Some Links

The usual brilliant post from Morgan Housel on 3 character traits that are bad for investors

Undervalued Shares has discovered the “Amazon of Iran” disguised as Swedish stock

Good Investing with a very interesting interview with the CEO of Naked Wines

Profit Hunting with a write-up of SNAM, the Italian natural gas network

The case against food delivery platforms (h/t SL)

Food for my new “passion”: A very good Biotech reading list from A16Z (scroll down)

Interestingly, Tesla is not accounting its Bitcoins as “money” or currency

4 comments

  • Biotech is a strange place for the fundamental analyst. In my ongoing stock screening project, I created a screen that looked for Biotechs with poor financials, low levels of cash, etc. – and was surprised to find that these stocks actually performed incredibly well! I reasoned that biotech is not about financials but more about whether there are investors (there are many) willing to add more cash to keep these companies afloat. I share this to point out the quirkiness of the space when it comes to fundamentals. Cheers!

    • Indeed, for a stock screener, early stage Biotech companies might be too hard. To me it looks that Biotech companies have much more in common with special situations, i.e. you need to get the probabilities of the main possible scenarios right. Seth Klarman for instance is considered a fundamental investor but has invested for a long time into Biotech. So it is not impossible.

  • beno,

    thanks for the summary. The post makes some points but forgets one very important thing: The (lazy) end customer. Most vendors don’t like platforms (Amazon marketplace, Apple App store, AirBnB/Bookinge etc), however, they still exist and are even getting stronger. Why? Because end users like the convenience of having everything in one place and they are a marketing channel.

    Of course, would restaurants prefer that customers order directly with them and cutting out the platform but most customers (myself included) don’t like to order all the time with the same restaurant. People want choice and convenience, i.i. not ordering via 10 different websites with 10 different interfaces and 10 different payment methods.

    The disruptors have the same issue as the restaurants themselves: How to get a lot of customers onto the platform? That requires marketing spent etc. So let’s see but I don’t think that they can reinvent the wheel without incurring the cost and charging a significant platform fee.

    However, there will clearly be some bumps in the road for the established players as the barrier to entry on the vendor/restaurant side s not so high.

  • Thanks for sharing the case against food delivery platforms.

    So to summarize his views:

    – independent restaurants do not profit economically from Uber, DoorDash etc due to high take rates and the shift of existing customers to third party food delivery platforms
    – large chains either neglect (i.e. Chipotle) or demand favorable terms to participate at food delivery platforms
    – delivery workers demand better terms and pressure from regulation might increase going forward
    – fierce competition within the food delivery platform’s industry due to high amounts of investor capital
    – disruptors have entered the industry offering independent restaurants a way out of paying continously high take rates to food delivery platforms

    I think the last point is really what makes me nervous about an investment here. Could it be the case that online food marketplaces in the current state are simply an interim solution for a brief period of time?

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