Interview. Mostly Borrowed Ideas on Google, Meta, and Investment Decision Quality
Feb 14, 2024
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In this interview, Mostly Borrowed Ideas provides deep insights into Meta, Google, and investment decision quality. Topics discussed include Meta's challenges, Google's future, constraints in cloud computing, Meta's real estate investments, the importance of writing in investment decision making, and the danger of borrowed confidence.
Understanding and analyzing big tech companies requires a comprehensive understanding of their strategies, market dynamics, and technological shifts.
Tech companies like Google and Meta (formerly Facebook) must adapt and optimize their businesses to anticipate and respond to significant platform shifts.
Investing in big tech companies requires a nuanced understanding of factors beyond financial metrics, including management acumen, competitive landscape, and emerging technologies.
Deep dives
Complexity of Understanding Big Tech Companies
Understanding and analyzing big tech companies is not a simple task, as their businesses constantly evolve and face various challenges. It requires a comprehensive understanding of their strategies, market dynamics, and technological shifts. Holding these stocks demands a deep appreciation for the complexity and uncertainty of their future prospects.
Navigating Platform Shifts
Tech companies like Google and Meta (formerly Facebook) have experienced significant platform shifts over the years, requiring them to adapt and optimize their businesses. The ability to anticipate and respond to these shifts is crucial. The challenge lies in prepping the response before an existential risk materializes, while also avoiding premature moves that could harm their existing revenue streams.
Continuous Evaluation and Adaptation
Successful tech companies must constantly evaluate their business models and adapt to changing market dynamics. They cannot rest on past successes but need to anticipate future challenges and opportunities. The ability to make informed decisions based on evolving data, market trends, and user behavior is essential in maintaining a competitive edge.
Appreciating the Complexity and Nuance
Investing in big tech companies requires a nuanced understanding of factors beyond financial metrics alone. Factors such as management acumen, competitive landscape, and emerging technologies influence the long-term prospects of these businesses. Appreciating the complexity and uncertainty of these factors is crucial in forming a comprehensive investment thesis.
The importance of writing in the investment process
Writing plays a critical role in the investment process, allowing investors to document their thoughts and track their thinking over time. By writing down their ideas and concerns, investors can analyze their own trail of thoughts and gain valuable insights. It helps investors stay grounded and maintain clarity amidst market volatility or changing opinions. Writing also enables investors to validate their own thinking, rather than relying on borrowed confidence from others. Ultimately, having a clear and documented thought process is key to making informed investment decisions.
The need for independent analysis and not relying solely on others
Relying solely on third-party research or other people's opinions can be detrimental to investment decision-making. Investors need to have a deep understanding of their investments and the industries they operate in. Doing independent research and analysis is crucial to develop a comprehensive perspective and make well-informed judgments. Subscribing to research services or reading other investors' work can be helpful, but it should be a starting point for further investigation. Taking the effort to read earnings transcripts, 10Ks, and staying immersed in the relevant information ensures investors are actively involved in their portfolio decisions. It is important to remember that there is no substitute for doing one's own work and having an informed, independent investment approach.
On our very first interview we talk with Mostly Borrowed Ideas in a wide spanning interview on Meta, Google, Microsoft, and investment decision quality. Mostly Borrowed Ideas writes a deep-dive on a publically traded company every month. You can find more out about him and his writings here.
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Show Notes
(0:00) Intro
(2:37) Meta, Risks, Tiktok, ATT, Metaverse
(26:22) Google, Sundar Pichai, Capital Allocation
(33:52) Google Risks
(46:59) What is a Great Business?
(59:19) Owners versus Managers
(1:08:45) Investment Process Improved through Writing
Email us at info@speedwellresearch.com for any questions, comments, or feedback.
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Disclaimer
Nothing in this podcast is investment advice nor should be construed as such. Contributors to the podcast may own securities discusessed. Furthermore, accounts contributors advise on may also have positions in companies discussed. Please see our full disclaimers here: https://speedwellresearch.com/disclaimer/
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