The hottest Investment Strategies Substack posts right now

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Billion-dollar Tech Babies: A Blessing of Unicorns or a Parcel of Hogs?

Musings on Markets • 0 implied HN points • 11 Jun 15
💼 Business Investment Strategies
  1. Unicorns are private companies valued over a billion dollars, and their numbers are increasing. This rise can be both good due to more investment options and concerning if it's just a bubble.
  2. Valuing unicorns isn't straightforward because capital investments and protections can distort their true worth. For example, investors might gain ownership stakes that adjust based on company value changes.
  3. While protections help investors feel secure, they can complicate the investment landscape. Both investors and founders should strive for clarity and balance to avoid overvaluing companies or risking too much equity.

The Oil Price Shock: Primary, Secondary and Collateral Effects

Musings on Markets • 0 implied HN points • 22 Dec 14
💰 Finance Investment Strategies
  1. Predicting oil prices is very hard, and even experts often get it wrong. This shows that forecasting in the commodity market doesn't always lead to clear answers.
  2. When oil prices change, some people and companies benefit while others lose. It takes time to see the full effects of these changes on the economy.
  3. Investors usually panic during big price shifts, leading to poor decisions. It's better to think strategically rather than react emotionally to price drops in oil.

Up, up and away! A crowd-valuation of Uber!

Musings on Markets • 0 implied HN points • 03 Dec 14
💼 Business Investment Strategies
  1. Valuation isn't just about the numbers; it's also about the story behind those numbers. Your personal views and biases will shape how you value a company like Uber.
  2. Different narratives can lead to vastly different valuations. If you see Uber as having a huge market potential, you might arrive at a value much higher than someone who sees it more conservatively.
  3. It's important to update your narrative as new information becomes available. Successful investors often get the narrative right, even if their number crunching isn’t perfect.

The Walking Dead: Blackberry, Yahoo and the Zombie Apocalypse!

Musings on Markets • 0 implied HN points • 30 Sep 14
💼 Business Investment Strategies
  1. Some companies can stick around even after their business model has failed, like zombies in a show. They keep going but aren't really successful anymore.
  2. Managers of these struggling companies often believe they can fix things, even when it's clear their efforts are not working. They might waste resources trying to revive the business.
  3. When investing in these 'walking dead' companies, it's important to recognize that their management may make bad decisions, leading to further losses. Investors should be cautious and realistic about their value.

Bubble, Bubble, Toil and Trouble: The Costs and Benefits of Market Timing

Musings on Markets • 0 implied HN points • 16 Jun 14
💰 Finance Investment Strategies
  1. There are different types of people who warn about stock market bubbles, like Doomsday Bubblers and Rational Bubblers. Each type has its own view on whether we are in a bubble or not.
  2. A bubble can be defined as a situation where stock prices rise significantly without support from the actual company's earnings or fundamentals. It's important to notice the difference between a real bubble and just market fluctuations.
  3. Deciding whether to react to a potential bubble is tricky. You could either reduce your investment in stocks or try to profit from a correction, but both options have their own risks and costs.
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Alibaba: A China Story with a profitable ending?

Musings on Markets • 0 implied HN points • 09 May 14
💼 Business Investment Strategies
  1. Alibaba entered the e-commerce market in China early and grew with it. They adapted their services to fit local needs, making them a key player in online retail.
  2. The company has a unique approach, charging low transaction fees and focusing on advertising revenue. This has helped them maintain a competitive edge in a crowded market.
  3. Alibaba's growth is impressive, but future challenges include rising competition and changes in market conditions. Investors should keep an eye on these potential risks.

Numbers Time! Data update for 2014

Musings on Markets • 0 implied HN points • 09 Jan 14
💰 Finance Investment Strategies
  1. Data access has changed a lot over the years. In the past, it was hard to find data unless you were at a university or bank, but now it's way easier and more global.
  2. The reason for sharing this data is partly self-interest. It helps the creator make better investment decisions and save time throughout the year.
  3. When using this data, remember that it reflects personal judgments and can include errors. It's important to verify details and be cautious when making decisions based on the numbers.

