generate outliar returns. This toolbox consists of the three alternatives for raising capital - tapping internal cash flow, issuing debt, and raising equity - and the five choices for deploying capital - investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, and repurchasing stock.

He tries to make it seem like this is the only valid skillset that has led to exceptional outcomes in public markets, which seems particularly inaccurate in the technology sector (for now, at least). Regardless, the framework introduced in this book is insightful.