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Musings on Markets's Blog

Tax Reform, 2017: Promise of Plenty or Poisoned Chalice?

October 6, 2017 Comments (0)

Every decade or two, the political class in the United States wakes up to the reality that the US tax code, as written, is an abomination that encourages and rewards bad behavior, and works on a tax reform package. In each iteration (and I have had a front row seat with the 1986, 1993 and 2001 attempts), the reformers start with the claim that the changes they make will make the system “fairer” and “simpler”, with the added bonus of increasing economic growth. And with each one, the end...

A Tesla 2017 Update: A Disruptive Force with a Debt Problem!

August 11, 2017 Comments (0)

These are certainly exciting times for Tesla. The first production version of the Tesla 3 was unveiled on July 28, with few surprises on the details and plenty of good reviews. Elon Musk was his usual self, alternating between celebrating success and warning investors in the stock that the company was approaching "manufacturing hell", as it ramped up its production schedule to meet its target of producing 10,000 cars a week. It is perhaps to cover the cash burn in manufacturing hell that...

The Crypto Currency Debate: Future of Money or Speculative Hype?

August 1, 2017 Comments (0)

When it comes to any finance-related questions, I am fair game, and those questions usually span the spectrum, from what I think about Warren Buffett (or why I don't agree with everything he says) to whether tech stocks are in a bubble (a perennial question for worry warts). In the last few months, though, I have noticed that I have been getting more and more questions about crypto currencies, especially Bitcoin and Ether, and whether the price surges we have seen in these currencies are...

Online Teaching: Promise, Pitfalls and Potential!

July 20, 2017 Comments (0)

I am a teacher. That is how I describe myself to anyone who chooses to ask me what I do for a living. I am not a professor (sounds pedantic and pompous), definitely not an academic (how boring is that..) and don't consider myself anything more than a dilettante on almost every topic that I hold forth on. It is in pursuit of my teaching mission that I have put my regular classes online for most of the last two decades, though technology has made that sharing easier. For those of you who have...

The Dark Side of Globalization: An Update on Country Risk!

July 13, 2017 Comments (0)

The inexorable push towards globalization has stalled in the last few years, but the change it has created is irreversible. The largest companies in the world are multinationals, deriving large portions of  their revenues from outside domestic markets, and even the most inward looking investors are dependent upon global economies for their returns. As a consequence, measuring and incorporating country risk into decision making is a requirement in both corporate finance and valuation. It...

User/Subscriber Economics: Value Dynamics

July 5, 2017 Comments (0)

In my last post, I tried valuing Uber by estimating how much an existing user was worth to the company and then using that number to extrapolate to the value of all existing users and the value added by new users. As always, I got many useful comments on what I was missing, what I could do better and what could be simplified, and I thank you (really). While I could spend this entire post rehashing assumptions, I don't intend to! To me, the most useful part of valuation is not the destination,...

User/Subscriber Economics: An Alternative View of Uber's Value

June 28, 2017 Comments (0)

In the week since I posted my Uber valuation, I have received many suggestions on what I should have done differently in the valuation, with many of you arguing that I was being a over optimistic in my forecasts of total market, market share and margin improvements and some of you positing that I was too pessimistic. I don't claim to have any certitude about these numbers but the spreadsheet that I used to value Uber is an open one, and you are welcome to convert your suggestions into...

Uber's bad week: Doomsday Scenario or Business Reset?

June 21, 2017 Comments (0)

Uber just cannot seem to help itself, finding a way to get in the news, and often in ways that leave its image in tatters. You could see this pattern in full display last week, where Travis Kalanick, its founder and CEO took a leave of absence to reinvent himself as Travis 2.0, and David Bonderman, founding partner at TPG and Uber director, had to step down after making a sexist remark at a meeting with Uber employees about countering sexism. Today, Travis made his departure permanent,...

A Tale of Two Markets: Politics and Investing!

June 6, 2017 Comments (0)

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A Valeant Update: Damaged Goods or Deeply Discount Drug Company?

March 23, 2017 Comments (0)

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