Market Multiples: Global Comparison and Analysis

Musings on Markets • 0 implied HN points • 30 Jul 13
💰 Finance Investment Strategies
  1. PE ratios help investors compare stock prices across countries, but many companies have negative earnings making PE less useful for them. It's important to consider the overall financial health of countries, not just their PE ratios.
  2. Price to book ratios can give a clearer picture of a company's value but should be used carefully. Countries with low price to book ratios might look cheap but could also have low returns, suggesting a deeper look is needed.
  3. Enterprise value to EBITDA multiples provide another way to assess company value, though they can sometimes show unexpected results. High returns on invested capital don't always align with high EV/EBITDA ratios, so understanding each country’s context is key.

A Sweet Spot for US Equities: Opportunity and Dangers

Musings on Markets • 0 implied HN points • 28 Mar 13
💰 Finance Investment Strategies
  1. US stock markets are currently doing well, but investors should be cautious about potential downturns or corrections. It's important to stay informed and not just ride the wave of rising prices.
  2. Key factors determining stock prices are cash returned to investors, expected growth, risk-free rates, and risk premiums. Each of these plays a role in how we value and perceive stocks.
  3. Despite some risks, stock prices are elevated for good reasons: strong cash flows, decent growth prospects, and poor returns from alternative investments make staying in the market appealing.

Marty Lipton: Shareholder Champion, Stakeholder Protector or Management Tool?

Musings on Markets • 0 implied HN points • 10 Mar 13
💼 Business Investment Strategies
  1. Activist investors are not necessarily short-term thinkers. Studies show that they often hold onto their investments longer than many passive investors, and they focus on getting companies to do what's best for their shareholders.
  2. It's okay for activists to speak out and share their opinions. Just like other investors, they have the right to use media to explain their views and more open discussions can help companies improve.
  3. Long-term shareholders actually benefit from activist investors. These activists push for changes that can help improve a company's performance and protect shareholders from unaccountable management.

Data Update 2013: The Dark Side of Numbers

Musings on Markets • 0 implied HN points • 13 Jan 13
💰 Finance Investment Strategies
  1. Some people use complex numbers to scare others into agreeing with them. You can fight this by sticking to common sense and focusing on the main idea.
  2. Data can be twisted to support a certain viewpoint by only showing what fits. Always check for the full picture before believing claims.
  3. Many analysts hide behind data instead of making tough decisions. It's better to personalize and adapt data to your own understanding rather than rely on generic numbers.

Storms and Stocks: Dealing with Disruptive Shocks

Musings on Markets • 0 implied HN points • 16 Nov 12
💰 Finance Investment Strategies
  1. When you see repeated problems, like storms or market issues, it’s likely they will keep happening. This means we should change how we invest and manage risks.
  2. Relying too much on past events can lead to bad choices. Just because something worked before doesn’t mean it will work again in a similar situation.
  3. After disruptions, there’s often a lack of clear information, causing people to believe rumors. It’s important to have systems that can adapt and provide real guidance during crises.

Value Investing: Where is the beef?

Musings on Markets • 0 implied HN points • 29 Jun 12
💰 Finance Investment Strategies
  1. Value investing includes many strategies, but it often assumes that value investors have a clear advantage over others. However, this belief isn't always supported by the evidence.
  2. Studies show that while some individual investors can outperform the market, many do not. Those who invest based on solid research and have focused portfolios tend to perform better.
  3. Successful value investing combines having a strong investment philosophy, a competitive edge, discipline, and an openness to learning from other investing strategies.

Growth (Part 1): The Limits of Growth

Musings on Markets • 0 implied HN points • 26 Oct 11
💼 Business Investment Strategies
  1. When valuing growth companies, you need to think about how big their revenues can actually get based on the market size. Companies in larger markets can expect to earn more than those in smaller markets.
  2. Some companies can surprise everyone and grow more than expected by changing what they sell, expanding to new places, or coming up with new innovations. This can make their potential market much bigger.
  3. Investors often get the big picture right but mess up when looking at individual companies. They might think many businesses can grow quickly, but if they all try to take a big share of the market, profits can get squeezed.

Growth and Value: Thoughts on Google, Groupon and Green Mountain

Musings on Markets • 0 implied HN points • 19 Oct 11
💼 Business Investment Strategies
  1. Growth is not always sustainable. Companies like Green Mountain Coffee have to consider how big their market really is and how long they can keep growing.
  2. As companies grow, their growth rates usually slow down. Even successful companies like Google face challenges in maintaining high growth as they get bigger.
  3. Investing for growth can be tricky. Companies need to spend money to grow, but if they don't manage investments wisely, it can hurt their overall value.

