Zynga Games creates games for Facebook and MySpace. Its users number in the tens of millions, and many of them pay real cash for virtual goods to spice up their gaming. In fact, Zynga might well be making more money with Facebook than Facebook itself is. In paper, the business model seems great. We’ll probably get to know this soon, since Zynga is supposedly preparing for an IPO. Anyway it’s a huge reminder that disrupting technologies don’t necessarily imply that the inventors will make the most money – in some cases, any money. For new and old industries, always look at the entire value chain, be it suppliers, service providers, etc.
We’ve recently had the opportunity to do research on Buffett’s letters to shareholders beginning in 1959 (when Buffett managed Partnerships and Berkshire Hathaway was not even in his sights). His consistency and transparency are always impressive – especially in times like these and since we’re talking about more than 50 years of Buffett clearly practicing what he preaches.
There is an increasing amount of BRK shares sold short and people seem quick enough to point to the Burlington deal as the culprit, for many reasons (listed inside). They may be missing the number one reason, and it’s one that merits attention.
Trail-sniffing independent information providers with excellent business models, looking horizontally for opportunities. Some of these companies (Gartner, FactSet Research, ComScore, etc.) look like acquisition targets.
They took questions from Columbia grad students and the event was broadcast live by CNBC. It has an eerie feel to it – with the whole “must keep spirits high” approach. That said, both men think in the long term (15+ years) and it’s always interesting to be reminded of some basic concepts.
Motivated by the recent LBO of IMS Health by TPG (the private equity group) and Canada Pension Plan, here’s an excerpt from our Q3 2009 report in which we discussed the company. We had been looking at it at least since 2007, when we started to look at the healthcare industry globally. Right after our text we link to other interesting articles on the deal.
This BBC special on Buffett has good and bad moments, but the Don Graham interview is a must-see. This is a man who has been around Buffett for decades. His description of how (and why) Berkshire is so different from the “average American business” is one of the best compliments Mr. Buffett could get. Not a bad goal at all for any business owner or manager.
The first 4-5 pages in GMO’s Q3 2009 letter are entertaining for their irony, but it’s hard to disagree with Mr. Grantham’s conclusion: concentrate your portfolio in quality U.S. stocks with a global earnings mix. We’d extend that to some non-US quality stocks with diversified earnings sources, of course.
Looking at the world’s largest remittance players, it’s perhaps useful to use Moneygram – smaller, under-covered and nearly-bankrupt – to better understand Western Union.
Short comments on Global Beverages motivated by the Femsa beer unit sale talks and (much earlier) the Kraft/ Cadbury imbroglio. Beer and soft drinks make sense together, as does beer + soft drinks and food.