weekly link
- 09/28/2019 – How to Kill a Housing Market
New York state tightens the screws on landlords, who will respond by letting apartments go vacant. - 09/27/2019 – Despite Their Huge Upside Potential, Why Do Most Platforms Fail?
“For anyone who follows the world of business, it is now common knowledge that the most valuable firms on the planet and the first companies to surpass the trillion-dollar mark in value (albeit temporarily) are platforms,” Michael Cusumano, Annabelle Gawer and David Yoffie write in their recently published book “The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power.” In a list of more than 200 startups with valuations of $1 billion or more, they estimated that platforms made up between 60% and 70%.
What do we mean by platform? The book offers a simple definition. “Platforms, in general, connect individuals and organizations for a common purpose or to share a common resource.” Examples include Airbnb Inc., Google search and Facebook Inc.’s social network.
Platforms are all about network effects. The more products or services a platform offers, the more users it will attract, helping it then attract more offerings, which in turn brings in more users, which then makes the platform even more valuable. Moreover, the larger the network, the more data is available to customize offerings to user preferences and better match supply and demand, further increasing the platform’s value.
A platform strategy differs from a product strategy in that it relies on an external ecosystem to generate complementary innovations and/or business transactions. The potential for innovation and growth is therefore higher than what can be achieved by one company focused on products.
And yet platform companies fail at an alarming rate. The reasons are numerous. After all, startups fail all the time. But the authors found four common mistakes that lead to failures: mispricing; lack of trust with users and partners; prematurely dismissing the competition; and entering too late.
- 09/24/2019 – Pot Investors and Consumer CEOs Are on Different Trips
Global brands are unlikely to make takeover offers for cannabis companies any time soon
Global consumer companies still are watching the cannabis industry. If they do get involved, it is likely to be through small minority stakes taken by their venture-capital arms rather than multibillion-dollar takeovers. Research partnerships, as Budweiser’s owner Anheuser-Busch InBev has with Canadian pot grower Tilray , are another low-risk option.
Bullish investors may have their reasons for paying up to 13 times projected sales for shares in cannabis companies like Canopy Growth. But hopes that big brands will buy them out shouldn’t be one of them.
- 09/22/2019 – Hemp CFO’s Quest: Educate Banks, Auditors on the Benefits of CBD
John Philpott faces a host of challenges as finance chief of Vertical Wellness - 09/21/2019 – What The Fed Did Right And What The Fed Did Wrong
- 09/04/2019 – Michael Burry of ‘The Big Short’ says he has found the next market bubble
- The Big Short’s Michael Burry Explains Why Index Funds Are Like Subprime CDOs
- Explaining Dr. Burry’s Index Fund Bubble And Meltdown Prediction
- Dr. Burry compares index funds and ETFs to the CDOs that triggered the 2008 financial crisis. The risks are piling again.
- I explain the details behind Dr. Burry’s rationale. However, what is key to comprehend, is that the timing is unknown.
- I share three different investing strategies anyone (passive and active) can apply to lower your risk and hopefully increase your long-term investing rewards in this risky environment.
