The Other Supply Chain Gorilla That May One Day Challenge Amazon

As detailed in my recent post, Amazon has built up quite a formidable competitive advantage through Fulfillment by Amazon (FBA). Not just on the demand side, which every happy Prime subscriber is already familiar with, but also on the supply side. In that post I concluded the following: Fulfillment is clearly beneficial on the demand … Continue reading The Other Supply Chain Gorilla That May One Day Challenge Amazon

Bitcoin and Cryptocurrencies – The Mother of All Bubbles

Two months ago I wrote The Bitcoin “Penny Stock”, detailing what I believed were the conditions that created Bitcoin’s incredible run through September. Although the piece sounded cautious given Bitcoin’s 30-40x 1 year return up until that point, I noted that the prevailing conditions allowed far more than that, perhaps another 50-100x. I highly recommend … Continue reading Bitcoin and Cryptocurrencies – The Mother of All Bubbles

Predicting the Potential of “New Electricity” by Looking at the Lessons of “Old Electricity”

Andrew Ng (former Chief Scientist at Baidu, Co-founder of Coursera) is fond of referring to AI as the “new electricity”. Similar to how electrification ended up transforming every single industry during the 20th Century, AI is broadly expected to have similar (if not greater) impact in the coming years. This post by Oscar Li does … Continue reading Predicting the Potential of “New Electricity” by Looking at the Lessons of “Old Electricity”

You Know What’s Better than Owning an Airline?

An airport.  Airports are natural monopolies. Who wouldn’t like owning a natural monopoly? And unlike other natural monopolies such as local utilities, airports tend to be higher growth assets (air travel is less penetrated than electricity).  At a high level, airports receive revenues from 2 sources: 1) fees on passenger tickets, and 2) commercial revenues generated … Continue reading You Know What’s Better than Owning an Airline?

A Publicly-Traded Airline “Float” Company

The last post, How Airlines Generate Float, compared the similarities between airline mile programs and insurance companies. I argued that airlines are now essentially generating float through their miles programs. Turns out it’s not that original of an idea (as much as I wish it was!) as there are at least two publicly-traded mile program managers in Brazil. Smiles One … Continue reading A Publicly-Traded Airline “Float” Company

What Apple, Google, and Facebook’s Business Models Tell Us About Their Ability to Adapt to the Coming AI-Future

  Judging from market multiples, it’s clear the market is skeptical of Apple’s ability to continue to succeed and has been for many years (currently, 1-yr forward P/E of ~15x despite recent re-rating), while holding limited concern for Google and Facebook (both 1-yr forward at ~26x). This concern is understandable given the ever-changing tech environment and … Continue reading What Apple, Google, and Facebook’s Business Models Tell Us About Their Ability to Adapt to the Coming AI-Future

The Importance of Focusing on Business Models

“Investment is most intelligent when it is most businesslike.” – Benjamin Graham “I am a better investor because I am a businessman and a better businessman because I am an investor.” – Warren Buffett Most investors define themselves along a couple of axes: Technical vs fundamental, value vs growth, long vs (and/or) short, contrarian vs momentum, … Continue reading The Importance of Focusing on Business Models

Berkshire’s Performance Edge that No One Talks About

Over the last half century, Buffett has achieved a marvelous long-term performance record. Many have studied and written about his investments to try to learn how to replicate what he did. I’ve read a lot of those, and you probably have, too. But I’ve always felt that something was missing.  Consensus has generally coalesced around a … Continue reading Berkshire’s Performance Edge that No One Talks About