- A really insightful and bearish essay on Nintendo.
- “However, the “Nintendo is Disney” thesis is deeply flawed. It feels more like a desire to apply a pattern than to find a real analogue. Elements of Nintendo certainly represent Disney, but they represent Disney insofar as both companies are best in class creators of four-quadrant, multi-generational content. Otherwise the businesses are fundamentally different, their management styles fundamentally different, and their approaches to content itself are fundamentally different, too.”
Stocks
Interesting, and often contrarian, Snippets on individual companies and the stock market.
Dotdash Pt II
- Snippet has previously written about DotDash, owned by IAC.
- The business is annualising $180m of revenue, made 24% EBITDA margins last year and continues to grow double digits.
- Part of the strategy is to grow the portfolio – organically and inorganically – and this is a nice table capturing it so far.
Tik Tok
- TikTok is a phenomenon.
- Their rise had a lot to do with a huge advertising campaign in the US
- This stat is staggering – for a period in 2018 “nearly 22% of all ads seen by U.S. Apple device users on Facebook ad network came from TikTok and its Chinese counterpart Douyin”
- As the article points out this actually provides more evidence of Facebooks dominance.
Uber
- A fascinating piece tearing apart Uber’s business model.
Equity Home Bias
- For Pensions – “There is a clear sign of a reduced home bias in equities, as the weight of domestic equities has fallen, on average, from 68.6% in 1999 to 39.7% in 2019.”
- Source.
Most Shorted US Stocks
- h/t themarketear.
Gambling
- Remarkable how Sky Bet has gone from 5th in 2015 to 1st today.
EU Banks
- “Some banks trade at valuations equal to (or less than) their surplus capital, implying that the banks themselves—including their interest-rate-resilient wealth management divisions, trading and operations segments, and automobile and mortgage lending businesses—are free.“
- Source.
Reed Hastings Profile
- Interesting NYT profile of the CEO of Netflix.
- On culture – “part of daily life at Netflix with a daily Circle of Feedback and annual written and live 360 Assessments, in which you meet with the team to get ripped apart.“
Equity Valuation
- When compared to fundamentals (GDP) equities look expensive but not if compared to money measures (M2). Interesting contrast.
Exchanges
Hype doesn’t pay
- Chart showing how it doesn’t pay to chase when the biggest stocks roof it.
Airbnb
- Interesting to see Airbnb bounce back like this.
- “Airbnb spending is running a whopping 75% higher than this time last year according to Edison Trends, based on a panel of spending data including more than 65,000 Airbnb transactions.“
Swiss Watch Exports Recover
- Recovery is being primarily supported by China.
Earnings Revisions
- Earnings revisions are back to positive.
- h/t The Market Ear.
Food delivery and competition
- Brilliant article on the monopolistic power of food delivery businesses especially as they begin to vertically integrate and merge around the world.
- “Losing money to acquire market power, or to steal from investors, is a form of counterfeiting, because it drives honest competitors that have to generate a profit out of the market“.
Rapid Covid Testing
- There was a lot of excitement about the FDA approving a rapid (15 minute, $5) SARS-CoV-2 test.
- This is an interesting analysis of when such a test would be useful and when not?
- In short – if the true infection rate of the population you are testing is very low (<1%) it won’t be useful.
- Which means using such a test on cruise ships, as some have suggested, won’t work.
Greensill
Content Wars
- Netflix has a bigger content budget than the top five European countries combined.
- From a brilliant slide deck by Benedict Evans.
The story of ICE
- A great post about the history of Intercontinental Exchange and its founder Jeffery Sprecher. Its success was based on a few factors.
- (1) “Sprecher gave away 80% of the company to his customers as an incentive for them to trade at his venue.”
- (2) “the company had a lucky break when Enron went bust.”
- (3) Lots of deals meant diversification especially into oil trading and clearing. 20 deals in the past 15 years. Three criteria drove these – enhance network, new content, turnarounds.
- It also comes down to three insights – analogue to digital, using regulation as an opportunity and the power of data.