Value Investing The State of Micro Private Equity |
- The State of Micro Private Equity
- Greenhaven Road Capital Q4 2020 Letter
- Have any investment theses or strategies presented here hit their targets? Do you invest in the securities you research?
- Is Facebook's moat widening or shrinking? My unorganized thoughts, do you see any flaws?
- Highly interesting lecture that explains the manipulation practices, potential securities fraud and regulatory capture that Hedge Funds are using on stocks like GameStop
- Tollymore Partners Q4 2020 Letter
- A Strong Balance Sheet is the Best Defense
| The State of Micro Private Equity Posted: 01 Feb 2021 02:08 AM PST |
| Greenhaven Road Capital Q4 2020 Letter Posted: 01 Feb 2021 02:16 AM PST |
| Posted: 31 Jan 2021 03:52 PM PST I notice there a numerous investment DD posts created here per week. Some of them are well researched and presented. The OP posts; we read the material, and often provide well constructed commentary and critique agreeing or disagreeing with the DD. The DD disappears into the ether as it sinks lower on the page and the next week there are new topics and discussions. One thing I notice is though, I rarely ever hear about the investment from OP or anyone ever again. Was the DD right? Was it wrong? It always leaves much to be desired. One of the biggest joys of security analysis is developing research that anticipates accurately what will happen, or when wrong let's one learn what you did wrong and how you can change your research. but I rarely get that here. We never see the outcome is of the research presented here and whether OP ever made an investment or opened a position based on their research. Perhaps some of these are school projects, or just random medium posts to send traffic to investment blogs, which is why a conclusion/update rarely gets reached on the DD. For someone that truly believes in an investment thesis I rarely see updates or discussing of positions. I was wondering if anyone else felt this way? Have there been any DDs that have reached the outcomes the DD concluded? Do you invest in the securities you research? [link] [comments]  |
| Is Facebook's moat widening or shrinking? My unorganized thoughts, do you see any flaws? Posted: 31 Jan 2021 09:47 AM PST Hardware: I think the smartest defensive move Facebook can make at this stage is doing whatever it takes to become a major player in consumer hardware. Even if they breakeven, or lose money on this endeavor it can be treated as user acquisition costs for the people who wouldn't make a Facebook account otherwise, or as a way to make Facebook accounts as sticky as possible to protect against people leaving the platform. Anecdotally, I've seen people that have preached "Facebook is evil" for years, say that not they will not ever delete their newly open accounts because if they did their Oculus hardware wouldn't work, and they'd lose all of their purchases. Facebook is dominating the growing VR market with an iron fist. Non-advertising revenue grew 156% in Q4, and IDC estimates 3 million Quest 2's were sold in Q4. Oculus Quest 2 has stellar reviews, despite the mandatory Facebook account for use. Facebook's VR devices also use Messenger for messages, Workplace for enterprise, and I believe Facebook Horizon (which is integrated with the FB app) will eventually be the place users load into initially, and launch third party apps from. High investment cost makes it unlikely that other social media company can compete with Facebook in hardware (especially AR/VR), and this should give Facebook a permanent utility advantage against its peers. The companies that could compete, big tech, and gaming giants seem unwilling to make the investment to compete. I think they're aware that Facebook is completely fine making $0 to be dominant in the VR space, and that's scared them away in addition to facts like VR being a relatively small market for them.Apple is rumored to be considering a release of a Quest-like headset in later 2022, but the device will be priced far above $1000 according to Mark Gurman. VR is where I'm most confident in Facebook's ability to achieve its hardware dreams, but consumer AR is also an area where its only competition in terms of investments made is Apple. So I think their chances there are decent too. Facebook is working on long term AR glasses, but is also releasing Smartglasses in collaboration with Luxottica (Ray-Ban and Oakley) this year. There's also Facebook's line of smart video chatting devices, Portal. Traditionally Listed Moats Intangible assets consisting of the vast amount of data users have shared: sustained and growing, but people are also sharing things about themselves on other