Investing notes. Business, technology, and strategy. In search of long-term business compounders.
Hi, friends. 👋🏻👋🏻
Hope you’re all enjoying the long weekend. If you have a significant other, hopefully you were able to do / enjoy something nice together for Valentine’s Day. For all my Asian readers, happy lunar new year! And for all my American readers, happy President’s Day!
As always, thanks for sharing a little bit of your time to hear what I have to say.… Read the rest “Tidbits #32 – The World Continues to Spin”
Now that we are several months into the COVID19 pandemic, many companies have gotten over the initial stage of shock.
Many (weak) companies have already declared bankruptcy. Like JC Penney. Like Nieman Marcus. Like J Crew.
But, there’s another side to the coin. As discussed in a recent post, companies with strong balance sheets are not only defensive in periods of stress, but strong balance sheets can be deployed offensively to aggressively box out weaker competitors during periods of stress.… Read the rest “Tidbits #7 – Strong Balance Sheets in Motion”
Starbucks – After decades championing “the third place“, Starbucks has been experimenting with newer store formats. Initially the company moved upmarket with their Reserve/Roastery formats. This one is from the Seattle location:
While the move upmarket feels quite natural for a company that has focused so heavily on building a well-recognized and beloved brand, the recent experimentations with smaller, more convenient stores is an interesting one:
What’s interesting is that Starbucks is experimenting with these smaller stores after having been outgrown by an aggressive Chinese competitor named Luckin.… Read the rest “Tidbits #5”
As previously mentioned, Nintendo is following in the footsteps of Disney and will be building theme park attractions. Bloomberg recently published more details on what that may look like ahead of Super Nintendo World opening at Universal Studio Japan:
… Read the rest “Tidbits #4”Super Nintendo World is slated to open this summer in Osaka, featuring a Power Up Band wearable that lets visitors collect coins and battle bosses while exploring a physical environment.
Fornite is officially a school sport:
… Read the rest “Tidbits #3”Fortnite, one of the world’s most popular games, will now be an official high school sport and college sport, thanks to an LA-based startup called PlayVS.
The company has partnered with Epic Games to bring competitive league play to the collegiate and high school level. This also marks PlayVS’s entry into colleges and universities.
Ever since adding Uber to the Paper Portfolio ~2 months ago as part of the November update, there’s been no shortage of negative news.
The latest episode of this drama continues to unfold with co-founder Travis Kalanick effectively completely severing ties with Uber. Not only has he sold essentially his entire stake in the company (~$2.5 billion), he will also be stepping down from Uber’s board.… Read the rest “A New Chapter for Uber”
The recent Wework debacle seems to have opened up a bit of soul-searching within tech companies and among investors. Cynics are largely looking for ways to say, “I told you so,” with the main conclusion being we have somehow gone full circle back to the cash-burning bubble experienced back in 2000.
While reflection and soul-searching is indeed needed, I think the cynics’ conclusions will likely prove to be the wrong ones when we reflect on this period in the future.… Read the rest “Hardware, Software, and Platforms”
During November, the paper portfolio outperformed the S&P500 by 0.92%. This number, however, masks the underlying strength of the portfolio since ~40% of the value is still allocated to cash. The stock-only portion of the portfolio outperformed the S&P500 by 3.89% with significant strength across almost all holdings except for Uber, Match, and Activision Blizzard.
Despite significant strength across most of the stocks in the portfolio, all of them continue to look undervalued over a longer time horizon.… Read the rest “Paper Portfolio – December Update”
Every tech/internet company today that has accumulated immense market power seems to have done it using two simple strategies: 1) Leverage a successful core customer base or asset to attack an adjacent market, and 2) Using a loss leader to encourage adoption.
Neither of these strategies are original and have been used effectively by some of the most successful offline businesses before.… Read the rest “Attacking Adjacencies + Loss Leaders”