Resisting the marshmallow
Readers may be familiar with what has come to be known as the “Marshmallow Experiment”–a test run by Stanford professor Walter Mischel in the 1960s. The experiment has implications for determining what traits can produce success in individuals, and it also holds useful insights around strategies for investing. The experiment involved Mischel testing hundreds of […]
The world of asymmetries and complex systems (Part II)
In Part I, I examined the concept of hidden asymmetries, as examined by Nassim Taleb in his new book, “Skin in the Game”. In Part II, I will step you through Taleb’s take on another important concept: complex systems. Given Taleb is one of the most highly respected and well-educated mathematicians in the world, when he […]
Does time in the market really produce better returns?
One of the most common and straightforward passive investment strategies is to “buy-and-hold” an index of stocks. Proponents of this strategy typically believe that “time in the market, not timing the market”, produces the best returns. They may point to the attractive returns generated by equity markets over a (very) long time horizon, for example […]
The world of asymmetries and complex systems (Part I)
I recently finished reading Nasim Taleb’s latest book, “Skin in the Game” and thought it would be useful to share some of our insights from it in the context of our investment process here at Montaka. As we know, Nassim Taleb is famous for many groundbreaking contributions to financial markets including his seminal work “Fooled by Randomness” […]
Investing: the sooner the better
As Albert Einstein once noted, “the power of compound interest is the most powerful force in the universe,” to which he added “compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” Previously I have written about the importance of compounding, and the need to […]
Why we like free options
Last week, The Wall Street Journal reported that Ant Financial, the owner of China’s largest mobile payments platform and affiliate company of Alibaba, is preparing to raise $9 billion in a funding round at a rumoured valuation of up to $150 billion. This would make Ant Financial by far the most valuable privately-owned technology company […]
Investing in the right place at the right time (Part I)
There is a famous quote attributed to Ray Kroc, the founder of McDonald’s (at least as we know it today): “The key to success is being in the right place at the right time, recognizing that you are there, and taking action!” This sensible piece of wisdom is also the essence of successful equity-market investing, […]
What do we do when Earnings Season comes around?
Four times a year, for just over a month, the Montaka research machine* is forced to find an extra gear above the intensity of the business-as-usual analysis that takes place at 45 Jones Street on a daily basis. These times come around a few weeks after the end of each calendar quarter as publicly listed […]
A framework for valuing tech platforms
Often when a business has a record of strong growth, investors are willing to pay a premium multiple if they expect that growth to continue. Earnings multiples of 50x, 75x, or more than 100x are not uncommon, especially for businesses that are just starting to ramp up their profitability. But how much should investors pay […]
The importance of savings and investment (Part IV)
In Parts I, II and III of this four part blog, we went back to first principles of savings, investment and trade. We then gave consideration to the trajectories of savings and investment of the US to see if we could make any sensible assessments of the likely trajectory of its current account and the […]
