This woman is really amazing!

[Guest Schwab711]

I guess we can't expect a rationale explanation.  It takes a sociopath to carry on a charade for close to 11yrs.

 

Sometimes you get in too deep. She actually seems pretty normal to me. I don't think it's possible to understand her motivations or accurately label her.

 

When I first heard about the case study below, they made it sound like he was a decent guy that needed money for his real business. Eventually, everything spiraled out of control and his intentions shifted dramatically after he came in to BIG money.

 

https://en.wikipedia.org/wiki/John_McNamara_(fraudster)

[Grenville]

It's been interesting to see how things developed with Theranos. If they don't suspend her license, I'll be disappointed in the system.

 

I would have thought the board members would be on top of some of this, but I guess they were just there to give her credibility. I figured someone with public company experience like Richard Kovacevich (WFC) would have done some diligence.

[oddballstocks]

I guess we can't expect a rationale explanation.  It takes a sociopath to carry on a charade for close to 11yrs.

 

Sometimes you get in too deep. She actually seems pretty normal to me. I don't think it's possible to understand her motivations or accurately label her.

 

When I first heard about the case study below, they made it sound like he was a decent guy that needed money for his real business. Eventually, everything spiraled out of control and his intentions shifted dramatically after he came in to BIG money.

 

https://en.wikipedia.org/wiki/John_McNamara_(fraudster)

 

Appreciate the McNamara mention. First I love Fargo, but second I found myself going down a fascinating Internet rabbit hole with this stuff. The Feds let McNamara keep some of the wealth and disappear into witness protection. Crazy ending.

[Jurgis]

It's been interesting to see how things developed with Theranos. If they don't suspend her license, I'll be disappointed in the system.

 

I would have thought the board members would be on top of some of this, but I guess they were just there to give her credibility. I figured someone with public company experience like Richard Kovacevich (WFC) would have done some diligence.

 

In this particular case, it seems only someone with medical experience could have done DD and pushed for answers. Likely medical skeptics either did not make it into the board or were silenced.

 

I doubt someone outside the field like Richard Kovacevich (WFC) can do much unless they are already informed by whistle blower or skeptical expert and decide to push with that evidence. Theranos was not cooking financials, Theranos was cooking test results. And their defense to any questions was that the system was proprietary so they would not disclose any results/methods/comparative studies. This may have sounded OK to non medical people on the board, especially if inside medical people perpetuated the illusion too.

[BargainValueHunter]

LoL!  I just read this entire thread.  I really wonder about this board lately.  They say hindsight is 20/20, but I thought the few detractors and skeptics were right on. 

 

The thing number one thing I've learned in life is that if it sounds too good to be true, it probably is!

 

Gio is like a reverse Midas... everything he touches turns to shit.

 

What a clown.

Go easy...we all make mistakes. How many of us on this board thought that Eddie Lampert, Bruce Berkowitz, Mohnish Pabrai, Tom Ward and Chad Wasilenkoff had the Golden Touch™ until reality set in?

[LongHaul]

This was very interesting.

 

WSJ journalist John Carreyrou shares year-long Theranos investigation & breaks latest, stunning news

 

[Guest Schwab711]

I guess we can't expect a rationale explanation.  It takes a sociopath to carry on a charade for close to 11yrs.

 

Sometimes you get in too deep. She actually seems pretty normal to me. I don't think it's possible to understand her motivations or accurately label her.

 

When I first heard about the case study below, they made it sound like he was a decent guy that needed money for his real business. Eventually, everything spiraled out of control and his intentions shifted dramatically after he came in to BIG money.

 

https://en.wikipedia.org/wiki/John_McNamara_(fraudster)

 

Appreciate the McNamara mention. First I love Fargo, but second I found myself going down a fascinating Internet rabbit hole with this stuff. The Feds let McNamara keep some of the wealth and disappear into witness protection. Crazy ending.

 

I've never seen Fargo and never realized the movie had this incident in it until now. People must have thought I was an idiot every time I've mentioned this story.

