Tweet

More from @trengriffin

Tren Griffin

@trengriffin

4 Dec

1/ What SPAC is involved in this?

2/ For people playing the at home version of this game, the SPAC brought only $16 million cash from trust to the company, while the company paid $35 million in transaction fees (-19 million net)! The the SPAC sponsor received 4.7% of the equity in the company as a welcome gift!

3/ Final clue: About 94% of the $287.5 million the SPAC raised was withdrawn by investors.

The company generated revenue of $90.1 million in the third quarter but it lost $3.6 million in that quarter.

Read 5 tweets

Tren Griffin

@trengriffin

3 Dec

1/ Charlie Munger today: "The dotcom boom was crazier on the valuations even than we have now but overall, I consider this era even crazier than the dotcom era. You have to pay a great deal for good companies and that reduces your future returns,” afr.com/markets/equity…

2/ To be clear, there are lots of things I disagree with Charlie Munger about, including certain issues related to China.

"We agree on Costco tho: “Amazon may have more to fear from Costco in terms of retailing than the reverse."

"You want companies that have high earnings on capital and have a durable competitive advantage. If they’ve got good management instead of a bad, that’s a big plus too. But the great companies of the world have been discovered. They’re very expensive to buy.” Munger

Read 5 tweets

Tren Griffin

@trengriffin

27 Nov

1/ "About three-quarters of global semiconductor production capacity sits in just four Asian locations: Taiwan, South Korea, China and Japan, according to the Semiconductor Industry Association. The U.S. represents just 13%." wsj.com/articles/more-…

2/ Exponential growth bias (EGB) is the tendency of people to perceive a growth process as linear when, in fact, it is exponential."

Demand for chips is experiencing a nonlinear increase while the world is trying to catch up. It's like trying to catch up with a moving train.

3/ As you know, "tiny balls of tin, about 30 microns wide are blasted twice by the world's most powerful carbon dioxide lasers. The first blast "gets it ready" and the second, stronger pulse turns it into a plasma which is 400,000 degrees Fahrenheit." cnbc.com/amp/2021/11/24…

Read 5 tweets

Tren Griffin

@trengriffin

27 Nov

https://twitter.com/nomad_capital/status/1464564264543346702

In a business with:

1) a positive spread between return on invested capital and cost of capital, growth adds value.

2) a negative spread between return on invested capital and cost of capital, growth destroys value.

3) at zero spread, growth has no impact.

It depends.

https://twitter.com/nomad_capital/status/1464564264543346702

"A company creates value when its investments earn a return higher than the opportunity cost of capital."

What is your opportunity cost of capital right now? If you can't write it down, you don't know what it is. The easiest person to fool is yourself.

"Corporate value = steady-state value + present value of growth opportunities (PVGO).

Note that if the return on incremental investment equals the cost of capital, the PVGO collapses to zero and
the value of the firm is simply the steady-state value." morganstanley.com/im/publication…

Read 4 tweets

Tren Griffin

@trengriffin

27 Nov

1/ Gambling includes any activity involving chance with negative net present value after fees.

In the first nine months of the year, commercial casinos generated $38.67 billion. But there are many other forms of gambling. americangaming.org/resources/aga-…

2/ "Incomplete information and factors outside of our control make all our investment choices uncertain. We evaluate what we can, figure out what we think will maximize our investment money, and execute. Deciding not to invest or not to sell a stock is a bet.” Annie Duke

The future is a probability distribution. "The expected value from any activity is the product of the gains available from doing it right multiplied by the probability of doing it right, minus the potential cost of failing in the attempt multiplied by the probability of failing.”

Read 7 tweets

Tren Griffin

@trengriffin

26 Nov

1/ “Paul Allen and myself, expecting the hobby market to expand, hired Monte Davidoff and developed Altair BASIC. Though the initial work took only two months, the three of us have spent most of the last year documenting, improving and adding features to BASIC." Altair Newsletter

2/ "Paul wrote the bootstrap loader on the plane. Everyone, including ourselves, was amazed when this BASIC worked the first time. Many MITS employees who couldn’t comprehend what to do with an Altair saw the value of the computer for the first time.”

3/ "Our primary emphasis was on a fail-safe BASIC that would always indicate user error instead of crashing or producing the wrong result. Our software was going to be put in ROM where it couldn’t be updated. Our other major worry was that our simulator might be incorrect." BG

Read 6 tweets

Share this page!

Tren Griffin

Try unrolling a thread yourself!

More from @trengriffin

Tren Griffin

Tren Griffin

Tren Griffin

Tren Griffin

Tren Griffin

Tren Griffin

Did Thread Reader help you today?

Like this author's thread?