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saltybit

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Posts posted by saltybit

    Primers for good legal knowledge to have for investing

    in General Discussion

    Posted

    Since a lot of folks on this board seem to have been around the investing block a few times, I was curious if there are any specific legal topics that came in handy for you to know while investing.

    Off the top of my head, corporate and business law, bankruptcy law, and things from the SEC seem to be useful.

     

    Are there any investing specific primers for these? (or other legal topics that are important)

    Thanks.

     

     

     

    Modern day examples of Buffett's "$100 billion" Moat

    in General Discussion

    Posted

    Visa probably has a stronger moat than Coke.

     

    Fannie/Freddie used to have a good moat, but management screwed that up.

     

    I was thinking if one of the big tech companies (Amazon/Google/Facebook) wants to get into the payments business. They can acquire one of the payment/card networks and will mount a fairly serious challenge to the rest of the industry. (they have more product/technical skills to come up with new ways of payments or adding functionality on top of the existing payments network)

     

    Having purchase data (even if anonymized or on an aggregate level) can also help their existing businesses, especially for advertising.

     

    Both Amazon and Google got into the payments business.

     

    Google Checkout gained pretty good market share.  Then they exited the business!!  My guess is that they were getting killed by fraud.

    Or look at Square... very popular, users love them... bleeding money.

     

    I suspect that Amazon might also be losing money.  It's hard to tell because Amazon doesn't break it out.  But it is very easy to lose money in the payments space.  The barrier to entry is fraud.  The survivors are the ones who didn't get killed by it (e.g. Paypal, Visa, Mastercard, Amex).

     

    Yes, payments is hard, and these companies have failed trying to enter before. What I meant though was what if say, Google decided to acquire Discover, or Mastercard?

    I think they have enough cash and access to financing if they want to do it.

    Modern day examples of Buffett's "$100 billion" Moat

    in General Discussion

    Posted

    Visa probably has a stronger moat than Coke.

     

    Fannie/Freddie used to have a good moat, but management screwed that up.

     

    I was thinking if one of the big tech companies (Amazon/Google/Facebook) wants to get into the payments business. They can acquire one of the payment/card networks and will mount a fairly serious challenge to the rest of the industry. (they have more product/technical skills to come up with new ways of payments or adding functionality on top of the existing payments network)

     

    Having purchase data (even if anonymized or on an aggregate level) can also help their existing businesses, especially for advertising.

     

    Modern day examples of Buffett's "$100 billion" Moat

    in General Discussion

    Posted

    Warren Buffett famously said the following about Coke:

    If you gave me $100 Billion and said, ‘Take away the soft-drink leadership of Coca-Cola in the world’, I’d give it back to you and say it can’t be done”.

     

    Which companies can you say this about right now? (ie. if you gave $X billion dollars to the second place company, it still will have a hell of a time to take leadership away from the first)

    College Savings for Kids

    in General Discussion

    Posted

    For the education specific programs, what happens if you end up not having to pay for your kid's education? (bec. they decided not to go, or got a scholarship)

    Will you have to pay some fine if you withdraw or use it for another purpose?

    Learning from Michael Burry

    in General Discussion

    Posted

    I started reading his 3000 something posts on SI. I am pleasantly surprised by his aptitudes in timing stocks/option strategies. He fits the traits of many great investors - flexible, have multiple mental models to deal with different situations, respectful of the market.

     

    Thanks patientCheetah, looking to do that as well. Link to his SI profile (you might need to register): http://www.siliconinvestor.com/profile.aspx?userid=690845

    Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms

    in Books

    Posted

    [amazonsearch]Anatomy of the Bear: Lessons from Wall Street's four great bottoms[/amazonsearch]

     

    I am still in the process of reading this book but thought I'd share it. It's a summary of 4 bear markets in the 20th century and when they "turned". (August 1921, July 1932, June 1949, and August 1982)

     

    The author studies the sentiment during those times, and breaks down each occurence. (Leadup, The Fed, Stock Market, The Bond Market, price stability, the bottom, etc.)

