Investors who bought APPLE shares at $3 in order to welcome Steve Jobs’ return in November 1997 have so far enjoyed a 5000% gain!
Clearly fans of Steve knew that a university education is not always necessary to become an outstanding entrepreneur. The founder of APPLE readily states that the Macintosh would never have had its quality of interface and design if he had not left school in order to take calligraphy lessons.
Of course, this does not mean that everyone who learns to write nicely will now be capable of building the same planetary success as APPLE. Indeed, an entrepreneur’s path is filled with obstacles. Despite the success of Macintosh in 1984, Steve Jobs was quite simply ousted from his group in 1985 by manager John Sculley (boasting an MBA from Wharton) who he recruited himself from PEPSI COLA in order to “change the world together rather than sell sweet water!”.
Far from being defeated, Mr Jobs founded a new entrepreneurial adventure and decided to create software company NeXT in the same year. In parallel, in 1986, he bought PIXAR animation studio for $10m from Lucas Films and created blockbusters Toy Story and Nemo. PIXAR was bought by DISNEY in 2006 for $7.4bn. Having lost momentum over this period, APPLE bought NeXt in 1996 for $429m before calling back Steve Jobs to head the company in 1997! An ingenius move for the company which 13 years later has become the world’s third-largest market capitalisation ($233bn) behind EXXON, PETROCHINA and just ahead of… MICROSOFT ($227bn), its powerful rival of the 1980s.
What do Steve Jobs and other outstanding managers who have succeeded in changing the destiny of their companies have in common? They are all visionaries, creative, tacticians, builders and above all, have exceptional tenacity. Other bosses merit just as much respect and admiration: Jeff Bezos (AMAZON.COM, graduate from Princeton) visionary and founder of the internet’s “largest store on earth”, Lakshmi Mittal (Indian, unknown education), who has managed to create the world’s leading steel group via acquisitions and sometimes daring bets and Jack Ma (less well known for the moment), founder of ALIBABA.COM in China, the world’s first internet shopping gallery.
Bravo to all of these recognised entrepreneurs and time for us to now identify the managers likely to found the huge successes of tomorrow. A passionate exercise at a time when the world is moving quickly and it is necessary to stay a few lengths ahead: while no-one doubts today the emergence of a middle-class in Brazil, India and China, fewer are those, like the managers of SEB (Thierry de La Tour d’Artaise), COLGATE-PALMOLIVE (Ian Cook) and YUM! BRANDS (David Novak) who built a strategy enabling them to benefit as of now from the huge growth harboured in these new markets.
Meeting these entrepreneurs is a key factor in our stock-picking strategy and remains the only way of identifying exceptional temperaments. It will always be too late for those who only hold onto an economic view of the markets and who have not crossed paths with Jacques de Chateauvieux (Chairman of BOURBON) or Amancio Ortega (founder of ZARA, key shareholder in INDITEX) for investing in their extraordinary stockmarket adventures…
As stated by Peter Lynch in Beating the Street, “there is often no correlation between the operational success of a company and its stockmarket performance over a period of a few months or a few years. In contrast, over the long term, the correlation is 100% and patience pays off”.
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