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Art of War:

King Halu ruler of Chinese


Hostile neighbor wants to invade --- Sun Tzu (cohesive holistic strategy)
-transform Palace women to soldiers comcubines impt maneuvers, 2
seniors ad plaeteau leaders and make sure there is discipline -> drums are
sounded and assemble together
-If instructions are not clear and commands not explicit, it is the
commanders fault -> Deadly serious -> killed the leaders
- San tzu commander of the wu army -> train 30000 to find an army 10x
larger
-foundation of the masterwork -> art of war -> 500 BC vertical bamboo strips
-> 13 chapters -> secerets to success
1) Know your enemy and know yourself and in 100 battles you will never be
in peril -> understanding your opponent is crucial to victory
2) To win too battles is not the heoght of skill, to subdue the enemy without
fighting is -> general outwit that outfight
3) avoid what is strong and fight what is weak
Individual strong but together unbreakable
----- abide teaching to sports, politics and business
train wu to deafeat chu
-Keeping their enemies shifting back and forth frustrates leaders a much
better picture how the chu army will fight better understanding of the
enemy (direct attack, surprise)
-Go: capture most territory with least number of stones: avoids strongest and
attack where it is weakest
-Mid 1960s north Vietnameseits better to outthink your enemy that
outfight
-despite overwhelming military power they cant win the war Dont rely on
military power
-North Vietnamese general: trick the enemy; how to win as much as territory
as possible (principle 1) ambushes booby traps forcing the enemy to
respond to you, you will know their strengths and weaknesses. Turn the will
of the people to go against the war
- Let your plans be as dark as night, then strike like a thunderbolt--- Vietcong
Jiak put his faith on his spies (use your spies for every kind of business) -> to
predict the movement of American unit -> smuggle weapons (deception and
secrecy -> underground tunnels)
-TET: few weeks before surprise attack at Khe Sanh -> ploy the attention of
the American to get the other cities to divert their attention-> spies, secrecy,
deception -> strategic targets
-5 factors to win the war: weather, terrain, leadershio, military doctrine,
moral influence (leader must have the will of the people behind him)
-War is the means to an end
-To move your enemy, Entice him with something he is certain to take (Sun
Tzu)
-studied every aspect of war even if the psychology of men facing with death
-WW2: if you can deceive your enemy befre battle you are more likely to win
- Normandy Deception convince the germans that they come in
Calais
-phantom army inflatables and fake calls(Eisenhoward)
-Spies: double agents are important (british-double cross (the group))
-Foreknowledge: breaking german codes German believes that
Enigma is unbreakable but the british broke the system and decoded
messages through ultra -> read the mind if the enemy to win the battle
-Make your enemy prepare oh his left and he will be weak on his right
-Operation Cobra: Behave like a snake
-No nation has ever benefitted in a prolonged war -> robert lee greatest
commander in Americas history ---- American Civil War (Worst) what sun tzu
doesnt like
-Use an attack to exploit a victory not to rescue a defeat

Margin Call
Peter Sullivan found out that there was a financial disaster that the company
will experience
-Volatility patterns; if the firms assets decrease 25% the firm will owe more
that its market capitalization -> 36 -40 months packaging new mbs products
(profitable) takes about a month a risk kor a risk management standpoint ->
-2008 financial crisis: one of the worst since the great depression
-Gathered all the heads of the company
-Sell it all today (assets) no value at a current market price so they can
survive but no one will trust them again Cohen but Sam disagrees
-dumping the firm's toxic assets will spread the risk throughout the financial sector and will destroy
the firm's relationships with its counterparties. He also warns Cohen that their customers will quickly
learn of the firm's plans, once they realize that the firm is only selling the toxic securities.
-robertson, cohen and tuld knew it all along
- Both Dale and Robertson are instructed to remain in the office all day and do nothing with the
promise of handsome compensation in return. Robertson expresses regret for knowing about the risk
and not objecting loudly enough.
-Company going down --- liquidate its fixed income today --- fired employees
-93% of your sales --- 1.3 million dollar ---- Firesale
-sending out people --- wil stay because he needs the money, will promote
Sullivan
-Rogers wrong decision but will save the company

The big short