TO KNOW THE UNDERPRIVILEGED, WALK IN THEIR SHOES

Last week Bank of Uganda called commercial banks in for a workshop about Small Business Recovery Fund (SBRF) set up last year to help small businessmen get over the worst of the pandemic.

The way the initiative was designed was that the monies would be channeled through commercial banks with government matching shilling for shilling whatever the commercial banks lent out.

Government committed sh100b to the process and the commercial banks matched it for the grand total of sh200b. I remember thinking the Fund was not big enough when it was first announced, but was disabused of that notion last week, sort of.

During the workshop It was reported that of the sh200b on offer only sh690m had been disbursed since November. Another sh1.2b worth of loans was still being assessed.

The monies were targeted at small businesses that do not have more than sh100m annual turnover.

The banks reported that most businesses that applied for the funds were in the sh100m to sh500m turnover and automatically ineligible.

Also the bankers also pointed out that ordinarily businesses with such low turnover cannot qualify for sh100m unless they were being set up for default.

"The central bank, which also takes back in vetting applicants complained that often times the documentation – there is a 26 point checklist which includes board resolutions, audited financial statements and marriage certificates, were often incomplete disqualifying applicants....

I suspect this is another classic case of government projects, backed by good intentions but totally oblivious to the reality on the ground.

For instance what does a sh100m a year business look like?

The other day there was a news report, which made reference to a rolex maker whose operation makes up to 382 chapatis a day.  At a thousand shillings each, that is just under a hundred million a year in turnover, assuming he works five days a week and 52 weeks a year.

Such a guy has no board resolutions leave alone being incorporated, it would be a miracle if he had audited accounts and a marriage certificate may be a stretch.

What this points to is that commercial banks, as they are constituted in Uganda, may not be the vehicle through which to channel these funds.

Government may find that the current model will be suited for those small business above sh100m in annual turnover, while the smaller businesses can work through their SACCOs or Village Savings Associations.

These know how to assess their members risk and provide for it, maybe the central bank will have better luck vetting SACCOs and let them get on with lending the funds to their members. Even if they don’t get many SACCOs it wouldn’t be as bad a success rate as a loan a month that they are showing now.

We need too, to guard against throwing good money after bad.

I have always believed that the main challenge of our business community is inadequate business skills, to allow them not only to thrive in good times but survive through the bad times.

"ABSA bank, at the end of February graduated some 60 decision makers from 46 SMEs who had gone through a yearlong Business survival and continuity training, aimed at equipping them to make sound strategic decisions....

The training was triggered by the challenges businessmen; especially SMEs were struggling with over the last two years due to the Covid-19 pandemic. Participants from the construction, manufacturing, tourism and hospitality sectors.

Among the things they learnt was running business online, building financial management systems and business planning, modelling and management among other relevant subjects. The graduating firms after vetting will have a chance to receive grant financing from GIZ one of ABSA’s partners in delivering the training.

The rationale is sound, enable the potential recipients with business skills so that they can maximize the benefits from future funding.

“To move Uganda and Africa forward, we are going to need collaborative efforts across the board to bridge the skills gap that is holding our SME sector back,” Mumba Kalifungwa, Absa Bank Uganda’s Managing Director (extreme left) said at the event.

The best of intentions can be derailed by an inadequate understanding of the challenge. Planners in both public and private sector need to walk in the shoes of the intended beneficiaries to understand their needs and provide the relevant solutions.

The need to do the right thing has never been more urgent. The SME sector accounts for more than 80 percent of the jobs in the economy. However, some estimates suggest over four million of the 13 million employed in this sector have in the last two years a suffered a decline in their incomes or lost them altogether.

They say the road to hell is paved with good intentions, but that need not be.

IN THE RUSSIA-UKRAINE WAR COMMUNICATION IS EVERYTHING, NATURE ABHORS A VACUUM

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Leading up to the first gulf war when the US and its allies first attacked Iraq in 1990 the western media bent over backwards to show how deadly Saddam Hussein was and hence the justification for his removal.

They consistently touted Saddam’s battle hardened army – it had just been in an eight-year war of attrition with neighbour Iran and his 400,000-strong republican guard, which was disciplined, well trained and sophisticated.

On later thought we laugh that Saddam must have been reading the western press and wondering whether they were talking about him, because before we could reach for the popcorn General Norman Schwarzkopf’s troops had reached the gates of Baghdad and the war was effectively over.