Behavioral Economics: Thoughts on Value and Price

Musings on Markets • 0 implied HN points • 01 Mar 11
💰 Finance Investment Strategies
  1. Different analysts can value the same company differently because their psychology and perspectives affect their judgment. This is why some people become buyers while others are sellers.
  2. Prices can differ from actual value due to irrational investor behaviors, like panic selling or following trends. Even when people have similar information, their emotions can lead to significant price deviations.
  3. Behavioral economics helps us understand how and when prices will align with value again. Knowing this can guide investors on how long they might wait for their investments to pay off.

Buybacks and Stock Prices: Good or bad news?

Musings on Markets • 0 implied HN points • 25 Jan 11
💰 Finance Investment Strategies
  1. Buybacks can increase stock prices if the market undervalues cash. If investors think the cash is wasted, buying back shares can make the stock more valuable.
  2. Companies with little debt that buy back shares can improve their value. However, if a firm is already in a strong position, a buyback might send negative signals about future growth.
  3. Mature companies often benefit more from buybacks because they might be seen as having poor returns on their investments. In contrast, fast-growing companies may harm their stock prices if they buy back shares.

Herding behavior: Why, so what and what if?

Musings on Markets • 0 implied HN points • 15 Jan 11
💰 Finance Investment Strategies
  1. Herding behavior is when people follow the crowd, which we see in many areas of life, including finance. This can lead to investors buying or selling the same stocks at the same time.
  2. This behavior can cause problems like pricing bubbles and make markets more volatile. When many people act in the same way, it can lead to big changes in stock prices.
  3. Investors can make money by either joining the herd during trends or by going against it if they have a strong understanding and confidence in their choices. But it takes skill to do it successfully.

How do you evaluate risk taking?

Musings on Markets • 0 implied HN points • 19 Nov 10
💰 Finance Investment Strategies
  1. Risk taking should be judged not just by the outcome but also by the process and information available at the time. Good decisions can sometimes lead to bad outcomes, and bad decisions can lead to success.
  2. It's important to consider the side effects of risk taking, like how it impacts others. A decision might be profitable for one person but harmful to society as a whole.
  3. How we reward or punish risk taking now can influence future behavior. If taking risks is consistently rewarded, more people will take risks in the future.

The secret to investment success: Self Awareness?

Musings on Markets • 0 implied HN points • 11 Nov 10
💰 Finance Investment Strategies
  1. Investment success isn't just about strategy; it's about knowing yourself. How patient are you? Do you handle stress well? These traits matter.
  2. Different investment philosophies work for different people. What might be a good strategy for one person could be a bad fit for someone else.
  3. Self-awareness can help you choose the right investment approach. Think about your personality and how you react to different situations before investing.

Insider Trading: My Perspective..

Musings on Markets • 0 implied HN points • 24 Oct 09
💰 Finance Investment Strategies
  1. Insider trading is when some investors trade using secret information not available to everyone. It's legal for company insiders to buy stock if they don’t do it right before big news, but illegal if they do.
  2. Studies show that insider trading doesn't always lead to big profits. Insiders might have better info, but they don't always make more money from it, and relying on tips can be risky.
  3. Instead of banning insider trading, we could make trading more transparent. This way, everyone can see what insiders are doing, which might level the playing field a bit.

Buybacks and Stock Prices..

Musings on Markets • 0 implied HN points • 20 Sep 09
💰 Finance Investment Strategies
  1. Buybacks give companies a way to return cash to shareholders without the long-term commitment of dividends. They also help adjust financial leverage, especially if a company feels it has too little debt.
  2. When a company decides to buy back its stock, it's usually based on how the price compares to the company's perceived value. If they think the stock is worth more than its current price, they'll consider buying it back.
  3. Sometimes companies buy back stock just to follow what others in their industry are doing, which may not always be the best choice for their own financial health.

