1/ Operating a business in space (space-to-space) or from space (space-to-Earth) involves a "cold start" or "chicken and egg" problem.

Some business activities aren't feasible until the cost of getting to space is lower (e.g., finding new services with product market fit).
2/ The price of something like transistors, communications or access to space dropping significantly creates optionality.

Optionality is the property of asymmetric upside (preferably unlimited) with correspondingly limited downside (preferably tiny).” 25iq.com/2013/10/13/a-d…
3/ "Optionality explains why top-down centralized decisions tend to fail.” NNT

The idea that bureaucrats were going to reduce the cost of going to space is a triumph of hope over experience by some people.

What will result from low cost access is unknown and uncertain. Big Fun!
4/ When investments occur in an area like space they may create positive and negative externalities. Some negative aspects may need to be offset (carbon capture similar to offsetting the climate impact of a trans pacific flight). Positive externalities benefit other activities.

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More from @trengriffin

22 Jul
1/ Why will NFLX create its own video games?

"Netflix will license some games... Netflix's intellectual property is a key differentiating factor against other rivals in the space. The first of those [differentiating factors] is about the IP we create." google.com/amp/s/www.cnbc…
2/ For a clue about the answer read my two blog posts on Reed Hastings. The posts are free, which is priced to sell:


3/ Why is licensing sports content like licensing a video game or a movie? spglobal.com/marketintellig…

Clue: "wholesale transfer pricing" a term I learned from John Malone.
Read 4 tweets
19 Jul
1/ Why the 1990s bubbles are so hard to understand is that they were the outcome of interacting complex adaptive systems resulting in a lollapalooza:

"The key issue is you can’t really understand the whole system by simply looking at individual parts." hbr.org/2011/09/embrac…
2/ "When you see something occur in a complex adaptive system, your mind is going to create a narrative to explain what happened—even though cause and effect are not comprehensible in that kind of system. Hindsight’s a beautiful thing."

I can do this about the Internet bubble.
3/ One spark causing one phenomenon underlying the dotcom part of a lollapalooza occurred in 1993 when it was finally legal to use a business application on the Internet. This change in the law caused people like Jim Clark to invest in firms like Netscape. 25iq.com/2018/03/03/bus…
Read 7 tweets
11 Jul
1/ You find a lamp and after you rub it a genie appears and offers you one of two businesses:

1. Business A generates $10,000 in "earnings" each month;


2. Business B generates $10,000 in "free cash flow" each month?

Would you select Business A or Business B?
2/ Cash flow rather than reported earnings is what determines value for an investor. You can't spend someone's opinion that a business generated an accounting profit. Earnings are only a clue about future cash flows. That and other clues about cash flow can be misleading or not.
3/ Why do so many investors focus on earnings rather than free cash flow ?

"convenient availability, single-number simplicity, auditors provide presumed authority and a shortcut, freeing investors from the need to assess long-term cash-flow prospects." expectationsinvesting.com/pdf/earnings.p…
Read 7 tweets
5 Jul
The 1993 to 2001 period in history isn't simple to explain. I'm not guessing since I was actually there. The era involved many simultaneous phenomena interacting to create a lollapalooza. If I had to select one triggering event it was creation of the commercial internet in 1993.
The triggering phenomena that created the commercial internet in 1993 were chips appearing in devices, running software and connected by wired and wireless networks. When this happened, many new ways to create value were possible and the process of sorting that out was exuberant.
People creating new value based on chips in devices connected by networks continues today ~ thirty years later. There's still a lot of exuberance as the efforts of businesses get sorted out. What's different? Central banks did not take interest rates to zero and beyond in 2001.
Read 4 tweets
3 Jul
1/ "Our goal at SpaceX is not to go bankrupt," Elon Musk said at Mobile World Congress in Barcelona.

The most unknown and fundamental challenge with space-based businesses is economic. A survivable business model is a core element of product market fit. google.com/amp/s/amp.cnn.…
2/ There's only one geostationary orbit, and that is over the equator at 36,000 kilometers. By contrast, SpaceX satellites orbit at about 500 kilometers. Everything in space (almost) involves tread offs. Close means better propagation but it's hard to offer committed data rates.
3/ With the combination of a high minimum vertical angle to low Earth orbit satellites--to overcome blocking and signal problems with Ka or Ku bands--and the low altitude, geometry takes over, and a constellation of hundreds of satellites is required to continuously cover Earth.
Read 10 tweets
30 Jun
1/ Buffett: "We learned a long time ago that you can't make a good deal with a bad person. Just forget it. Now, if you think you can draw up a contract that, that is going to work against a bad person, they're gonna win. They probably enjoy litigation." cnbc.com/2021/06/29/cnb…
2/ Buffett: "The bad guys win. They know more games. They may lose eventually. but it's no way to spend your life."

This interview was recorded after the annual meeting in May and only really covered new ground on Archegos. I need to read it to be able to summarize it for you.
3/ I've tried to make it seem like Buffett and Munger are on Twitter through me since it's educational for some people.

Why do I do this? It just happened as I saw people misinterpret.

If you think they are going to say something new every time in every comment, get serious.
Read 6 tweets

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