pricingpower

Keep having to remind myself to give a larger mental weight to pricing power for protecting downside Interesting that some of these I wouldn't really consider to have that much pricing power as they are more like exchanges capturing a percentage of the value of running through a marketplace (GOOG/FB) where raising the % is probably difficult now so it's more like their revenue floats with a market. Charging a % of value toll on a bridge is still a great business though The most knowable pricing power co's are heavily weighted toward a pretty small part of final product cost SPGI/MCO, VRSN, V/MA, KO/KDP, UNP/NSC, MSFT, INTC, Booking In addition to the aggregates names other natural monopolies due to transport costs would be cement (EXP/MCEM) or long lead time products (MGPI) or locked into long life designs (aerospace suppliers) or some semblance of customer switching costs (AXTA's refinish business) It's kind of striking how much some aspects of these lists change over time... 20y ago IBM would have been top of mind and would have a lot more consumer packaged brands before online reviews killed a lot of their pricing power by easing new product discovery so much. Any businesses that are understood to have terrible pricing power that are improving secularly now? Thought airlines until recently.

I think my years-later recall is best doing printed documents with notes on paper but in practice have migrated to doing a split screen of Google Sheets (mostly plaintext notes with occasional screenshots) and a pdf (sumatraPDF on computer or foxitpdf on ipad) as it's really nice to be device agnostic and searchable. I found doing all notes in Sheets better than a word doc as in practice I do more back of envelope jotting down of random ratios and adjustments to financials as they come to mind. I set up a template with small formatting tweaks I like like using =isformula(a1:ac1044) conditional formatting to make anything that's a formula automatically colored differently. Google Sheet is also nice for maintaining a watch list as the =googlefinance() function can pull some decent data and sheets can do basic web scraping. Being searchable across all google drive files is nice and seeing the build up over time of a folder per ticker researched is pleasant in the same way as a a full bookshelf. For equipment the 12.9 inch ipad pro with a bluetooth keyboard and the safari browser version of Google Sheets (app version is terrible!) works reasonably in split view, a 17 inch laptop with a 16:10 aspect ratio and a bluetooth numpad is more comfortable for long sessions but docking with a large 4k display is best. BenQ's monitor light is nice for a dark desk. When looking at SEC filings I'll pretty much always first run them through Draftable's free tool to highlight year-on-year additions to the text, makes it much faster to skim boilerplate language in annual reports and pick up on subtle wording tweaks. You can download Draftable's output as a pdf with green highlights of everything that was added or do a neat side-by-side view of the deletions. For general life organizing and synchronization I like Simplenote although I'll periodically download to backup

It’s an enjoyable quick read. Iger’s recent book and Cable Cowboy were other good books touching on some tangental spaces I feel like I retained more from though.

For daily news a Bloomberg terminal is the gold standard but I’ve found Fidelity’s daily news alerts to be strong, I have it set up as a 8:30am daily email for sec filings press releases and headlines. Used to also use Google Alerts but the quality has gone way down in recent years. Credit card data and satellite data (how much traffic at a retailer or oil in a storage tank) are more useful for trading than investing. GLG expert network and sell side research analysts are probably still more informative for longer term market consensus. Scraping online inventory listings and predicting index add/removals. I read somewhere that nearly 10pct of internet traffic is now automated scraping for financial interests, dunno if right but that’s believable.

Seems reasonable shorter term assuming they can do a better job segmenting drivers with good behavior than competitors their marginal advantage increases as the new source of danger is people using smartphones while driving (a not random population) and severities trending ever higher (value of a human life increases and cars are steadily more difficult to repair). Makes sense to me that good underwriting is more valuable than historically and given how fast growth is already a rational operator would choose the extra combined ratio benefit over pedal to the metal growth. I don’t have strong confidence current combined ratios will be sticky but I also have a view investment returns will eventually improve with higher rates. Would recommend their investor presentations, watching them feels more like a master class on operating their business with an unusually high level of transparency... that probably comes from not being super threatened by the competition.

PGR has been my largest holding for years, auto insurance is a great industry for now with sleepy competitors, by being at the forefront of using telemetrics data I love how pgr has been long term greedy and taken reduced near term revenue for a stickier harder to assault customer relationship (30pct discount to a great driver makes it really hard for anyone to poach them but gives up a lot of near term easy profits). The home insurance seems like a somewhat forced response to the 15+ years out autonomous vehicles business model threat but I like how they reinsure most of that risk while learning the underwriting and trying to make economics via sticker customers. In the long term I think of each dollar of premiums if they can make 4pts of underwriting, 4 pts of investment returns and 1-2 dollars of return on additional equity funded investments that more than justifies trading at 1x premiums written which themselves have been growing low double digits as pgr and geico take all the industry net growth. They can then reinvest 5% of salrs into equity to grow premiums 15pts and return the rest to shareholders even while growing that fast (used to be returned via a variable dividend formula they recently changed given the speed of growth). Its a fearsome flywheel. I also like it directly benefits from higher interest rates. Recently they have overearned vs this on underwriting but ought to earn less in investments.

For monitoring condo listings in NYC streeteasy.com is solid and supports free email alerts https://streeteasy.com/building/77-greenwich There is a large supply of luxury condo conversions/new construction scheduled for 2020 occupancy in the financial district- 130 william 25 park row 33 beekman 45 park place 125 greenwich 161 maiden lane (one seaport) 77 greenwich 1 wall st 1 Wall St is near 77 Greenwich and has a Whole Foods coming as the commercial tenant, that and the Alamo Drafthouse at Chase Plaza should help make the area feel more residential After monitoring this since pre the bankruptcy I bought my first shares in December as an asset play and looking for a January effect. Future capital allocation is my top concern.

my watchlist monitoring workflow- For prices Google Sheets, it's not 100% reliable but you can pull in prices (some realtime and others delayed using googlefinance functions), it's easy to look at where a stock is trading relative to 52w high and lows, a bit harder to pull in historic info (have to use index for google data or importhtml functions to scrape from elsewhere). For corporate news/events I'll subscribe to SEC filings using an RSS feed (Feedly app is great), Fidelity watchlist and Google Alerts for media coverage, and also sign up with the company's investor relations if available.

The recent Matt Rose interview linked in another thread is great A couple recent under the radar books (but less focused on industry competitive advantage are) Riding The Rails, Inside the Business of America's Railroads - memoir of Robert Krebs, he elevated Rose Railroader The Unfiltered Genius and Controversy of Four-time CEO Hunter Harrison

Would note at least currently the state income tax gets deductible from federal, at top tax brackets this dampens their marginal impact, one can't just add federal state and local, that overstates. Limitations on deductions make the exact impact not super transparent though

A few I liked across genres: my own story (Bernard baruch) The Rosie project An astronaut's guide to life on earth Dodger how to not be wrong Personal history The shipping man the gray man A universe from nothing

In!