‘Capital’ is a shorthand for ‘factors driving business finance and economic climates’, which is one of the three legs of triad mental model of business expertise. If you don’t know what that is, read this page first.
Broadly speaking, the Capital leg of the business expertise triad covers things like: P&L style thinking, capital allocation, capital structure and the relationship businesses have with capital markets. It also has to do with the ‘capital cycle’ (more broadly known as the market cycle).
It is this Capital aspect of expertise in business that Warren Buffett was referring to when he said “I am a better investor because I am a businessman, and a better businessman because I am an investor.”
Series, Guides and Cases
There is really one big series here:
- The Expertise of Capital in Business — which describes all the various aspects of capital expertise in the context of business, and explains why, on a long enough timescale, good businesspeople must eventually act like good investors.
And three large concept sequences in the Commoncog Case Library that are relevant to this topic:
- Capital Allocation — which contains cases of business leaders and companies with remarkable capital allocation skills.
- The
‘Capital’ is a shorthand for ‘factors driving business finance and economic climates’, which is one of the three legs of triad mental model of business expertise. If you don’t know what that is, read this page first.
Broadly speaking, the Capital leg of the business expertise triad covers things like: P&L style thinking, capital allocation, capital structure and the relationship businesses have with capital markets. It also has to do with the ‘capital cycle’ (more broadly known as the market cycle).
It is this Capital aspect of expertise in business that Warren Buffett was referring to when he said “I am a better investor because I am a businessman, and a better businessman because I am an investor.”
Series, Guides and Cases
There is really one big series here:
- The Expertise of Capital in Business — which describes all the various aspects of capital expertise in the context of business, and explains why, on a long enough timescale, good businesspeople must eventually act like good investors.
And three large concept sequences in the Commoncog Case Library that are relevant to this topic:
- Capital Allocation — which contains cases of business leaders and companies with remarkable capital allocation skills.
- The Capital Cycle — which contains cases of businesses navigating various capital cycles well or otherwise.
- Capital Expertise — which is tied most closely to The Expertise of Capital in Business series above and includes cases of businesspeople doing fancy things with the capital side of the triad.
Here are other articles on the topic:
- The Games People Play with Cash Flow
- The Joy of Small Markets — why attacking small, contained markets can be an easier way to build generational wealth.
- How to Become an Asian Tycoon — which explains the capital allocation piece of most Asian tycoons (note: this is part of the Asian Conglomerate Series)
- The Shape of the Game We Play — which is ostensibly about learning in business but in reality talks about the end of ZIRP and its influence on how we operate.
- Cash Flow is King (part of the Chinese Businessmen series)
- What the CEO Wants You To Know book summary
