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Tren Griffin Profile picture
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27 Jan, 4 tweets, 1 min read
The odds that a new AMC shareholder understands movie theater economics are .... To learn they could try my post on MoviePass which digs in. Wholesale transfer pricing power is featured.25iq.com/2017/12/30/mov…
You may have recently seen discussions of wholesale transfer pricing power in such places as Stratechery yesterday in is discussion of Substack/Revue economics.
"For the movie theater owner, generating profitability is about the sodas, popcorn, candy and any other concessions they can sell. Innovation by movie theaters tends to be focused on the snack bar".
4/ Traders start reading my 25iQ post after the market closes on move theater economics and AMC moves down down after hours?

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More from @trengriffin

Tren Griffin Profile picture
26 Jan
1/ "A short squeeze and a gamma trap..."

What could go right, wrong or not matter depending on your position? bloomberg.com/opinion/articl…
2/ "There is a feedback loop: The stock goes up, short sellers give up, they buy stock to surrender, and their buying pushes the stock up more."

Benefits from randomness (increased potential for upside in the presence of fluctuations) = convex.

Harmed by randomness = concave.
3/ I once spent a half day walking around Seattle with Nassim Taleb talking about optionality and other ideas. It was a very interesting and enjoyable experience. It also makes for a great story, which checks the box on my test for having a great life. 25iq.com/2013/10/13/a-d…
Read 4 tweets
Tren Griffin Profile picture
24 Jan
This is an interesting picture of 143 different devices that SpaceX launched this morning as part of its SmallSat Rideshare Program. You can see the Starcraft satellites efficiently stacked at the bottom and then on top a range of other devices with various shapes and sizes.
The SpaceX Falcon 9 ride-share "included 48 Earth imaging satellites dubbed SuperDoves from Planet, 17 tiny communications satellites for Toronto-based Kepler, and 30 small satellites for the US and Europe packaged by Berlin, Germany-based Exolaunch." news.google.com/articles/CAIiE…
These Starlinks are the first launched into a polar orbit enabling coverage further north, including in polar regions. Delivered to Sun-synchronous orbit of 550 km inclined 97.59 degrees to the equator. Polar orbit missions typically go from Vandenberg, but this one was Florida.
Read 9 tweets
Tren Griffin Profile picture
23 Jan
1/ I've been though several periods when stocks rose very quickly and then "repriced down" very quickly. I didn't read about these periods in a book or papers. The best explanation that fits with my experience is Per Bak's self-organised criticality. guydcutting.com/media/SOC-Scie… Image
2/ If you want to understand more about how complex adaptive systems and self organized criticality impact markets I suggest you read this paper by Michael Mauboussin: "THE STOCK MARKET AS A COMPLEX ADAPTIVE SYSTEM." capatcolumbia.com/Articles/Maubo… The paper includes this paragraph: Image
3/ My take away from my experience during periods like this one is that they fit with Per Bak's sand pile model. What this means is: I deal with the risk of possible "swift downward repricing" via asset allocation. Rather than trying to time markets I calibrate my allocations. Image
Read 5 tweets
Tren Griffin Profile picture
20 Jan
1/ This from today reminds me of conversations I had with Bill Gurley and Benchmark partners in 1999 when I was spending a lot of time in their office. We talked about "software in a box."

"Electric vehicles are more about software than hardware." wsj.com/articles/how-v…
2/ I wrote about the "software in a box" business model in this post: 25iq.com/2018/03/10/pel… I wrote in that post:

'Some people like to say 'every business is now a technology business.' The more precisely accurate statement is “every business is a software/SaaS business.”
3/ We are still in the first inning when it comes to how software will impact value chains in business.

Charlie Munger says look for a tailwind in you career. Software is that tailwind.

Steve Jobs in 2004:

“More and more [devices] look like software in a box."
Read 6 tweets
Tren Griffin Profile picture
17 Jan
Let's say you are trying to tell a story to investors about how your business is creating value. One way to do that is to create a value metric. John Malone invented EBITDA. McCaw Cellular invented MHz/POP.

"across all categories MHz/POP was $0.942." fiercewireless.com/regulatory/c-b…
The first time people recall using the MHz/POP was when McCaw sold an equity stake to Scripps Howard in 1983. As with EBITDA, the metric was intended to indicate the business would be able to generate cash. Any real business operator knows running out of cash is unforgivable.
3/ A newspaper company invested in early cellular? a DM asks me. They still flowed a lot of cash then and invested in cable and broadcast too. Why did these companies sell or distribute their cellular and cable shares ? Because it hurt "earnings," which was idiotic then and now.
Read 5 tweets
Tren Griffin Profile picture
17 Jan
1/ Some people believe on Tuesday, the December quarter "earnings season" kicks into a higher gear.

Smart investors know this is actually the "free cash flow season" and their better investing outcomes reflect that realization.

Why the focus on earnings? People are lazy.
2/ Justifying your professional existence is hard. Early securities analysts had to find ways to convince customers they could predict which stocks would outperform others. They naturally were attracted to "earnings" due to a mental bias Charlie Munger calls "overcounting."
3/ Everyone knows the history of depreciation and why tax laws are focused on earnings. home.treasury.gov/system/files/1… The good news for everyone is that they can decide to invest based based on the metric which actually determines value (AKA, free cash flow). Differential advantage!
Read 4 tweets

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