Later reports were that the US and its allies in some places found soldiers armed with nothing but pitchforks.

"It took a second war, a decade later – with a new narrative about the fictitious weapons of mass destruction, to dislodge Saddam and send Iraq back to the dark ages....

As I see the noise around the current war in Ukraine, I cannot help going back to that first gulf war three decades ago.

With the benefit of experience, I now see that Saddam’s major failure was his inability to win the communications war. All the international media houses, including at that time, the fresh-out-of-the-box CNN were western controlled and dominated the narrative. In a time before the internet, their narrative of events is all we swallowed.

In communications training I always insist that when you are operating in a vacuum, that is little to nothing about your enterprise is being communicated, the vacuum will be filled and more often than not to your detriment. If you are a serious player, you have to ensure that vacuum does not exist, you have to populate it with your message, so when the fight comes you have a foot to stand on.

So Vladmir Putin, who the west have demonized –  I have heard him referred to as a thug in certain sections, is suffering Saddam’s problem. His story is being written for him and not by his friends.

The former KGB boss probably is not surprised by all this firestorm of negative press and has probably factored it into his calculations, despite what the western press says. But he might learn or already has that the “manufactured consent” that has been created by the western media means he will get little to no sympathy from everybody else leaving Russia open to all sorts of attacks and a very uncertain destiny.

He is at a disadvantage. The number of people who can speak Russian outside of Russia can be counted on one hand.

"Which in hindsight makes the colonial project a work of genius. Apart from extracting raw materials from the colonies at dirt cheap prices to fuel their industry, they ensured a critical mass of people spoke English. About one in five people on the planet now are English speakers and this number is growing as they teach English in schools today around the world as a matter of routine.

So when the western propaganda machine swings into action it has almost two billion malleable minds paying attention.

The old saying that sticks and stones may break my bones but words cannot is due for a readjustment.

Does the fact that Russia feels threatened by its enemies, the North Atlantic Treaty Organisation (NATO) pushing to set up camp at its border in Ukraine, count for nothing? That Russia sees itself being squeezed into nothingness, the end game in the cold war, with real consequences for that nation, does this count for nothing? Never mind that a unipolar world, never mind how benign the single power seems to be, will not be good for anyone.

Putin may as well be howling into the wind, we are not listening.

I never know whether to laugh or cry at how our companies and countries continue to treat the communications function as something to endure with gritted teeth rather than embrace as a key function in achieving their strategic objectives.

Many labour under the biblical saying “That we will be known by our good works”. In a world where information is moving faster and faster, that assumption is seemingly more and more dated, leaders and managers need to, no, must communicate.

The thing is, communication is not as sexy as big procurement deals or commissioning big plants or juicy promotions. Communication like everything in life works by compounding, small moves made frequently and consistently build up to improved perceptions and associations. The challenge of course is the better you communicate the less it seems important, but when the crisis comes you will have built enough momentum to ride it through...

Russia possibly has cutting edge military technologies and I believe they will make significant gains on the battlefield, but the war of perceptions has been lost and will very well determine whether they have a pyrrhic victory or not.

Which reminds me of the top NSSF official, who when the organization was getting bad press for the Nsimbe Estate scandal about 20 years ago, innocently said they felt no need to communicate all the good plans the Fund had because people would see for themselves. Needless to say he is no longer at NSSF and his good reputation did not survive the scandal.

 

CAN WE STAMP OUT CORRUPTION IN UGANDA?

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Last week the Inspector General of Government Betti Kamya reported that her office has started verifying the declarations of public officials.

Under the leadership code political leaders and senior public officials are supposed to declare their wealth every so often. The move is intended to serve as a deterrent to corruption.

However, her office also reported that thousands of political leaders and public officials have not declared the wealth in the stipulated time. Of the 25,000 political leaders 23,080 had not declared and of the 333,000 public officers only 182,187 had declared their wealth.

Such breaches can lead to interdiction of public officials, confiscation of ill-gotten wealth, payment of a fine and imprisonment depending on the crime.

So in an ideal world we should expect in coming weeks and months, mass interdictions of public officials, convictions, fines and jail term for thousands of officials who have thumbed their noses at the IGG...

The man on the street will not encourage you to hold your breath for this to happen. If it happened, it would be an earth shattering development. This is sad not least of all because the general public has little confidence in the government’s will to stamp out corruption.

