The age of data monopolies
About a decade ago, was an investor to ask, “What are the best businesses? The ones nearly immune to competition?” the most robust options on the market were arguably two-way network-effect businesses.
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Stroke of the pen risk
The risk that a change in the rules governing an industry could impair an institution's financial performance—more casually known as “stroke of the pen risk,”—is something that all companies are exposed to in varying degrees.
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Don’t ignore the dragon
We must not ignore the dragons in our lives or they will grow bigger and bigger, until they are destabilizing. Acknowledging your dragons is necessary to keep them kitten-sized.
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The anatomy of trust
For investors, trust is an especially fascinating topic. It’s often a factor within the investment thesis since it relates to management teams. And yet, how should we consider “trust” in the context of management teams? How much trust is really enough to invest with someone? And is it ever prudent to fully trust a management team?
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Peanut butter (or why to expect the improbable)
Would you rather give up your favourite food for the rest of your life or wake up every day with a 5% chance of being completely covered in peanut butter?
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Argentina’s 100 year “Houdini” bond
Reminiscent of master escape artist Harry Houdini—who made a small fortune performing upside down and bound in heavily shackled circumstances—Argentina issued a $2.75 billion century bond in U.S. dollars at an interest rate of 7.125%.1 This means that the Argentinian government doesn’t have to pay investors back until the year 2117.
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Are all New Zealanders male and vegetarian?
In our experience, it is useful to have a checklist to question the validity of statistics. We find checklists to be powerful tools in our research process—especially in our forensic accounting and risk work—and they are no less potent here. And one of the simplest first “checks” when it comes to evaluating a stat is what I will call the New Zealand vegetarian problem.
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Bayes for days: What to do with signal
We need to ask: what is the best way to deal with new information? Fortunately, there is a tool that can help us with this problem: Bayes’ Theorem.
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Skydiving in a squirrel suit: Understanding the risks of NVCC bonds
Since 2010, there has been growth in a certain breed of bond in debt markets. This bond has a unique risk profile: it is a bond until a crisis scenario is triggered and then it turns into equity. If that sounds unappealing to you, we wouldn’t blame you.
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Scuttlebutt
Not everybody does it, but for long-term investors, the edge scuttlebutt provides is worth the time and effort.
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Galapagos Island risk
Complacency is often overcome, not by desire, but by necessity. In the case of business, a little competition is often exactly what we need to encourage improvement.
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Not your typical trading desk
Our traders share the benefits, realities, and misconceptions regarding what they do.
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The age of data monopolies
About a decade ago, was an investor to ask, “What are the best businesses? The ones nearly immune to competition?” the most robust options on the market were arguably two-way network-effect businesses.
August 30, 2017
-
Stroke of the pen risk
The risk that a change in the rules governing an industry could impair an institution's financial performance—more casually known as “stroke of the pen risk,”—is something that all companies are exposed to in varying degrees.
August 23, 2017
-
Don’t ignore the dragon
We must not ignore the dragons in our lives or they will grow bigger and bigger, until they are destabilizing. Acknowledging your dragons is necessary to keep them kitten-sized.
August 16, 2017
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The anatomy of trust
For investors, trust is an especially fascinating topic. It’s often a factor within the investment thesis since it relates to management teams. And yet, how should we consider “trust” in the context of management teams? How much trust is really enough to invest with someone? And is it ever prudent to fully trust a management team?
August 9, 2017
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Peanut butter (or why to expect the improbable)
Would you rather give up your favourite food for the rest of your life or wake up every day with a 5% chance of being completely covered in peanut butter?
July 26, 2017
-
Argentina’s 100 year “Houdini” bond
Reminiscent of master escape artist Harry Houdini—who made a small fortune performing upside down and bound in heavily shackled circumstances—Argentina issued a $2.75 billion century bond in U.S. dollars at an interest rate of 7.125%.1 This means that the Argentinian government doesn’t have to pay investors back until the year 2117.
July 19, 2017
-
Are all New Zealanders male and vegetarian?
In our experience, it is useful to have a checklist to question the validity of statistics. We find checklists to be powerful tools in our research process—especially in our forensic accounting and risk work—and they are no less potent here. And one of the simplest first “checks” when it comes to evaluating a stat is what I will call the New Zealand vegetarian problem.
June 28, 2017
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Bayes for days: What to do with signal
We need to ask: what is the best way to deal with new information? Fortunately, there is a tool that can help us with this problem: Bayes’ Theorem.
June 21, 2017
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Skydiving in a squirrel suit: Understanding the risks of NVCC bonds
Since 2010, there has been growth in a certain breed of bond in debt markets. This bond has a unique risk profile: it is a bond until a crisis scenario is triggered and then it turns into equity. If that sounds unappealing to you, we wouldn’t blame you.
June 14, 2017
-
Scuttlebutt
Not everybody does it, but for long-term investors, the edge scuttlebutt provides is worth the time and effort.
June 7, 2017
-
Galapagos Island risk
Complacency is often overcome, not by desire, but by necessity. In the case of business, a little competition is often exactly what we need to encourage improvement.
May 25, 2017
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Not your typical trading desk
Our traders share the benefits, realities, and misconceptions regarding what they do.
May 17, 2017
