Posts Categorized: Finance

The Investor’s Podcast

The problem with the financial television shows is that it is very hard to have a good investing discussion in 5 minutes. These shows still have the reach, of course, but the short nature of the segments means you have to focus more on sound bites than truly helpful advice/information. I think of going on TV as a…

The Persistence of Growth

It is unlikely that the fastest growing companies from the past five years—think Tesla, Apple, and Under Armor which have grown sales 32x, 4x, and 4x respectively since 2010—will continue to be the fastest growing companies over the next five years. Some high growth stocks will continue their torrent growth, but future growth rates have…

Fun with F.A.N.G.

Growth stocks have killed value stocks lately, led in large part by four stocks. Let’s make the following arbitrary assumptions in order to have fun with the group of stocks know as F.A.N.G. (Facebook, Amazon, Netflix, and Google). Let’s assume: That each company’s market cap grows by 7% per year for the next 10 years (roughly…

Metaphors and Mental Models: The Key to Understanding

When I first read the sequence of passages that I quote below, I felt like I had discovered a diamond while exploring a shop of horrors. The passages come from a book by Julian Jaynes, whose controversial (and carefully thought out) theory is that just a few thousand years ago, human beings weren’t conscious like us,…

Benchmark Oddities

Imagine two NBA teams. Team one starts Anthony Davis, Russell Westbrook, Stephen Curry, Kevin Durant, and James Harden. Team two starts Hassan Whiteside, DeMarcus Cousins, Brook Lopez, Marc Gasol, and Nikola Vucevic. Who wins? The two teams above were determined by a stat called PER (player efficiency rating) with the twist being that while team…

Are You A Paul Revere or William Dawes?

You know Paul Revere, but you probably don’t know William Dawes. They both left Boston with the same mission on April 18th, 1775: to alert others that the British were coming. Their message reached an area of 750 square miles by the next morning: an incredibly fast diffusion of information given the lack of communications…

Buybacks and Debt

One advantage for investors and corporations is to be really good at boring stuff. Two things that are boring are capital structure and capital allocation. There are no Apple or Tesla-like events to unveil new strategies for mixing debt and equity, although such an event is funny to imagine. I’ve written about buybacks (here and…

To Gain an Edge, Run Up Stairs

Where can you find an advantage? This is the question I ask myself more than any other. There are many ways, but this (from Paul Graham) is one of the best: Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase….

Another Thing That Worked in the Past That Won’t In the Future

Meb Faber, one of my kindred investing spirits, has a new book out. He asked twitter for book title ideas. One of my favorite twitter cynics (@ianjoblingrox) joked that he should name it “another thing that has worked in the past that won’t in the future: mean reversion is a bitch.” I laughed pretty hard at that one. I…

Improvisation

I began to think of children not as immature adults, but of adults as atrophied children. – Keith Johnstone The topic of this post is an obscure book called “Impro: Improvisation and the Theatre” which was recommended to me twice in a day by 1) a standup & comedy writer (my sister) and 2) a…