Valuing declining and distressed companies

Musings on Markets • 0 implied HN points • 30 Jun 09
💼 Business Investment Strategies
  1. Declining companies often show stagnant or even falling revenues over time. This can signal a deeper issue, especially if it's happening across their whole industry.
  2. These firms frequently deal with shrinking profits due to losing pricing power and competition. As a result, they might start selling off assets to stay afloat.
  3. Declining companies might pay out large dividends or buy back stock, but this can be risky. If they have a lot of debt, it could make their financial situation even worse.

Data update for January 2009

Musings on Markets • 0 implied HN points • 20 Jan 09
💰 Finance Investment Strategies
  1. Equity risk premiums and default spreads dramatically increased in 2008, making companies worth about 40% less today than the year before, even if their earnings and ratings stay the same.
  2. During a crisis, emerging markets suffer the most, and risk premiums for these markets have also risen significantly, affected by higher premiums in developed markets.
  3. Although market multiples look cheap right now, the accounting numbers are outdated, meaning the full impact of the crisis isn’t reflected yet, and an update is expected in May 2009.

The Crisis of 2008: Lessons learned, unlearned and reinforced

Musings on Markets • 0 implied HN points • 31 Dec 08
💰 Finance Investment Strategies
  1. Interest rates can be negative, which is surprising. It shows how unexpected financial situations can be.
  2. Investing in established companies isn't always safe, and relying on certain rules can lead to mistakes. The financial landscape can change quickly.
  3. Cash can be an important safety net, and understanding risk is more complex than just looking at numbers. Real-world connections matter too.

Corporate Hedging: The Down Side

Musings on Markets • 0 implied HN points • 27 Nov 08
💰 Finance Investment Strategies
  1. Not all risks should be hedged. Some risks can be passed on to investors who may want that exposure, like how oil companies shouldn't hedge oil prices.
  2. Companies should hedge against important risks that can greatly affect their operations, like insurance for physical damage or stabilizing fuel costs for airlines.
  3. Firms can also benefit from seeking out risks where they have an advantage. This can lead to success if they understand and exploit those risks well.

What is the message the market is sending?

Musings on Markets • 0 implied HN points • 25 Oct 08
💰 Finance Investment Strategies
  1. The market is currently focused on the economy rather than banking issues. Investors are worried about a possible recession next year.
  2. Historically, the market isn't always a reliable predictor of economic slowdowns. A big drop in the market can suggest a slowdown, but not every decline leads to a recession.
  3. Some positive factors are still present, like falling oil prices and low global interest rates, which could help the economy recover in the future.

Is it time to make the move?

Musings on Markets • 0 implied HN points • 07 Oct 08
💰 Finance Investment Strategies
  1. The market drop was influenced more by worries about the economy rather than just fear, showing a different sense of urgency than previous weeks.
  2. The equity risk premium in US stocks is higher than usual, suggesting either a big change in the markets or that stocks are undervalued.
  3. When looking for investments, focus on stable companies with essential products, strong earnings, low debt, and reasonable prices.

Explaining the Market....

Musings on Markets • 0 implied HN points • 05 Oct 08
💰 Finance Investment Strategies
  1. Market moves can be unpredictable and often relate to expectations rather than absolute news. For instance, a good earnings report can be seen as bad if it doesn't meet high expectations.
  2. Many factors can influence the market on a given day, making it tough to identify the exact cause of movements. It could be anything from economic data to global events.
  3. Experts providing explanations after market shifts helps us feel more in control, even if the reasons are not always clear. These insights can give us perspective and help us move forward.

Quant Letter: November 2024, Week-3

The Parlour • 0 implied HN points • 20 Nov 24
💰 Finance Investment Strategies
  1. Vulnerability Conditional Risk Measures help assess risk during financial crises. They focus on understanding tail risks in the market.
  2. Research on heavy-tailed risks can show how certain extreme events might develop. It looks into the behavior of sums of risk factors.
  3. New studies in finance are slowly changing how we understand and measure risk. Keeping up with these developments can improve investment strategies.

Crypto Market & Polymarket Dynamics Heading into Elections

Coin Metrics' State of the Network • 0 implied HN points • 05 Nov 24
🔮 Crypto Investment Strategies
  1. Bitcoin usually saw big gains after U.S. elections, but the amount gained has been going down each time. Events like Bitcoin halvings and changes by the Federal Reserve also affect these gains.
  2. Around U.S. elections, the price of Bitcoin becomes more volatile and tends to stay that way for about a month after. This means traders are adjusting to new information as the election gets closer.
  3. Polymarket, a prediction market, shows changing odds for the election, with international traders reacting to U.S. political news, often trading during U.S. night hours. This suggests a global interest in U.S. elections.