[Graham Osborn]

Not to needle Gio too badly as he (?) really is a good guy.  But the bullish posts on VRX, AGN, and Theranos all originated with him.  I think it just illustrates how intense the euphoria has been in the pharma/ biopharma sectors over the last few years.  By the sounds of it he had a killing in the first 2, and there's nothing wrong with profiting from mania as Soros likes to say - provided you bought BEFORE the mania.  But you always had to wonder why a sector with limited underlying technological/ productivity gains (unlike say tech in the mid 90s) should generate those kinds of returns.  And so the moments where ValueAct started dumping, where PFE/ AGN was announced, and where Theranos announced its technology required individual test approvals were all sell signals - assuming selling was an option ;)

[Deepdive]

I recently ran into someone who works under her and she kindly stated that Holmes is not as perfect as the media makes her out to be.

[Valuebo]

Not to needle Gio too badly as he (?) really is a good guy.  But the bullish posts on VRX, AGN, and Theranos all originated with him. 

 

Not to mention his bullishness on Biglari, Fairfax, .. Where is their performance now? People DID warn that performance for those was unlikely to continue.

 

If you then state that your goal is to achieve 15% / year for the next 30-40 years (meaning Gio would become a billionaire) and that you focus on quality of management and go on and on about it all the time... Well then you shouldn't be surprised if people call you out on it imo.

 

I also got screwed over once, believing management too much. Well, I've learned from it. I hope Gio does too.

[Palantir]

Go easy...we all make mistakes. How many of us on this board thought that Eddie Lampert, Bruce Berkowitz, Mohnish Pabrai, Tom Ward and Chad Wasilenkoff had the Golden Touch™ until reality set in?

 

It's not just giofranchi though. A few pages ago, critical comments about Ms. Holmes were dismissed by posters as driven by jealousy over seeing a talented woman do well. Somehow those voices are silent now.

[rkbabang]

A little much you guys.  This is a private company with little information available other than some stories in the news.  At first those stories made her sound amazing and now they are making her sound like a fraud.  Not a single person on this board has done any due diligence into this company for investing purposes.  Poor Gio was just posting a news story he found interesting.  Cut the guy some slack.  I know, you want a pat on the back and a "hey nice going" for posting that you were skeptical.  OK <pat> <pat> Hey nice going. You're so smart.

 

[giofranchi]

Not to needle Gio too badly as he (?) really is a good guy.  But the bullish posts on VRX, AGN, and Theranos all originated with him. 

 

Guys,

I had lost this discussion until now.

There is no doubt I have been very wrong with VRX (it was a large position), I have been wrong with AGN (it was a small position), while I had no particular view about Theranos except the article I had read and posted…

Though I surely have learnt some lessons, basically I keep looking for great managers at the helm of great businesses that could be bought at fair enough prices.

Over the long term I think this strategy could yield stock market returns that are in the range of 7%-9% annual, while my own businesses could on average generate 5%-6% of additional free cash. That is still my goal, but I am very aware of the fact I might never achieve it.

Why do I choose to invest in specific businesses instead of simply investing in the S&P500? Because I enjoy the process of following real businesses and I believe that to understand their dynamics helps me very much in managing my own companies.

At least, this has been my experience until now.

 

Cheers,

 

Gio

[premfan]

Not to needle Gio too badly as he (?) really is a good guy.  But the bullish posts on VRX, AGN, and Theranos all originated with him. 

 

Guys,

I had lost this discussion until now.

There is no doubt I have been very wrong with VRX (it was a large position), I have been wrong with AGN (it was a small position), while I had no particular view about Theranos except the article I had read and posted…

Though I surely have learnt some lessons, basically I keep looking for great managers at the helm of great businesses that could be bought at fair enough prices.

Over the long term I think this strategy could yield stock market returns that are in the range of 7%-9% annual, while my own businesses could on average generate 5%-6% of additional free cash. That is still my goal, but I am very aware of the fact I might never achieve it.

Why do I choose to invest in specific businesses instead of simply investing in the S&P500? Because I enjoy the process of following real businesses and I believe that to understand their dynamics helps me very much in managing my own companies.

At least, this has been my experience until now.

