TFTLR: Compounder investing, Howard Marks, Acquisition integration, and Building personal moats

Thoughts for the Long Run, June 24th 2022

Welcome back to TFTLR! If I forcibly added you to this newsletter, it’s because I admire you as a thought partner and respect your feedback :)

Mental Model 1 - The Unwind of Hamilton Helmer (STROTW): Exceptional piece describing the origins of modern "compounder" (and broadly technology) focused investing (buoyed by low-interest rates and deflation) through the microcosm of food delivery. The industry is fundamentally over-competitive and unit economics are poor, but consolidation drives profit, with Meituan in China illustrating this well (though long-term 5 - 8% EBITDA margins are achievable).

Mental Model 2 - Conversation at Panmure House (Howard Marks): Economics is not a pure science given the variability of outcomes with the same inputs. Most markets are mostly efficient, but every so often the market transitions from flawless to hopeless (creating buying opportunities) - being a skeptic works both ways.

Mental Model 3 - All About Acquihires (a16z): I firmly believe Silicon Valley companies don't execute M&A as often as they could (acknowledging the challenges as hypergrowth is already breaking everything internally), but this is a pretty comprehensive guide as to how to effectively acquire and integrate a company (focused on acqui-hires) to accelerate go-to-market or product.

Personal Development: Build Personal Moats: "A personal moat is a set of unique and accumulating competitive advantages in the context of your career. This should be something that's: 1) Hard to learn and hard to do (but perhaps easier for you), 2) Impossible without rare and/or valuable skills, 3) Unique to your own talents & interests, and 4) Legible, in the sense that your expertise should be easy to describe, easy to share, and makes people want to do both for you

Have a great weekend,

Aimun