1. “The question is: Is the cable business going be a great business; who is going to make the money? It may well be that the Disneys of the world make the money and cable and video continue to get squeezed. But I think at least for now they’ve got enough pricing power in broadband to make up for that.” “They key to future profitability and success in the cable […]
1. “Capital just isn’t that important to the early triumph of a company anymore. Much more vital in those inaugural days is collaborating side by side with a founding team that controls its own destiny. Entrepreneurs who are empowered by seasoned advisors, but free to frame achievement for themselves, are much happier.” “When you’re just getting started, I’m the guy you want in your room to help design your product, […]
1. “A startup is a temporary organization designed to search for a repeatable and scalable business model.” Any analysis of this statement should start with a definition of “business model.” I like the Mike Maples, Jr. definition: “The way that a business converts innovation into economic value.” Steve Blank has his own definition: “A business model describes how your company creates, delivers and captures value.” One very effective way to find a business model is to […]
1.“The entire pursuit of value investing requires you to see where the crowd is wrong so that you can profit from their misperceptions.” A value investor seeks to find a significant gap between the expectations of the market (price) and what is likely to occur (value). To find that gap the value investor must find instances where the crowd is wrong. Michael Mauboussin writes: “the ability to properly read market expectations […]
Jeffrey Gundlach is always an interesting investor to watch, but recently he has become even more interesting given the news about Bill Gross leaving PIMCO. It is useful to contrast his style with that of Bill Gross in an attempt to understand how the wheels came off the bus from Gross at PIMCO. Few things result from a single cause, but it Gundlach has been managing far less money than Bill Gross […]
Preface: Charlie Munger uses a “lattice of mental models” approach to acquiring what he calls “worldly wisdom.” Here’s Munger: “What are the models? Well, the first rule is that you’ve got to have multiple models—because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models…” Eric Ries has created a very important model […]
This is a special rushed edition of my usual post given today’s news. I planned to post this in two weeks, but it is more interesting today. I had already collected the quotations last weekend, but had not written the usual commentary. Since it is a rushed edition (I read the news less than an hour ago at 6AM), there is less commentary than usual, but most of the quotes are self-explanatory. […]
The investments of Henry Ellenbogen’ s New Horizons Fund are particularly interesting since they span both public and late-state private markets. While his late-stage private investments are only about 2-3% of the total assets of the New Horizons Fund, they have disproportionate visibility. Since he joined the fund in 2009 Ellenbogen has invested in five to seven private companies per year. Ellenbogen’s investing results speak for themselves. Barron’s writes: “Ellenbogen, is up an […]
1. “If you want to get disproportionate returns, go against flow. Otherwise returns will not be as high. If everybody thinks it’s a great idea, returns would be under pressure… It’s a positive indicator if you go against the flow–for not only investors but founders as well. You almost have to have it if you want to be disproportionately successful.” “…being criticized is a positive indicator that you are going to […]
1. “The problem is, as a retail broker, you don’t make commissions when you sit in cash. You put all your clients in cash, you are going to end up going to the soup kitchen.” Josh Brown is talking about one of the many “incentive” problems which exist in investing. In this specific case, the broker has incentives to convince you to trade stocks, since that is the basis on […]