     

    He cites and includes WSJ clippings about the market during these times frequently, and I find these to be helpful to see the actual sentiment then. Hopefully will give perspective next time a bear market strikes.

     

    Letters from a Self-made merchant to his Son

    in Books

    Posted

    This book isn't about investing, but I think members of this board will appreciate the humor and wisdom of the author.

     

    It's free on Kindle:

    http://www.amazon.com/Letters-Self-Made-Merchant-Pork-Packers-intimates-ebook/dp/B004UK1JZQ/ (part 1)

    http://www.amazon.com/Gorgon-Graham-Letters-Self-Made-Merchant-ebook/dp/B0084C3F6C (part 2)

     

    If you want a physical version:

    http://www.amazon.com/Letters-Self-Made-Merchant-His-Son/dp/B003YHBET2

     

    Enjoy!

    Incentivizing sales people

    in General Discussion

    Posted

    Thanks for the good suggestions. Tying compensation with longer-term metrics like customer retention and lifetime value make sense.

    He was worried that he won't be able to attract enough salespeople with this kind of compensation scheme, but I told him, at least the people who end up joining will be more aligned with the company's interests. =)

     

    Identifying the Next Outsiders

    in General Discussion

    Posted

    Has there been any research done on people with similar early trajectories as the original "outsider" CEOs, but ended up not doing so well?

     

    It's not *exactly* the same but you can look at the horizon kinetics wealth master index.  I don't know if it's been verified by a 3rd party but they claim that an index of individuals owning $100M+ of stock has beaten the S&P by 2.7% per year over the past 20 years.

     

    http://www.horizonkinetics.com/docs/CC_112_Jun13.pdf

     

    There are other studies you can dig up if you're curious that indicate that companies with large insider ownership tend to outperform.  Now a CEO with large ownership is not necessarily a great capital allocator but if you follows siddharth's definition of individuals who benefit by increase in per share value, certainly those with insider ownership would qualify.

     

    Thanks for the suggestion!

    Incentivizing sales people

    in General Discussion

    Posted

    I was talking to a friend who runs a B2B software company today, and he mentioned that last year, he changed the compensation scheme for his salespeople from a mostly commission-basis to a fixed salary scheme, because the sales people were not necessarily thinking about the long-term relationship with the customer and were saying (almost) anything that the customer wanted to hear just to get them to sign on the dotted line.

    Since the change, sales had gone down, so he is thinking of changing the scheme again.

     

    I personally have my own opinions, but I was curious since the members of this board have reviewed many companies, if they have come across examples of effective/innovative ways of compensating sales people.

    Thanks!

    smartest CBF members

    in General Discussion

    Posted

    You need to learn the way I did, go through all the posts from the start. I'm about half way through the general forum and I'm going to do the investment ideas.  Liberty did the same and I think we both agree that it's time well spent.

     

    I definitely second that.

     

    I'm just here to learn, as I'm nowhere near the level of many investors on this forum, and reading through the archives was an incredibly fruitful period of learning when I found this place a few years ago. In fact, I'm starting to think that I should do that again at some point (I think I've learned a lot since then, so I might get more out of certain things that were over my head back then, or that I had less context for).

     

    I've also started to be more diligent about keeping an investment journal, and, among other things, I use it to collect good stuff I find (here, in 10Ks, interviews, blog posts, etc). Re-reading through that journal once in a while should also provide good insight and reinforcement.

     

    Liberty, I was curious which discussions/threads did you find that were particularly insightful?

    Epic OpenSSL Security Flaw (affects Yahoo users, among others)

    in General Discussion

    Posted

    I did a search and didn't find any financial websites affected. Does anyone know if that's indeed the case?

     

    (I tried this script https://gist.github.com/takeshixx/10107280 on various sites that I use and didn't find any that were affected, though maybe they have patched things already by the time I got around to it)

     

    Probably safer to just change all passwords, after first confirming that the site/service you are using does not have this vulnerability anymore.

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