The text inside did not appear in our Q2 2010 report in English, but we’ve brought it to Buysiders. It’s about “visibility” in the markets: do investors really alternate between periods of “excellent” and “very poor” visibility or is that just an illusion? We choose the latter. As Warren Buffett says, “Forecasts usually tell us more of the forecaster than of the future”.
Read more about IP report excerpts, vol.7, part 1: on visibility
Thought-provoking presentation on (buzzword alert!) “information shadows”, “the sensor web”, cloud computing, data collection/ processing/ visualization, local marketing + micropayments, P2P credit-card payments, social network risk evaluation… and how all this is coming together to create new products and services that feed on the cloud and/or organize it. It’s still impossible to tell just how practical this is and who will make money from this, but it’s nice food for thought. Also a comment on the skill of networking.
Many analogies with investing in this Slate post about a mountaineer’s worst mistakes. Quoting from the introduction: “(…) I was curious about the kind of attitude you develop toward error when a single mistake can easily cost you your life. I also wanted to test a hypothesis that I call “the paradox of error”: If your goal is to avoid making mistakes, then you must constantly assume that you are about to make one. That’s why fields like aviation and medicine have, at their best, a productive obsession with error.”
Quick collection of articles and papers with “psychological tidbits”. The first one is interesting as it can be seen as a sort of counter-argument against “confirmation bias”, but there’s more…
The WSJ had an interview in late June with Carlos Brito about his plans for Anheuser-Busch Inbev. The video inside is focused on the corporate culture aspect, and it’s always refreshing to watch. That said, we wonder if the video registers for foreign investors as much as it registers for investors who have been exposed for so many years to the effects that Brahma’s/ AmBev’s/ InBev’s and now ABI’s culture really has over time.
GP Investments’ Antonio Bonchristiano and Fersen Lambranho gave an interview for Valor Economico (in Portuguese) that should be pretty interesting for those interested in Private Equity in Brazil – not the least because it’s above-average in terms of frankness.
Quick post on time perspectives – plenty of connections to be made with investing from the video inside, right? Yes, as long as you retain a healthy skepticism. In fact, it’s downright scary how the “coolness” of the presentation can lead one to “lower one’s guard” to data that’s not necessarily accurate or that answers not necessarily the right questions. By Dr. Karl Menninger, here’s a quote: “One of the most untruthful things possible, you know, is a collection of facts, because they can be made to appear so many different ways.”
Spinoff & Reorg Profiles’ latest report has a very interesting section on Insider Buying, and we asked for and got Bill Mitchell’s permission to post an excerpt here. Using Sharps Compliance (ticker SMED) as an example, this section of the report discusses when “incentive stock option exercises may act as an insider signal”. Item #5 in his summary (the last paragraph) is vital, as insiders are only human and can get carried away with frothy valuations just like the rest of the market. No matter how powerful one or even a combination of “signals” may seem, there must be “fundamental value” / margin of safety.
Strategy & Business published a review for The Curse of The Mogul, which we’ve read recently. It’s a must-read for several reasons: media, capital allocation, competitive strategy and leadership. Not that we agree with Greenwald 100%. Chapter 2, on competitive strategy, is especially interesting because it assesses the competitive strategy framework from a specific industry’s standpoint (always better than ‘generic speeches’) and it was useful for thinking about other industries as well.
