Okta and Base Rates

Any student of psychology knows the famous “Librarian and the Farmer” question posed by Daniel Kahneman in Thinking Fast and Slow. “As you consider the next question, please assume that Steve was selected at random from a representative sample. An individual has been described by a neighbor as follows: ‘Steve is very shy and withdrawn, …

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Bond Markets and Electronic Trading [MKTX and TW]

“The Fox knows many things, but the Hedgehog knows one big thing.”  Greek poet Archilochus  A Market Stuck in the Past  This quote aptly describes the differing strategies of MarketAxess and TradeWeb, which IPO’d last year. TradeWeb is the fox and MarketAxess is the Hedgehog. At their core, these companies are trading platforms, much like MSCI and SPGI. …

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Interview: Call with AutoNation IR [AN]

AutoNation is one of those surprisingly resilient companies that isn’t talked about enough. It was founded in 1996 by none other than Wayne Huizenga. Prior to AutoNation, he founded Waste Management and was instrumental in its astronomical growth. Prior to Waste Management, he co-owned Blockbuster Video back when it was one of the best performing …

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The Evolution of the Data Center [CSCO, ANET]

“Gilfoyle: The software you wrote just shit the bed, no surprise.  Dinesh: My software’s fine – it’s just running on your shit hardware!”  Silicon Valley  Issues with Old Hardware  Silicon Valley is meant to be a satirical show, but this perpetual tug-of-war between software and hardware certainly exists. Over the past few decades, the ability …

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The Naspers Ecosystem, Part 3: Payments

Back in 2014, Naspers combined all of its payments investments into one company, PayU, which currently represents the whole Payments vertical. As a result, PayU presents itself as an emerging markets payments solution with operations in 18 of the 20 fastest growing markets. The crown jewel of this portfolio is the Indian segment, which makes …

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The Naspers Ecosystem, Part 2: Food Delivery

The Food Delivery business is Naspers’ biggest loss-making venture. Naspers’ exposure extends to its stakes in Delivery Hero [$1.3bn invested to date; ~22% ownership], Swiggy [$837m invested to date; ~39% ownership] and iFood [$400m invested to date; ~55% ownership]. Delivery Hero is a European publicly traded company with operations in across the world. Swiggy is …

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The Naspers Ecosystem, Part 1: Classifieds

The general narrative around Naspers slices the company into two pieces: its Tencent stake and “other businesses”. Through either prodigious foresight or sheer luck, Naspers go into Tencent on the ground floor, investing ~$30m for 35% of the company in its infancy. Since then, Naspers has sold a portion of this investment, but its current …

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Interview with Carriage Services CFO/Head of IR

This is the first of what will hopefully be many interviews that I regularly conduct to supplement my research. Writing is a big part of my investment process and I’ve found that writing these memos has allowed me to take away much more than simply having a one-hour phone conversation. The obvious next step was …

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Issues Analyzing Companies From the Outside [XPO Logistics]

Think of this post as an extension of the fragmented XPO discussion we’ve been having across various posts. I’m not going to provide a background on the industry or anything since I have covered that in previous posts. To get you up to speed, find Part 1 of my post on Trucking here and Part …

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Mid-Year Review [July 2020]

I hesitated before deciding to write mid-year review of some of the companies I talked about because I do not want this blog to be seen as a place to receive stock tips or buy/sell recommendations. Rather, I consider this blog as a real-time journey into my research process. Sometimes I encounter a really great …

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