 

Cheers,

 

Gio

 

You came in with extreme confidence and bravado.  Results matter. That said, i'm following you on twitter and you have a talent in curating content. Its actually quite educational to review all the bias in your previous posts. Looking at your portfolio now its essentially mirroring a index brother. So you're indexing without being aware you're indexing. Continue the great content on twitter.  I would add i'm average to below average in public market investing( trending towards average on recent realized gains) dont  listen to any investing stuff from me.  I only have 10 percent of my liquid net worth in stocks. Cheers!

[Jurgis]

OT.

 

Portfolio: AAPL, AMZN, BRK.B, FFH.TO, GOOG, JNJ, LBRDA, LILAK, LMCA, LSXMA, LVNTA, MKL, PFE

 

I don't know if I should be concerned or proud or both that my portfolio has large overlap with the above. I don't have PFE/JNJ and have only token amount of AMZN and GOOG. I don't think PFE/JNJ has great management, but they might have better longevity than some of the others.

[giofranchi]

You came in with extreme confidence and bravado. 

 

But I really never intended to. I have only tried to say what I was doing and why. I use both Twitter and this board as means through which I can share ideas with people I would never have met otherwise. I manage my own businesses and my own money. I have no hidden goals.

 

Looking at your portfolio now its essentially mirroring a index brother. So you're indexing without being aware you're indexing.

 

You might be right. But as I have said I don’t really care. Instead, what I care about is being involved in some businesses, thinking about their dynamics, and learning what works and what doesn’t. Being constantly aware of how things are evolving in the business world. Besides, I also think that Fairfax and the Malone family of businesses might differentiate somewhat my portfolio from the S&P500 (for better or for worse I cannot say… we’ll see).

 

Cheers,

 

Gio

[Poor Charlie]

I guess we can't expect a rationale explanation.  It takes a sociopath to carry on a charade for close to 11yrs.

 

Sometimes you get in too deep. She actually seems pretty normal to me. I don't think it's possible to understand her motivations or accurately label her.

 

When I first heard about the case study below, they made it sound like he was a decent guy that needed money for his real business. Eventually, everything spiraled out of control and his intentions shifted dramatically after he came in to BIG money.

 

https://en.wikipedia.org/wiki/John_McNamara_(fraudster)

 

Where Holmes went wrong is she tried to do something very difficult in an industry that is unforgiving.  If Holmes plied her craft to an industry like finance where PR charades, deception, and faulty products are the norm, we would probably be looking at the next keynote speaker at Ira Sohn.  Even if she did lose her way I have to at least give her credit for dedicating her life to a decent cause and having a goal that is incredibly ambitious. 

[writser]

Or she's a narcissistic psychopath who endangered peoples lives with faulty blood tests and scammed investors for a billion or some. Probably something in between. We'll see. Props to randomep for asking the right questions back when everybody was salivating.

[AzCactus]

One of the things that I like about this forum is that people can/should think for themselves.  I think most of us would say we aren't lemmings.  So if Gio or anyone for that matter posts something it really only expresses their opinion.  If he was wrong about Holmes or VRX who cares....we are all adults and should make decisions accordingly.  Just my two cents. 

 

 

[Vish_ram]

She is impressive but I am very skeptical of the valuation.

 

Remember when Eike Batista was worth $35B? It turned out the market was wrong and he was worth $0.

 

The economics of Theranos' business don't sound promising at all. I suspect it will be lower margin and more capital intensive than investors are hoping.

 

I see no reason to compare her to Eike Batista at this point. He was highly leveraged, operating in a fairly corrupt and bureaucratic country, in a cyclical, commodity industry, while being extremely promotional to push his public companies to ever higher valuations. She's been in stealth mode for 10 years working on technology and runs a private business that has only been valued by extremely savvy investors like Larry Ellison, and as far as I know they have no debt.

 

If anyone smells a bit like Batista at this point it's Drahi, in my opinion...

 

Not a slight on Liberty, whose posts I like. This episode just shows how hindsight is 20/20.

 

Holmes

1) highly leveraged "Steve Jobs" persona

2) was highly corrupt by suppressing negative findings , test's inadequacy, effectively put a gag order on ex-employees, send her lawyer goons to threaten John Carreyou who was doing some investigative reporting, kept her board in the dark, assiduously recruited non-medical board members....

