“Duke economist Mike Munger calls these three types of transaction costs triangulation, how hard it is to find and measure the quality of a service; transfer, how hard it is to bargain and agree on a contract for the good or service; and trust, whether the counterparty is trustworthy or you have recourse if they aren’t.”Markets are Eating the World, Taylor Pearson “There are hundreds of thousands of complete SARS-CoV-2 genomes available and this number increases every day.
Perhaps there many ways to compare the best and I attempted to build on Kai Wu / Sparkline Capital’s analysis on the human side of disruption.
In the past few years, I’ve come around to this mental model that the economic value of tech businesses are not easily calculated when looking just at public financial reports/filings (10k, 10q, annual reports etc.) at face value.
“”For capital to be truly [inflation] indexed, return on equity must rise, i.e., business earnings consistently must increase in proportion to the increase in the price level without any need for the business to add to capital – including working capital – employed. (Increased earnings produced by increased investment don’t count.) Only a few businesses come close to exhibiting this ability.
“The world is full of obvious things which nobody by any chance ever observes.”Sherlock Holmes in The Hound of the Baskervilles, Conan Doyle Maybe it’s signalling, maybe it’s marketing, maybe it’s self-selection, but I have long found fascinating what the greatest investors look when making investment decisions.
“One thing I find particularly interesting is that TOI [Topicus.com] is about the size of CSU [Constellation Software] in 2010.