For those who don’t know, Peter Lynch was the manager of the popular Fidelity Magellan Fund. He took over the fund when it held around $20m in assets and by the end of his 13-year stint the fund was valued at $14b - it averaged an annual return of 29.2% during his tenure.

I thought the most interesting thing about Peter Lynch, however, was the fact that he quit while he was at the top of the game to spend more time with his family. That’s not the point of my story, though - just an interesting side note.

Maybe Peter Lynch just got luckyA few days after hearing Lynch speak I was chatting with my accounting teacher, Ralph, a brilliant man who also happens to be a money manager (I am still in contact with him to this day). He said something very thought-provoking about Lynch - he said, “you know, some people think he’s just lucky.” I didn’t understand - how could you beat the S&P all but 2 years of a 13-year career by luck? He went on to tell me that a lot of people thought Warren Buffet was just lucky too. Now this just sounded like a crazy conspiracy theory…

Games of chance produce large winnersI was surprised, though, when I started listening to Ralph that the theory actually made sense - games of chance produce large winners.

Take, for instance, a lottery - it is a game of chance that creates a lot of losers and a few very large winners. Assume for a second that investing has nothing to do with skill, that it is purely a game of chance where an investor has a 50-50 chance of winning or losing. (Hey, after what we’ve been through over the past 2 years 50-50 odds seem pretty good, don’t they?)

Over time most investors would break-even - they would win as many bets as they lose. There would be a lucky few, however, who seem to always be right. Since this is a game of chance, of course, there is nothing special about them - they are just bell-curve-outlying-freaks. (At the same time, there would be the very unlucky few who seem to always be wrong - assuming a large sample size there should be just as many “losers” as “winners”).

Market influenceBut that’s not all - when a statistical outlier has demonstrated an unusual pattern of winner-picking they start to attract attention from their peers. Their peers assume that the outlier has some sort of magical winner-picking powers. At this point the outlier can actually create their own market adjustments - if they are betting on a stock, for instance, the stock is likely to increase solely based on the fact that they are willing to make a bet on it (regardless of the fundamentals of the underlying stock).

Savvy outliers learn to quickly capitalize on their newfound fame - some are able to parlay even the shortest stints of success to major, market-moving influence. Celebrities are really good at this.

The FormulaSo what we are left with is a basic formula for becoming an influencer (assuming that whatever business you are in is merely a game of chance, see disclosure below):

1. Learn to publicize your successes. You will have plenty of time for self-deprecating banter after you are an influencer - when you have achieved influencer status you really can’t do anything wrong. At this point people think you know something that they don’t (even when you don’t).
2. When you hit a string of lucky breaks you should learn to capitalize on them quickly - the faster you do this the sooner you will be able to create your own market adjustments.

Disclosure: I don’t really believe that all business is a game of chance, but I do think it’s an important factor. I think that really, really smart business owners can increase their chance of success significantly. If, for instance, an entrepreneur can increase their odds of success to 60%, statistically they will probably become an influencer in their industry organically (without needing to be a statistical outlier). In this case their influence in the community would be well deserved since they really do have magical winner-picking abilities.

By the way, I know now that Ralph doesn’t personally subscribe to this theory (he is after all an investor in Berkshire Hathaway).

Also, I think Warren Buffet and Peter Lynch increased their odds of success by paying attention to basic business fundamentals and sound investment practices - they probably had better than 50-50 odds on each stock-picking decision they made. However, I think there are a lot of other investors who make rational, disciplined investment decisions like Peter Lynch and Warren Buffet - I just don’t know their names because they weren’t quite as far out there on the bell-curve

For most large retailers the window has already passed, but if you are doing a small production run you probably have time for production and air shipping (obviously at this point a boat is out of the question).

The nice thing is that this year you have a little more time to get orders in before Chinese New Year - Chinese New Year is on Valentine’s Day this year, buying you a couple more weeks to get orders in before the whole country takes a week and a half break.

If you think this is interesting you might enjoy a quick post I wrote for Sewell’s support site today - Why do cable prices fluctuate so much? (The answer is copper prices in case you’re wondering)

By the way, we have tried the bulk uploader (using an Excel file) but it still requires a little babysitting which is why we would prefer API access.

Managing 2 Exchange accounts has been a huge pain for me - Outlook doesn’t even support this (yet). This made my day.

We were 5′th and 6′th in line and the store opened at 8. We managed to get 3 Pre’s between us (I got one for myself and one for my wife) after waiting a couple of hours.The phone is amazing - I do have some gripes (the email app seems too clunky, the battery life isn’t great and I often find myself wanting to type when I’m in landscape mode, which isn’t possible), but overall the phone blows me away. I love loading up one window and running a big report and going and doing something else while it runs.

This post isn’t really about that, though - if you want a more in-depth review check out PalmPreReviews.net, Cameron’s Pre site.What I’m really impressed with is the leadership and vision of Palm’s management - a year ago I thought the company was on life support and would be going under. I loved my Centro, but was looking longingly at the iPhone and even the Samsung Instinct. Palm seemed to have lost the “cool factor” they once had.

And boy did the press notice - they were beat up for being out of touch and stuck in a different era. The Foleo was an epic disaster that made everybody wonder who could have allowed such a catastrophe to happen. But with an ace up their sleeve Palm just bided their time.

