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Tren Griffin Profile picture
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13 Feb, 4 tweets, 2 min read
1/ How many factors have changed since Buffett made this statement in 2001:
 
"The market value of all publicly traded securities as a % of the country's business--that is, as a percentage of GNP."
archive.fortune.com/magazines/fort…

Would Buffett still say that this is a useful metric?
2/ Charlie Munger: “You ask me what’s going to happen? Hell, I don’t know what’s going to happen. I regard it all as very weird. Anybody who is intelligent who is not confused doesn’t understand the situation very well. If you find it puzzling, your brain is working correctly.”
3/ "I don’t think price-book ratios, price-sales ratios — there’s no single metric that will tell you this is a great time to buy stocks or not to buy stocks. It just isn’t that easy." WB buffett.cnbc.com/video/2002/05/…

Munger: “There isn’t a single formula. There's no magic system."
4/ "You would love to have something that said if P/Es are 12 or below or some number, you buy, and if they’re 25 or above, you sell. It doesn’t work that way. It’s a more complex business than that." Buffett

"There never will be a formula that will make you rich." Munger

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More from @trengriffin

Tren Griffin Profile picture
14 Feb
1/ "You Americans measure profitability by a ratio. There’s a problem with that. No banks accept deposits denominated in ratios. The way we measure profitability is in ‘tons of money’."

Morris Chang the founder of TSMC on CREAM (Cash Rules Everyning Around Me)
2/ "Americans use the return on assets ratio if cash is scarce. But if there is actually a lot of cash, then that is causing you to economize on something that is abundant.” Morris Chang
3/ Clayton Christensen: "Reducing assets is much easier than increasing revenue. If you become a semiconductor manufacturer without any factories, the New Church of Finance gives you high marks for profitability because your RONA is wonderful." google.com/amp/s/www.dese…
Read 5 tweets
Tren Griffin Profile picture
14 Feb
1/ It's almost as if the ability to creators to sell their products directly to consumers has forced platforms to find ways to better compensate them for their work. This is a shift in the share of the profit pool that is going to creators. Wholesale transfer pricing has changed.
2/ Take the example of @jasonzweigwsj or @danprimack negotiating compensation. Their current employer knows that Jason and Dan have the ability to sell their work directly to their customers through Substack, Revue or by rolling their own. Pricing power comes from a better BATNA.
3/ A better BATNA at its core is about opportunity costs of the people involved. I co-wrote a book to help you become better negotiator and improve the quality of your relationships. This book is available to read for free, which is priced to sell. 25iq.com/wp-content/upl…
Read 6 tweets
Tren Griffin Profile picture
13 Feb
Steve Jobs in 2004: “The more we look at it, for more and more consumer devices the core technology in them is going to be software. More and more they look like software in a box." reuters.com/article/busine…
"Why is Peloton making hardware at all if software/SaaS is so valuable? The one-word answer to this question is: distribution." google.com/amp/s/25iq.com…
"Why is Facebook making hardware at all if software/SaaS is so valuable? The one-word answer to this question is: distribution." mobile.reuters.com/article/amp/id…
Read 5 tweets
Tren Griffin Profile picture
13 Feb
1/ Howard Marks: “We've never had growth potential relying on code and engineers rather than equipment. Firms have few assets and a high ratio of price-to-assets, but it's meaningless because potential profitability is not asset-based, it’s idea-based." investec.com/en_za/focus/in…
2/ "If a software company develops a desirable app or piece of software and they produce 100, it costs several million. But the next 100 costs almost nothing and the next costs almost nothing so incremental profitability is extremely high and reliance on assets is extremely low.”
3/ "It's not what you buy, it's what you pay for it. There's no reason why a fast-growing company can't be good value or why a low multiple company can't be a good investment." "Anything can be overvalued and produce a poor return or undervalued and produce a good return."
Read 7 tweets
Tren Griffin Profile picture
12 Feb
Rich Barton at Zillow is like Ted Williams hitting a baseball.

"You can name people who are richer than Rich, but you can’t name very many people who have his track record. You will find very few people in this country who have as many times created something from nothing.”
“If we’re doing things for regular folks that make their lives better and save them money and give them transparency, we’re on the side of the angels.” Rich Barton nytimes.com/2014/04/14/tec…
A few years ago I was going in for unexpected surgery and I sent an email to a few friends saying "it was nice knowing you if I don't survive." Rich had a balloons in my room to cheer me up amazingly quickly. Not only is he a great entrepreneur but he is a caring and kind person.
Read 6 tweets
Tren Griffin Profile picture
11 Feb
I'm increasingly concerned that people are sharing entertaining stories and delivering free advice on Clubhouse. How are talking heads on cable TV news expected to complete with this phenomenon? And don't get me started about the adverse impact of Clubhouse on bots and trolls.
Why would an interesting and knowledgeable person want to have a fun non-adversarial conversation with similar people in a public setting that thousands of people may find informative and entertaining?

Aren't divisive and adversarial interviews good enough for these people?
The positive public conversations happening on Clubhouse can easily spread to other platforms. Demagogues and other peddlers of divisive twaddle will unfairly be forced to compete for attention. I'm concerned that cable news ratings in may fall significantly in key demographics.
Read 6 tweets

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