Gustavo Ballvé on February 28th, 2011

When we mention good capital allocators, one imagines managers that deploy capital well – who invest shrewdly in existing and new businesses, and when the returns on those investments seem poor, return capital in the best possible way. Thermo Fisher’s management has been a case study in excellence in all these regards. What isn’t intuitive is that capital allocation involves divestitures as well – and the latest from Thermo suggests that they also do a great job when it comes to selling assets.

Read more about Thermo Fisher raising the bar

Gustavo Ballvé on February 26th, 2011

We set time aside one Saturday per year to read Warren Buffett’s letter, and the one for 2010, due out tomorrow, is bound to be very interesting. The Wall Street Journal and the Financial Times both published stories about what to “expect” from the letter. While the WSJ story focuses on numbers and the power of “float” in Berkshire’s business model, the FT’s piece focuses on succession.

Read more about UPDATE: Buffett’s 2010 letter is out!

Gustavo Ballvé on February 24th, 2011

A collection of articles in the Financial Times from Feb. 16th to 22nd that share a common theme: Brazil’s credit boom is starting to cause concern. Even in the stories we quote here, it’s hard to separate signal from noise. Either side can be “right” but may be getting to that conclusion via inadequate or at least insufficient reasons. The point is to highlight risks so the reader can compare them to the expectations embedded in companies’ stock prices.

Read more about Brazil credit boom – Financial Times

Gustavo Ballvé on February 22nd, 2011

Two quick notes. One: IBM’s “Watson” computer beating humans at Jeopardy has people yearning to use the technology in Finance. Really?? Two: South Koreans may get one gigabit per second Internet in every household by 2012. Any Brazilian paying almost US$ 100 for half-decent connections is certainly thinking about how much time this country has lost…

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Gustavo Ballvé on February 21st, 2011

While this is just part of the overall digital/ online content evolution, our subject today is TV. One story is a behind-the-scenes account of how Google TV came to be – and what’s at stake if and when they get it right (or when somebody else does it). The other story shows the experiments that “old-media” TV companies are running to benefit from – or to try not to get overrun by – the effects of social media as it regards TV watching. There’s a lot happening, and business models just aren’t defined yet. As we’ve said in our Q4 2010 report, “Experimenting has a cost. Failing to experiment, ditto.”

Read more about The future of TV

Gustavo Ballvé on February 18th, 2011

The Economist yesterday ran a story on the frothiness of the Brazilian markets, especially for Private Equity and Hedge funds. It’s great that the country has seen a wave of IPOs and that more sectors of the economy are now represented in the exchanges. More Private Equity investments and a healthy exit market are good news, but some caution is due.

Read more about P.E. and Hedge Funds in Brazil

Gustavo Ballvé on February 16th, 2011

The Browser.com is an interesting source and new Buysiders Blogroll inductee. We try to visit it weekly, but only recently did we find out they had a Twitter account as well. The post we highlight is actually a series of interviews with different authors about “Mind and Brain”-related topics. Interesting stuff as usual.

Read more about Mind and Brain

Gustavo Ballvé on February 15th, 2011

NYT’s Dealbook linked yesterday to a CNBC interview with Bill Ackman of Pershing Square. A little more digging revealed other sections with him – it was a “Harvard Business School special” of sorts, and as such featured other high-profile alumni and professors such as Michael Porter. While each video has back-and-forth interaction with all participants, we highlight a few of Mr. Ackman’s “moments” inside.

Read more about BIll Ackman on CNBC

Gustavo Ballvé on February 14th, 2011

While we were searching for the Charlie Munger quotes for the Thursday post (“Aha! moments vs. strategy”), we found an interesting text by Li Lu, the chinese investor who had been shortlisted as a candidate for the CIO position at Berkshire post-Buffett. It’s the preface to the Chinese edition of the spectacular book Poor Charlie’s Almanac, where Li Lu writes a lenghty profile of Charlie Munger in a rare first-person account that even Warren Buffett hasn’t really provided yet.

Read more about Li Lu describes Charlie Munger

Gustavo Ballvé on February 10th, 2011

We highlight a very interesting article called “How Aha! Really Happens”. In it, the author argues that the notion of the brain’s two hemispheres being extremely specialized – “left” being rational/ analytical, “right” creative/ intuitive – has been proven inadequate since 1998, which means that companies focusing on “right-side brainstorming” exercises to foster innovation are not doing themselves many favors. The main point is this: “(…) our most-accepted approach to problem solving is grounded in an incorrect premise about the source of creativity in the brain.” The implications are very interesting.

Read more about “Aha!” moments vs. strategy

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