Stocks

Interesting, and often contrarian, Snippets on individual companies and the stock market.

Stocks

Apple

  • Fascinating article on how apple is organised.
  • “Believing that conventional management had stifled innovation, Jobs, in his first year returning as CEO, laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization.“
  • Apple has retained this structure despite revenues being 40x larger. As the number of employees went from 17k to 137k the number of VPs only doubled from 50 to 96.
Stocks

Intangible Value

  • We covered the topic of the misuse of intangibles by some participants in our innugral blog post.
  • This is an interesting academic paper that corrects this by appreciating that the question is one of developing better valuation metrics.
  • The authors improve on the classic value factor by adding intangible assets (based on cumulative SG&A spending) – creating a new and better performing valuation measure.
Stocks

Airbnb

  • The stories of the early days of Airbnb, who recently filed to go public, are the stuff of legend including how the founders turned to selling themed cereal to survive.
  • The cereals were called “Obama O’s, the Cereal of Change,” and “Cap’n McCain’s, a Maverick in Every Box.” – a throwback to their first success housing delegates of the Democratic National Convention in 2008. It was also what got them a spot on Y Combinator.
Stocks

Analysing Impact of Covid – History

  • Although the events of 2020 are in many ways unprecedented one can look at the 2002 SARS outbreak in Asia as a possible analogy, after all it involved a lot of people in China staying at home.
  • Netease, a gaming company, was one of the few publicly listed stocks that reported financials at the time.
  • This table (h/t Selcouth Capital Management) shows what happened to quarterly financials at Netease at the time.
  • Netease saw a huge boost to revenue and a re-rating. Yet, eventually revenue slowed against tough comps and the stock deflated.
  • Will the same happen to the current crop of beneficiaries?
Stocks

Brick and Mortar the Real Winners?

  • A fascinating and thought provoking read on why it is the category leading brick and mortar retailers who will be the real winners in the post Covid era.
  • In one word – omni-channel.
  • “Wal-Mart’s digital revenue in Q2 was an annualized $42 billion, growing 94% — faster than Amazon … Perhaps the simplest way to express what has happened during Covid is to note that Amazon has actually lost share in e-commerce during Covid.”
  • A nice quote – “nothing accelerates change like success“
Stocks

Toyota on Tesla

  • “I am hesitant to say this — Tesla’s business, if you want to use the analogy, is like that of a kitchen and a chef. They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying ‘Our recipe is going to become the standard of the world in the future!’ At Toyota, we have a real kitchen and a real chef too, and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already.” Toyota President Akio Toyoda.
  • Source.
Stocks

NYT Transformation

  • Great set of slides on the transformation at New York Times since 2011.
  • The company just crossed a milestone where digital overtook print.
  • This is also a fascinating read about what happened inside the NYT newsroom during the Trump years and whether this boost was partly responsible for its growing business success.
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