Grab a cup of coffee, in this thread I will explain
1. What are Porter's 5 Forces? 2. How to use them while analyzing a business? 3. What information can they tell you about a business
We will be analyzing Divis Labs as an example.
Lets dive right in.
Michael Porter, is a business and economics professor at Harvard Business School. He is the author of more than 20 best sellers, all written on the topics of competitive advantage, his expertise.
He is most famous for his work on 5 force model which was first published in 1979.
Porter's 5 Force model is used to identify competitive advantages a company has amongst its peers and in an industry it operates in.
A simple 5 point analysis can help anyone determine whether a company enjoys certain advantages that its peers do not have.
Grab a cup of coffee, in this thread I will explain
1. What is Proxy Investing? 2. How to apply it? 3. What are the benefits of Proxy Investing?
Thread includes examples of few famous proxies from history.
Lets dive right in.
The famous example of proxy investing always quoted is the California Gold Rush
In 1848, approximately 300,000 people migrated to California from various parts of the US to dig for gold
The news was, Cali was rich in gold and almost everyone who was digging was able to find it.
This sudden influx of migrants digging for gold meant demand for certain commodities went through the roof.
These commodities included
- Daily Ration
- Picks and Shovels
- Denims
Yes, Denims!
Denim is a hardened material, originally developed for miners and doesn't tear easy.