There was some chatter in late December/early January that Palm was introducing a new phone - finally we got a peek at the Pre at CES and the rest was history - five months later and they were finally available. A lot of people try to tell me that Palm built the Pre in those 5 months - that’s simply not possible. In 5 months they probably had enough time to find and fix major bugs and sharpen up a few features, but they couldn’t have done the bulk of the heavy lifting - that must have been in the works while Palm was constantly being criticized for being behind the times and clueless about what consumers wanted.

So what’s the moral of the story? Don’t listen to the haters. Palm didn’t even worry about it because they knew they were going to release a device that would raise the bar, even for the king of cool, the iPhone. They played it cool and now they have the last laugh.

Anyway, if you’re importing from China and you don’t know what the ISF (importer security filing) is you really need to educate yourself. Starting in January 2010 importers will need to file this special form for ocean shipments (does not apply to air yet). A lot of the information is the same old stuff we always had to give customs, but ISF requires that you investigate and name your manufacturers.If you’re buying directly from the actual manufacturer this shouldn’t be a problem but if you are buying from a trading company you need to do some investigating. Somehow you have to convince the trading company to disclose the actual manufacturer - and you are responsible for making sure they tell you the truth (you will be penalized for providing false information, not them). The standard fine for incorrect information will be $5k per filing. Ouch.

I’m not really sure how I feel about this - I used to think we were always better off dealing directly with manufacturers but many of them are clueless about our market and don’t really care about customer service. Of course most trading companies are just as bad or worse (because there is no barrier to entry), but occasionally we find a really good trading company who can find just about anything we want for a minimal fee.

By the way, ISF actually went into effect this past January but everybody is given a 12-month period to get up to speed, so for all intents and purposes it won’t be enforced until next year. You should, however, at least look into the implications of this new requirement. 

This is totally random, but I always wondered and my father-in-law (Ralph Ahlgren) was kind enough to give me an answer.

The real answer is that they really don’t break that easily (I mean, they won’t fall apart in your hands like I always thought they would), but are kind of brittle because they use single-crystal silicon (the atoms are carefully aligned in a single crystal form).

I posted the full answer on Sewell’s site: Why do silicon wafers break easily?

Large companies often deal with more red tape (on a side note, one company I have done work with requires everything on their website to go through their legal department. I suggested that they try user-generated content at one point and they just laughed).

Layout - Williams-Sonoma

I like how Williams-Sonoma uses their real estate on their homepage. I am using a 13″ laptop and I still see a ton of wasted space on the right and left side of the Sur La Table page. I initially thought that SLT’s site was just a little more busy (cluttered), but then I realized that they both have a comparable amount of information, WS’s presentation just makes it look a little cleaner.

URL - Sur La Table

It drives me crazy that Williams Sonoma uses a hyphen in their name, but at least williamssonoma.com now resolves to williams-sonoma.com (it hasn’t always done that).

SurLaTable just wins by default here since they don’t have a hyphen, but there is one small thing that still bugs me - if you go to SurLaTable.com everything looks normal, but if you click on the site logo to return to the homepage from anywhere on the site it takes you to http://wwwsurlatable.com/home.do - I get what’s going on here, but it’s totally unnecessary.

Williams Sonoma links their logo to http://www.williams-sonoma.com/index.cfm, but they remove the index.cfm part when you get there. This probably doesn’t matter for most people, but it just makes it slightly easier to link back to them (or at least less confusing).

Title Tag - Williams-Sonoma

Sur La Table: “Sur La Table”

Williams-Sonoma: “Cookware, Cooking Utensils, Kitchen Decor & Gourmet Foods | Williams-Sonoma”

Now, these are just the homepage title tags - Sur La Table does a better job on their subpages. My problem with SLT’s homepage title tag is that if I tell somebody to go to their site and they are using google to try to remember the name and they type in “Sir La Table,” scanning through the titles of the results doesn’t make it immediately obvious that SLT has anything to do with cooking.

Of course if the searcher takes the time to read the description under the link (which is pulled from the meta description) they will figure it out, but some people are just lazy, especially if they aren’t sure if they have the right name. Contrast that with a google search for “william sonoma” - obviously that first link is what you’re looking for, right?

Also, Williams-Sonoma gets the slight SEO benefit out of this - their homepage ranks on the first page of google for “kitchen decor,” a term that apparently gets about 220 searches per day.

Conclusion

Williams-Sonoma wins this round, but I like to cheer for the underdog. I would really like to see Sur La Table improve their website and give Williams-Sonoma a run for their money.

I don’t really have a great reason for wanting to see SLT win a battle other than the fact that I slightly prefer shopping at Sur La Table (they have a store up in Salt Lake, in Gateway).If I were SLT I would also consider implementing user reviews - this improves conversion rates and helps you get some free organic links.

Apparently, however, many users are having problems with partial downloads and on my very first Unbox order I experienced this.  The frustrating thing is that they don’t have any way for you to re-enable the download yourself, you have to call in to a poorly staffed call center - my guess is that they are gambling that most people won’t wait on hold for an hour to rectify a $4 purchase.

They are right about that, but I won’t be purchasing from them again - Apple TV wins. 

This is happening for every site I monitor (which is significant). I don’t know if this is just a problem for me or if other people are seeing it as well but it’s really frustrating.