But why is it so hard to rid ourselves of this scourge?

Isn’t it clear that corruption negatively affects service provision and therefore is politically expensive? Isn’t it clear that it serves to widen wealth inequalities in the society which threatens instability and chaos? Isn’t it clear that the stronger the corrupt become, will protect themselves against any move against them from wherever it comes endangering the very government that seems to be protecting them from prosecution?

The Auditor General in his report for the year ending 2021 pointed out that hundreds of government projects happen without a feasibility study done, which means they may not be successful in achieving their intended goals, may suffer duplication and worse, suffer conflict from other government projects.

They say when we fail to plan, we plan to fail. So it is safe to say most of these projects will flop, which is sad, even tragic, because of the 371 projects sampled 245 – worth sh645b had no feasibility study.

A few years ago the budget for treating 140,000 inpatients at Mulago hospital was set at sh22.5b. Assuming a third – about sh215b of those unplanned expenditures went to waste, that would be the cost of treating all Mulago’s inpatients for ten years. Or put another way because these monies have gone begging the quality of service at Mulago will, and does reflect that loss.

This is more important than it sounds. One of the main ways to get people out of poverty is to give them the means to earn more. Countries do this by educating their people – so they can earn more and keeping them healthy – so they can have fewer sick days, so to the extent you can offer quality education and health services, because some people are pocketing the money, means more people miss the bus out of poverty...

But assuming this sh215b was shared equally – is their honour among thieves? by 100 officials each taking home just over two billion shillings, so not only have a million Mulago patients suffered poor quality service the hundred officials can now be treated in private hospital here or abroad. The resources of a million have been appropriated by a 100 people. Meaning, as the poor people get poorer because the ladder to wealth has been kicked out from under their feet, the rich public officials get richer because they and their offspring get better services, that improve their productivity and ensure they will earn more. Scandalous!

Which brings me finally to the question of whether corruption can be stamped out. While it is true that if you called a meeting of the corrupt you would have an empty room, the corrupt have their networks which feed them and more importantly preserve them.

A man with an official salary of four million shillings but who earns up to 10 times that amount monthly in underhand deals, will fight viciously to protect his turf. His co-conspirators brought together by mutual benefit will do the same. The more they eat, the more extensive and entrenched the networks become until they assume a life of their own and are a power onto themselves.

We see it every day with the sense of entitlement and the impunity of certain sections of our society.

As they grow they will stop working for the government and the government will start working to sustain them, their friends and family.

And eventually, in the weird way that these things work, they will become a threat to the very state that feeds them. Because at some point someone is going to say enough is enough and these corrupt networks will do away with such “retrogressive” ideas...

No one can argue that we aren’t already far along that slippery slope. Whether we are beyond redemption will depend on who you talk to.

So, can we stamp out corruption from this country?

 

TAX ALL THE LAND IN UGANDA

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This week it was reported that the Justice Bamugemereire inquiry to land matters had recommended in their report the taxation of idle private land as a way to improve productivity of the land.

They proposed a threshold of half a square mile or 320 acres above which idle land should be taxed.

This is a great development, while politically hazardous is farsighted and inevitable if Uganda is to fulfill its development ambitions.

I would have gone further and taxed all land.

The naysayers will argue that this will disrupt our small farmers, who cannot make enough money off their little patches to pay tax. And I would argue all the more reason to tax their land.

"The economics text books say the factors of production are land, labour and capital. Entrepreneurship/ management then manipulates these factors of production to generate economic activity. A deficiency in one, two or all of them is the extent to which economic activity will be generated or not...

As it stands now our convoluted tenure system is a major reason why our land is idle. We have freehold land, customary land and leasehold land and everything in between. In more functioning economies the state owns all the land and the rest of us are tenants on the land, leasing it from the government. It is so much easier to deal with land issues under those circumstances.

In a democratic dispensation like we are under now it is unlikely that our land tenure system will be sorted out soon. Land reform is by definition politically expensive for those who try it.

One of the main reasons for any sort of land reform is to increase productivity of land for more people.

That’s why taxing the land becomes useful. So assuming we impose a tax on all the land, what would happen to the rural man with barely an acre to his name?

He will have several choices.

 One, he can improve his farming methods to ensure he has enough money to pay his taxes. One of the main challenges of our farmers is their poor farming practices which cannot ensure optimal utilization of the land. 

