Investing - Incremental Economics

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Investing

A collection of 12 posts

barriers to entry

NYT Write-Up

For the first time in years, investors have become pessimistic on the main drivers of NYT’s business model – its digital news subscriber potential & its digital news pricing power. This write-up examines base rates for both of these drivers.

Unit Economics & Cohort Retention Curves

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Unit Economics & Cohort Retention Curves

Churn cannot be reduced to a single number because customer retention is a curve, not a constant.

What's Priced In?

What's Priced In?

Stock prices are the clearest and most reliable signal of the market’s expectations for a business’s future performance. Ignore them at your peril!

Scale Economies Shared

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Scale Economies Shared

Scale Economies Shared businesses have a flywheel because their competitive advantages increase as the business grows larger, making it harder and harder for competitors to offer as much value to customers.

What Makes Stocks Go Up?

If you read the title of this and are hoping for a magic formula that mints money, then read no further. You’re not going to find what you’re looking for in here. Both stock prices and changes in stock prices can be deconstructed into simple mathematical terms. In

The Scientific Method in Investing

The Scientific Method in Investing

Would you rather have the fifty most important pieces of information when making an investment decision, or only the five most important pieces of information? Most people would say fifty – more is better than less, right? Well, not necessarily, as we can see from a study on horse betting [https:

The Nature of Content: New York Times vs Netflix

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The Nature of Content: New York Times vs Netflix

How does the nature of content impact long-term margins at media businesses? All else equal, the more durable your content, the less you need to continually spend on content creation. Let's explore that.

Network Health

Network Health is a way of thinking about the edges of a network and trying to understand what is the health of those nodes in terms of (a) the positive/negative feelings those nodes experience & (b) the positive/negative experiences that those nodes create for other nodes.

The Evolution of Gaming

The Evolution of Gaming

Gaming has evolved from single player games that were solely designed for and solely charge the players, to increasingly social games designed for both players and the audience. Where is the future going?

The Customer Value Proposition of the Cloud

The Customer Value Proposition of the Cloud

The cloud is a great example of why it is often beneficial to turn your fixed costs into variable costs. Concurrently some players are emerging as scaled champions from having this be a fixed cost.

When Fixed Costs Turn Variable

What happens when a variable cost turns fixed? What happens when a fixed cost turns variable? Let's explore.

The Seven Deadly Sins at Tinder and PokerStars

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The Seven Deadly Sins at Tinder and PokerStars

Investors want to know why customers use a company’s products/services. Often this is referred to as the ‘customer value proposition’ or the ‘customer ROI’. The Seven Deadly Sins helps us understand situations where that value proposition isn't entirely rational.