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Quick video, tough subject

IP — Fri, 03 Feb 2012 16:25:25 +0000

Seth Godin’s appearance in this talk show (video embedded inside) is constrained by the format: a talk show requires “controversial sound bites” and leaves little room for deep analysis of a given issue. That’s up to us, and the ideas he repeats here – “get ready for a ‘forever recession’ by reinventing yourself”, “learn by doing”, “go ahead and do it”, “take risks” – are worth considering during the weekend.

The video:

The wired doctor

IP — Thu, 02 Feb 2012 13:14:25 +0000

Interesting, short interview with Athenahealth CEO Jonathan Bush in a recent Fortune issue. Very interesting reminder of the sometimes almost insurmountable barriers of inefficient habits and practices in some sectors – “old habits die hard” indeed. The potential for IT-based revolutions in healthcare is huge, however the questions of “when” and “how” are, as per this example, still hard to answer. Picking winners in such uncertain realms is not within most investors’ circles of competence, yet keeping track of the “cost control/ accountability” trend in HC is vital.

China’s future prosperity

IP — Tue, 31 Jan 2012 18:08:11 +0000

Very interesting Economist.com article on the roots of China’s success – and why China must change to achieve future prosperity. There is an interesting Case Study by Harvard Business School professor Diego Comin called “China ‘Unbalanced’” (updated very recently), which forms a very interesting base for discussing these issues. That said, the “China Unbalanced” debate is far from over, and countless arguments have been laid out for each side of the debate. Why does it matter to us? Surely, as Brazilians, because of the undeniable impact of China in our economy. But more importantly, as global citizens and asset managers, because of the uncertainty that comes from such a wide range of possible outcomes.

DLD Conference 2012

IP — Sun, 22 Jan 2012 17:59:44 +0000

DLD 2012 has started today in Munich and runs until Jan. 24th. In it, people as diverse as Sheryl Sandberg, Arianna Huffington, the Dyson family (Freeman, Esther and George Dyson) and Hiroshi Mikitani (Chairman & CEO of Rakuten) share their views on what matters to them. The themes are also varied – augmented reality, the future of cities, citizen science, epiphanies – and the program is packed with interesting talks and panels.

In the age of multi-disciplinary events, this is one of the best. You can keep track of it live on Livestream.com, check out the event’s blog on Tumblr, its Twitter feed or Facebook page. Enjoy!

Double standards regarding defaults

IP — Mon, 02 Jan 2012 14:09:05 +0000

Two recent stories highlight the current moral double standards regarding defaults and indebtedness in general. The first article by James Surowiecki in the New Yorker uses the recent American Airlines umpteenth Chapter 11 filing, which was lauded as a “smart move” to shield the companies from the obligations it was supposed to honor, and contrasts this reaction to the stigma surrounding personal bankruptcies by home owners. We have discussed here before how one can never forget the personal responsibility aspect of the housing bubble – the people who bought houses they couldn’t afford – but Mr. Surowiecki has a point.

The second article in the Financial Times tries to tack the same “double standards” theme onto Germany, given its treatment of the heavily-indebted Eurozone members. It doesn’t work nearly as well, but for argument’s sake – and its use of Goethe quotes from Faust – it’s an interesting read.

Rethinking: from innovation to production

IP — Thu, 29 Dec 2011 13:27:49 +0000

Two Financial Times articles yesterday, taken together, are great reading material and food for thought. The first one is about rethinking innovation and new product development. We have posted here before about open innovation, crowdsourcing and so on, and it’s a subject that’s far from being exhausted. The second article, even larger, is about production processes that are becoming – paradoxically perhaps – more efficient and more flexible. Again a subject we’ve touched on before.

What does it matter for investments? We invest in companies, so we have to think about every aspect of business, including R&D/ new product development and production processes. In the sense that the evolution in these and other business factors may lead to more efficient uses of capital in the companies that take advantage of these trends, the question becomes: how does it NOT matter?

Free-spending Brazilians

IP — Wed, 28 Dec 2011 17:36:31 +0000

Two recent stories in US newspapers – New York Times and Wall Street Journal – highlight the huge per-capita spending of Brazilians in the US. While the Wall Street Journal piece focuses on tourists in NY and retail sales, the NYT piece focuses on Florida and also mentions Brazilians buying up real estate in the state.

The big point behind both stories: the protectionism that drives the huge taxation making imports so expensive in Brazil as to justify, in some cases, the airfare and hotel expenses.

The floating incubator

IP — Mon, 19 Dec 2011 03:41:48 +0000

No mistake in the title: it’s not about floating an incubator, it is about an incubator that floats. US immigration laws have some California entrepreneurs – Peter Thiel included – pondering a ship to house innovators and entrepreneurs 12 nautical miles off the California coast – i.e. international waters! Great amenities to pass the time, and take a ferry inland when needed with your temporary or business visa. Reading the comments discussing the viability – storms? cold? pirate attacks? – was quite disheartening, but at last one comment captured the real point: not the specific plan, but the regulatory and political environment that spawned it. “How shameful that our immigration policy is so broken that instead of making it easy for the best and brightest to start companies here and build jobs and our economy, we are reduced to fantasizing about off shore holding pens for thwarted entrepreneurs.”

iDividends?

IP — Wed, 14 Dec 2011 06:00:56 +0000

Not our preferred source, but this article – an “open letter” to Apple’s CEO Tim Cook – has interesting food for thought on Apple’s capital allocation issues. While we don’t necessarily agree with 100% of the arguments, assumptions etc., it’s still an interesting read and it ties well with our last two posts on capital allocation (on M&A and Share Buybacks).

Just a reminder: Buysiders.com is all about sharing useful investing building blocks and mental models with a community of people interested in these subjects, and this post is highlighted exclusively for overall capital allocation policies that might be applied to other investments. We don’t advise on specific stocks nor do we make any recommendations, as well as we may or may not hold Apple at any given time and so on.

Brazil and the future

IP — Tue, 13 Dec 2011 18:53:58 +0000

The Financial Times’ Beyond Brics blog has posted an article by PUC-Rio professor Marcio Garcia, and it’s a very sober look at what this country has been through in the years since it was included in the “BRICs” by Jim O’Neill. Much more importantly, however, is the warning about what we must still do if we are to succeed in the future. We have sounded these warning bells many times before, and we will continue to do so.