Secondly, he can get together with his fellow small holders aggregate their land, labour and capital to take advantage of economies of scale to improve their bargaining power in the market for inputs or with the middle men. If all else fails, our man can lease or sell off his land to someone who can work it better and meet the tax obligations.

"This is not even original. The colonialists to get us to grow coffee and cotton imposed poll and hut taxes – and liberal doses of kiboko, as a way to incentivize us to grow these crops for which we had no use for, up to that point...

We are not reinventing the wheel.

We need to stop molly coddling our rural cousins, stop patronizing them, especially if the net effect of this move will mean more incomes and better living standards for them.

I suspect though that those opposing such moves are the absentee landlords, who cannot be bothered to increase the productivity of their land and enjoy the ego trip of announcing h ow they have a farm up country at the bar. Imposing a tax on their land will mean forgoing their land either by leasing or selling and deny them the bragging rights among their friends.

This is an important subject because while our arable land is reducing by the day because of our negligence or outright abuse, our population keeps doubling every 24 years. This means we have to not only stop the loss of our land to bad practices and climate change, but maximize its productivity to ensure we head off pending food insecurities.

Peruvian Economist Hernando De Soto argued that capitalism, the manipulation of aforesaid factors of production for profit doesn’t work in the underdeveloped world because of the ambiguity surround land tenure in our countries.

According to the Uganda Bureau of Statistics of the seven million households in Uganda, seven in ten or about five million own their own homes. Ownership is being used loosely here because there are less than a million land titles issued in this country and those include factories, hospitals and schools.

By imposing a tax on land we are going to be forced to title more land, improving the value of our lands, while we increase productivity and increase revenue collections.

The knee jerk reaction of society when faced with new taxes is to resist. This is not a uniquely Ugandan problem. But the benefits that would came with taxation of land far outweigh the discomfort of the naysayers. Let us get it done.

LISTEN TO PROPHETS OF DOOM ON UGANDA POWER SITUATION

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In 1996 I  made my first trip to South Africa. We got there in the dead of the night, but you wouldn’t know it. The highway from the airport was so well lit you could drive without your headlamps on.

At the time Uganda was beginning major loadshedding. We would have power on in 12 hour alternating intervals – power would be on in the day today, off at night, tomorrow off in the day and on at night.

I asked our South African hosts whether they ever had loadshedding and they went, “What is that?”

Today they are the ones suffering massive power outages and we go crazy when it goes off for 30 minutes. They failed those years ago to plan for the growth of their economy and the subsequent jump in demand that would swallow their surplus supply.

As it is now we have a installed generation capacity of about 1,252 MW against a peak demand of 750 MW. This surplus will bumped up even further when Karuma’s 600 MW comes on line later this year.

"While we may be forgiven for taking a break from trying to build new power dams given the bloodiness of the fights that it took to build Isimba and Karuma dams, industry experts estimate that by 2027 if we don’t start building new power generation units now, we will be back to the loadshedding years of yesterday and who knows it may be South Africa’s time to ask again, “What is that?”...

Also given that on average it takes about seven years to commission a power project in this country, we are behind schedule to beat the 2027 deadline.

Government keeps moaning that it has got bad deals in the generation and distribution concessions it signed with private providers, but everybody who was around knows we were in a desperate situation at the time with little to no bargaining power. To do nothing now means in a few years we will be signing other “bad” deals because a crisis will be upon us.

For starters there has to be more integrated planning. The left hand needs to know what the right hand is doing. Recently it was reported that a 40MW hydro power dam at Achwa is ready for commissioning there are no transmission lines in place to evacuate the power. As a result government is paying a few billions a month to the owners for power we are not consuming because the promoters of project cannot be blamed for government inefficiencies.

It seems the logical thing to do, when you start building a dam you have to ensure there is demand down the line, that you have the distribution network to feed this demand and you have the infrastructure to get the power from the dam to the distributor. To that all the players up and down the line have to be in the know of what is happening. In Uganda clearly not.

It was the same complaint with Karuma where the dam construction was ahead of the process of getting transmission lines to them. Is it possible that the multi-year development of the billion dollar 600 MW Karuma dam was kept secret from Uganda Electricity Transmission Company Ltd (UETCL)?

