Here are my top takeaways from the Morgan Stanley TMT conference in San Francisco this week (1/n): 🧵 👇
Stop giving advice to CEOs on how they should run their businesses. I know you think your 3 years of equity research experience at Citi gave you worldly insights into how to run a Fortune 500 technology company, but I promise you, they 💯 do not give a shit.
Stop eating the apple strudels and hit the gym, fatties. The pandemic has not been kind to some of you. Maybe you should’ve actually bought a Peloton for yourself while you were yolo-ing into the shares at $80 in 4Q.
Long thesis or seminal anti-trust paper? The incoming FTC Chair, @linamkhan, actually wrote one of the best investment analyses on Amazon I've ever read.
"loss leading pays higher returns with platform-based e-commerce than it does with brick-and-mortar stores"
"online retailers ... face the high entry barriers of a railroad coupled with the relatively low exit costs typical of brick-and-mortar retailers"
A story about govt waste and a long pitch on $LMT $NOC $RTX and $HII: While I like to joke about the F-35, this is about the Zumwalt-class destroyer program, the Navy’s cool but expensive next-gen stealth destroyer that can’t shoot, isn’t very stealthy, and doesn't float well.
US military procurement is kind of the opposite of Occam’s razor: where there’s a cheap, simple solution that’s 80% effective, we find a way to do it that’s 20% better but 1,000% more expensive. This is how our tax dollars end up in the pockets of the military industrial complex.
The Zumwalts were designed around three key features, 1) massive long-range phased array radars, 2) an Advanced Gun System firing highly accurate artillery shells called the Long-Range Land Attack Projectile (LRLAP), and 3) a stealthy hull.
Someone pointed out to me that Google has averaged 35% returns in odd years and 5% in even years. It outperforms QQQ by 12% in odd years and underperforms by -12% in even years. Why? Is there a nefarious explanation here (timing of stock grants, etc.)?
Same data in chart form:
It holds true going back to the IPO even if you exclude the IPO year and 08-09 GFC periods.
One of the greatest omnichannel transition stories that is under discussed is Brazil's Magazine Luiza, which has quietly 500-bagged ("only" 300x in USD) in 5 years since Frederico Trajano took over as CEO.
The family-owned "Magalu" was founded in 1957 with a single store selling appliances and the story progresses much like other growth retail stories through store expansion and acquisitions.
Frederico, part of the 3rd generation, was early to see the disruptive effects of the Internet on retail and helped launched the ecommerce site in 2000 when the Internet was just taking off in Brazil.