apps increasingly. Growth of users means network effects still growing Number and diversity of advertisers, and advertiser verticals still growing Competition? There is rising social media competition, and always the threat of new entrants. That being said, competition seems to carve out niches, so they aren't competing as directly as we'd think. The closest thing to Facebook the Blue app, for connecting with family and friends is Instagram. Competing apps can have similar features, but the main utilities are different. Tik Tok is mostly a short video app, Youtube is a long video app, Twitter is a breaking news app, Reddit is a communities app, etc. Facebook's utility first and foremost is connecting with REAL people who's identity you can verify, like friends and family. Like previously mentioned, the closest competitor is Instagram. Messaging There can be lack of differentiation here, but Messenger tied to Facebook, Instagram, Portal and Oculus. I suspect it'll be tied to future hardware as well. Whatsapp has network effects, and may one day have lock-in comparable to Chinese super apps (at least that's what's being worked towards). iMessage is the the main competitor here, because they are automatically installed on every iPhone Misc I think Facebook Marketplace, the Craigslist alternative benefits greatly from Facebook using real identities, and is an overall better product. If you want to sell something locally FB Marketplace is the best option, and I think it's a strong reason to have an account. Usage of Marketplace is growing. The integration with Jio in India, and importance in Indian society is worth mentioning for Whatsapp. Facebook Groups, have competition in the form of Reddit, and Discord. The edge here will be real identities, and the tools they are building to make moderating a Facebook group profitable (subscriptions, etc) The only other pure "Real Identity social network" is Linkedin is a professional network. Problems No young people use Facebook? This seems to be a US centric cliche, as Facebook is popular among all age demographics around the world. According to Pew Research 76% of people 18-24 use Facebook, only superseded by Youtube. For teens in 2018, 51% of teens used Facebook which is good in my opinion for a social network not targeted to teens like Tik Tok. I personally think the utility of Facebook kicks in after college age, but regardless if there is a problem, I think the cure can be User Acquisition through hardware. Chance of mass exodus? again, mitigated by the lock-in of hardware, but this is a concern of mine based on Facebook's reputation. 1. Privacy, there is truth to some criticism here, because Facebook's business model does depend on data collection, and in many ways is opposed to strict definitions of privacy, but much of it is also pushed by myth like "Facebook sells data". Facebook has the same business model as its advertising funded peers, but perception is what matters, and Facebook is losing the perception battle. 2. Politics, In my opinion has been half of Facebook's reputation problem. Recently Zuck said that they are trying to make Facebook less political by not recommending political groups, and lowering reach on political posts. Also, Donald Trump being gone should make the next 4 years less politically controversial. Since Facebook is in the business of advertising, and people can mostly say what they want, there's always the small chance of a #DeleteFacebook movement reaching critical mass based on these themes. Being banned in countries? Mitigated by becoming a hardware player, but this is an unlikely outcome for many reasons that my hands are too tired to elaborate on. Apple's privacy stance and iOS 14: The hit to revenue estimates I've seen are between 1%-7%, but it could also be a boost to revenue since third party signals being reduced will give the edge to whoever has the best first party signals, we'll have wait to see. This is something to watch closely, but transferring third party data into first party data by having ecommerce on the platform through initiatives like Facebooks shops, and Instagram shopping can be the cure. Also, being in control of hardware mitigates this risk Antitrust- generally not concerned Privacy as a theme that is adversarial to advertising - slightly concerned but I don't think ad funded business models are going anywhere, many people like not paying for things Might add more to this later... [link] [comments]  |
| Posted: 01 Feb 2021 05:21 AM PST |
| Tollymore Partners Q4 2020 Letter Posted: 01 Feb 2021 02:23 AM PST |
| A Strong Balance Sheet is the Best Defense Posted: 01 Feb 2021 03:54 AM PST |
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