I just joined Twitter and I can see how people's identities can be co-opted by others. I remember once when Malcolm Gladwell responded to someone asking about a comment of his on Twitter, that he doesn't even have a Twitter account (the point being that whoever that was tweeting using his name was a fake account). It's really hard to tell who is real and who isn't. This isn't a problem for no-name people but it's hard to tell with prominent individuals. Twitter does appear to verify some identities as authentic—for instance, Bill Gates is easy to find and follow—but I'm not sure if the user has to pay for this or not. In any case, it's an interesting world on Twitterland. It is also easy to fall prey to information overload.
Having said all that, here are some articles you may find worthwhile reading...
- "The End of Borders and the Future of Books" (Bloomberg Businessweek): I can't believe William Ackman wanted to merge Borders and Barnes & Noble at one point — it would have taken down both firms. In any case, a detailed look at the collapse of the second largest bookstore in America.
- (Recommended) Was Steve Jobs an inventor or an innovator? (The New Yorker): As usual, a thought-provoking, article from Malcolm Gladwell on Steve Jobs. Gladwell continues his long-running view of innovation—you may want to read this post and this one—and the incremental steps involved. In the article, Gladwell calls Jobs a "tweaker" but I think a better word is "innovator." I think the notion of tweaking, as envisioned by Gladwell, can be misunderstood by the general public. You may also want to check out the author interview with Gladwell if this topic interests you.
- "Financial Reform: Unfinished Business" (Paul Volker for The New York Review of Books): Paul Volker guided the financial reform that is being pursued by the US government—a lot of it is being watered down though—and he presents further thoughts on what need to be done. It's an uphill battle against the status quo.
- (Highly Recommended) ROIC and growth rates in creating shareholder wealth (Rishi Gosalia for GuruFocus): Excellent article touching on key elements of value creation, including the interplay between growth rates and return on invested capital. I prefer to look at return on equity rather than ROIC but the concept is similar. Study the table included in the article, and notice how, if ROIC is lower than cost of capital (left side of the 10% column), value decreases as growth rate increases (i.e. you actually destroy shareholder wealth as growth rate increases). In contrast, if ROIC was higher than cost of capital (right side of the 10% column), shareholder wealth increases as growth rate increases. I also like the example Rishi uses to illustrate his point in real life. Namely, how Walgreens growing at 14% with 14% ROIC produced less shareholder wealth (16% annual) than Wrigleys growing at 10% with 28% ROIC (17% per year). Having said all that, the difficulty beyond identifying the metrics is to buy a high ROIC (or high ROE) company cheaply. Without looking it up, I would bet that you would have had a hard time buying Wrigley's cheaply whereas Walgreens probably was cheaper more often.
- (Recommended) The history of Microsoft's Xbox - part 1 - part 2 (VentureBeat): Excellent, lengthy, article on the history of one of the few successful new products by Microsoft in the last decade. Recommended if you are into technology, gaming, or "start-up culture."
- A look at Canadian microcap, Bennett Environmental (TSX: BEV) (Hardcore Value): Ran across a new Canadian blogger. This is a write-up of Bennett Environmental, which is a struggling, distressed-type, activist play, so anyone interested in such situations should check it out.
- The evolving television and Internet media landscape (The Economist): I've been studying Netflix lately and this is a good article on the current state of affairs in the media world. Its provides a good synopsis of the various players and what they will gain or lose as Internet video emerges.
- (Recommended) Book excerpt from Exile on Wall Street by Mike Mayo - "Why Wall Street Can't Handle the Truth" (Wall Street Journal): "Longtime bank analyst Mike Mayo tells the inside story of why it's so hard to yell 'sell' in a crowded room—and lays out how Wall Street needs to change to avoid the next financial collapse." Long-time market followers are aware of the points raised but newbies may want to read the thoughts from an insider on why analysts on Wall Street are, at times, nothing more than cheerleaders.
- "China Makes, The World Takes" (The Atlantic): An somewhat old, 2007, article on China's manufacturing prowess and the impact on the world.
- (Highly recommended) Book review of Boomerang: Travels in the New Third World by Michael Lewis (New York Review of Books): Michael Lewis has a habit of painting complex situations with a broad brush but, nevertheless, he often does manage to zero-in on the causes. Some of you may have already read Lewis book or his articles in Vanity Fair but I like reading essays to get a different perspective. Highly recommended.
- Book review - Google, I love you, I love you not. Reviews of The Googlisation of Everything (and Why We Should Worry) by Siva Vaidhyanathan; In the Plex: How Google Thinks, Works and Shapes Our Lives by Steven Levy; I’m Feeling Lucky: The Confessions of Google Employee Number 59 by Douglas Edwards(London Review of Books): Just like how the public used to debate the power of radio or newspapers about 80 years ago, it's not uncommon to wonder about the power of Google and how much of a threat it is to society. If you are interested in the topic, do check out my prior post on a similar topic.
- Is there a college education bubble in America? (The New Yorker): Pretty good summary of both sides of the college bubble argument.
- Book review - Why is higher education failing? Reviews of The Faculty Lounges: And Other Reasons Why You Won’t Get The College Education You Paid For by Naomi Schaefer Riley; The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters by Benjamin Ginsberg; The Chosen: The Hidden History of Admission and Exclusion at Harvard, Yale, and Princeton by Jerome Karabel; Unmaking the Public University: The Forty-Year Assault on the Middle Class by Christopher Newfield; Crossing the Finish Line: Completing College at America’s Public Universities by William G. Bowen, Matthew M. Chingos, and Michael S. McPherson; Academically Adrift: Limited Learning on College Campuses by Richard Arum and Josipa Roksa; Education’s End: Why Our Colleges and Universities Have Given Up on the Meaning of Life by Anthony T. Kronman; Saving State U: Why We Must Fix Public Higher Education by Nancy Folbre (New York Review of Books): An essay on why universities in America may not be performing well. As the article sort of alludes to, the interesting thing is how the top, elite, universities are world-class but the vast majority of the rest, which is where the vast majority of the future workers are trained, are thought to be under-performing.
- Top 10 management books of the decade (Strategy+Business): Haven't read any of them but heard of a few. If you are interested in management, strategy, business culture, trade, and innovation, check it out.
- (non-investing) Profile of Malcolm Gladwell (New York magazine): Lengthy profile of author, Malcolm Gladwell. Some people hate him but long-term readers know that I'm a big fan of his writing, even if I don't agree with all of it.