“Aptitude is the rate at which you level up, by changing the nature of the problem you’re solving (and therefore how you measure “improvement”). The interesting thing is, this is not purely a function of raw prowess or innate talent, but of imagination and taste.“
This is a nice way to think about learning in investing – as returns to a particular area diminish, it is key to open a new front.
“Crossover investors have become more active in Europe (e.g. Tiger Global, BlackRock, RA Capital, Coatue).
While in 2019 only 2 made the top 15 investor league table, now, as at the half year, 4 of these (all from the US) are part of the top 15, with the number 1 overall being Tiger Global.”
Mergers and acquisitions (M&A) activity has spiked to 12% of market cap in the UK, double the global average.
This is driven by cheapness of UK listed firms, stabilisation post Brexit, and record private equity dry powder.
Interestingly this spike is driven by a larger number of deals (25) when compared to the previous spike in 2015 (where mega deals for SAB Miller and BG Group dominated).
It is well documented that the Warren Buffett indicator, which measures equity market cap as a ratio of GDP, is at an all time high, surpassing the dotcom boom.
It is less well documented that the ratio of profits to GDP is also strong and has been trending up.
JPM analysed 98 SPAC deals that closed or liquidated from Jan 2019 to March 2021.
It isn’t a pretty picture – “while SPAC sponsors and “SPAC Arbitrage” investors are still making money, it’s an unsightly picture for everyone else in the SPAC ecosystem“.
Things didn’t get any better for the 85 SPAC mergers since March 2021 – the same patterns hold.
This was a great post looking at the crazy things going on recently in the SPAC world.
George Lucas was forced to sell Pixar to fund his divorce.
Venture capitalists, 35 of them, refused to back the firm as did eight strategic partners, but Steve Jobs agreed.
“If we’d had any other investor than Steve, we would have been dead in the water.“
He forced the firm to succeed “He’d berate those of us in management, then write another check”
Pixar was eventually sold for $7bn to Disney “This is astounding considering they could have had us for free in the 1970s when we approached them on bended knee.”
“Splitting a good black jack hand” is a great way to describe how Michael Dell pulled off perhaps the most daring deal of the last decade.
“Before the LBO, he owned 15.6% of his company, shares worth less than $4 billion. Thanks to the miracles of his financial engineering, he will own 52% of Dell and a 42% stake in VMware. The total value of his Dell holdings is $40 billion.“