Economic Calendar for the Week of January 19, 2025

Alex's Personal Blog • 0 implied HN points • 19 Jan 25
💰 Finance Investment Strategies
  1. This week's economic calendar includes important U.S. and global events, so it’s a good time to pay attention to financial news.
  2. Earnings reports from companies like 3M and American Express are happening this week, which could affect their stock prices.
  3. Key economic indicators such as jobless claims, retail sales, and inflation rates will be released, providing insights into the economy's health.

Game Over? (Summer 2022)

The Valley of Dunning-Kruger • 0 implied HN points • 27 Jan 25
💼 Business Investment Strategies
  1. The tech market has experienced a crash that affected many investment firms, especially Tiger Global, which focused on rapid investments without preparing for downturns. This shows the importance of balancing speed with caution in investing.
  2. Emerging 'Venture Platforms' will likely dominate the market by leveraging their scale and resources, creating stronger advantages over smaller firms. It’s about using size to deliver better services to startups.
  3. Venture capital is moving into an 'asset accumulation' phase, where larger firms will capture more market share, which can lower overall returns for investors. This shift poses challenges and opportunities for smaller funds and their strategies.

Economic Calendar for the Week of July 6th, 2025

Alex's Personal Blog • 0 implied HN points • 07 Jul 25
💰 Finance Investment Strategies
  1. This week has many economic events in the U.S. and globally that could affect markets. It’s important to pay attention to updates like inflation rates and jobless claims.
  2. Companies like Delta Airlines and Levi Strauss have notable earnings coming out this week. Their results could give clues about their business health and the overall economy.
  3. There are various reports about consumer spending and credit changes this week. These reports help understand how people are feeling about money and spending.

The Taxi Cab Theory of Venture Capital

Digital Native • 0 implied HN points • 16 Jul 25
💼 Business Investment Strategies
  1. Venture capital today often relies on consensus rather than bold decisions. This means investors might jump into trends instead of backing unique, original ideas.
  2. Timing plays a big role in investment decisions, much like how people choose partners based on when they're ready, not who they truly connect with. Investors sometimes feel pressured to act, leading to hasty decisions.
  3. For the venture capital world to thrive, it needs to reward original thinking and long-term potential, not just quick profits. Encouraging patience and deep conviction can lead to better outcomes.

Economic Calendar for the Week of July 20th

Alex's Personal Blog • 0 implied HN points • 21 Jul 25
💰 Finance Investment Strategies
  1. This week features important earnings reports from major companies like Verizon, Tesla, and Intel. Keep an eye on these to gauge how different sectors are performing.
  2. Several economic events are happening, such as speeches from Fed officials and reports on home sales and consumer confidence. These can influence market trends and investor decisions.
  3. Global economic data, including trade balances and retail sales from various countries, will also be released. Understanding these can provide insights into the overall economic health around the world.

Quant Letter: August 2025, Week-1

The Parlour • 0 implied HN points • 07 Aug 25
💰 Finance Investment Strategies
  1. Market makers can influence prices using smart financial models, allowing them to adopt winning strategies. This means that how they operate shapes the market itself.
  2. There's a new math model that looks at complex positions like they're options, helping to understand risks and potential losses better.
  3. The latest research in finance is exploring innovative approaches to market making and risk management, showing a shift towards more analytical methods.

Crypto at the Crossroads: ETF Flows, Leverage Reset, and Shallow Liquidity

Coin Metrics' State of the Network • 0 implied HN points • 25 Nov 25
🔮 Crypto Investment Strategies
  1. Demand for Bitcoin and other cryptocurrencies is down because big investors, like those in ETFs, are pulling back their money. This has made the market more unstable.
  2. Many traders are reducing their leverage, which means they're taking less risk. This is helping to clean up the market a bit but may lead to lower price movements for now.
  3. Liquidity in the market is still weak, making it easier for small trading activities to cause big price swings. This fragility needs to improve for the market to stabilize.