Category: Excerpts

The most common form of platform monetization is the collection of “rents” from the third parties that build on top of it. This model also tends to be the best one, too, as it allows the platform to directly benefit from the value they create as well as leverage the investments of all its developer partners, thereby gaining access to their many total addressable markets, or TAMs.

The rent model is also why digital platforms are particularly valuable. Every person and company uses the Internet and computing devices (making it a far larger market than just a road system or toy), and there’s no constraint to how many customers can be served at once (Barbie doesn’t appeal to all toy buyers, nor can everyone use a highway at once without making the highway worse), while the marginal costs from incremental revenue are essentially zero (meaning every sale goes straight to the bottom line).

To this end, it’s notable that almost all of the most valuable companies in the world operate digital platforms that support billions of daily users and tens of billions of dollars in economic value daily

-wrote Matthew Ball

I feel uncertain, more uncertain about the future now than I did 20 years ago.

The way it plays out is I have more stocks in my portfolio now than I had 20 years ago.

I know for some people this becomes the issue of don’t you have enough conviction?

And I hate that word in investing, because it puts us on a spot.

So, do you have enough conviction?

Can’t you put all your money in this if you feel that strongly?

No, I never feel that strongly. I don’t have that much conviction. Maybe you do.

And there are investors out there, I think, who overestimate their capacity to value companies and overestimate the capacity of markets to correct and then underinvest.

They might still make money for a while, but at some point in time, their portfolios will blow up

said Aswath Damodaran

Source: Forbes

There are three main wholesalers, AmerisourceBergen, Cardinal Health, and McKesson Corporation that account for more than 90 percent of wholesale drug distribution in the United States.

With multiple suppliers, wholesalers end up having a lot of bargaining power. Additionally, there are always new suppliers entering the market, who are willing to drop prices further to enter the market. So wholesalers negotiate with the existing players to offer the same price, for them to retain their existing market share—hence constantly hitting the prices.

This leads to almost 90 percent price erosion, from the price at which the innovator sold the drug versus the generic drug prices.

Source: Investor Meet Transcript of Vesuvius India Ltd