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Departing Bernstein analyst's thoughts on investing in tech:

"There is a misguided obsession in many tech circles around predicting the future of technology. In contrast, I would posit that predicting the future is actually pretty easy - the hard part is making any money on it."
"In short, predicting the future of technology is easy: just look at what's already failed, and assume that somebody will eventually make a version that actually works."
"In the tech sector, linear extrapolation is a fools' errand because outcomes follow a power law distribution...

...when a technology really takes off, it really, really takes off - success in the tech industry is oftentimes mean-repelling rather than mean-reverting..."
inbound controversial opinion:

"What's the takeaway for investors here? Your entry and exit multiples matter"
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modest proposal
@modestproposal1
Concentration is the essence of an escalating euphoria. By late-stage cycles, many buyers are fixating on “winners” with the purchase motive being further stock gains, rather than any logic of long-term value.
Thus, as the market soars, attention is increasingly focused on those with the largest earnings and stock price gains, and interest in the B players falls away. (This concentration effect naturally favors larger companies, perhaps because they can better absorb a rising demand.)
The second principle is the outperformance of quality and low beta stocks in a rapidly-rising market. This is clearly odd behavior and is very rare, restricted as far as I can tell to some, but not all, late-stage bull markets.
Read 8 tweets
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modest proposal
@modestproposal1
Porch is going public via a SPAC, and I was intrigued. Vertical software to the home services industry sounds great.

But this is one of the most deceptive presentations I've ever seen, and the SEC should absolutely take a look.

This slide is insane:
"Recurring" vs "Reoccurring"
With the punchline out of the way, let's look at the whole presentation.

"Vertical software platform for the home". Sounds great!
Hmm, the first sign something may be up.

"Vertical Software Platform Reoccurring B2B2c Transaction Revenue"

Do you like SAAS? Do you like Marketplace? What if both!
Read 8 tweets
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modest proposal
@modestproposal1
"Our business model is predicated on behavioral economics"

this is like a parody
"For example, our user base is made up primarily of renters and we have very few instances of those renters becoming homeowners, a key element of our business model. It is also difficult for us to track that data."

that seems like an important also
"By leveraging technology, data, artificial intelligence, contemporary design and behavioral economics, we believe we are making insurance more delightful, more affordable, more precise, and more socially impactful"
=
"We somehow do not believe we are selling a commodity product"
Read 9 tweets

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