Weekly Kaizen – September 15th – Porsche vs Tesla & valuing Growth companies.

It took Porsche almost 5 years to release their first fully electric sports car after their announcement back in 2015.  Is it enough to take on Tesla? No, I don’t think so. It will mainly appeal to current Porsche owners who are looking to get a fully electric car. 

Not a single day goes by without a new WeWork article, and after this weeks news that they are going to half their IPO valuation (still not enough) an analysis by Aswath Damodaran, NYU Finance Professor, and his process on valuing growth.

Don’t forget to check the links in the Further reading section. 

Have a great week ahead! 


Porsche vs Tesla

Last week Porsche released their new fully electric car, the Taycan. It was first unveiled at the 2015 Frankfurt Motor Show,  does it have what it takes to take on Tesla?

Aswath Damodaran –  WeWork & Growth

More on WeWork, this time from Aswath Damodaran analysis on his blog and YouTube channel, interesting slides are slide 20 on growth and margin expectations (24min) and slide 23 (26min) The Runaway story. 

Slides: http://www.stern.nyu.edu/~adamodar/pd… Blog Post: https://bit.ly/2lHFlVY

Pitchbook published an article on WeWork’s acquisitions (20+) over the last 4 years.

Growth

Growth is one of the main narratives and drivers for valuations at startups/ Unicorn’s. How do you determine a reasonable growth rate and deal with negative earnings?Aswath on growth: http://people.stern.nyu.edu/adamodar/podcasts/valfall16/valsession9.pdf

Further Reading:

Weekly Kaizen – September 8th – What is a tech company, Argentina & Michael Burry


Another week another S1 filling from a ‘Tech company’ that is looking to raise capital at a tech sector valuation for their upcoming IPO, is this just? Ben Thomson posted a great article on what a Tech company is.

Furthermore a deeper look into Argentina which once again is restructuring it’s debt, and lastly one of the best known investors, Michael Burry, on two of his long bet’s and his worries on passive investing.

What is a Tech Company?

Following the post from two weeks ago from Ben Thompson’s view on WeWork and Peloton’s  upcoming IPOwhat is a Tech company. 

Argentina’s debt:

Argentina’s has already defaulted  8th default times and twice in the last 20 years, this week President Mauricio started with  a debt restructuring  plan(Financial Times)  It’s a pity to see a country which was once one of the world wealthiest struggle with corruption and poor governance from current and past governments. 

FT video: Argentina prepares next steps to tackle debt crisis

Michael Burry’s letter’s:

Lot’s of articles this week on Michael Burry:

Recommended: Read The Big Short by Michael Lewis or watch the movie

Further Reading:

 

Weekly Kaizen – August 25th – China, WeWork and Caesar…

What have Trump, Adam Neumann and Julius Caesar in common?

Grandiosity


In this weekly Kaizen, we will firstly take a look at China from two different view points. The first is from Ray Dalio, discussing the Impact of China’s Growth on the World Economy in the second video Kyle Bass, a hedge fund manager, interviews Steve Bannon.

Bridgewater’s Ray Dalio Discusses the Impact of China’s Growth on the World Economy

Over the last 40 years, China’s rapid economic expansion has altered the world’s geopolitical and economic landscape. Bridgewater’s Founder, Co-CIO and co-Chairman Ray Dalio joins Bridgewater’s Senior Portfolio Strategist Jim Haskel to discuss the historical arc of this growth and why the portfolio characteristics of China’s markets are attractive and diversifying despite escalating global tensions. To learn more visit: https://www.bridgewater.com/china/
Steve Bannon, former White House Chief Strategist, sits down with hedge fund giant Kyle Bass to discuss America’s current geopolitical landscape regarding China. Bannon and Bass take a deep dive into Chinese infiltration in U.S. institutions, China’s aggressiveness in the South China sea, and the potential for global conflict in the next few years. Filmed on October 5, 2018 at an undisclosed location.

Great video on the final year of Caesar:

Before getting into WeWork, let’s look back into history to get a better understanding of the last year of Caesar, arguably one of the most accomplished humans in history.

Source: Historia Civilis

Views on WeWork:

Ben Thomson’s Stratechery view on WeWork: The WeWork IPO

Alternative, and entertaining read:

Prof.Scott Galloway on WeWork in his No Mercy/No Malice blog

Also, recommended to read the S1 filling:

Read here We Work’s S1     

Extra reading:

Softbank Will Succeed Even If Its WeWork Investment Doesn’t Work Out

So, what do I think of WeWork?  My prediction is that in 20 years students will try to make sense of how, a heavily indebted real estate company, got valued at 26x revenue. Similar to how students currently look back on the Dot-Com bubble.