- Big slide deck about the biggest areas of innovation.
- A lot of lofty growth predictions but interesting charts throughout.
- This one graphs monetisation of various media.
- They argue that even a 20% increase in cost per hour for gaming still leaves it a bargain.
Stocks
Interesting, and often contrarian, Snippets on individual companies and the stock market.
Fund Performance
- Interesting chart plotting excess returns of various managers against the durability of this performance.
Streaming Retention
- Interesting chart showing that Disney Plus now has market leading customer retention.
VR
- VR is taking off.
Consumer Health
- Nice chart from Euromonitor on what could be the big growth areas in consumer health.
- Euromonitor expects demand for conditions such as sleep, stress, digestion, mood/depression, memory/cognition, and weight management to surge in 2021.
FundSmith 2020 Letter
- A good read as always.
- “What are the similarities between a forecaster and a one-eyed javelin thrower? Answer: Neither is likely to be very accurate but they are typically good at keeping the attention of the audience.“
Starbucks
- It is really astounding how SBUX business has evolved from nearly 100% US focussed to a global business.
Lemonade
- Interesting short report on the hot insurance company Lemonade Inc.
- The section on the Lemonade Foundation and ESG is worth reading as a new form of “manipulation”.
Utilities
- Pretty amazing transitions at some European Utilities – reaching turning point in terms of renewable energy.
Match Group
- Great chart showing how Match Group revenue evolved over time and the power of optionality of new business lines (like Tinder).
- Could Hinge and Pairs layer on top like this from a de minimis contribution now?
Chip Wars
- There is a lot being written about China’s push for self-reliance.
- One of the biggest parts of this story over the next decade is likely to be the battle for semiconductor technology of all kind.
- The electronic design automation (EDA) industry is controlled by three firms and are all US. China is now making first moves into this industry., crucial for semiconductors.
- Europe is also getting involved and has just signed a €145bn declaration to develop a next generation processor and 2nm technology.
Content Business
- A great piece of analysis applying Helmer’s 7 powers to the content business in order to establish if content has ability to maintain profitability and resist competition.
- Scale is one such power – this chart shows there is a slight positive linear correlation between size of budget and eventual box office returns.
- Network effects are also interesting – given the social dynamics of shared experience and discussing content. Franchises really shine here.
Electronification
- Rather amazing to see that huge parts of many financial instruments are still not traded electronically, especially in the credit markets.
- From a brilliant post on the electronic trading business MarketAxess.
e-commerce Marketplaces
- A brilliant long read on the state of e-commerce marketplaces in 2020.
- Amazon marketplace, which “added eBay’s worth of sales to its GMV this year“, is a key topic.
- The nature of sellers there has evolved, including the new trend of capital raised to roll-up (i.e. acquire) sellers.
- The review also covers other winners like Walmart and Etsy.
Real Options and Valuation
- A fascinating read about the use of real options in valuation analysis by Mauboussin and Callahan.
- They argue it applies to a subset of companies – namely those with adept management, strong competitive position and high asset volatility.
- They also show why 2020 had characteristics (like decoupling of volatility and equity risk premium) that made this type of analysis more attractive.
Home Fitness Shift
Amazon as a Risk Factor
- Interesting chart showing number of annual reports that mention Amazon as a risk factor.
Fedex ShopRunner
- Interesting acquisition by Fedex buying the ShopRunner platform – vertically integrating forward.
- Sign of more to come?
Churn Rates
- A key variable to the life time value of streaming businesses is churn rate.
- This interesting chart shows the churn rate of NFLX vs. Disney services.
- There is a lot of room for improvement in the latter.
ARKK
- ARKK is the ETF that represents the latest rally.
- It is seeing a lot of flows and discussion.
- This table shows the top 10 holdings as of 31/12/2020.
- Always worth knowing the composition of ETFs that are seeing strongest flows.
