Monthly Archives: July 2013

Links of Interest – July 26, 2013

Links of Interest – July 19, 2013

Notes from Philippe Laffont, founder of Coatue Capital Management on Bloomberg

  • tries to find companies that will be cheap based on earnings in five years
  • many cheap tech companies are cheap for a reason
  • Google looked expensive in 2004 but was trading for 2x 2013 earnings
  • tech stocks are historically cheap (March 4, 2013)
  • in tech investing it is important to look for new trends
  • there are many tech trends today and they are not dependent on the economy
  • Apple is cheap by any measure
  • the key is to think about what would get Apple to $800/sh.
  • believes Apple to needs to go on offense; believes this will happen
  • Apple’s use of cash will help determine value
  • Apple could benefit by acquiring companies with new ideas and talent
  • Apple is very open to listening to shareholders
  • Contrarian bets in tech sector can become value traps
  • Google is an infrastructure play on eCommerce
  • Google’s margin of safety is that it is trading for 5x future earnings (5-7 years)
  • Apple, Google and Samsung are the top tech companies
  • they are looking for short candidates among companies that will be negatively impacted by the paperless office
  • the desktop food chain will be hit be developments in tablets
  • he likes the storage theme, for example, being able to retrieve files ubiquitously in the cloud
  • took a pass on Yahoo because he can not value the U.S. business
  • Samsung and Twitter are candidates to be great tech companies
  • Twitter is hard to value: huge strategic value but little revenue
  • The are investing in video content. Smart phones will lead greater consumption of video and more ways for content companies to monetize their libraries.
  • Sometimes these new trends are uncovered from insights based on a few words from industry leaders. Jeffrey Katezenberg recently said that in the future we will pay for content by the “square inch”.
  • This may mean that in the future users may pay $.50 for watching a movie on a smart phone, $1.00 on a tablet, $5 on the TV etc. which could lead to large new markets and ways to monetize content.
  • It is very hard to make content. There are a handful of these companies in the U.S. and they excel at making content.
  • He likes Time Warner, CBS and News Corp.

Original Interview

Value Investing, the Sanjay Bakshi Way | Safal Niveshak

Safal Niveshak: Value investing requires a great deal of research, discipline, and
patience. What do you suggest an investor just starting out could do to practice
these habits to ingrain them in his/her investing mindset? How easy or difficult
were these and other relevant habits for you to form in your early years as a value

Prof. Bakshi: One of my role models is Charlie Munger who often talks about the idea
of “inversion” like the man who wanted to know where he was going to die so he never
went there. So, I’m going to use the same trick by inverting your question. Let me focus
on not what an investor who’s just starting out should do, but on what he must avoid

Don’t ask the barber, you need a haircut

So, my first advice to investors who are just starting out is that they must avoid listening
to intermediaries, whose interests are not aligned to their own interests.

You’re really on your own out there. Warren Buffett’s office table has a framed
quotation: “A fool and his money are soon invited everywhere.”

People who invested in the Reliance Power IPO or the Facebook IPO would know what
that means.

(continue reading)