It was heartening to see that Uganda Electricity Generation company Ltd (UEGCL) showed a healthy profit last year – all of sh92b. This has been helped by the takeover of Isimba dam which suggests we are developing in house capacity to develop our own power projects.

This is important, because in our desire to lower power costs for industrialists, who generates our power is a big determinant.

"A recent industry showed that while government power plants – Kiira and Nalubale produce about half the power we consume they account for less than 20 percent of the tariff that we pay. Common sense would dictate that government should be looking to shifting development of power plants more and more towards UEGCL as a way to shift the tariff further down...

Private investors should be encouraged but within a broader strategy of pushing tariffs down, that recognizes this fact.

It comes as surprise then that the other day Electricity Regulatory Authority (ERA) put out an announcement that China International Water & Electric Corp, the contractors of Isimba are undertaking a feasibility of building a 392MW dam at Oriang in northern Uganda.

To begin with there is too much conflict of interest in the proposed contractor carrying out a feasibility study on the dam they want to build. What if the site has a capacity of 700MW but the contractor can only finance a 392 MW dam, will he tell the truth and forgo the project? Highly unlikely.

At the bare minimum feasibility studies like these should be done by government before the put out bids for development of these projects.

This should be UEGCL’s work. UEGCL is not only to collect fees from independent producers, but eventually to develop projects just like KENGEN in Kenya does, all within an industry strategic plan.

The energy ministry as the overseer of the sector needs to pull up its socks. Just because we now have private players in the sector, does not mean the ministry should abrogate its responsibility as the overall planner of the sector.

 

MADNESS: DOING THE SAME THING OVER AND OVER

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This week parliament entertained a motion to have MP Francis Zaake lose his position on the parliamentary commission for alleged abuse of deputy Speaker Anita Among.

In a tweet Zaake suggested the deputy speaker was dishonest and reckless in her comments about him, which he thought were idiotic.

The background to the story is that last year MP Zaake had claimed torture by state agents, there were pictures of him looking far gone in hospital.  Later in the year he went on to win a sprint competition during regional inter parliamentary games in Arusha, Tanzania. The Deputy speaker in one of her comments noted the recovery of MP Zaake given this evidence, comments which MP Zaake took exception to.

A motion was moved by MP Martin Mapenduzi to have him ejected from the parliamentary commission, which serves as the administrative arm of parliament.

But another backstory is that opposition MPs are boycotting house seatings in protest over the increasing reports of torture of people with divergent views from government. That move was triggered by the release of novelist Rukirabasaija Kakwenza a few weeks ago who claimed he had been tortured in detention and had the scars to show for it.

This means that depending on the speed of the house in deciding the matter, MP Zaake’s fate may very well be decided by NRM MPs who more than constitute the quorum to carry the motion, if they so decide.

This is playing simultaneously with opposition MPs trying to censure security minister Jim Muhwezi to take responsibility for the torture being meted out by security agents. NRM whip Thomas Tayebwa has ensured the ruling party MPs have closed ranks behind the Major General and we can expect that motion will come up empty.

"One of the things we badly need is a credible opposition, which can hold government to account. This should go beyond heckling the government in public, to actually having a sword over government’s head to ensure they behave....

This column has long argued that the seduction of running for the presidency has ensured the opposition cannot muster serious enough numbers in parliament to play their effective role.

But it is easy to see why. 

It is too much work to try and grow grassroot support than it is to organize a once every five years run for the presidency. Not to mention a run for the presidency is sexier and more lucrative than the rolling in the mud needed to build and sustain local political support.

The opposition will continue to take this class as long as they don’t learn the lesson.

The opposition argue that they are hampered at every turn in building grassroot support. That should not come as a surprise. In the world history there is no group in power that relinquishes its hold without a fight.

"You cannot shame power into good behavior. In order to force concessions from power you need to build a formidable counterforce and force power to the negotiating table....

The kings of Europe in some instances had to have their heads loped off in order for them to make concessions to the unwashed masses. Even today in better developed democracies the contests for office can be intense, the difference being that over long years of practice certain power grabs, like coups, are not an option. But nevertheless those in power will do anything within the limits of the law to cling to power, while those on the outside will do anything to get in.

There are no shortcuts. Our opposition have to put building local support ahead of winning the presidency if they are to be more relevant to the evolution of democracy in this country.

As it stands now the ruling NRM has 336 of the 529 seats in the house or just short of the two thirds majority needed to push any law through. However, the independents many of whom are sympathetic to the movement are 74.

