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If you haven’t read Measuring the Moat by @mjmauboussin you should read Measuring the Moat csinvesting.org/wp-content/upl…
And: “You should not view the calculation of ROIC as an academic exercise. The goal is to understand the magnitude and sustainability of ROICs in excess of the cost of capital. Companies with large excess returns generally have some competitive advantage.” research-doc.credit-suisse.com/docView?langua…
And definitely this:
“Capital allocation is a senior management team’s most fundamental responsibility. The problem is that many CEOs don’t know how to allocate capital effectively. The objective of capital allocation is to build long-term value per share”
research-doc.credit-suisse.com/docView?langua…
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More from @modestproposal1 see all

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modest proposal
@modestproposal1
"likely to see more sports on ABC" = we are gonna win NFL rights for ABC
Keeps talking about sports on multiple platforms. They want Sunday Ticket as well for ESPN+.

Read 3 tweets
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modest proposal
@modestproposal1
The CFO of MTCH historically uses Q3 to talk down the next year's margin to give themselves room to invest in the biz.

He has tried to do it every year, but couldn't in 2017, because Gold was ramping so hard that it was nonsensical to even try.

Here's 2016's effort:
Here's his half hearted effort in 2017, where he's like regulatory costs blah blah blah but there's no way to outrun the fact that Tinder Gold is 2x the ARPU of Tinder Plus
And here's 2018's effort where he talks about investments in Hinge, regulatory and compliance costs.
Read 5 tweets
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modest proposal
@modestproposal1
What are the best materials you've read on consumer loyalty programs?

What are the most successful ones and why? (Starbucks, Ulta, Hotels.com, etc)

What companies have tried and failed? Lessons?

Any lessons on free vs paid programs?

All materials/ideas welcome!
Very interested in loyalty program tradeoffs e.g.

- friction caused by paid for programs vs value of "commitment bias"

- increase/decrease in LTVs from cost of discounting to best customers vs improving frequency and/or lower cost of maintenance marketing
Do programs that reward consumers with free vs discounted have different outcomes?

Difference in outcomes for loyalty programs in high frequency / low AOV relationships vs low frequency / high AOV?
Read 4 tweets

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Tren Griffin
@trengriffin
1/ "Competitive advantage period (CAP) is the time during which a company is expected to generate returns on incremental investment that exceed its cost of capital." "Competitive forces will drive returns down to the cost of capital over time" Mauboussin people.stern.nyu.edu/adamodar/pdfil…
2/ "CAPs are set at the margin … if an implied CAP is “too short” (too long) for the shares of a given company, astute investors will purchase (sell) those shares in an attempt to generate excess returns. CAPs are rarely static, and are usually expanding or shrinking..." MM
3/ "CAP attempts to capture the period a company can invest at returns in excess of the cost of capital. The terminal value is calculated with a residual technique (NOPAT/ WACC). With that set, stretch the number of years of assumed value creation to match the stock price." MM
Read 14 tweets
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Tren Griffin
@trengriffin
1/ Michael Mauboussin: “A beautiful thing about expectations investing is it actually reverse engineers the process. … implied from the market price [are] the expectations for a business.” acquirersmultiple.com/2019/10/the-3-…
2/ “One thing we know for sure is the price. You then basically are asking a simple question: what has to happen for this price to make sense? Can I do a good job, or a reasonable job, of trying to understand the consensus expectations that are built into this price?"
3/ "Sales growth rates, operating profit margins, capital intensity, and understanding what has to happen for that price to make sense. You’re making an over-under judgment rather than saying, ‘I have a laser precision as to what I think the thing is worth.’” To be continued...
Read 23 tweets
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Tren Griffin
@trengriffin
1/ This is your periodic reminder that if you have not read these Charlie Munger speeches, you are a damn fool.

I have read these speech transcripts many times, both as a reminder of what I already should know and because I discover new ideas as I experience more of life.
2/ A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business, USC 1994 fs.blog/2015/09/munger…

The Psychology of Human Misjudgement, Harvard 1995 fs.blog/2013/02/the-ps…
3/ Investment Practices of Leading Charitable Foundations. 1998 valuewalk.com/wp-content/upl…

Academic Economics: Strengths and Faults After Considering Interdisciplinary Needs (UCSB) 2003 csinvesting.org/wp-content/upl…

USC Law School Commencement Speech 2007 genius.com/Charlie-munger…
Read 4 tweets
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Issue One
@IssueOneReform
NEW: Candidates, political parties, super PACs, and #darkmoney orgs routinely spend billions of dollars to secure power in the political system. But the @FEC fails to ensure they don’t break our election laws. Our new report looks at why it doesn't work: issueone.org/busted-broke-w…
@FEC The @FEC lacks the budget, staff, and teeth it needs to enforce the country’s campaign finance laws as the 2020 elections unfold
@FEC While it is common knowledge that the FEC gridlocks frequently, it is less known that the agency is severely understaffed and underfunded. The lack of resources is crippling the enforcement of existing election and anti-corruption laws.
Read 17 tweets
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Tren Griffin
@trengriffin
What? You have never read the talk Charlie Munger gave at Harvard-Westlake School on January 19, 2010? Seriously? csinvesting.org/wp-content/upl…
"The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best [spouse] you can find that will have you. The rest of life is the same damn way." Charlie Munger
"Upton Sinclair said, ‘It is very hard to get a man to believe non-X when his way of making a living requires him to believe X.’ On a subconscious level, your brain plays tricks on you and you think [that] what is good for the true little me is what you should believe." CM
Read 4 tweets
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Tren Griffin
@trengriffin
Charlie Munger Trilogy: A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business, USC 1994. old.ycombinator.com/munger.html The Psychology of Human Misjudgement, Harvard 1995 …ffettmungerwisdom.files.wordpress.com/2013/01/munger… USC Commencement Speech, 2007 google.com/amp/s/genius.c…
Charlie Munger's second trilogy:

Harvard Westlake School 2010 csinvesting.org/wp-content/upl…

Investment Practices of Leading Charitable Foundations. 1998 valuewalk.com/wp-content/upl…

Academic Economics fs.blog/2015/03/charli… UCSB 2003
What? You want to read more from Munger?

Dueling views of reform
sfgate.com/business/netwo…

Stanford: law.stanford.edu/stanford-lawye…

The Best of Charlie Munger: 1994-2011
valueplays.net/wp-content/upl…
Read 4 tweets

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