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, 3 tweets, 1 min read
1/ "To perform present value analysis, you must predict the future, yet the future is not reliably predictable.” “A perfect business in terms of the simplicity of valuation would be an annuity. Real businesses, even the best ones, are unfortunately not annuities.” Seth Klarman
2/ "I keep going back to what Charlie Munger said to me, which is none of this is easy, and anybody who thinks it is easy is stupid. It is just not easy. There are many layers to this, and you just have to think well.” Howard Marks
3/ People like John Malone, Craig McCaw, Jeff Bezos and Jim Sinegal discovered that you can "think different" and find quasi annuities and grow value in ways that others didn't yet know about. They had analytical, behavioral and informational edges over other entrepreneurs.
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More from @trengriffin see all

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Tren Griffin
@trengriffin
Whenever you read or hear the phrase "losing money" you should ask yourself: what does this person mean?

1. GAAP earnings?
2. Cash flow?
3. Unit economics?

The phrase is so unspecific that it should not be used unless money in physical form is lost.

cnbc.com/2019/10/17/air…
"investors have grown wary of cash-burning companies"

Is Airbnb really "burning cash" given:

"Airbnb has over $3B in cash on its balance sheet as of Thursday [and] also has a $1B line of credit that it hasn’t used."

Revenue isn't profit, isn't cash flow, isn't GAAP earnings!
Airbnb could be cash flow positive and yet have a GAAP loss. Or not.

Airbnb could have positive unit economics and yet have a GAAP loss. Or not.

It depends. The only thing known for sure is that the phrase "losing money" has negative value. Avoid and be wary when it is used.
Read 13 tweets
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Tren Griffin
@trengriffin
An operator that stops reselling content is free from the "wholesale transfer pricing power" (see my previous tweetstorm) of content owners and can instead focus on service differentiation at the network function level (encryption, security, network acceleration and other CNFs).
25iQuiz: Why would the significant size of cable operators referred to by John Malone years ago no longer be enough to offset wholesale transfer pricing power of content owners? What changed? google.com/amp/s/25iq.com… Being an OTT provider requires direct customer relationships.
25iQuiz Extra Credit Question:

Is investing in network services within your circle of competence if you don't know what these terms mean? How technical must you be to be in your circle of competence in this case?

Bare metal?
K8s?
VRAN?
SDN?
gNB?
MIMO?
Fronthaul?
Top of Rack?
Read 3 tweets
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Tren Griffin
@trengriffin
"Recent research suggests that current official statistics may understate productivity growth by missing a significant part of the growing value we derive from fast internet connections and smartphones." Jerome Powell October 08, 2019 federalreserve.gov/newsevents/spe…
I agree. And what about open source and imbedded software and non final goods? And exports? If they aren't part of "productivity," then what exactly are they? brookings.edu/wp-content/upl…
GPS handsets were once expensive (e.g., $1,000 plus). GPS is now in virtually all if not all smartphones. GPS in smartphones isn't part of GDP now because the price is zero. If GPS capability in a smartphone isn't part of productivity, then what is it?
Read 3 tweets

Related threads

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Gwen Snyder is uncivil
@gwensnyderPHL
Let's be clear.

Saying I think Nate Silver-style liberal hot take polling stat "science" is largely opinion disguised as science doesn't mean I don't understand stats or their utility.

But stats are only as useful as 1) the methodology they're based on, & 2) their interpreter.
Beltway types and their orbiters (like the NYT op-ed crowd) act like polling is magical science alchemy.

The reality is, the displacement of landlines with cell phones have made it almost impossible for pollers to do anything approaching accurate population sampling.
Even if they *could* do accurate sampling, policy opinion polls (and Silver cites a loooot of policy opinion polls) are often conducted in ways that promote extreme bias towards the status quo, because they're usually commissioned by establishment politicians & orgs.
Read 14 tweets
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Toby Nangle
@toby_n
I see Michael Johnson is calling for putting present value of State pension in WGA again brightblue.org.uk/tackling-inter…
I can see the point of this if your ambition is to a) cut the State pension; b) do something else with the result.
I can’t see an argument right now in his doc for (b).
Read 5 tweets
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Nick Hotz
@thisiswhyimhotz
With the same reasoning as a DCF stock valuation model, you can use a discount rate in this model to calculate a valuation at any point in time. Instead of using dividends, one uses transaction fundamentals.

I present the DTF 😏(Discounted Transaction Fundamentals) model.
2/ The dividend discount model (DDM) values a stock as the present value of future dividends.

Vo = Dt/(1+r)^t
3/ Applying the same logic, you can value a (crypto)currency as the present value of velocity and supply-adjusted future transactions.
Read 12 tweets
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Paul Kelleher
@kelleher_
A rather long thread about newly minted Nobel laureate Bill Nordhaus’s “debate” with Nicholas Stern over the vexed issue of discounting. tl;dr: Though very different from one another, I don’t think their views on discounting are inconsistent.
As Robert Nozick wrote of his rival John Rawls's landmark book _A Theory of Justice_, "Political philosophers now must either work within Rawls' theory or explain why not." The same goes for Nordhaus and his pioneering work in climate economics.
For example, Nicholas Stern & Simon Dietz wrote in 2015: "‘To slow or not to slow’ by Nordhaus is a landmark in econ research. As the first analysis of the costs and benefits of policies to abate greenhouse gas emissions, it opened the profession to a new field of application.”
Read 53 tweets
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Julian Gough
@juliangough
"For now, few experts think that a broader crisis is imminent."

Well, I think a broader crisis is imminent. Let me put that on the record: We will have a worse global financial crisis than 2008, starting within the year. Let's see who's right.

washingtonpost.com/business/econo…
This is just irritating.

"Authorities in the United States and Europe took steps after the 2008 crisis to avoid a repeat episode."

No, they took steps that guaranteed a repeat episode. They tried to solve the problem at the wrong level.
The problem is that the main economic theory that all the authorities' actions are based on (general equilibrium theory), is wrong in its fundamental assumption. (Spoiler alert: it's that "equilibrium" bit.)

So it keeps being startled by crises it causes.
en.wikipedia.org/wiki/General_e…
Read 41 tweets
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Mr. Azam
@mrazamtweet
#b 'Teknik menjawab' is not a series of rituals that you carry out to secure an A in the exam. You don't get guaranteed an A just through superficial actions like highlighting keywords or drawing meniscus or inserting isi tersirat.
The problem is students and teachers treat teknik menjawab as some sort of pseudo magical ritualistic gestures that will bring a certain outcome. Draw a pentagram, slaughter a chicken, and your wish will be granted.
Some remote Pacific Islanders in 1940s came in contact with Allied and Japanese soldiers who were more technologically advanced and thought the soldiers were gods who had many "cargo" (canned food, electronics, modern stuff)
Read 11 tweets

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