And over the years while the opposition, which has 109 seats in the house have seen their numbers rising, the percentages still are in the NRM’s favour.

"If they are really serious about at the bare minimum, influencing the politics of this country and at best wrestling power from the NRM they have to boost their numbers in parliament....

It will be a hard slog but if the evidence before our eyes is anything to go by – their ineffectiveness in the house, somebody has to come this realization and commit to pay the price.

Parliamentary walkouts and confronting the security forces on the street may make is just grandstanding and achieves nothing of any substance.

But our opposition are intelligent people and they must know all this, so what are they playing at?

 

BOOK REVIEW: CHARLIE MUNGER: THE COMPLETE INVESTOR

 HELPS TO BE A GOOD INVESTOR, TO BE A GOOD BUSINESSMAN

AUTHOR: TREN GRIFFIN

 

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Charlie Munger along with Warren Buffett are the co-chairmen of American conglomerate Berkshire Hathaway, the $715 billion – almost 25 times the size of the Uganda economy, enterprise that is into everything from insurance to power generation; railways to furniture and from paint to candy makers.

The diverse nature of the company’s holdings is what happens when rationale investors -- Buffett and Munger, are in charge of a company. In their search for good companies, run by good managers they can work they have built a literal mosaic of companies, which on the surface seem to follow no rhyme or reason.

"While Buffett is widely acknowledged as the greatest investor of all time, Munger is considered his equal at least in how he thinks about business and investment. The two of them have been at the helm since 1970 and bolted together a wealth creation machine the likes of which have never been seen. As of writing this review Berkshire Hathaway was trading at about $480,000 (sh1.7b) a share, and that is not a typo.

Author Tren Griffin distills the wisdom of Munger in this compact book and below are a few of Munger’s thoughts on investment and business.

1.       Understanding how to be a good investor makes you a better business manager and vice versa

He says it in the book that the number one job of the investor is asset allocation, committing money with the hope of future return. To do this optimally it helps to understand the business you are investing in. On the flip side as a businessman if you understand how investors think you can better structure your business for long term success, because investors are looking for businesses that can sustain high returns for the long term. A businessman who thinks like an investor will focus on building the companies value consistently.

2.       Betting on the quality of the business is a better than betting on the quality of the management.

A business quality is largely dependent on its ability to develop and sharpen its competitive advantage, that thing that it can do profitably better than the competition. By developing and maintaining its competitive advantage not only will it keep the competition at bay or people dissuade people from joining the industry, it allow them better flexibility in determining pricing of their products or services. Those are the best businesses to be in, than those whose pricing is determined by their competition.

3.       The most effective way to genuinely reduce risk is to know what you are doing.

When you leave home to drive to work, no one seeing you having done the trip to and from often, fear that you will not return at the end of the day. But give the car keys to your ten-year old child to drive and the risk rises exponentially. The way to mitigate risk is to know more about the business or investment. Just because your neighbour has made a killing in the mobile money business doesn’t mean you will enjoy equal success, mostly because you don’t know what he knows.

 

4.       Excess cash is an advantage not a disadvantage.

They say profit is an opinion but cash is fact. Anyone who has been in business knows that what is in the profit and loss statement may not reflect what is in the bank account. While the accountants fret about too much cash lying around, because the returns on it are not much, cash on hand allows you flexibility and may be the difference between surviving a crisis – like the covid-19 pandemic, or not. At last count Berkshire Hathaway has $149b in cash and has served as the savior of other less liquid companies during the financial crisis of 2008 and more recently with Covid-19. So actively building cash reserves in the business should not be frowned upon even if the bean counters think otherwise.

 

5.        The only way you win is by knowing what you are good at and what you are not good at and sticking to what you are good at.

Munger and Bufffet always talk about circle of competence and how important it is to know the boundaries of this circle. As suggested above to stray out of this circle increases the risk of failure. How many businesses have come unstuck because following success in one endeavor the promoter thinks he can replicate the success in another field of business? Munger counsels concentration of ones efforts for better returns, while diversification seems to be a hedge against future disaster, it risks pulling you out of your circle of competence, increasing the chance for loss of capital.

 

Munger and his partner have been in the business of investment for more than 100 years between themselves, so when they talk you listen.

Its fantastic book, more than worth its weight in gold.

 

The book is available on Amazon.