What I learnt in Jan 2018

Modern Monopolies (https://www.amazon.com/Modern-Monopolies-Dominate-Century-Economy/dp/1250091896)

The one thing i learn from this book is that platform is the new age biz model.  The old capital intensive vertical supply chain biz model is now challenged by platform model.  A biz model that can cut down on transaction cost and connect the producer and the end user will thrive.  The author gave many examples on how to be successful as a platform, as well as many examples on failure.  Bottom line, getting to that critical mass, and being able to encourage good behaviour on the platform are key to success.  Come to think about it, old economy company can be a platform as well, BRK is a platform to some extent.  CPG companies like Unilever is becoming more like a incubation platform for emerging brands.

Good Stocks Cheap (https://www.amazon.com/Good-Stocks-Cheap-Confidence-Outperformance/dp/B073W3589D/ref=sr_1_1?s=books&ie=UTF8&qid=1517986837&sr=1-1&keywords=good+stocks+cheap)

Nothing ground breaking.  The author is a Stanford professor.  The book offers assessment frameworks from industry to company strategy to valuation to Psychology. It was a referral from the Safal value newsletter.  

Chasing Subprime Credit - How China's Fintech Sector is Thriving - Joe Zhang

Got a better understanding on the issue and how small lenders make money.  the authors also argues that this sector helped china banking system to avoid the subprime issue and in a way, why the high debt and shadow banking issues in china may not be such a big issue.

From work:

• Spoke to accountants regarding Cayman setup, what are the tax issues on perf fee
• Work on our own checklist.  I find having sections and structure to the checklist is as important
• Read a few investment letters.  RV, Platinum, Howard Marks, Hayden Cap.  the shake shack example from RV is an interesting case study on his investment mindset.  
• Having a conscious mindset in trying to learn when asking question (https://medium.com/@timhanso/the-questions-that-matter-46c5dd978f0c)
• How to make sense out of Amazon's valuation?  It's the FCF, but need to adjust Op Lease, and split CapEx into Maintenance CapEx
• Worked on filter/screener to find companies that exhibit low capital intensiveness with growing revenue/EBIT/OCF.  An idea from the Modern Monopolies book
• Looking into P&G and the Peltz whitepaper.  management structure to align accountability is very important.

Other sources:

• caught up with Chris Xu for lunch and he explained how the PE guys just want to get the deal done and suffer from lots of bias.  the supposedly long term view gives room to lots of hiding space
• what a turnaround in VW!  great article in FT
• good blog on Amazon OCF writeup.  finance lease should be accounted for in OCF, and it is necessary to split maintenance capex in this case to fairly evaluate the improvements in OCF.  (http://mp.weixin.qq.com/s?__biz=MzA5MTAxMjEyMQ==&mid=2653500060&idx=1&sn=3efe5fd45787a42411943fb60aa288d2&chksm=8bdf7feabca8f6fc643545f0cea4e295859daf7bc52bc4f09b0ed84a42aba17be10b681eed9a&scene=21#wechat_redirect)