“Fearful when others are greedy and greedy when others are fearful.” – Warren Buffet
The last week has been an interesting view on my own psychology, on how all the best-made plans aren’t worth anything if you don’t have conviction and resolve. Fintwit talked about keeping a trading diary and here is my attempt to keep myself intellectually honest!
I am not a trader. I strongly believe that on a really long term horizon stocks will outperform every asset class. I also believe that the best opportunity to purchase assets is when everyone else is scared. In my lifetime I’ve seen two recessions – dotcom and GFC. I had just started my career during the dotcom boom and didn’t know anything and right before the GFC, we bought a house (great timing right :). So never had any cash to capitalize on the downswings in markets. I’d always thought that in the next downswing, I will be prepared and buy in-size!Read More »
Warning: Stream of consciousness follows! This week has been wild in the markets and I wanted to put my thoughts on paper and #timestamp my thinking. Standard disclaimer applies; none of this should be taken as investment advice!
RIP good times again?
Sequoia published version 2.0 of its RIP good times memo, catchily titled Coronavirus black swan of 2020. Taleb is furiously deadlifting somewhere right now 🙂 What was public stock performance since RIP good times? Looking back it looks like the S&P ripped up since its publication in October ’08. Is this the ultimate contrarian indicator? Are VC’s the last group to point at markets crashing? Is it all upside from here?Read More »
A16z’s Angela Strange has a very correct take on where financial services are heading. In the future, every company will need to offer financial services in order to compete. Complete vertical integration from click to purchase reduces the most friction for the user, which leads to the best customer experience which leads to a competitive edge. For companies, this is a source of extra high margin that can offset their low margin core business. It also makes the users more sticky – why go anywhere else? I recommend watching the entire presentation in full, very spot on where fintech is headed!
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For the last post in 2019, I wanted to look back at this blogging experiment that I’ve been running. The initial impetus for the blog was to use it as a mechanism to get better at writing. I’ve found writing to be a great method to figure out If I truly understand something. As with everything practice makes perfect and blogging is how I practice!
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In the last post, I highlighted that SMB’s are mostly a long tail business with a majority of the market at the smaller end of the spectrum. An insight that I did not appreciate going into this market is the amount of sensitivity to price. The statement that “There are three things that are most important in SMB, price, price and price” is 100% true! With most small businesses being small and not really in it to grow this price sensitivity makes a ton of sense. So if you are a startup in this space you come across an interesting squeeze.Read More »
Small Business is the biggest market in the US and this is the best place to start a company in
This is an oft-repeated quote in many pitch decks, sorry to inform you, dear reader, it depends. After spending a decade in the SMB space, I’ve learned a few things – what follows is an attempt to describe some myths and mistakes. Hopefully, you don’t fall into the same traps!
Myth #1: SMB market is huge in the US and is underserved. This represents a big opportunity
The huge number everybody trots out is ~30M small business in the USA, the engine of growth, big big market, main street America – AMURIKA YEAAAAAH. Alas in practical terms this is a long tail market. This data set from the SUSB is the best place to start. Just by looking at the distribution of firms by employee size it is clear that this is a long tail market. There are a large number of firms that are <10 employees.Read More »