Investment acumen is hard to measure. In the short term, skill is indistinguishable from luck, and if you wait until the long term has arrived, skilled investment managers won’t take your money. So asset allocators — fund LPs, heads of multi-manager funds, and portfolio managers who work with teams of
The Seven Deadly Sins are a good framework for thinking about your dream job. There’s the job you’d do out of greed — something involving either lots of options or the numbers two and twenty. There’s the sloth-job, probably manning some counter during the night shift of an
If you guys were the inventors of Facebook, you’d have invented Facebook. - Mark Zuckerberg, as imagined by Aaron Sorkin As a general rule, a large tech company will be chronically undervalued if 1) it produces reasonable free cash flow in its core business, and 2) investors are rolling
It’s easy to get distracted by Amazon’s stock price and forget that, on paper, they’re a financial train wreck. Historically, being a software provider for a high-growth sector is a great way to report 40%+ operating margins with minimal capital expenditures. Amazon… does not report stats like
Whenever a hot company raises a round or IPOs, there’s a traditional Hacker News ritual where people dig through the S-1 looking for reasons to hate it. According to Hacker News, the typical well-funded tech company is a company that: 1. Has no real technology advantage 2. Is losing
Netflix’s ostensible goal is to win the Moment of Truth: when you’re home from work and too tired to do anything but vegetate, are they your first choice? But for investors, this breaks down into two separate, related missions: 1. Be available to anyone who enjoys passive entertainment
High Confidence * Large-cap tech is undervalued. Big tech companies are mature enough that you can value them based on their current financials. But every one of these companies is run by a crazy visionary who has already scrapped the whole company’s model at least once. Bet on that happening
Some time near the end of 2010, Andrew Mason and Eric Lefkofsky did a little bit of subtraction, and some multiplication, and wound up with a $950 million check for Groupon’s Series G. The math worked like this: Groupon pays some customer acquisition cost to get a new user.
Active management used to be easier. Information took forever to percolate out. Big buyers and sellers accidentally tipped their hands, giving more nimble traders opportunities. Good analysts at small banks didn’t move stocks, but even mediocre analysts at big banks did. And short-term correlations were lower than medium-term correlations:
There is a great deal of ruin in a [corporation] - Adam Smith, approximately Traditionally, Uber has a very happy New Year indeed. Midnight to five AM on January 1st is one of the peaks of inelastic demand for a ride home, so they usually start the year having just
Streaming video service iflix, the Netflix of Southeast Asia, has raised at least $90m, bringing their total amount raised to $165m. The investor roster is not who you’d expect for investors buying into an early-stage growth company — they raised most of their funds from cable companies. Cable companies care
Bitcoin prices dropped 15.6% in minutes on Friday after the SEC refused to change its rules to accommodate a new Bitcoin Exchange-Traded Fund. The Bitcoin ETF would have allowed investors to buy and sell Bitcoin through a normal brokerage account, rather than buying it directly through a Bitcoin-specific site.