Great FT article on how to think about monopolistic power in the digital platform age. Pre-digital v. digital (my emphasis): "In pre-digital days, the question an economist would ask is whether the efficiencies gained by big or merging companies would be passed on to consumers in the form of lower prices. Another key question was … Continue reading “Digital platforms force a rethink in competition theory” (FT)
Good short piece in the NYT this morning titled: "TV's Future Is Here. It's Messy. It highlights well the simple fact that cord-cutting is not about declining demand for the bundle itself, but rather the technology of the bundle. Flipping thru 300 channels is terribly obnoxious when juxtaposed to the app-based format of an Apple … Continue reading TV’s Messy Future
Barron's short thesis for NFLX this morning is spot on, IMO. In short (no pun intended), NFLX: Does not own its key hits (i.e. it licenses them) Will burn over $2 billion of cash in 2017...which I will add is a point of pride for CEO Reed Hastings, who says it's a sign of growth/"success" … Continue reading Barron’s on Netflix
In a recent Barron's column, Jeremy Grantham penned a tortuous essay outlining the obvious: Stock markets do not see large-scale P/E ratio compression outside of recessionary US economic conditions. In short, he says the equity market's currently elevated P/E ratio is simply a reflection of high profit margins and low inflation, and until either one … Continue reading Millennials: Future Source of Margin Compression?
The NYT is out this morning with a good article detailing the current state of the Luxury goods sector, where it came from and where it is likely going. In short, COH and KORS are looking to diversify away from their increasingly commoditized, middlingly priced "luxury" hand bags under the guise of turning into diversified … Continue reading “The Luxury Arms Race”