3) was extremely promotional to pump up the valuation

 

AND

4) blood testing is a commodity industry

[Eye4Valu]

I think Elizabeth got gored by her own unicorn!

[LongHaul]

Part of the reason Gio started so many of the posts was that he posts so much.    I applaud him for being a frequent poster and contributing interesting content to the board.  Please keep it up Gio.  Tall trees get a lot of wind!

 

All of us who have never made investing mistakes can keep throwing stones.

 

I did not see any posts here prior to the 1st WSJ article claiming Theranos was a fraud.  Some skeptics yes, but not a fraud.

 

I didn't think Theranos would run into these "issues".  But after listening to the interview I can see why - I was totally outclassed by those in the know of lab testing equipment, medical research, venture capital board composition, etc. 

I did know that startups are tough.  I, probably like most, just read the media articles describing the technology and how it would bring down costs, etc.

 

[rkbabang]

Part of the reason Gio started so many of the posts was that he posts so much.    I applaud him for being a frequent poster and contributing interesting content to the board.  Please keep it up Gio.  Tall trees get a lot of wind!

 

All of us who have never made investing mistakes can keep throwing stones.

 

I did not see any posts here prior to the 1st WSJ article claiming Theranos was a fraud.  Some skeptics yes, but not a fraud.

 

I didn't think Theranos would run into these "issues".  But after listening to the interview I can see why - I was totally outclassed by those in the know of lab testing equipment, medical research, venture capital board composition, etc. 

I did know that startups are tough.  I, probably like most, just read the media articles describing the technology and how it would bring down costs, etc.

 

 

I agree. And remember he wasn't posting this as a possible investment, just as an interesting news story. I had never heard of Theranos until he posted about it here, so I'm glad he did.  Geo if you run across any other interesting business news I hope you post it regardless of the negativity of a few here.

[Graham Osborn]

Not to needle Gio too badly as he (?) really is a good guy.  But the bullish posts on VRX, AGN, and Theranos all originated with him. 

 

Guys,

I had lost this discussion until now.

There is no doubt I have been very wrong with VRX (it was a large position), I have been wrong with AGN (it was a small position), while I had no particular view about Theranos except the article I had read and posted…

Though I surely have learnt some lessons, basically I keep looking for great managers at the helm of great businesses that could be bought at fair enough prices.

Over the long term I think this strategy could yield stock market returns that are in the range of 7%-9% annual, while my own businesses could on average generate 5%-6% of additional free cash. That is still my goal, but I am very aware of the fact I might never achieve it.

Why do I choose to invest in specific businesses instead of simply investing in the S&P500? Because I enjoy the process of following real businesses and I believe that to understand their dynamics helps me very much in managing my own companies.

At least, this has been my experience until now.

 

Cheers,

 

Gio

 

Just so it's clear Gio, the "?" in my post was in regard to your gender and not whether or not you are a nice guy :) I respect your opinions even when I don't agree with them.  I have no idea what your returns have been but there is no question VRX/ AGN gave their investors a great ride on the way up.  Michael Burry bought a stock in the late 90s that looks a lot what they were doing early on.  There's nothing wrong with making money in the stock market so long as one understands the dependencies and the risks.

 

Furthermore, I will say this: I was among EH's admirers.  I am the first person to root for a woman who is ambitious and willing to take on a moonshot like that.  Sure, I thought 9B was a nifty valuation for a biotech company with lots of uncertainty still to traverse, but I never did serious DD on it since I wasn't considering a buy.  Even now I know little more than what the media presents; I just via it as another indicator of sentiment on the biotech sector since unlike the 90s these unicorns aren't publically traded.  EH is still young and hopefully she can take some time off to reflect and become a more long-term thinker.  Becoming a billionaire too quickly can be hazardous to one's health.

[LC]

  I, probably like most, just read the media articles describing the technology and how it would bring down costs, etc.

 

 

Brings up a good point: the quality of journalism is on a constant decline.

 

I spoke with an ex-Sequioa analyst about 8 months ago. He said, "do you know who sequoia hires (as analysts)? journalists."

 

And i'm sure it's not just them. So with some exceptions perhaps, the brightest guys in that market are getting snatched up by funds, and the public readership is left with the rest.