As ever the Collaborative Fund blog puts out another gem collection of short stories. Each holds an interesting lesson.
Whether it’s how starting from scratch has its advantages – like when German complete disarmament after WWI meant it had the most modern army for WWII.
Or how Michael Lewis’ first hit book (Liar’s Poker) was followed by a decade break before his next one – the break allowed him to be patient and “start all over again, start completely fresh as if I’ve never written a book before and give myself at least the option of not writing books.“
“Humanity’s ability to heal the depleted ozone layer is not only our biggest environmental success, it is the most impressive example of international cooperation on any challenge in history.“
Simply fascinating read on how the confluence of science, politics and industry led to this human triumph.
Recommended by Quintin Price, head of Alpha Strategies at Blackrock (the $1trn active arm that is making a comeback against the firm’s passive dominance) on this excellent podcast, is an intriguing essay – “Why Should Anyone be Led by you?“
The authors, two business school professors, find that there are four qualities that make a great leader.
First, leaders must expose vulnerabilities, revealing their approachability. This builds trust, a collaborative atmosphere, and solidarity. Never reveal a weakness that can be seen as a fatal flaw, jeopardising central aspects of one’s professional role.
Second, good leaders must be great situation sensors. They can sense unexpressed feelings. This requires a fine balance as it needs to be validated i.e. observations must be grounded in reality and not just projections.
Third, leaders should care, intensely, about the work employees do, something that is hard to fake. This can’t be soft but requires tough empathy – a respectful “grow or go” mentality.
Finally, and most importantly, leaders must be different and show that difference. This takes time to discover and can’t be over done.
Although these sound like rules to follow it is incredibly hard to fake and authenticity is key as the article concludes – ““Be yourselves—more—with skill.” There can be no advice more difficult to follow than that.“
Japanese companies bloated their balance sheets with low-yielding cash and unproductive assets. This has meant that companies delivered just 3% return on capital compared to 6% fo the developed world for the majority of the past four decades.
Returns look to be improving according to GMO, the change is structural and not cyclical, and the result of improving margins and not improvement in inefficient balance sheets.
63% of TikTok users (1bn worldwide) discover new music on TikTok before any other platform.
This is worrying for SPOT.
TikTok has already launched a competing service – Resso – in key emerging markets (Brazil, Indonesia and India).
iOS App download rank data for the recent 90-day period from App Annie (pictured, link) shows it still hasn’t hit Spotify’s dominance (it has only reached 2nd place in Music category in Indonesia, and lingers in 4th for the other two launch countries).
The probability that a mature private equity fund will deliver 2x on investment fell in the 1990s and has since held steady at 30-35%.
In other words the probability of NOT achieving 2x is 65-70%.
For >2.5x the probability of NOT achieving is nearly 90%.
The data uses North America and EU strategies, >$100m, across buyout, growth and turnaround. 2011 vintage year is used to eliminate non-mature funds. This filter led to 1,200 funds.
Credit Suisse, who suffered $5.5bn in losses in the Archegos debacle earlier in 2021, have published a full report of what happened by an external firm.
Nice read for those interested in the inner workings of the Prime Brokerage business.
If you aren’t familiar with it, this is a brilliant introduction and history (paywalled).
The first part looks at the company pre-Covid – “From 2016 right up until the emergence of COVID-19, Moderna could barely hold it together, as it was shedding key executives, top talent, and major investors at an alarming rate.”
The second part covers how the Covid crisis “bailed” the company out and the circumstances around this.
