"The Riff" with Byrne Hobart and Erik Torenberg
E10: Prediction markets are a trillion dollar opportunity. Why aren’t they working yet?
Podcast summary created with Snipd AI
Quick takeaways
- Companies often make questionable investments when buying expensive headquarters or real estate properties outside their core competency.
- Undergraduate enrollment in specific majors can indicate industry talent cycles, but relying solely on industry cycles for educational decisions may not be advisable.
Deep dives
Companies buying adjacent properties to their business
Companies often allocate their capital outside their core competency by buying adjacent properties to their business. For example, some oil companies engage in oil trading to generate extra profits. However, when companies buy expensive headquarters or other real estate properties, such moves can be questionable. These companies are essentially betting that they have an expertise in real estate that surpasses that of dedicated real estate professionals. Often, companies that engage in such activities end up on the wrong side of the trades, as they compete against people who specialize in real estate. While there may be justifications for companies wanting to design a headquarters to suit their specific needs, the long-term value of such investments is often uncertain.
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